Will CTP/SSG Changes Lead to Expanded CMS Audits?

Key Takeaways

• Medicare CTP/SSG spending (US, outpatient wound care): Spending rose from ~$252 million (2019) to >$10 billion (2024); in 2025, CMS fraud prevention stopped ~$185 million in improper payments. CMS and OIG audits intensified, targeting improper payments, pricing inconsistencies, and high-volume outliers.
• 2026 reimbursement changes: Shift to flat-rate payment; wastage no longer reimbursed; non-BLA products treated as incident-to supplies; emphasis on FDA-aligned coding and appropriate homologous use (361 HCT/Ps). LCD crackdown withdrawn, but overhaul remains.
• Audit focus areas: Baseline wound metrics, failed conservative therapy, rationale for CTP/SSG selection, note–billing consistency, objective improvement, credible healing trajectory; expect more frequent, data-driven audits.

What effect do you feel the regulatory cellular- and tissue-based product (CTP)/skin substitute graft (SSG) changes will have on audits? 
 
I have spent nearly a decade assisting providers in navigating CTP/SSG and other audit types, but the surge in CTP/SSG-related audit activity over the past two years has pushed my workload to capacity. Having said that, the 2026 CTP/SSG reforms didn’t materialize overnight, and this increase in audit activity should have come as no surprise since Medicare spending on these products exploded, from roughly $252 million in 2019 to over $10 billion by 2024.¹ 
 
With growth of that magnitude, the Centers for Medicare and Medicaid Services (CMS) have been clear that increased oversight isn’t slowing down; if anything, it’s accelerating. Both CMS and the Office of the Inspector General (OIG) have been conducting extensive audits of CTP/SSG utilization, uncovering improper payments, inconsistent pricing data, and even signs of potential profiteering. In 2025 alone, CMS fraud prevention efforts stopped nearly $185 million in improper CTP/SSG-related payments.¹ 
 
The shift to a flat-rate payment model also makes it easier for auditors to spot outliers. Without product-specific pricing, unusual utilization patterns or questionable wound-size reporting stand out much quicker. And since wastage will no longer be reimbursed, auditors now have a new indicator to watch—cases where the product size used (and billed as applied amounts) is significantly larger than the wound requires. While the planned January 1, 2026 Local Coverage Determination (LCD) crackdown on diabetic foot ulcer and venous leg ulcer skin substitute coverage has been withdrawn, the overall CMS reimbursement overhaul remains fully in effect, and heightened scrutiny persists. On top of that, CMS is putting stronger emphasis on Food and Drug Administration (FDA)-aligned coding accuracy, appropriate homologous use of human cells, tissues, or cellular and tissue-based products (361 HCT/Ps), and lessons learned from prior audits that found issues concentrated among a small group of high-volume providers. 
 
Taken collectively, all these factors point toward continued, or even expanded, audit activity rather than any reduction in scrutiny and providers should expect more frequent, more detailed, and more data-driven audit activity over the next several years. 
 
Altogether, the rapid growth in CTP/SSG spending, the shift to flat-rate reimbursement, the intensified focus on coding accuracy and appropriate use, and the lessons emerging from recent high-volume provider audits all point in the same direction: heightened scrutiny is here to stay. Providers should anticipate not only continued audit activity, but a more sophisticated, data-driven approach from CMS and other oversight bodies. In this environment, proactive compliance, meticulous documentation, and a firm grasp of evolving regulatory expectations are no longer optional—they are essential for navigating the years ahead. 
 
What should providers be aware of regarding the CTP/SSG changes? 
 
The move to a flat-rate payment model marks a major shift for wound care providers, reducing reimbursement for many products and often falling short of covering acquisition costs, application expenses, and practice overhead. This will push clinics (especially smaller, rural, or lower-volume practices) to tighten inventory controls and reassess their ability to offer certain advanced therapies. With non–Biologics License Application (BLA) products now treated as incident-to supplies, documentation takes on heightened importance, as practices must clearly demonstrate medical necessity, proper procedure pairing, and accurate coding. 
 
These changes are also likely to redirect more advanced wound care toward hospital outpatient departments, which stand to benefit financially, while office-based and mobile providers will experience cuts due to the decrease in reimbursement. As a result, hospitals may reemerge as central hubs for advanced wound care, prompting operational adjustments in contracting, product management, and workflow design. 
 
Looking forward, CMS intends to differentiate payment based on FDA regulatory pathways, so providers will need to stay aware of how their formulary products are classified. 
 
Documentation expectations will tighten significantly, and providers will need to demonstrate not just that a CTP/SSG was applied, but why it was the appropriate choice at that moment in the patient’s care. Unclear or boilerplate templates will become high-risk triggers. Expect auditors to focus on: 

• Baseline wound characteristics and measurements 
• Response to prior conservative therapies and why they failed 
• Intent on using the advanced therapy and other options were discussed with the patient 
• Consistency between progress notes, procedure notes, and billing 
• Objective measurements that show continued improvement 
• Other signs of improvement (such as increased granulation tissue, decreased exudate, etc.)—this is especially important if the wound has not decreased in size, but is showing improvement in other ways (continued use of products with minimal measurable improvement will raise red flags) 
• Credible wound-healing trajectories 

Altogether, this is a transformational moment in Medicare wound care policy. Success will depend on early adaptation, strengthening documentation, refining coding practices, and making strategic product choices. For those who adjust proactively, the new environment may eventually support fairer resource use, increased transparency, and sustained patient access to essential advanced wound therapies.

Michael J. Crouch is a Certified Professional Coder (CPC) and Medical Auditor (CPMA) with more than 30 years of experience in wound care and hyperbaric medicine. He has served in senior leadership roles, including VP of Reimbursement and Corporate Hyperbaric Safety Officer, supporting over 300 outpatient wound management centers. His background includes directing multiplace hyperbaric programs, conducting extensive revenue cycle compliance audits, and providing education for clinicians and providers.

Mr. Crouch has contributed to the field through service on AAWCM and UHMS committees, including roles as UHMS Associates Chair and UHMS Facility Accreditation surveyor. He has authored multiple articles and textbook chapters and currently leads the consulting firm he founded in 2017, specializing in revenue cycle operations and regulatory compliance for outpatient wound management programs.

Reference
 
1. Centers for Medicare & Medicaid Services. CMS modernizes payment accuracy, significantly cuts spending waste. Published Oct. 31, 2025. Accessed Feb. 18, 2026. Available at: https://www.cms.gov/newsroom/press-releases/cms-modernizes-payment-accuracy-significantly-cuts-spending-waste