Medicare tightens coverage for skin substitutes in 2026

Medicare will implement significant changes to its Local coverage determination (LCD) for cellular and/or tissue-based products (CTPs) starting Jan. 1, 2026. Also known as skin substitutes, these products are used in outpatient wound care for the treatment of diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs). These changes emphasize evidence-based practice, standardized clinical thresholds for medical necessity, and more robust documentation to support utilization.

This LCD will be adopted by all seven Medicare Administrative Contractors (MACs), collectively covering all 12 Medicare jurisdictions, ensuring nationwide consistency in coverage criteria. An associated billing and coding article has also been released, offering detailed guidance on appropriate coding, billing, and documentation requirements aligned with the updated LCD.

While the formal regulation has been delayed multiple times and isn’t yet in effect, healthcare leaders shouldn’t mistake these delays for reprieve. Delays in enforcement don’t diminish the likelihood of eventual adoption.

Organizations that wait until the final hour to adapt, risk coverage denials, revenue disruption, and care delays. Early action offers the best opportunity to align workflows, retrain staff, and maintain compliance.

Key policy updates

Providers can look for the following key changes to Medicare’s LCD for CTPs.

Coverage limited to evidence-based use

• Only CTPs with peer-reviewed clinical evidence supporting efficacy in DFUs or VLUs will be reimbursed.
• Products like Oasis Tri-Layer Wound were removed from coverage due to lack of evidence.
• New additions to the covered list include Derma-Gide, Kerecis, and NuShield for DFU indications.

Clinical thresholds for use

• Failure to respond has been replaced with the phrase ‘50% ulcer area reduction after four weeks of standard care of treatment.