CMS Final Rule October 31,2025

📌 Key Highlights

• Medicare Part B spending on skin substitute products under physician‐office billing grew from approximately $252 million in 2019 to over $10 billion in 2024. CMS

• For CY 2026 (effective January 1, 2026), CMS finalizes major changes to how “skin substitute” products are reimbursed. CMS

• Payment amount: CMS is finalizing a single national payment rate of approximately $127.28 per square centimetre (before geographic adjustments) for skin substitute products when used as part of a covered application procedure. CMS

• Payment will be as incident-to supplies when the product is used in a covered procedure under the Physician Fee Schedule or Hospital Outpatient Prospective Payment System (OPPS) settings. CMS

• CMS will categorize skin substitute products based on their regulatory status (e.g., 361 HCT/Ps, 510(k) devices, PMA devices) and will consider future years’ payment rates that differentiate among those categories. CMS

🧐 Why This Matters

• The establishment of the ~$127.28 /cm² rate represents a major shift from the previous ASP-based methodology (where each product had its own unique billing code and payment limit) toward a standard supply‐based model. CMS

• Manufacturers face increased pressure to demonstrate value, as CMS signals future rates may distinguish among product types or regulatory pathways.

• For patients, the change aims to align reimbursement with evidence of clinical value, potentially improving access to effective treatments while controlling unsustainable spending growth.

📝 Action Items for Stakeholders

• Review your skin substitute product inventory and contracts in light of the ~$127.28 /cm² payment rate, and update financial modelling accordingly.

• Ensure documentation supports medical necessity and proper usage of skin substitute products as part of application procedures.

• Monitor upcoming CMS guidance for future years when payment rates may be differentiated by regulatory category (361 HCT/P vs 510(k) vs PMA) and how that might affect product selection.

• Engage with suppliers and manufacturers on how contractual pricing, volume purchasing, and innovation strategy may be affected.

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Bottom line: CMS is redefining the reimbursement mechanism for skin substitute products — transitioning from individualized ASP‐based payments to a standardized “supply” payment at ~$127.28 /cm² in CY 2026. Providers, suppliers, and manufacturers will need to adapt to the new landscape, with attention to coding, contracting, evidence generation, and procurement strategy.