By: Sinead B. Killeen

In a surprise move just before the new year, the Centers for Medicare & Medicaid Services (CMS) withdrew the long-anticipated Local Coverage Determinations (LCDs) for skin substitute grafts and cellular and tissue-based products (CTPs) used in treating diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs). Announced on December 24, 2025, and effective immediately, this decision halted the implementation of policies that had been set to take effect on January 1, 2026.
The withdrawn LCDs—finalized across all seven Medicare Part B Administrative Contractors (MACs)—would have standardized coverage but introduced significant restrictions. They limited Medicare reimbursement to only 18 specific products deemed to meet rigorous evidence thresholds, while explicitly excluding coverage for 158 others and leaving 154 in a discretionary “case-by-case” category. This could have dramatically reduced options for clinicians and potentially restricted patient access to advanced wound care therapies.
CMS’s press release was clear and concise: “Effective immediately, CMS’ A/B Medicare Administrative Contractors (MACs) are withdrawing the Local Coverage Determinations (LCDs) for Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers that were scheduled to become effective on January 1, 2026.” Notably, the language avoided terms like “delayed” or “postponed,” signaling a full withdrawal rather than a temporary pause. No replacement timeline or revised policies have been outlined, leaving the program in a holding pattern.
What Changes—and What Doesn’t
With the new LCDs scrapped, the status quo prevails:

• In jurisdictions where active LCDs already exist (primarily Novitas Solutions, First Coast Service Options, and CGS Administrators), those legacy policies remain in force indefinitely. These cover states including Texas, Florida, Ohio, and others, with requirements for documentation, frequency limits (often up to 10 applications), and evidence-based use for DFUs and VLUs.
• In the remaining MAC jurisdictions without specific skin substitute LCDs (such as Noridian, Palmetto GBA, NGS, and WPS), coverage continues to be determined on a case-by-case basis under the general Medicare standard of “reasonable and necessary.”

This geographic variability has long been a point of frustration in wound care. Providers must navigate differing rules depending on where a patient lives, increasing administrative burden, compliance risks, and the potential for claim denials.
Importantly, the withdrawal does not affect other 2026 changes. CMS is moving forward with a standardized payment rate of approximately $127 per square centimeter (sources vary slightly between $127.14 and $127.28) for non-biological skin substitute applications in physician offices and hospital outpatient settings, effective January 1, 2026. The WISeR (Wound care prior authorization model) also proceeds in select states (New Jersey, Ohio, Oklahoma, and Texas), requiring prior authorization for certain services—but only where active LCDs exist.
Industry Reactions and Implications for Providers and Patients
The decision has been welcomed by many in the wound care community and manufacturers of skin substitutes. Companies like Kerecis (fish-skin based products) and Celularity (with Biovance products) highlighted that their offerings maintain broader coverage under the legacy policies, avoiding the exclusions that would have hit competitors. Celularity’s CEO, Dr. Robert J. Hariri, praised the move as preserving patient access while noting the flat reimbursement rate remains in place.
For clinicians treating chronic wounds—especially DFUs and VLUs, which affect millions and carry high risks of amputation—this preserves flexibility in product selection based on clinical judgment rather than a narrow approved list. Patients benefit from continued access to a wider range of evidence-based options without abrupt disruptions.
However, uncertainties remain. Why the sudden withdrawal? Some speculate it ties to the transition to new leadership at CMS or ongoing reviews of evidence submitted by manufacturers (a deadline of November 1, 2025, had invited peer-reviewed data). Without future guidance, providers face ongoing inconsistency across regions. Advocacy groups continue to push for sustainable reimbursement rates and more equitable national policies to reduce administrative harm and improve outcomes.
Key Advice for Wound Care Providers
In light of these changes and the persistent variability in coverage, wound care providers should take proactive steps to mitigate risks and ensure compliance. First, always obtain a signed Advance Beneficiary Notice of Noncoverage (ABN) from Medicare patients before rendering services involving skin substitutes or CTPs. This protects your practice financially if Medicare denies the claim, as it shifts responsibility to the patient for payment after they’ve been informed of potential non-coverage.
Additionally, carefully review your contracts with skin substitute distributors and manufacturers. Pay close attention to clauses detailing the required payment amounts, timelines, and any contingencies. Understand your obligations if reimbursement is not received from Medicare or is later recouped—such as through audits or appeals. This might include repayment terms, interest penalties, or other liabilities that could impact your practice’s financial health. Consulting legal or compliance experts familiar with healthcare reimbursement can help clarify these terms and prevent unexpected exposures.
Prioritizing Products Supported by Peer-Reviewed Evidence
Even with the withdrawal of the proposed LCDs, the core Medicare requirement that services be “reasonable and necessary” under Section 1862(a)(1)(A) of the Social Security Act remains firmly in place. In jurisdictions without active LCDs—or during audits, appeals, or Administrative Law Judge (ALJ) hearings—providers must demonstrate that the chosen skin substitute or CTP meets this standard. A key way to strengthen this defense is to prioritize products backed by robust peer-reviewed evidence, such as randomized controlled trials (RCTs), systematic reviews, or high-quality published studies demonstrating clinical efficacy for DFUs and/or VLUs.
CMS has repeatedly emphasized the value of “high quality evidence of effectiveness,” including in prior announcements inviting peer-reviewed publications from manufacturers. In the absence of a standardized national LCD, relying on products with strong, independent, published evidence can be critical in establishing medical necessity during appeals. ALJ hearings often hinge on comprehensive documentation, including literature supporting the product’s use as an adjunctive therapy for chronic ulcers that have failed standard of care. Selecting products with such evidence not only aligns with evidence-based practice but also bolsters your position if a claim is denied and escalates to the third level of the Medicare appeals process, where additional substantiation can overturn earlier denials.
Providers should:

• Review available peer-reviewed literature for products in their formulary.
• Document the rationale for product selection, citing relevant studies in the medical record.
• Maintain records of baseline and follow-up wound measurements, photos, and progress notes to correlate clinical outcomes with the evidence base.

This approach helps safeguard against denials rooted in questions of evidence quality, which have been raised in recent audits targeting skin substitutes.
Looking Ahead
As 2026 begins, wound care professionals should:

• Review their MAC’s current (legacy) LCDs if applicable.
• Strengthen documentation practices to support “reasonable and necessary” determinations.
• Monitor CMS announcements for any revival or revision of skin substitute policies.
• Prepare for the new flat payment rate and WISeR requirements where they apply.

This withdrawal represents a reprieve that maintains broader access to advanced therapies for chronic wounds. Yet it also underscores the need for clearer, more consistent national guidance to support high-quality care without unnecessary regional disparities. Stay tuned—wound care reimbursement policy remains a dynamic space.