Effective January 1, 2026, CMS finalized a major shift in how skin substitute products are paid under the OPPS, ASC, and non-facility settings, with coding, compliance, and financial implications. The new rules are designed to reduce cost and overutilization of expensive products.
Under the new, current rules, CMS will:
- Separately pay certain skin substitute products as incident-to supplies, not drugs or biologicals
- Group products by FDA regulatory pathway, not brand or ASP (average sales price)
- Create three new APCs:
- APC 6000: PMA (Premarket Approval) skin substitute products
- APC 6001: 510(k) skin substitute products (cleared by FDA)
- APC 6002: 361 HCT/Ps (Human Cells, Tissues, and Cellular and Tissue-Based Products) skin substitute products
- Apply a uniform initial payment rate of $127.14 across all three APCs
- Implement this policy across hospital outpatient departments, ASCs, and non-facility settings
- Require hospitals to report certain market-based payment rate information on their Medicare cost report
Organizations should expect greater oversight of product selection, utilization, documentation, and financial arrangements tied to skin substitute use. Governance, compliance, and revenue cycle leaders should already be assessing:
- Clinical utilization patterns
- Compliance with coverage and reimbursement guidelines
Although CMS withdrew the Local Coverage Determinations (LCDs) for skin substitute grafts for the treatment of diabetic foot ulcers and venous leg ulcers which was scheduled to be effective on January 1, there are still rigorous coverage requirements in place.
The Final Rule can be found here: 2025-20907.pdf
The CMS Fact Sheet can be accessed here: Calendar Year 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Final Rule (CMS-1834-FC) | CMS