On October 31, 2025, the Centers for Medicare & Medicaid Services (CMS) released the CY 2026 Physician Fee Schedule (PFS) Final Rule, introducing major updates to the payment and coding of skin substitutes - also known as cellular and/or tissue-based products (CTPs) or Cellular, Acellular, and Matrix-Like Products (CAMPs). These changes, effective January 1, 2026, represent some of the most significant shifts in years for wound care clinicians, billing teams, and product manufacturers.

This FAQ covers the most common questions we’ve received about the 2026 policy changes. For a a full overview of updates, see "Skin Substitutes - What’s New in 2026? Navigating CMS Payment Changes"

Skin Substitute Payment Model Updates

1. What changes were implemented in the Medicare Part B Skin Substitute Payment Model in 2026?

Effective January 1, 2026, CMS implemented several changes for Skin Substitutes/ CTPs/ CAMPs) in Medicare Part B. Key updates include:

1. Unified Payment Rate: A flat national rate of $127.14 per square centimeter applies to CTPs not licensed as biologicals under Section 351 of the Public Health Service Act (i.e., non-BLA CTPs).
2. Incident-to Supply Classification: CTPs without FDA Biologics License Application (BLA) approval (i.e., non-BLA CTPs) are now classified as incident-to supplies when used during a covered wound application procedure. Biologicals continue to be paid under the Average Sales Price (ASP) methodology.
3. Separate Reimbursement: CMS offers separate reimbursement for the application service, apart from the product itself.
4. Consistency Across Care Settings: These policies apply uniformly across HOPDs (facilities), QHP offices, and patients’ homes (non-facility settings) to ensure consistency.
5. Unbundling in HOPDs: CMS has unpackaged CTPs from the procedure payment in HOPDs, meaning the application and the product are reimbursed separately.
6. HCPCS Coding Updates: Low-cost group HCPCS codes (C5271-C5278) that were used at HOPDs have been deleted. High-cost application codes 15271–15278 remain and are used for all CTP applications.
7. Future Payment Rate Differentiation: CMS has signaled plans to propose differentiated payment rates in future years based on the three FDA regulatory categories of non-BLA CTPs (PMAs, 510(k)s, and 361 HCT/Ps).

2. Why are these new regulations taking place in 2026?

CMS states that there has been a nearly 40-fold increase in Medicare Part B spending for skin substitutes between 2019 and 2024, escalating from $252 million to over $10 billion. CMS largely attributed this surge to increases in skin substitute payment rates and initial launch prices for these products under the ASP plus 6% methodology, which is typically reserved for biologicals.

3. How much does Medicare reimburse for skin substitutes in 2026?

Effective January 1, 2026, CMS implemented a flat national reimbursement rate of $127.14 per square centimeter for covered skin substitute products that are not biologicals licensed under Section 351 of the Public Health Service Act. These products are now treated as incident-to supplies in both facility and non-facility settings.

For biological skin substitutes (licensed biological products), the Average Sales Price (ASP) payment methodology remains unchanged.

Note: CMS pays separately for the application procedure and the product. The $127.14 per sq cm rate applies only to the product.

Billing/Coding:

HOPD (Facility) Billing

• Facility claim (UB-04):
• CTP application code (HCPCS 15271–15278)
• CTP product HCPCS code
• Professional claim (CMS-1500):
• QHP/physician charge (CTP application code only)

Non-Facility (Physician Office) Billing

• Professional claim (CMS-1500):
• Physician/QHP charge (CTP application code)
• CTP product HCPCS code (incident-to supply)

4: How can wound care practitioners ensure compliance and sustainability under the new payment model?

Practitioners should select the lowest-priced skin substitutes with demonstrated clinical effectiveness, optimize documentation, treatment justification, and care pathways to ensure the standard of care is consistently met.

• To preserve sustainability, profit margin and compliance, wound care practitioners can follow the steps below: 
• Step 1. Select the lowest-priced skin substitutes/CTPs/CAMPS with demonstrated clinical effectiveness using the resources below. Many of the payment limits are less than $127.14 per sq cm. Selection of cost-effective products ensures a predictable profit margin based on the difference between the fixed CMS payment rate and the acquisition cost, without concerns over audits related to manufacturer discount agreements.
• For a sample list of skin substitutes, along with the average sales price (ASP) reported by manufacturers, refer to Table 1 below.
• For the entire list of skin substitute ASPs, refer to the CMS ASP Pricing Files webpage, download and open the ASP Pricing File, then look for “Payment Allowance Limits for Medicare Part B Drugs ”.
• For the latest available ASP, along with clinical, pricing, coding and reimbursement information on each CTP, refer to the WoundReference Product Navigator, find the specific CTP page, and on the "Essentials Table", click on the "Product Reimbursement" Tab, then look for the column labeled "Office and/or Facility - Product reimbursement".
• Step 2. Focus on optimizing documentation, treatment justification, and care pathways to ensure that the standard of care is consistently met. For clinical, reimbursement and documentation updates and checklists, see topic "Cellular and/or Tissue Based Products".

5. Which skin substitutes are considered biologicals? 

As of January 2026, the FDA has not classified any skin substitutes/CTPs/CAMPS as biological products.

6. What FDA regulatory categories does CMS use to group skin substitutes for payment?

CMS has finalized a policy to align payment for sheet skin substitutes with their FDA regulatory categories, establishing three groups for payment based on a skin substitute's FDA approval, clearance, or self-determination.

These three FDA groups are:

• 361 Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/P)
• Pre-Market Approvals (PMAs)
• 510(k)s

For a comprehensive list of skin substitute codes and their FDA categories, see file "Skin Substitute Products by FDA Regulatory Category," available on the CMS website in the downloads section for the CY 2026 PFS Final Rule.

Or refer to: 

• Product Navigator > specific CTP Product Page > Clinical > FDA 

7. Will CMS require prior authorization for skin substitutes?

The Wasteful and Inappropriate Service Reduction (WISeR) model introduces new prior authorization processes in the Medicare fee-for-service program, beginning on Jan. 1, 2026. The WISeR model is initially piloted in six states (New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington) and, as summarized by the American Medical Association, includes service categories such as skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for knee osteoarthritis. 

For details, refer to "Understanding the WISeR Model: What Wound Care Providers Need to Know".

Skin Substitute Application Eligibility, Episode of Care and Coverage Limitations

8. How long should a patient receive Standard of Care before a skin substitute is applied?

According to existing LCDs and Articles related to use of CTP for the treatment of diabetic foot ulcers (DFUs) or venous leg ulcers (VLUs) (CGS Administrators, LLC; Novitas Solutions, Inc.; and First Coast Service Options, Inc), the ulcer must have failed to respond to documented standard of care treatment for a minimum of four weeks (defined as 30 days) with documented compliance to prescribed treatment. Failure to respond is defined as an ulcer that has increased in size or depth, or no change in baseline size or depth, or no sign of improvement, or no indication that improvement is likely (such as granulation, epithelialization, or progress towards closing)

Examples of standard of care include vascular assessment, blood glucose management, offloading, infection control, debridement of nonviable tissue, compression, and moist wound care with appropriate dressings.

A description of the ulcer(s) must be documented at baseline (prior to beginning standard of care) and include size, location, stage, duration, and presence of infection, in addition to the type of standard of care treatment given and the response. This information must be consistently updated in the medical record throughout the patient’s treatment.

9. How many skin substitute applications are allowed?

According to existing LCDs and Articles related to use of CTP for the treatment of diabetic foot ulcers (DFUs) or venous leg ulcers (VLUs) (CGS Administrators, LLC; Novitas Solutions, Inc.; and First Coast Service Options, Inc), a maximum of ten skin substitute graft/CTP applications per ulcer are allowed within a 12-week episode of skin replacement surgery.

10. Can a skin substitutes/CTP/CAMP be applied - and reimbursed - on ulcers other than diabetic foot ulcers (DFUs) or venous leg ulcers (VLUs)?

• First, access your Medicare Administrative Contractor’s (MAC) Local Coverage Decision (LCD) as the covered indications may be outlined specifically. 
• If your MAC does not have an active CAMP/CTP LCD, then contacting the MAC is advised.
• You can locate Regional MACs on WoundReference here.
• If wishing to proceed, please see Evidence and Recommendations: Topic Cellular and/or Tissue Based Products on WoundReference

Consider the following:

• Ensure your CAMP/CTP has sufficient evidence. It would be wise to choose a product with a high level of evidence in the event the claim is denied and you need to file an appeal.
• Meticulous documentation will be needed to prove medical necessity. If the CAMP/CTP is denied, multiple levels of appeal may be needed. If you know ahead of time that the CTP/CAMP is not covered by the MAC, the patient can be notified ahead of time and offered the option of signing an Advance Beneficiary Notice of noncovered service. The patient  would be responsible for the product and service.

Modifiers

11. Does CMS pay for the full skin substitute/CTP/CAMP, or only for the portion applied to the patient?

Effective January 1, 2026, Medicare pays only for the units of a non-BLA skin substitute that are actually applied to the patient.

According to CMS:

• When only part of the product is applied, only the applied portion may be billed.
• Discarded units are not billable under any circumstance.
• They cannot be billed with the JW modifier.
• They cannot be included in the billed units for the applied amount.
• Medicare does not reimburse for any wastage of non-BLA CTPs, regardless of package size or clinical need.

Providers must still document whether the entire product was used and, if not, how much was discarded. Documentation is required for the medical record but does not result in payment for discarded units.

12. Should the JW and JZ modifiers be used when billing for separately payable incident-to supplies? 

• No. As explained by CMS, the JW and JZ modifiers are used only when billing for drugs and biologicals that are separately payable under Medicare Part B. These modifiers must not be used for incident-to supplies - even when those supplies are separately payable.
• Medicare does not reimburse for any discarded amounts of incident-to supplies.
• As mentioned above, Non - Biologics License Application (non-BLA) CTPs are categorized by CMS as incident-to supplies. As of January 1, 2026, non-BLA skin substitutes are no longer payable as Part B drugs or biologicals, and only the portion actually applied to the patient is billable.

Resources

WoundReference

• Skin Substitutes - What’s New in 2026? Navigating CMS Payment Changes
• Cellular and/or Tissue Based Products
• Medicare Coverage Determinations for Wound Care
• Understanding the WISeR Model: What Wound Care Providers Need to Know
  

CMS

• CY 2026 PFS Final Rule
• CMS ASP Pricing Files
• CMS list of Skin Substitute Products by FDA Regulatory Category
• CY 2026 OPPS Final Rule
• Upcoming Update to the Final Local Coverage Determinations (LCDs) for Certain Skin Substitutes