Skin Substitutes: Will CMS Restrict Access to Care for Our Most At-Risk Minority Patients?
It seems that our country is now divided on nearly every issue. Even in the midst of the deadly COVID-19 pandemic, citizens and clinicians fought bitterly over vaccine mandates, masking, and lockdowns. Yet, somehow, we all emerged from the pandemic united on the importance of prioritizing the health care needs of our elderly and most at-risk patients. This has been brought home most recently by the new Congress, as both Democrats and Republicans on Capitol Hill agreed not to cut Medicare and Medicaid funding.
Despite this bipartisan resolve, recent proposals by Centers for Medicare and Medicaid Services (CMS) and Medicare Administrative Contractor (MAC) could cut reimbursement on a vital tool used by wound professionals to heal our most complex chronic wound patients: skin substitutes. Even more concerning, their proposals would also deny access to skin substitutes to our most at-risk patient populations.
One thing the pandemic brought to the forefront is the health care disparity gap between minorities and their Caucasian counterparts. At the peak of the pandemic, African Americans died from COVID at a disproportionately higher rate.1 But long before COVID, it was well known amongst wound specialists that African-American and Latino patients suffered disproportionately from chronic wounds and amputations. And now CMS and some MACs appear to be on the verge of widening the minority health care disparity with proposed changes to skin substitute policies, with the most harmful proposal of all being the idea of bundling the private office setting.2 What’s worse, the proposed changes would jeopardize the use of skin substitutes that are most likely saving CMS money over the long term.
A Closer Look at Health Care Disparities in Wound Care
How wide are some of the health disparities in wound care? African American and Latino patients are 50% more likely to undergo lower extremity amputations than Caucasians. For these patients, the cost to quality of life is impossible to estimate. And for our health care system the costs are extremely high. The estimated direct cost of a single leg amputation is $640,000, while the aggregated lifetime cost is estimated to be a staggering $46.7 billion across all patients.3
In my 10,000-patient census in rural Louisiana and Mississippi, wounds in African-American patients are 54% larger than in Caucasian patients. The average size of our patients’ wounds is 32 cm2. Our average patient has three wounds. In many cases, these patients cannot be treated with skin substitutes in hospital-based outpatient departments (HOPDs) because of the current bundled skin substitute reimbursement system. Hospitals can realistically only treat wounds with skin substitutes approximately 7 cm or smaller (head-to-toe) without losing money. Ironically, the smaller the wound, the more margin the hospital makes using tiny skin substitutes. Thus, hospitals are financially incentivized to treat the smallest 1 cm wounds with skin substitutes.
Private clinics, however, can treat wounds with skin substitutes of much larger sizes because of its Q-code (per square centimeter) reimbursement structure. As a result, when complex, larger wound patients have failed to heal despite receiving the standard of care, the private office has been their only realistic option to heal their wounds. Overall, treating wound patients in the private office is the site of service (POS 11) with one of the lowest costs to the entire health care system. CMS should be driving more chronic wound patients to private offices than anywhere else in the health care continuum if the goal is cost savings and better outcomes.
Any wound specialist who has practiced for any length of time knows that skin substitutes work in accelerating wound healing when compared to basic topical dressings alone. Skin substitutes accomplish this by supplying native extracellular matrices, growth factors, and other essential components for wound healing for our immunocompromised patients. Skin substitutes can promote the formation of granulation tissue and stimulate the patient’s own skin to regenerate. There are many different skin substitute types ranging from human derived tissues to animal derived xenografts. Several research studies have shown skin substitute efficacy of various types.
But CMS has stated that there isn’t enough research to distinguish efficacy amongst the myriad of graft choices and therefore is eyeing possible cuts to skin substitute reimbursement due to rising costs. In the Office of Inspector General’s (OIG) letter to CMS in March of 2023, the OIG stated it does not know how to distinguish the efficacy of the different skin substitute categories when compared to each other.4 There is talk of potentially bundling the private office skin substitute reimbursement to make it similar to how HOPDs are reimbursed. Novitas and First Coast MACs came out with an LCD proposal to arbitrarily lower the number of skin substitute applications from ten to two per wound.5
All of this seems like a logical response if the sole purpose is to curtail the rising costs of skin substitutes—but not a well thought out plan to address the chronic wound pandemic as a whole that is sweeping our country. CMS and the MACs are right to rein in costs whenever they can to preserve the Medicare fund, but restricting access to advanced modalities ultimately increases costs, amputations, and mortality. Published literature about the efficacy of skin substitutes suggests that more patients, not fewer, should be getting skin substitutes.
A Town Hall on Skin Substitutes
I am encouraged, however, that CMS has paused to evaluate the ramifications of its proposals affecting patients and the provision of care. The first CMS Town Hall on Skin Substitutes in January 2023 was a great start to a broader dialogue.6 It was heartening to see the entire wound industry united for the first time in my career. Physicians, vendors, hospitals, manufacturers, and patient advocacy groups were unanimous in their opposition to the idea of bundling the private office reimbursement of skin substitutes. “Where will we send our large wounds if you bundle the private office?” was a question that was asked by hospital outpatient clinic representatives—especially now that long-term acute care hospitals (LTACHs) will have limited ability to treat chronic wounds after the COVID wound reimbursement exemption expires on May 11, 2023.
All of the town hall presenters were unanimous in recommending that the Average Sales Price (ASP) reporting process should be allowed to be fully implemented which would save CMS hundreds of millions of dollars in the first year alone. OIG’s March 2023 letter to CMS stated that “transitioning all skin substitutes to ASP-based payments has the potential to substantially reduce Part B expenditures.”4 OIG estimated a savings of $84 million per quarter once all skin substitute companies report ASP. That’s $336 million in Part B savings in the first year, which would be a significant reduction in cost and a win for all concerned parties.
But any skin substitute savings is a tiny drop in the $50 billion–dollar ocean that CMS spends on wounds annually.7 It seems like CMS should be addressing the much larger problem of overall wound expense in a more comprehensive cost cutting way by accelerating value-based care (VBC) models or alternative payment models (APM). We as wound specialists pride ourselves on healing wounds as fast as possible. If we were paid by how fast we heal wounds (using whatever means necessary including skin subs, hyperbarics, or any of our other advanced tools at our disposal), instead of per-click fee for service, the savings to the system would be in the billions instead of the millions. The way a clinician knows that she is practicing with integrity is that her protocol doesn’t change whether she’s in a fee for service model or a value-based care model. The idea is, just get the patient healed as early and fast as possible and the system will sustain itself.
Hospital outpatient departments (HOPD) are currently paid under a bundled code at a rate of approximately $1750 for the bundled service of skin substitutes for “high bucket” grafts. This capped reimbursement only allows HOPDs to treat wound sizes up to about 7 sq cm (head to toe). Any wound larger than 7 sq/cm is cost prohibitive for HOPDs so these larger wound patients, more often minorities, are not currently being adequately treating in the hospital outpatient department setting. Additionally, if a patient has multiple wounds, then the surface area is additive, so these patients are excluded from treatment as well if the cumulative area is greater than 7 sq/cm.
Real-World Examples of Wound Care Patients
One might ask why this patient with a venous leg ulcer this large would not just get a split thickness skin graft (STSG) (Figure 1)? This patient had type 1 diabetes, was on dialysis for end stage renal failure, with a poor prognosis for a good result with an STSG. Additionally, he refused a STSG because he said he “didn’t want to create even more wounds on this leg from multiple donor sites that won’t heal either.”
As a result of the HOPD refusing to treat this patient with skin substitutes due to bundled payment, the patient sought treatment in the private office setting (Figure 2). He was able to receive weekly applications that covered the entire wound in the private office setting, resulting in near complete closure (Figure 3).
On the contrary, because of the current HOPD bundled reimbursement, patients with smaller 1 sq cm wounds are commonly being healed with skin substitutes (Figure 4).
Meanwhile African-American patients with large single or multiple wounds are disproportionately being told to either get a disfiguring split thickness skin graft that often creates even more non-healing wounds, or to just get an amputation. The 3-year mortality rate after leg amputation in these patients is 50%, worse than most cancer mortality rates with the exception of pancreatic carcinoma. In addition, split thickness skin grafting is a risky, painful, and unsuccessful option for many patients with multiple comorbidities. Most of these patients refuse to undergo STSG for these reasons despite the cajoling of concerned clinicians. At the end of the day, it’s their leg, and their choice along with their wound specialist as to how best keep it attached to their body without causing more non-healing wounds. Sometimes we are able to convince them to get a STSG after prepping their wound bed with skin substitutes to increase the chances of a successful graft (Figure 5).
Summary
Patients of any race, especially at-risk minorities with multiple and/or larger wounds, must not be discriminated against by a bundled policy that restricts the treatment of larger wounds or policies that unreasonably restrict number of applications.
Implementing many of CMS and MAC proposed changes to private office reimbursement of skin substitutes will severely restrict patient access to quality care, discriminate against patients with multiple or large wounds, widen the minority health care disparity, while eliminating patient and physician choice of treatment options. I also believe that no overall savings will occur as these patients will be forced into the hospitals for multiple re-admissions, continuing the vicious cycle of skyrocketing costs and poor outcomes. Delaying the implementation of bundling or any severe skin substitute restrictions will help ensure this does not happen. This will allow for the appropriate amount of time for the CMS Office of Minority Health to conduct a thorough analysis of any proposal’s potential harmful impact to minority health. It will also allow the proper skin substitute research to be completed to gather the data to create a sustainable model for wound patients of all patient wound sizes.
Finally, I look forward to the day that wound medicine becomes a nationally recognized specialty with a board-certified residency program. I believe that when there is enough training and organization within our growing specialty, we can definitively solve the catastrophic wound pandemic, lower costs, and start to focus on wound prevention. If CMS wants to heal patients while saving billions, it must finally recognize that creating a fertile environment to grow highly trained wound specialists is a vital key to success, and both CMS and MACs should incorporate our perspectives into any plans for regulatory changes that will adversely affect our most at-risk patients.
Shaun Carpenter MD, CWSP, WMS, is the Chief Medical Officer of MedCentris Wound Healing Institute.
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References
1. Centers for Disease Control and Prevention. Risk for COVID-19 infection, hospitalization, and death by race/ethnicity. Updated April 7, 2023.
2. Nusgart M. An overview of the 2023 CMS payment policies impacting wound care. Today’s Wound Clinic. 2022; 16(12).
3. Palli S. Impact of a limb salvage program on the economic burden of amputation in the United States. Value Health. 2016; 19(3):PA45.
4. Office of the Inspector General. Some skin substitute manufacturers did not comply with new ASP reporting requirements. Published March 14, 2023.
5. Centers for Medicare and Medicaid Services. Skin substitutes for the treatment of diabetic foot ulcers and venous leg ulcers.
6. Centers for Medicare and Medicaid Services. Skin substitutes.
7. Fife CE, Carter MJ, Walker D, Thomson B. Wound care outcomes and associated cost among patients treated in US outpatient wound centers: data from the US Wound Registry. Wounds. 2012; 24(1):10–17.
