Payers’ Perspectives on Wound Care Coverage Policy Determination: What We Know and Ways to Move Forward

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Any views and opinions expressed are those of the author(s) and/or participants and do not necessarily reflect the views, policy, or position of Wounds or HMP Global, their employees, and affiliates.

The path to gain regulatory approval from the US FDA is separate and distinct from the process for gaining coverage and reimbursement by Medicare and private payers. Evidence of efficacy and safety—which for the most part is the bar that must be cleared to satisfy the FDA for market access—does not necessarily translate into coverage and reimbursement by payers, including Medicare. Payers look to the quality of the evidence and the bar of “reasonable and necessary,” as well as whether a product is better than the existing standard of care and should be covered.

In wound care, products gain market access through different FDA pathways, including 510(k), premarket approval, biologics license agreements, and under regulations governing Section 361 of the Public Health Service Act (PHSA). Section 361 of the PHSA was created by the FDA in the 1990s to regulate HCTPs that do not pose a significant risk to public health. The vast majority of wound care products—including surgical dressings, autologous blood-derived products, negative pressure wound therapy, and some CTPs (or skin substitutes)—reach the marketplace through the FDA’s 510(k) pathway, a regulatory pathway created with the enactment of the 1976 Medical Device Amendments. The 510(k) pathway enables appropriate medical devices to receive FDA clearance without a requirement to conduct clinical trials demonstrating efficacy. Under this pathway, all that manufacturers need to demonstrate is that the safety and efficacy of their device is “substantially equivalent” to that of a device already on the market. Since 1976, about 99% of medical devices approved by the FDA have used the 510(k) pathway.¹ As most wound care products gain market approval through this path, few have the RCT evidence payers want to determine coverage policy.  

Exacerbating this problem is the fact that CTPs that are HCTPs that come to market through the FDA as a 361 product do not require any evidence from the FDA if they are used for homologous use and are minimally manipulated.² However, Medicare and other payers do require evidence in order for products to gain coverage and reimbursement. When developing coverage policies, Medicare and other payers review evidence for the products they are considering for coverage, and most payers look to RCTs as the evidentiary bar to gain coverage in their policies. 

It is clear that there is a lack of congruence between the regulatory and payer environments with regard to FDA requirements for market access versus payer requirements for coverage and reimbursement. Manufacturers need to recognize this difference and generate the kind of evidence that is required for coverage and reimbursement. 

The Alliance of Wound Care Stakeholders’ Wound Care Evidence Summit (May 2022) assembled more than 150 payers, government agency policymakers, prominent researchers, wound care medical specialty societies, patient and clinical associations, wound care clinics, and manufacturers to discuss these and other challenges. The Summit highlighted the need to improve clinical trial research and design that would yield more robust evidence that payers could use when determining coverage policy. Active and recently retired medical directors from these payers participated: Aetna, CareFirst Blue Cross Blue Shield, Centers for Medicare & Medicaid Services, Humana, Molina Healthcare of Texas, and UnitedHealth Group.

The Alliance reported on the quality, adequacy, and relevance of the existing chronic wound care research base and discussed the gaps, associated problems, and implications for clinical trial design and execution in a previous publication.³ Here, the authors explore additional insights from the Summit and how they can be applied today to the current coverage challenges surrounding wound care products.

Payers confirmed they follow similar processes when developing coverage policies in that they consider multiple sources, including: scientific evidence, clinical practice guidelines, health technology assessments, and expert opinion, sometimes through independent third-party reviewers. Payers also examine the level of need in their member populations and consider additional factors such as legal precedents, state laws and regulations, and other commercial and government payers’ coverage policies. 

Payers cautioned that there are no specific standards regarding the types of evidence and level of quality required for coverage decisions. However, panelists agreed that there is a hierarchy of evidence and that RCTs are superior to other types of evidence. RCTs are the highest and preferred form of evidence considered. Other factors—such as study size, duration, replication, generalizability, and execution—are also critical.

In the absence of RCTs, some payers will consider research based on other study designs; this is particularly true for rare diseases or in the absence of any established efficacious therapy. However, providers and manufacturers remarked that in their experience, most commercial payers will only accept RCTs for coverage determination.

That standard has been a particular challenge in the wound care space, where many of the devices used were cleared by the FDA via the 510(k) pathway. As previously highlighted, the wound care evidence base is not robust.³ Clinical trials often are of insufficient duration and enroll too few patients and thus are inadequately powered. Moreover, study populations do not reflect the types of real-world patients clinicians treat. As a result, when making coverage determinations for wound care products and services, payers often need to examine other sources to determine coverage policies, such as clinical practice guidelines, HTAs, and expert opinion/medical consensus documents.

Clinical practice guideline recommendations, commonly developed by medical specialty societies, use systematic reviews and the results of scientific research such as RCTs to arrive at their recommendations. Not only do payers consider these tools, but providers use them as well to guide them in their clinical practice so they can eliminate unnecessary treatment variations and improve the quality of care.

Clinical practice guidelines vary in quality. Sound, high-quality guidelines:

• Score or grade the strength of the recommendations and the quality of evidence that forms the basis for the recommendations. 

• Disclose when recommendations are based solely on opinion and consensus.

• Engage multidisciplinary panels of experts to develop recommendations using an explicit and transparent process where all the conflicts of interest are well known and fully disclosed.

• Are current, meaning reviewed and updated annually or every 2 years, if possible. Many payers review their coverage policies annually to determine whether new supportive evidence exists and they expect timely updates to guidelines to incorporate supportive evidence as it emerges.

The Grading of Recommendations, Assessment, Development, and Evaluation, or GRADE tool, assesses the quality of the best-available evidence as it relates to a specific screening, diagnostic, or therapeutic intervention within a clinical guideline and serves as the gold standard for any type of evidence evaluation.⁴ Using the GRADE methodology, experts grade the quality of the evidence as high, moderate, low, or very low and the strength of the recommendations as strong or weak (or conditional). A second tool, the Appraisal of Guidelines for Research and Evaluation, or AGREE instrument, is useful to evaluate the quality of the overall guideline and examine the methodologic rigor and transparency that was used to create it.⁵ Sound, high-quality clinical practice recommendations emerge when experts use a rigorous process of evidence evaluation (GRADE) and guideline development (AGREE).

Payers at the Summit concurred that clinical practice guidelines aid in policy determination and that they review them with the following considerations in mind: How current are the guidelines? How good is the evidence supporting them? Is there congruence between guidelines created by different organizations? Stakeholders acknowledged that despite decades of research, the wound care community has yet to define the gold standards of care. This is problematic, as variability in wound care clinical practice guidelines limits their value when payers use them to make decisions about coverage policy. 

One proposed solution is to create consensus around standard of care. As an outcome of the Evidence Summit, the Wound Care Collaborative Community established a work group to do just that. A second solution is to encourage cross-specialty discussions in provider systems. Eliminating silos and creating opportunities for various specialists to confer about best practices is a step toward identifying wound care standards of care. 

As payers noted, rapidly changing science is another barrier to use of clinical practice guidelines for coverage policy determination. Guidelines must be regularly reviewed and updated to incorporate the most recent scientific evidence. Payer panelists proposed developing processes whereby guidelines can be updated annually. When that is not feasible, payers recommended labeling guidelines with a “use by date.”

HTAs critically appraise and grade currently available evidence using formal methodologies such as GRADE or other proprietary approaches to determine whether a new or emerging health technology is safe, efficacious, and better than the existing standard of care. These assessments are built on a comprehensive and systematic review of the best-available clinical evidence published or accepted for publication in peer-reviewed journals. Analysts then go on to examine other sources of information such as clinical practice guidelines and similar FDA-approved products and indications, noting the underlying methodology that was used to approve these products. For example, analysts will determine whether placebo-controlled RCTs were available for the FDA to review or if the products were approved through the 510(k) pathway or another route. Additional information sources include a sampling of existing commercial and government coverage policies and comparative and cost-effectiveness studies, as available.

Panelists identified 3 main applications in which HTAs may be used: to support evidence-based development of coverage policy in the payer setting; to inform acquisition or adoption of a new technology in health systems; and to potentially reduce clinical variability and improve clinical effectiveness when used by providers.

HTAs deliver a comprehensive and rigorous assessment of the evidence base and are another tool payers can use when evaluating wound care products and treatments for coverage and reimbursement. Several commercial payers identified HTAs as one of the sources they rely upon when making coverage decisions. Unfortunately, limited accessibility presents a barrier to the use of HTAs for coverage policy determination, as they may be subscription- or fee-based products. Unless payers subscribe to or pay for HTAs, they will not have access to them. To eliminate this barrier, some payers produce HTAs in-house using their own analysts. This is a viable solution as long as in-house analysts are skilled and follow a rigorous and comprehensive process; however, this option may also be more costly over time.

Consensus statements are often issued while clinical evidence is still being collected with the aim of creating clinical practice guidelines. Clinical consensus statements may be useful to clinicians when the evidence base is insufficient for a clinical practice guideline but when significant practice variations and quality improvement opportunities exist. However, consensus and expert opinion are not substitutes for evidence evaluation. Researchers and payers recognize that consensus and expert opinion are the weakest forms of evidence. Consensus can be wrong—it is not always as evidence-based as it should be. In addition, conflicts of interest influence opinion and consensus.

Payers may assemble medical advisory panels comprising national experts who review the relevant evidence to determine consensus on the use of a particular product or treatment. Stakeholders noted that payers rarely disclose the national experts who are members of these advisory committees, which limits manufacturers’ and other researchers’ ability to have direct discussions about coverage policies and prevents stakeholders from determining whether experts have any conflicts of interest. 

Payers confirmed that while they may seek expert opinion when high-quality evidence is unavailable, they have justifiable concerns when consensus is supported by practice patterns only without supportive evidence, and when conflict of interest may be a factor.

Clinical practice guidelines and HTAs have a role in clinical care and coverage policy development but, as payers reinforced, they need to be based on high-quality evidence. Clinical consensus and expert opinion, according to payers, are not substitutes for evidence evaluation. Consequently, the wound care community needs to adhere to widely accepted standards for clinical trial design to achieve coverage and reimbursement for wound care products.

Since few wound care products have the clinical trial evidence payers currently require to determine coverage policy, providers, researchers, and manufacturers suggested leveraging RWD and RWE as an alternative source of evidence to supplement limited RCTs in wound care. Using a combination of registries and RCTs, payers may be able to develop more inclusive coverage policies. 

Payers noted that although RWD shows promise, much work needs to be done to create standardized data sets to the point where stakeholders can use it to generate RWE. Nevertheless, the evolving allowance of RWD and RWE is exciting, as these alternative sources of evidence can supplement limited RCTs in wound care. Highlighting the possibilities of RWD and RWE, in late 2023 the FDA released draft guidance, Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices, which would make use of RWD and RWE for clinical trials and in expanding indications.⁶ Yet even if the FDA permits RWE/RWD for regulatory decision-making, the Centers for Medicare & Medicaid Services and commercial payers must also accept it for this to meaningfully improve patient and provider access to new products—and this is where the authors see slower progress.

A recent example of the slow uptake in the acceptance of alternate sources of evidence is the proposed LCDs and Coding and Billing Articles issued by MACs to address new Medicare coverage requirements for CTPs/skin substitutes when used to treat diabetic foot ulcers and venous leg ulcers. Although the MACs are on the right track, as they seek to apply evidence standards as a prerequisite for coverage, in their draft proposal they used only RCTs for coverage purposes. As heard at the Summit, when RCTs are unavailable, other sources of evidence should be considered, including well-designed and conducted studies that can include but are not limited to real-world clinical trial studies from registries, as well as observational prospective and retrospective studies based on medical record data and registries. Although RCTs are the gold standard, other forms of high-quality evidence exist and should be reviewed. The Alliance of Wound Care Stakeholders and others shared these recommendations in written comments to the draft documents. The final LCDs and Billing and Coding Articles have been released, with implementation scheduled for April, 2025; that date is subject to change.

Payer coverage and payment regulations specify which technologies and procedures wound care clinicians can offer their patients, which ones they will (or will not) be reimbursed for, and at what level. Consequently, coverage is a quality-of-care issue as well as an access-to-care issue. Given the known existing health disparities in wound care, building more clarity and transparency around wound care evidence requirements and coverage policies and processes is essential. 

At the Wound Care Evidence Summit^™, payers made it clear that they recognized the challenges associated with conducting RCTs for patients with chronic wounds and were open to exploring alternative sources of evidence. Every stakeholder can take steps to improve consensus and minimize coverage challenges. Researchers, manufacturers, and providers need to learn more about payers’ evidence requirements and their opinions regarding RWD and RWE relative to coverage policy. Payers should not automatically exclude products that do not have RCT data, but should consider well-designed and executed published clinical studies that demonstrate a high degree of certainty that the products are safe and efficacious and reflective of the patient population being treated. Moreover, payers should adopt a methodology such as GRADE to judge the quality of evidence and apply it equally to all studies under review.

Patients will benefit when clarity and agreement exist among payers, providers, manufacturers, and researchers with regard to the kinds of evidence that are acceptable to make coverage policy decisions. Meaningful discussions must continue among all stakeholders to explore the methodology payers use in determining coverage policy so that the evidence they require becomes available. Patients are depending on all parties to collaborate with their best interests in mind.