Healthcare reimbursement is changing again. This time the shift directly affects skin substitutes and cellular and tissue based products. These products include many birth tissue derived grafts used in wound care.
And after reviewing, these new rules bring opportunity but also some real challenges for providers.
This update explains what is changing, when it becomes effective, and how it impacts access to birth tissue therapies.
Medicare. Tighter Coverage and Higher Evidence Requirements
All Medicare Administrative Contractors have finalized Local Coverage Determinations for skin substitutes used in diabetic foot ulcers and venous leg ulcers.
Implementation was delayed to April 13, 2025. Full transition aligns with national reimbursement changes beginning January 1, 2026.
The policy now requires:
- A chronic non healing DFU or VLU
- A documented period of standard of care
- Vascular assessment
- Evidence of standard care failure
- Detailed procedure and product documentation
The number of applications is also defined. Up to eight applications may be allowed in a twelve to sixteen week treatment episode. This is a significant change and signals a more structured method of oversight.
2026 Payment Shift. One Rate for Many Products
Beginning January 1, 2026, Medicare will shift reimbursement for many skin substitutes into a unified payment model. The product will be treated as a supply furnished in a covered procedure. Rates will be based on regulatory pathway. For example 361 HCT P products will be grouped together rather than priced individually.
Medicare officials have pointed to dramatic growth in spending for skin substitutes. The new structure aims to reduce variation and encourage more consistent billing and documentation.
Commercial Payers. Earlier and Stricter Rules
Commercial insurers have already moved ahead on new coverage rules. Several large plans now require documented standard care failure, wound measurement, and clinical justification. Some include specific product lists and HCPCS codes. Effective dates vary by payer. UnitedHealthcare updated its skin and soft tissue substitutes policy in October 2025. Other plans, including Medicaid plans, have also revised policies.
Providers should expect more prior authorization, narrower product lists, and higher documentation standards.
What This Means for Birth Tissue Derived Therapies
Birth tissue derived amniotic and placental grafts are often used in complex wounds. The new rules do not eliminate access but they do demand stronger evidence and better clinical documentation.
Members should prepare for:
- More precise wound assessment
- Clear proof of standard care failure
- Vascular testing when required
- Product identification and regulatory classification
- Tracking of applications and treatment episodes
Products that can demonstrate safety, efficacy, and economic value will be better positioned. Products that rely on minimally documented claims or lack controlled data may face increased restriction.
Why This Matters
Birth tissue therapies remain an important option for limb preservation and healing of difficult wounds. Many patients with diabetes or vascular disease depend on advanced wound care to prevent severe complications. These policy changes will shape who receives care and which products remain available. The American Amnion Association will continue to monitor coverage policies and advocate for responsible and ethical access to birth tissue therapies.
Providers, distributors, and manufacturers should review their documentation practices now as preparation will protect access for patients who need these treatments most.
Next Steps for Members
- Review MAC LCDs and commercial payer policies in your region
- Audit clinic documentation and billing workflows
- Confirm that your product information reflects its regulatory pathway
- Educate clinical staff about the change effective January 1, 2026
- Watch for additional payer updates in early 2026
The Association will continue to report policy changes and provide guidance for safe clinical use of birth tissue derived grafts. If you would like policy summaries tailored to your state or payer mix please contact Theresa Hong at theresa@americanamnion.org.