High Costs and Political Influence Cloud Medicare Skin Substitute Policy

Extremity Care, a company known for its high-cost skin substitute products covered by Medicare, has made significant political donations, including $5 million to Donald Trump’s super PAC and $2.5 million towards the construction of a new White House ballroom.

These political contributions coincided with delays and opposition to regulatory efforts aimed at barring Medicare coverage of Extremity Care's products, which lack scientific validation compared to alternative skin substitutes that are both more effective and substantially less expensive.

The Biden administration initially proposed a rule to restrict Medicare payments to scientifically proven skin substitutes, aiming to curb misuse and excessive spending. Despite this, the Trump administration delayed the rule, resulting in a marked increase in Medicare spending on skin substitutes, projected to reach $15.4 billion by the end of 2025. CMS data show that many alternatives to Extremity Care's costly products are backed by scientific evidence and cost significantly less per square inch.

In contrast to the Biden rule, a Trump administration proposal suggested capping payments at $806 per square inch, a figure supported by neither comprehensive scientific efficacy nor the lower market prices of many validated products. Industry groups, including the Medicare Access to Skin Substitutes Coalition which represents Extremity Care, oppose this cap, arguing it underestimates production costs and could limit patient access. They advocate for higher reimbursement rates, citing paid research endorsements.

These policy debates and financial influences highlight significant challenges in Medicare’s oversight of skin substitute reimbursements. The intersection of political donations, regulatory delays, and Medicare spending growth raises concerns about the sustainability and integrity of payer/provider relationships in this sector. Stakeholders should monitor ongoing regulatory developments and industry responses as they have substantial implications for Medicare’s cost management and clinical effectiveness safeguards.