Politico released an article about the billion dollar scam of “skin substitutes.” It’s behind a pay wall, so I will summarize the key points. (I will use the term “skin substitutes” since that’s how they are referred to in the Politico article.) Since I started writing about fraud in the skin sub industry, I have gotten a lot of phone calls, texts and private emails that I have not been at liberty to share. I had a call from a physician medical director of one of the ACOs mentioned in the Politico article telling me about the MILLIONS of dollars they were being charged per patient for in-home use of skin subs. I had a call from a physician who does claims reviews for the private payers that act as “secondary insurers” for patients with Medicare. He told me the private payers were seeing huge claims for skin substitutes because previous skin sub charges had used up all the patients’ Medicare benefits, at which point the secondary payer became responsible for the skin sub charges.

I saw in my own “Field Test”, a project initiated by CMS to measure the cost of “non-pressure ulcers,” that “my” costliest patient had stopped seeing me and started getting skin subs placed at home by a nurse practitioner in my city now working for a new mobile wound practice (and I assure you that this patient was not a candidate for a CTP). Medicare allocated her skin sub charges to ME for stupid reasons I’ve already discussed:

• Cellular Tissue Products (CTPs) / Skin Substitutes in the Home Setting – What Do We Think?
• Attention All Wound Care Practitioners – If You Want to Stay in Practice, Download Your Field Test Report Before March 14

Here are the high points of the Politico article:

• .Tennessee-based physician network, Upperline Health, noticed last fall that one patient had received $1.5M in wound care treatments
  • This particular patient got a skin substitute applied every other day for 3 weeks.
• At least 5 other physician groups have noticed huge spikes in the use of “skin substitutes” since 2022.
• Colorado-based Bloom Healthcare saw a 17-fold increase in wound care spending starting in late 2022 and alerted the Department of Justice (DOJ).
• At the beginning of 2022, Medicare spent about $10 million a month on skin substitutes but by November, it was roughly $80 million, according to an estimate from the University of Pennsylvania.
• The Accountable Care Organization (ACO) Revere Health spent $7.4 million in 2023 on skin substitutes, a 165% increase from 2022.
  • $2.8 million of that total was on one patient.

“One possible reason for the spending spike is an increasing number of patients are being treated at independent clinics or through home health companies without supervision from their regular physician, according to several groups interviewed by POLITICO.”

This is a multi-billion dollar fraud that preys on the elderly, and is impacting the future of Medicare, secondary payers, and ACOs. The two wound company owners who have been jailed for kickbacks are only the tip of the iceberg. There will likely be doctors and nurse practitioners in jail before it is over. And if you are a home health agency – stop taking kickbacks for referring patients to a mobile wound care company.

Meanwhile, the cost of new amniotics moved past $3000/cm2.

• Counting the Cost of Cellular and/or Tissue Based Products (CTPs) in Diabetic Foot Ulcers: Is There a Justifiable Price Limit Per Square cm?
• Pricing Trends in Cellular Tissue Products (CTPs) / Skin Substitutes / CAMPs – and Why Publishing the ASP is Not Helping

If you are a practitioner involved in this business STOP now, and report yourself. Doing so might keep you out of jail. You should also be careful who you tell about that second home and that fancy car that you purchased with our Medicare dollars. The legitimate wound care practitioners in this country are really angry.

Caroline Fife, M.D.

Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos

The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.