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Are Amniotics Experimental – Like Medicare Auditors Say They Are?

by | Aug 10, 2026 | Cellular / Tissue-Based Products, CTP / Skin Substitutes | 0 comments

Are Amniotics Experimental – Like Medicare Auditors Say They Are?

In October 2025, Michael Crouch posted a guest blog about a Medicare audit of skin substitute/CTP claims outlining some very interesting reasons for the denial of charges, including:

  1. The products used are amniotic membrane allografts. The amniotic membrane acts as a covering in the fetus, provides protection, promotes gas and nutrient exchange, removes carbon dioxide, and produces hormones. Therefore, their use as a skin substitute graft for treatment of an ulcer or wound is a non-homologous use.
  2. These products do not have FDA approval under the Federal Food, Drug, and Cosmetic Act and or section 351 of the PHS Act. In addition, they have insufficient peer reviewed, evidence-based literature to support their use for ulcer or wound treatment or healing. They are investigational and experimental and have insufficient peer-reviewed, published evidence or any evidence-based recommendations by a specialty society or organizations to support their safety, efficacy, or clinical utility, or frequency of use as ulcer or wound healing products. (An interesting side note: Although the MAC determined that none of the products used were “approved” for use as a skin substitute, one of the products denied is on the “approved list” of skin substitutes in the pending future LCDs.)
  3. CPT codes 15271 and 15272, which were billed for these services, specify that products used as skin substitute grafts must provide scaffolding for cell growth and there is no literature-based evidence which demonstrates they provide skin scaffolding.

In a subsequent post, Mr. Crouch provided portion of the Administrative Law Judge’s (ALJ) decision on the issue of whether amniotic membranes were experimental:

  1. The Appellant has demonstrated that the application of the amniotic and fish membranes as covers to wounds refractory to conservative measures were NOT experimental and investigational and their uses were supported by peer-reviewed human trials demonstrating their medical efficacy.
  2. The Appellant has maintained that unlike most products that require formal FDA approval before being considered medically safe and effective, these products do NOT require FDA approval because they are human cells and tissue and cellular and tissue-based products (HCT/Ps) that are eligible to be marketed under section 361 of the Public Health Service (PHS) Act.
  3. Additionally, the Appellant maintains that regardless, there is sufficient support from human clinical trials for safety and effectiveness when used as wound coverings to treat chronic wounds with compromised beneficiaries that fail conservative treatment methods.
  4. In conducting our own review, we DISAGREE with the Medicare contractors that there are no peer reviewed studies to suggest these tissue covers have been shown to be safe and effective. An article from Bioengineering Journal, entitled “Placental-Derived Biomaterials and Their Application to Wound Healing: A Review”, Nicole M. Protzman, Yong Mao, et. al, July 12, 2023, 10(7):829; aids the Appellant’s case.
    • We find that these studies have application to amniotic products regardless of their different names if approved through the FDA Tissue Group. Those studies show that certainly, the use of the amniotic membrane as a wound covering is safe and effective and enhances the body’s ability to heal more than conservative wound treatment methods alone.
  5. Determining whether a medical item is Medicare-covered involves a different determination than whether it has been sanctioned by the FDA. We have to determine, through a hierarchy of sources in declining strength of authority, whether the medical item is eligible to be covered by Medicare.
    • There are no statutes, regulations or NCDs that have the force and effect of law governing the use of amniotic membranes or porcine collagens. Most of the wounds were not diabetic foot or venous stasis ulcers.
    • Thus, we agree with the Medicare contractors for the most part that there were no specific LCDs in the beneficiaries’ jurisdictions regarding the wounds at issue.
    • The next consideration then would be Medicare Manuals. The CMS Medicare Program Integrity Manual (MPIM) 100-08, Chapter 3, §3.6.2.2 establishes the “reasonable and necessary criteria”. However, the fact that there exists a current LCD regarding the use of certain wound coverings, including amniotic membranes, for lower extremity diabetic and pressure ulcers does add some veracity to the Appellant’s point that the wound coverings are not experimental or investigational.

The above ALJ decision was extremely thoughtful. Unfortunately, ALJ decisions do not create “legal precedent” – nor is there even a way to collate ALJ determinations since they cannot be shared without redacting all the protected health information (PHI) and only with the consent of the clinicians involved who may feel uncomfortable doing so. MANY of you have contacted me to tell me that your Medicare claims were denied on the argument that amniotics were experimental. The crux of this issue (I think) has to do with the claims that can be made around a device based on its pathway to market. This complex issue was detailed in an excellent guest blog by Joe Rolley, “What Claims Can Cellular Tissue Product / Skin Substitute Sales Reps Make About Wound Healing? A Closer Look at the Proposed List of 15 in the LCDs”. As Mr. Rolley explained, human tissue that is “minimally manipulated” and is intended for “homologous use” is not regulated by the FDA as a medical device. This means that the manufacturers cannot make specific claims about their use. Despite this reality, over the past few years, I posted many egregious examples of improper communications from sales representatives (Cellular Tissue Products / Skin Substitutes, Medicare Coverage & Sales Reps, What Claims Can an Amniotic “Skin Substitute” Sales Rep Make?), but as far as I know, none were ever held accountable. I do not know if part of the problem is that clinicians stated in the medical record that a specific product was selected in order to (for example) “heal” the wound, or whether such a statement in the medical record can legitimately be used as a reason for denial.  

Although none of the writers asked to be anonymous, I decided not to provide their names because of ongoing legal actions, but here are few examples of your letters around claim denials due to the “experimental” nature of [certain] amniotic products:

Dr. Fife,

Over the past 8 years, I have provided high level care for wound care in the home for complex cases in patients that were either homebound and/or bedbound in NYC, NJ, Long Island and Westchester. In 2023, I underwent a major audit of both surgical debridement of wounds as well as the use of skin substitutes. The first audit was very unfavorable with over 98.9% denial. After providing more documentation during an appeal, UPIC claimed that the allografts were experimental and not medically necessary. We presented evidence to an ALJ in September 2024 with expert witness from another wound care provider. The judge seemed to understand that I optimized all conditions and exhausted all conventional modalities in every patient and only employed biologics in chronic wounds greater than 6 months. We seemed to have a fair hearing with this judge. However, 8-9 months later, we received another unfavorable appeal stating that the CTP/grafts were experimental and not medically necessary.

[Name withheld by CEF]

 

Dr. Fife,

I have suffered a devastating audit on my use of skin substitutes on chronic pressure ulcers in the homecare sector.  There was adequate documentation and all were performed after optimizing all conditions and as a final resort. We appealed at the ALJ level and still received an unfavorable outcome. It took the judge 9 months to render an opinion and merely echoed the UPIC which stated that they are experimental and there is no data to support this despite our expert witness and the literature. Do you have any advice for me on how to proceed? We are obviously taking it to the next level. Any guidance would be greatly appreciated.

 [Name withheld by CEF]

 

Dr. Fife,

I have had to close my practice and declare bankruptcy. After many months of appeals, I received an unfavorable ruling by the ALJ. One of the reasons was that amnions were “experimental” (but other reasons for denial indicated that they never read the records provided so I am not sure it mattered what I provided.) My attorneys tell me that they have seen a lot of these cases and each case continues to be judge dependent (to the point of a favorable and an unfavorable decision on the same encounter which got sent to 2 different judges-another client of my attorney). Additional off the record information provided to me recently is that the judges are receiving memos from higher up essentially directing them that they need to find literally any reason to favor Medicare and permit recoup.

 [Name withheld by CEF]

 

Dr. Fife,

I have acted as an Expert testifying on behalf of practitioners at the ALJ level and I can tell you that practitioners cannot win an ALJ hearing without published data on the product that they used – otherwise the ALJ will determine that the product was experimental. The necessity of published data on specific products cannot be over-stated.

 [Name withheld by CEF]

What do you think about this as a reason for denial of Medicare claims?

Caroline

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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.

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