On November 21, the Centers for Medicare and Medicaid Services (CMS) released final policies affecting payment for Medicare hospital outpatient department services for calendar year (CY) 2026. In the final rule with comment period, CMS finalized significant changes to payment for skin substitutes furnished in outpatient hospital settings that largely align with policies finalized in the CY 2026 Medicare Physician Fee Schedule (MPFS) Final Rule for skin substitutes furnished in non-facility settings.
Specifically, CMS finalized that skin substitute products in sheet form would be treated as separately payable incident-to supplies under the Medicare Hospital Outpatient Prospective Payment System (OPPS). Under the final policy, CMS will unpackage the skin substitute products from the ambulatory payment classifications (APCs) for administration of the product and will assign the products–based on their HCPCS codes–to one of three new APCs that reflect U.S. Food and Drug Administration (FDA) regulatory categories:
APC 6000 (PMA Skin Substitute Products)
APC 6001 (510(k) Skin Substitute Products)
APC 6002 (361 HCT/P Skin Substitute Products)
All products assigned to these APCs will be considered add-on codes that receive separate payment. Payments for products will be set at $127.14/cm2 for CY 2026 across all three APCs. Unlike under the MPFS, payments for skin substitute products under the OPPS will not be geographically adjusted. In the future, CMS will set separate payment rates for each category based on volume-weighted cost data.
Skin substitutes products that are licensed under section 351 of the Public Health Service Act would not be subject to this policy and would continue to be paid as biologicals under the ASP methodology specified in section 1847A of the Social Security Act. Skin substitute products that are in non-sheet form will continue to be packaged with a separately payable service for CY 2026.
Contact the APMA Advocacy Department with any questions or concerns.