Medicare Ends Coverage for 158 Skin Substitutes January 1 as AI-Powered Claim Review Launches in Six States
Most wound centers are still operating with formularies that include products losing coverage in ten days”
LOS ANGELES, CA, UNITED STATES, December 22, 2025 /EINPresswire.com/ -- Hospital wound centers face unprecedented regulatory shift; industry experts urge compliance review before twin deadlines take effect— Mike Comer, CEO of Wound Care Advantage.
Hospital wound centers nationwide face a major regulatory shift on January 1, 2026, when two significant Medicare changes take effect simultaneously: new Local Coverage Determinations that eliminate reimbursement for 158 skin substitute products, and the launch of CMS's WISeR program—an AI-powered prior authorization system targeting wound care claims in six states.
The convergence creates immediate compliance challenges for hospitals still using products that will become non-covered, and longer-term documentation pressures for wound centers in WISeR states where claims will face algorithmic review before payment.
What's Changing January 1
The updated LCDs represent the most significant overhaul of skin substitute coverage in Medicare history. Of 330 product codes reviewed by Medicare Administrative Contractors:
- 158 products are now classified as non-covered—claims will be denied
- 154 products remain in a 12-month "status quo" category pending additional clinical evidence
- Only 18 products earned full covered status with adequate evidence support
The changes follow a period of intense scrutiny of the skin substitute market, where Medicare spending exploded from $256 million in 2019 to over $10 billion in 2024—growth that triggered OIG investigations and DOJ enforcement actions across the industry.
AI Prior Authorization Adds Second Layer of Scrutiny
The same day the LCD changes take effect, CMS launches its WISeR (Wound care Improvement through Streamlined Evaluation and Reimbursement) pilot program in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program requires prior authorization for certain wound care services, with AI-driven review of documentation before treatment.
Providers in these states face a choice: participate in prior authorization or face continued post-service audits. CMS has indicated that providers demonstrating strong compliance may eventually earn exemptions, but building that track record requires clean documentation from the outset.
Hospital Systems Urged to Review Formularies and Processes
Industry observers say many hospital wound centers are unprepared for the dual compliance burden.
"Most wound centers are still operating with formularies that include products losing coverage in ten days," said Mike Comer, CEO of Wound Care Advantage. "And the documentation standards that worked last year won't necessarily survive AI review. Hospital systems need to audit both their product mix and their charting practices before January 1—not after denials start arriving." Comer notes that the regulatory environment rewards proactive verification over reactive appeals. "The cost of confirming compliance before treatment is a fraction of fighting a denial after the fact. That math gets worse when patterns of denied claims trigger broader audit exposure."
Resources for Hospital Wound Centers
Wound Care Advantage has published updated guidance on the LCD changes and WISeR requirements, including product coverage status and documentation thresholds. WCA’s platform includes an Authorization Review verification system that provides real-time chart review to help clinicians confirm product eligibility and documentation compliance before treatment decisions.
About Wound Care Advantage
Wound Care Advantage has supported hospital-based wound care programs since 2002. The company's consultative model helps health systems transition from outsourced management contracts to clinically excellent, financially sustainable in-house operations. WCA's Luvo platform provides real-time analytics, compliance monitoring, and the Authorization Review System verification service to wound centers nationwide.
Chris Schellenbach
Wound Care Advantage
+1 888.484.3922
info@thewca.com
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