Skin substitutes and possible danger: Is patient harm happening in wound care?

The use of skin substitutes for wound care on patients who were inappropriate candidates for such treatment was associated with a startling rate of hospitalization in a patient cohort — one-third of the patients were hospitalized after the treatments, a Colorado doctor said in an interview.

The practice found that independent specialists who claim to treat wounds that won’t heal were apparently using skin substitutes on the wrong patients and using substandard wound care practices, resulting in serious complications. Skin substitutes, used to treat wounds that do not heal properly, have become a focus of attention because of skyrocketing costs. But it has generally been assumed that skin substitutes are good because — of course — healing any wound must be good. This finding challenges that assumption.

Dr. Danielle Whitacre, chief medical officer at Bloom Healthcare in Lakewood, Colo., said in a Zoom interview that independent wound care specialists inserted themselves into the treatment of Bloom patients and appear to have applied skin substitutes inappropriately, resulting in hospitalization in one-third of the people in a cohort of Bloom patients, because the patients were not good candidates for treatment, and comprehensive wound care treatment practices were not observed.

When used properly, she said, skin substitutes for wound healing are very helpful. But “there is no doubt in my mind that, when used inappropriately, this treatment could be harmful,” she said. “Instead of kickstarting healing, I’m worried that they are firestarters for infection.”

Her statement was echoed by the National Association of Accountable Care Organizations, a trade group for Medicare providers, which said that “some use of biological skin substitutes was abuse or potentially fraudulent,” in a statement made in the comment period for a new set of usage regulations, referred to as the Local Coverage Determinations for skin substitutes, which have apparently been blocked by the Trump administration. A similar opinion challenging the widespread use of skin substitutes in inappropriate cases was expressed by a 20-year veteran consultant in the wound care industry, who spoke on condition of anonymity to avoid endangering an ongoing investigation.

One industry source said Robert F. Kennedy Jr., the Trump administration nominee to head the Department of Health and Human Services, was involved in delaying the implementation of the new regulations, but that could not be confirmed.

The doctor, N.A.A.C.O.S. and the consultant were careful to say that skin substitutes can be extremely helpful when used appropriately, but that they are sometimes being used willy-nilly and without comprehensive wound care practices, including assessment of the whole person. The doctor and consultant also said that the pricing system set up by Medicare seems to encourage some wound care specialists to use the most expensive product, regardless of research on efficacy. (See our previous story here.)

Skyrocketing spending

It may not be a big world, but it’s an important one: Wounds that don’t heal by themselves need special treatment, often by the application of products commonly known as skin substitutes that can be biologic or synthetic — derived from infant foreskins, placentas or cadaver skin, as well as fish skin and some other sources. Treatment of these wounds, including diabetic foot ulcers and venous leg ulcers, as well as other wounds like pressure injuries (bedsores), and some surgical incisions, can avert pain and other complications, including amputations.

The finding on patient harm is important because Medicare spending on skin substitutes and the entire sector for care of non-healing wounds has skyrocketed, with industry figures expressing concern over both the practices of using skin substitutes when they may not be needed or helpful, and also over sharp price increases in the product prices, with new and ever-pricier products coming to market with limited scientific proof of increased efficacy to match increased prices. As a result, new regulations were proposed by the nation’s seven Medicare Administrative Contractors to limit the number of products that are covered by Medicare, and also to impose some other restrictions. They were due to come into effect Feb. 12. But those new regulations, proposed in identical Local Coverage Determinations (L.C.D.’s) by the M.A.C.’s, were postponed Jan. 24 until April 13.

Bloom’s patients are mainly Medicare and Medicaid patients. They are generally frail, elderly and homebound, and may have many conditions and ailments, including chronic diseases, poor nutrition and dementia, Whitacre said.

Bloom gives them home-based primary care, she said. Their practice has about 80 providers; 30 percent of patients are in private homes, and 70 percent are in some congregate care, like assisted living or nursing homes, with 10-15 percent of all patients on hospice care. “We’re doing primary care just in the home, the same kind of care you get in the office setting,” she said.

Whitacre said that Bloom started to notice that independent wound care practices were using questionable methods — marketing directly to assisted living facilities, and operating without coordinating with primary care physicians. They would show up, apply a skin substitute to a wound, and deliver poor documentation, often using incorrect wound coding.

Bypassing normal processes

The independents bypassed normal referral processes, she said: “They were marketing to assisted living, saying, ‘Hey, if you’ve got wound patients, give them to us.'” The assisted living people would respond that Bloom is involved in their care, she said, and the independent practice would say, “‘We’re specialists. We can take care of them too. We don’t need a referral.’ They were knocking on doors and talking to home health and such and getting patients. And some of them happened to be ours.”

Bloom had Medicare claims data for the end of 2022 for a small subset of their population that was in an Accountable Care Organization (A.C.O.), the name for a group of healthcare providers who work together to deliver coordinated care to a specific group of patients. Claims for skin substitute “Q” codes — the Healthcare Common Procedure Coding System (HCPCS) coding category for skin substitutes — increased by 17-fold for the fourth quarter of 2022, over the first quarter of 2022, she said. The Medicare A.C.O. patient data comes in with a lag of 2-4 months, she said; Bloom realized the problem based on seeing the data in early 2023.

Bloom examined the data, she said, and realized that these wound-care entities had been involved, but “we didn’t really know what they were doing. We we didn’t always get notes from them. And when we did get notes, they didn’t even use the right codes for the wounds. It would just say, ‘lower extremity non-pressure ulcers.’ But etiology wasn’t discussed. It did not look like good comprehensive wound care that we’re accustomed to with wound care specialists.”

Poor outcomes

Digging into the data, she said, they realized that the problem was bigger than just the 17-fold increase in spending. There were poor outcomes among the treated patients. They identified 35 Bloom patients — A.C.O. and non-A.C.O. — who “to our knowledge had received treatment with a skin substitute from October 2022 to March 2023.”

About one-third of of patients required hospitalization “for something that looked like infection of the wound,” she said. Complications included osteomyelitis, cellulitis, sepsis, bacteremia and amputations.

Many patients discontinued treatment without healing, the data showed. Fewer than 10 percent of wounds treated with skin substitutes actually healed, she said. (The terminology is a little confusing: While they are commonly called “skin substitutes,” the formal name is officially “cellular and/or tissue-based products” (C.T.P.’s) or “cellular and acellular matrix-based products” (C.A.M.P.’s) — different variations on the theme. Payments are generally based on the price of the procedure plus the price of the product used, but there are different arrangements.)

Bloom sometimes refers patients to a couple of university-based wound care centers, but these centers did not use skin substitutes at all, Whitacre said. The only skin substitutes used on in-home patients came from the independent practices.

Whitacre said Bloom’s mission is to increase access to care — homebound patients are particularly vulnerable.

‘The wrong patient’

She also said she knows that for some patients, skin substitutes and this kind of wound care treatment are valuable.

“Looking at what I’ve seen in the literature and talking to wound care specialists, it seems like skin substitutes can be very appropriate for the right patient, where they’ve got the nutritional intake they would need to heal a wound. They have all the elements for healing in place, but they just need a kickstarter to get them healed.

“That’s not my patient. My patient has issues with pressure that because of cognition or other limits we can’t change, or just really poor nutrition. We’re talking patients who are very, very frail, and have chronic diseases that maybe aren’t optimally managed for various reasons. In my patients, looking at this data, they’re the wrong patient for the substance.”

Lacking comprehensive wound care practices, she said, is part of the problem. With comprehensive care, taking into account the issues like nutrition, or the etiology of the problem — a pressure wound like a bedsore — the ideal is to have a home health nurse visiting three times a week and getting typical interventions.

“I rarely see patients with infection and hospitalizations related to their wounds, so to me, it was astounding to see so many hospitalizations associated with this treatment, and it really makes me concerned that, in the wrong patient, this could be like a firestarter for infection,” she said. “It’s anecdotal. I don’t have proof, but it was really alarming to me to see the association with these entities that were going into our patients’ homes and utilizing these substances.”

To understand the process of applying a skin substitute, here’s a short video on the RXWound site.

No co-pay required

She also said that the patients were not asked to pay the typical 20 percent of the charge –after Medicare Part B pays its 80 percent: “Some of the patients that we spoke with said that they were told they didn’t have to pay a co-pay, to ignore the bill if they saw it. But most of them, I don’t think got a bill.” Record-keeping by individuals on payment for these visits is spotty, she said; a Bloom patient might have a daughter with power of attorney and a son who pays the bills. But Medicare is clearly getting billed, as Bloom saw in its A.C.O. records, while her patients seem not to be asked for the co-pay.

“The thing that has me concerned, that I don’t feel like anybody’s looking at, is the fact that it appears to me that patients are being harmed when these skin substitutes are not being used appropriately. We’ve got a system that, for whatever reason, is motivating people to create business models around the use of skin subs.

“I can tell you, Jeanne, if there is an intervention that’ll heal a wound on my patient, I want it. I want it for my patient. There’s a lot of costs associated with with chronic wounds. And so if there’s a cure, by all means. But this is not a panacea, and I worry that we’re applying it in cases where it could be harmful.

“And that’s what people aren’t talking about, and aren’t seeing.

“I wish somebody would look at it a little closer, in a wider population, to make sure we’re not harming people when we’re using it in the wrong case. I think we need regulations to ensure that we’re only using it in those cases where we expect to see benefit.

“If you’ve got a patient who is unable to offload pressure on a wound, there’s no possible way that a skin sub is going to help. And I would pose that if we’re using a skin sub in a case where the milieu is not right, and and they don’t have the mechanisms for healing in place — what if we’re creating a situation that predisposes them to infection?”

Small cohort

The total number of cases they investigated was small, she said — 35 patients. But if that level of hospitalization was that visible, then red flags should be raised.

Of those cases, about half were pressure ulcers, she said, which would never heal with only a skin substitute, if the pressure isn’t offloaded. In one case, she said, a skin sub was used on a skin tear, “which is not standard of care.”

The remainder, she said, seemed to be diabetic foot ulcers and venous leg ulcerations, but “the notes we had from these providers often said just the location of the wound, but not the etiology. That’s not good clinical medicine.

“If you’re treating a wound, you need to identify why the wound is there, and they weren’t always. I can say in a little over half the cases, it was pressure ulcer. The rest were various non-pressure of some type, but I can’t tell you if it was a D.F.U. or a V.L.U. because they didn’t identify it, which is just crazy to me.”

Training lacking

She said the clinicians providing the skin substitutes might be victims also in a sense.

“We’ve heard that the the providers that are using this stuff in these companies that are creating business models around this are fresh out of school, nurse practitioners who don’t have any wound care training, except for what these entities are giving them,” she said.

“I’m worried for these people. I don’t think they’re evil people, I just think they’re not knowledgeable, and they’ve been trained by their employers and and given perverse incentives for using this stuff. I think they’ve been taken advantage of because they’re new providers, and they don’t have the training. We have talked to a couple of them, and they just didn’t seem like they knew really what was going on.”

Help wanted ads for wound care nurses are common on the internet, promising high pay — $250,000 to $500,000 a year for 15-20 hours a week, in one representative case.

Whitacre said that Bloom has been in touch with its Medicare Administrative Contractor, and that the Office of the Inspector General had reached out to Bloom.

Similar experiences

Have other organizations expressed concern? “People have said, ‘Yeah, we just don’t see the outcomes.’ And have expressed worry. When we talked to assisted livings, they saw an association with not having good outcomes, and so when we said, ‘Hey, we have concerns,’ they’re like, ‘Yeah, we were wondering too, and we’re going to stop using them, because we just don’t see the benefit.’

“Of course, home health organizations are on the hook for re-hospitalizations and different metrics, and so they weren’t seeing great outcomes. But so far, all I’ve heard is anecdotal, like, we see an association with at the least, not getting better, and at the worst, yeah, we think there might be something to people getting worse or being hospitalized.”

The lack of collaboration with primary care providers at Bloom also made for confusion, she said.

Bloom has made sure that these independent wound care providers are not seeing Bloom patients any more, she said, but others may not know what Bloom knows. Bloom does continue to use a couple of university-based wound specialists, she said.

“There’s a couple university wound care programs that we refer to. In that same time frame, they did not use skin subs on any of our patients. There’s something amiss when the specialists out of the university aren’t using the substance in a six-month time frame, but 35 percent of our patients are getting it with people who are not in the upstanding wound care specialist.” She said she did not recall the names of the independent practices.

Pricing structure

What is the solution? For one thing, fix the pricing structure, she suggested — reducing the incentives to apply skin substitutes at will.

“At the height of Covid, when P.C.R.’s for Covid testing were being reimbursed really high, I could call a courier, have them drive to my patient’s house and pick it up same day. But that went by the wayside because they figured out the pricing. That’s fair, right? And today we haven’t.

“We have not decided to reimburse for going to a patient’s house who can’t leave their home. But when there are interventions that are high-margin, all manner of people will get in a car and drive because they can make high enough margins to pay for that courier service. That’s kind of what we’re seeing with skin subs. You can pay a provider windshield time, because they’re making in excess of fair dollars.”

Pricing is also an issue: The skin substitute market, experts said, allows the manufacturers to set the price they want to see, called the Average Sale Price, and Medicare will pay it. So if a first-generation skin substitute, which is still commonly used, is around $120 a square centimeter, newer ones — often similar, but without research underpinnings — are coming to market at $3,000 and $4,000 a square centimeter. This is one flaw in the system that the L.C.D. is intended to fix.

Another problem, industry figures say, is that there are frequent discounts and rebates that Medicare cannot see, often using middlemen. The manufacturer sells the product to a middleman at full price, and the middleman then sells to a clinician at half price — and receives a rebate from the manufacturer and is thus made whole for the discounted sale. The clinician may bill at full price. This is not how the system is supposed to work, though rebates are widely used in the pharmaceutical industry, and are widely known to drive up prices.

In a related development, an Arizona couple who had been charged with fraud relating to skin substitutes in June pleaded guilty on Jan. 31 to $1.2 billion in fraud in wound care. In the fraud case, Alexandra Gehrke and Jeffrey King “were charged by indictment with various counts of conspiracy, health care fraud, receiving kickbacks, and money laundering in connection with an alleged scheme to fraudulently bill Medicare $900 million for highly expensive amniotic allografts. The defendants targeted elderly Medicare patients, many of whom were terminally ill in hospice care, through their companies—Apex Mobile Medical LLC, Apex Medical LLC, Viking Medical Consultants LLC, and APX Mobile Medical LLC,“ the Office of the Inspector General wrote. (See legal document in our previous story.)

The Department of Justice statement on the guilty plea said Gehrke and King, “who had no medical training, directed the nurse practitioners to suspend their own medical judgment and apply all grafts ordered by the sales representatives, even when medically unreasonable and unnecessary, which resulted in the application of grafts to infected wounds, wounds that had already healed, and wounds that were not responding to the grafts.”

This suggests that patients and family members believed they were being treated by professionals working in their best interests, and were being well treated and monitored.

Trade group comment

Bloom’s observations are similar to those noted by the National Association of Accountable Care Organizations, according to a comment by N.A.A.C.O.S. in support of the L.C.D.’s dating to June 2024.

“Skin substitutes are an important adjunct in the management of acute or chronic wounds. However, our members have reported a rapid increase in the use of biological skin substitutes that do not align with clinical needs,” the comment said. “A.C.O.’s are responsible for the total cost of care and outcomes for patients. Accordingly, C.M.S. provides A.C.O.’s with full claims data for attributed beneficiaries. Upon reviewing the increased expenditures, our members were able to review full patient records and determine that some use of biological skin substitutes was abuse or potentially fraudulent. For example, members have reported:

“Using skin substitute products in patients without control of underlying conditions or exacerbating factors. Members have reported that skin substitutes who have been provided to patients who are poor candidates for specialty wound care, including hospice patients receiving significant wound care in the last 3 days of life, patients with inability to off-load pressure or transport without force, and patients who are unable to maintain adequate nutrition.
“Exceeding recommended treatment minimums and continuing to treat wounds that are not improving. Members have reported that the number of units are increasing over time, indicating that the wound is not healing….

“We believe this L.C.D. will address potential overutilization and abuse reported by our members as it clarifies the covered indications and limitations under which the skin substitutes are not considered medically reasonable and necessary.”

Meeting with Medicare

Whitacre wrote in an email that she was among several N.A.A.C.O.S. members who, with N.A.A.C.O.S. officials, spoke with Centers for Medicare and Medicaid Services officials about Medicare’s coverage of skin substitutes.

The meeting was held on July 23, 2024. N.A.A.C.O.S. organized that meeting, she said, and she and a Bloom colleague took part, along with representatives of VillageMD and Physicians of Southwest Washington.

The topic was seeking national guidelines for usage and enforcement strategies.

The meeting took 30 minutes. A.C.O. data regarding skin sub claims trends across the country was presented. Each practice discussed their observations and the clinical outcomes concerns, Whitacre wrote in the email.

Not fully trained

The 20-year industry consultant said some of the wound care specialists appear to be less than fully trained in the full scope of wound care.

“They say ‘Hey, I found this patient. They have a wound, it’s non-healing. God bless them. They’ve been struggling with this for a long time. You might want to get in touch with them.”

The next step, he said, is to see what kind of insurance the patient has. Medicare Advantage plans (sometimes known as Part C) tend to have more denials and prior authorization. So fee-for-service Medicare patients — with “traditional Medicare,” and perhaps a supplementary Part G plan — mean more money than Medicare Advantage patients.

“‘What insurance do they have? If it’s not Medicare B, we’re not going to go see him’ — they don’t want it unless it’s an opportunity for them to apply a wound graft — and use an expensive wound graft.

“Although they’re quote, unquote wound care providers, they’re not interested in wound care. They’re interested in putting on a wound graft. O.K., well, you have a wound, it’s not healing? What you done so far? It’s past 30 days. You got Medicare Part B? You pass. Let’s slap some on there. See what happens.

“There’s other factors that could be involved, why it’s not healing, why it’s chronic. But most lf these providers don’t care about that. They just want to slap a skin sub on. And that’s their model, whether or not the patient really healed or trying to help them, even if they don’t qualify for a skin graft, that’s not their concern. They just want skin graft. And that’s, unfortunately, a large part of the environment right now.

“It’s money, let’s get it while we can,” he said.

Medicare’s role

Why hasn’t Medicare cracked down on this? He said he had spoken with Medicare officials and asked them, saying “it should be easy for you to tell” by running the numbers.

“You look and see who’s who submitted the most claims. And then they said it wasn’t that easy. Well, in my opinion, someone’s doing $1,000 and all of a sudden they start doing three and four and five million, it seems pretty easy to me to say something’s going on,” he said. “And of course, if they’re using the most expensive as opposed to an inexpensive one.

“There should be some simple alarms going off — like why aren’t you using something less expensive? Well, it’s subjective, and unfortunately, they could say, ‘we think the one that costs $4,000 a square centimeter is better than the one that cost $100.’ [See price list below.]

“I said, ‘there’s no clinical evidence to prove that.’ And the answer: ‘Well, yeah, but it’s subjective, and this is his opinion, it is a lot of gray area.’

“But it shouldn’t be that hard to rein this in. I certainly could. I’m not king for a day, but if I was, it wouldn’t be hard to rein this in. But for whatever reason, we’re not. Why haven’t they done something, because obviously they’re aware of it? What’s going on?”

Smaller companies

He said a lot of the sketchy practices come not from industry leaders, because “their moral compass won’t allow them to,” but from smaller companies and new-to-the-market ones that are taking advantage — both manufacturers and clinicians — to apply the skin subs.

Would he name names? No, he said. The bigger companies are well-known. He said a Google search in your area will turn up big ones at the top of search — and then there are small guys, like “Big Tim’s Wound Care Service,” which “doesn’t sound real good.” Or you can look closely at a web listing, and “there’s one guy working out of his house. And then you drill down, and what did this guy do before? He was a manager at Burger King.” It could be “a guy, or maybe two guys, and all they do is skin grafts.”

“Most nurse practitioners that are doing it, I wouldn’t call them wound professionals. They’re warm bodies out there, debriding the wound, slapping an amniotic on it, wrapping it, and then moving on and collecting the reimbursement. There’s not a lot of wound care going on there. That’s not all of them, but those small guys, for sure. That’s all they’re doing.”

Promotions online

The promotions online are pretty convincing: Here’s one from RXWound, and here’s one from Gotwound.com.

On RXWound, the patient is offered $50 to take part in “research,” and the video on GotWound features a man identifying himself as Tony Lani, director of patient care at RXWound.

On the GotWound website, the claims include “zero reported adverse effects.” This seems exaggerated: Nothing has zero adverse effects, and the Bloom and N.A.A.C.O.S. experiences seem to contradict that.

Notwithstanding, the hiring market for wound care companies is quite active. Here’s a Reddit thread with one example.

Role for R.F.K. Jr.?

Meanwhile, the world of wound care is full of conversation about whether the L.C.D. regulations that were delayed for 60 days will eventually be set aside for good.

Some industry sources said the delay was clearly part of the new administration’s sweeping regulatory freeze, and the freeze would indeed end on April 13 as noted on the L.C.D. document on the Medicare site. But others said the skin sub L.C.D. is a special case: Some industry scuttlebutt had it that this L.C.D. would be put off indefinitely “because there’s so much money being made,” as one person put it. This may explain why the wound-care companies keep hiring with such gusto. It’s not clear that people who are hiring on to do this work know that the L.C.D., if implemented, could bring part of the business to a screeching halt.

One public forum on the topic of the L.C.D. said that Robert F. Kennedy Jr., President Trump’s nominee to run the Department of Health and Human Services, has an interest in the L.C.D.

“If you joined our provider call last night, you had the opportunity to hear that RFK fully plans on pushing back the Future effective date of Feb 11 indefinitely,” a commenter named Eric Lankford wrote on the RXWound forum. Lankford is listed on LinkedIn as the owner of RXWound. The screenshot of the post is below.

Screenshot from RXWound forum, captured Jan. 31, 2025 https://www.rxwound.com/forum/general-discussion/great-news-on-lcd

“And even if the LCD goes through the still great news is that all of RxWound products will still be covered for anything non DFU of VLU. This means pressure wounds, burns, excision, incision, post surgical, trauma, and more will still be covered regardless of the LCD outcome. …

“(And if you see any other trolls or negativity being posted by so called experts on this forum, please report them to myself or your manager immediately. They will be immediately blocked. Thank you!) ☺️”

(I have asked RXWound several times for an interview with Lankford but did not hear back by publication time; I will update if we hear back. Kennedy’s office at MAHANow did not respond to a request for comment; I will update if we hear back.)

The consultant said that the L.C.D. delay in late January resulted in a change in the market: The manufacturers and clinicians had been holding their breath to see what would happen, he said. But with the announcement of the delay, and industry scuttlebutt that the L.C.D. would be fully laid aside, they are full steam ahead.

“That has sparked the companies now to say ‘All right, let’s go hire more people. Let’s do everything we can in the next 60 days. And more than likely, it’s going to get kicked down the road again,'” he said. “In fact, I was just on a call with a group who’s doing a big recruiting drive right now, all over the United States, they’re trying to recruit people to come in and start selling.”

Do you have things to tell us about the wound care or skin substitute industry? Reach Jeanne Pinder at email jeanne@clearhealthcosts.com or encrypted Signal at 914-450-9499.