New year, new changes to CTP use
Starting April 13, a new Local Coverage Determination (known as LCD L35041) will significantly narrow the range of cellular and tissue-based products (CTPs) covered by Medicare for treating non-healing diabetic foot ulcers and venous leg ulcers. According to the National Institutes of Health, the prevalence of non-healing diabetic foot ulcers (DFUs) is around 6.3% globally among adults with diabetes, while venous leg ulcers (VLUs) affect approximately 1-2% of the general population, with a significantly higher rate in older adults, often reaching up to 5% in individuals over 65 years old.
Practitioners in all jurisdictions should prepare to comply with the LCD L35041 and ensure proper clinical and documentation practices. Failure to do so could lead to claim denials, audits and repayment demands.
What are the key points to know?
- Reduction in covered products: The list of eligible CTPs will shrink from over 200 to
just 18 products.
- Focus on evidence-based efficacy: Medicare will only cover products that have demonstrated efficacy in published research.
- Cost-containment goals: The LCD supports CMS' broader effort to control healthcare costs while ensuring clinical effectiveness.
Additionally, providers should understand the changes and limitations related to LCD L35041.
Key changes:
- The application limit was increased from four to eight, and the duration of an episode was extended from 12 to 16 weeks.
- If a DFU or VLU has failed to respond to standard of care treatment after four weeks, the addition of a skin substitute graft/CTP may be considered reasonable and necessary.
- Medicare expects the mean number of skin substitute graft/CTP applications associated with wound healing to be four.
- If more than four applications are needed, a KX-modifier must be used. This modifier requires the provider to attest that the LCD requirements are met and that additional applications are medically necessary.
- The skin substitute graft/CTP must be used efficiently, selecting the most appropriate size for the specific treatment at the time.
- Only skin substitute grafts/CTP with labeled indications for use over exposed muscle, tendon or bone will be considered reasonable and necessary for those indications.
Key limitations:
The following uses of skin substitute grafts/CTPs are not considered reasonable and necessary:
- More than eight applications of a skin substitute graft/CTP within a 16-week episode of care.
- Repeat applications of skin substitute grafts/CTP when a previous application was unsuccessful. Unsuccessful treatment is defined as an increase in size or depth of an ulcer, no measurable change from baseline, and/or no sign of improvement or indication that improvement is likely (such as granulation, epithelialization or progress towards closure).
- Application of skin substitute grafts/CTP in patients with inadequate control of underlying conditions or exacerbating factors, or contraindications.
- Placement of skin substitute grafts/CTP on an infected, ischemic or necrotic wound bed.
OIG work plan
Shortly after LCD L35041was released, in November 2024, the Office of Inspector General (OIG) announced two new work plan items for 2025 related to skin substitute manufacturers’ reporting and Medicare payments for skin substitutes.
- Medicare Part B payments for skin substitutes: OIG will review Medicare Part B claims for skin substitutes to identify payments that were at risk for noncompliance with Medicare requirements.
- Average sales price (ASP) reporting for skin substitutes: OIG will address manufacturer noncompliance with ASP reporting requirements for skin substitutes that led to excessive Part B payments.
Learn more about the requirements around LCD L35041 and the 2025 OIG work plan.