Organogenesis Applauds CMS Proposal for Skin Substitute Payment Reform, Urges Refinements for Patient Access and Innovation

Organogenesis Holdings applauds CMS' proposed payment approach for skin substitutes/cellular and tissue-based products under the CY 2026 Physician Fee Schedule. The company urges CMS to establish 2026 payment rates based on clinical value and relative cost. The new payment structure aims to curb abuse and ensure consistent payment across sites of care, while promoting access to innovative wound healing technologies.

The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule for the 2026 Medicare Physician Fee Schedule (PFS), which includes significant updates to payment rates and methodologies. Organogenesis Holdings, a company specializing in skin substitutes and cellular and tissue-based products, has expressed support for CMS's proposed approach, emphasizing the importance of aligning payments with clinical value and relative cost.

Key Proposed Changes

1. Conversion Factors: The proposed rule introduces two separate conversion factors, one for qualifying alternative payment model (APM) participants and another for non-qualifying APMs. The qualifying APM conversion factor is proposed to increase by 0.75% (from $32.35 to $33.59), while the non-qualifying APM conversion factor is set to increase by 0.25% (from $32.35 to $33.42).

2. Efficiency Adjustment: CMS is proposing an efficiency adjustment to work relative value units (RVUs) for non-time-based services. This adjustment, based on the Medicare Economic Index (MEI) productivity adjustment, is set at -2.5% for CY 2026. This move aims to address potential overinflation in the valuation of many PFS services.

3. Practice Expense Methodology: CMS is not proposing to implement data from the AMA’s Physician Practice Information (PPI) and Clinician Practice Information (CPI) Surveys for 2026 rate setting due to concerns about small sample sizes, low response rates, and representativeness. Instead, CMS is proposing significant updates to the PE methodology to better reflect current clinical practice, including recognizing greater indirect costs for practitioners in office-based settings compared to facility settings.

4. Telehealth Services: The proposed rule simplifies the process for adding services to the Medicare Telehealth Services List by removing the distinction between provisional and permanent services. It also proposes to permanently remove frequency limitations for certain services and adopt a definition of virtual direct supervision for applicable incident-to services.

Implications for Skin Substitutes

Organogenesis Holdings applauds the CMS proposal for its potential to promote access to innovative wound healing technologies. The company urges CMS to establish 2026 payment rates based on clinical value and relative cost, aiming to curb abuse and ensure consistent payment across sites of care. By aligning payments with clinical outcomes and costs, the new structure can help incentivize the adoption of advanced wound healing technologies.

Conclusion

The proposed CMS rule for the 2026 Physician Fee Schedule represents a significant step towards a more efficient and equitable healthcare system. By addressing issues such as overinflation in service valuations and ensuring that payments reflect clinical value and relative cost, the rule has the potential to improve access to innovative technologies and promote better healthcare outcomes.

References

[1] https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-pfs-proposed-rule-cms-1832-p