Medicare Fraud: Examining the Explosive Growth in Skin Substitute Spending

This GOP Oversight subcommittee roundtable held on July 21, 2026, focused on the explosive growth and rampant fraud in Medicare spending on skin substitute products used for wound care. Witnesses detailed how flawed Medicare reimbursement policies, including a fee-for-service payment system that reimbursed skin substitutes by square centimeter at excessively high rates, created incentives for fraud and abuse. Spending on these products surged to $14.4 billion, with some providers billing for medically unnecessary procedures or services never rendered. The discussion highlighted recent CMS reforms capping reimbursement rates and efforts to improve oversight, but witnesses emphasized the need for further changes such as adjusting application fees, linking reimbursement to actual provider costs, and requiring FDA clearance for products. The hearing also addressed the balance between combating fraud and ensuring patient access to legitimate wound care, especially in rural and home-based settings. Panelists called for enhanced prepayment review processes, better data sharing with accountable care organizations, and more timely government action to prevent wasteful spending. The meeting underscored the complexity of addressing fraud while preserving innovation and access in this critical healthcare sector.