Updated December 24: The planned January 1, 2026 LCD crack-down on skin substitutes has been pulled back. As per this Fact Sheet: "CMS’ A/B Medicare Administrative Contractors (MACs) are withdrawing the Local Coverage Determinations (LCDs) for Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers that were scheduled to become effective on January 1, 2026."
CMS launches AI-powered prior authorization the same day 158 skin substitutes lose coverage; Wound Care Advantage updates Authorization Review verification system to help hospitals navigate regulatory collision
SIERRA MADRE, Calif. – On January 1, 2026, hospital wound centers face a regulatory collision unprecedented in the industry's history. On January 1st, 158 skin substitute products will become non-reimbursable under the new Medicare Local Coverage Determinations (LCD). Simultaneously, CMS launches its WISeR program—deploying artificial intelligence to flag and deny claims for wound care services in six states covering millions of Medicare beneficiaries.
Wound Care Advantage (WCA) has updated its Authorization Review verification system to address both areas of concern, providing hospital wound centers with real-time, expert-staffed chart review before treatment decisions are made.
The updated LCDs fundamentally reshape skin substitute coverage. Of the 300+ products on the market, only 18 are now explicitly covered. Another 154 sit in a 12-month "status quo" category—reimbursable for now, but with no guarantee of continued coverage. The remaining 158 will not be paid, effective January 1.
The same day, CMS's Wasteful and Inappropriate Service Reduction (WISeR) program goes live in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The six-year pilot uses AI and machine learning to screen claims before payment, with skin substitutes explicitly named as a target category. Technology vendors participating in WISeR are compensated based on the savings they generate—creating direct financial incentives to deny claims.
"We've never seen anything like this convergence," said Mike Comer, CEO of Wound Care Advantage. "You have coverage rules changing overnight, a new AI-powered audit system launching in six major states, and 154 products in regulatory limbo. The wound centers that don't have a verification system in place are flying blind."
WCA's Authorization Review System is a staffed clinical verification service built into the company's Luvo platform. When a wound center clinician is considering a skin substitute, hyperbaric oxygen therapy, or another advanced modality, they can request a chart review before initiating treatment. WCA's compliance team verifies:
Unlike generic compliance checklists, WCA's Authorization Review System is customized to each wound center's formulary, payer mix, and patient population—delivering same-day verification tailored to the specific clinical scenario.
For wound centers in the six WISeR states, the January 1 launch introduces a choice: submit prior authorization requests through the new AI-driven system, or face traditional post-service audits. Providers who opt out don't escape scrutiny—they simply face it after the claim is filed, when denial means lost revenue and potential recoupment.
CMS has indicated that providers with strong compliance track records may eventually earn "gold card" exemptions from prior authorization. But building that track record requires clean documentation from day one.
"The math is simple," Mike Comer said. "Verify before you treat, or defend after you're audited. We built the Authorization Review System for exactly this moment."
The regulatory tightening follows explosive growth in Medicare skin substitute spending—from $256 million in 2019 to over $10 billion in 2024. OIG investigations, DOJ indictments, and aggressive MAC audits have made wound care one of the most scrutinized categories in Medicare Part B.
For hospital administrators, the stakes extend beyond individual claims. Patterns of denied claims can trigger broader audit exposure, recovery demands, and reputational risk.
January 1, 2026 changes wound care operations overnight. Coverage shifts. AI reviews claims before payment. Errors don’t get corrected—they get denied. Hospital-based wound centers can no longer rely on historical usage, or “what worked last month.” Every advanced therapy must be verified before treatment. WCA’s Authorization Review System gives centers expert, real-time verification of coverage, documentation, and medical necessity before the claim is filed. It protects revenue, reduces audit exposure, and lets clinicians focus on patients—not denials. This is no longer a best practice. It’s required.
For health systems, risk scales quickly. One site’s mistakes become system-wide audit exposure. WISeR and LCD changes demand a unified wound care strategy with centralized oversight and consistent decision-making. WCA’s Authorization Review System standardizes advanced therapy verification across all wound centers, reducing denials, limiting audits, and strengthening compliance at scale. In 2026 and beyond, health systems will win by submitting cleaner claims, avoiding recoupments, and controlling risk across the network. Verification before treatment is how that happens.
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.
