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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that Per the American Medical Association and the CPT Manual, ?Skin Replacement Surgery? or 
?Skin Substitute Grafting? is a conceptual model focusing on the work and services provided regardless of the 
product used. This removes the requirement for maintenance and education on the use of supply codes that 
have little impact on the "typical patient" or the provider effort for application of the product. The application 
of skin substitute (or CTP) is distinguished according to the wound characteristics and surface area rather than 
by product description. Currently, no product has demonstrated individual superiority for the treatment of 
diabetic foot ulcers (DFU) and venous leg ulcers (VLU) of the lower extremity, and, frequently such products 
are utilized inappropriately. 
 
Non-graft wound dressings are generally included in standard wound care management; such products may 
provide value and, in fact, may preclude the need for skin substitute application. 
 
Standard treatment of chronic lower extremity ulcers or skin loss (e.g., DFU or VLU) primarily includes 
infection and edema control, mechanical offloading, mechanical compression or limb elevation, debridement of 
necrotic or infected tissue, and management of concomitant and inciting medical issues (blood glucose control, 
tobacco use). Maintenance of a therapeutic environment with appropriate dressings to preclude further trauma 
facilitates development of healthy granulation tissue and encourages re-epithelialization. A wound that fails to 
show evidence of healing by contraction and advancement of epithelial margins following 4 weeks of 
optimization, including all aspects of standard therapy, is considered a chronic non-healing wound and falls 
into the auspices of this LCD. The fundamental basis for non-healing of a wound is of paramount importance 
and must be corrected prior to consideration of additional therapy. 
 
The depth of skin loss is the determinant of its ability to return. Full thickness skin loss, implying the loss of all 
elements of the epidermis and dermis, will require re-epithelization of the surface once a clean granular base is 
established. Both full and partial thickness skin loss may benefit from enhanced products referred to as Skin 
Substitutes. Though no skin substitutes are capable of replacing the patient?s own skin, they have been 
demonstrated to allow scaffolding for the growth of epithelium, enzymatic cleansing and provision of growth 
factors beneficial to deficit reduction and re-epithelization. 
 
This document addresses the management of chronic non-healing wounds or skin deficits of the lower 
extremities with the goal of wound and skin closure when standard or conservative measures have failed. While 
lower extremity ulcers have numerous causes such as burns, trauma, immobility, ischemia or other neurologic 
impairment, over 90% of the lesions are related to venous stasis disease and diabetic neuropathy. Therefore, the 
focus of this policy is the application of bioengineered skin substitute material to diabetic foot ulcers and 
venous leg ulcers of the lower extremities and the reasonable and necessary (R&N) threshold for utilization of 
skin substitutes. Particular emphasis is placed on the indications for application of bioengineered skin substitute 
material for DFU and VLU. 
 
Patients receiving a skin substitute graft must be under the care of a physician licensed by the state with full 
scope of practice for the treatment of the systemic disease process(es) etiologic for the condition (e.g., venous 
insufficiency, diabetes, neuropathy). This concurrent medical management and the identity of the managing 
medical physician shall be clearly discernable in the medical record and available upon request. 
 
Medicare coverage for wound care on a continuing basis, for a single wound, in an individual patient is 
contingent upon evidence documented in the patient?s medical record that the wound is improving in response 
to the wound care being provided.  
 
Since it is neither reasonable nor medically necessary to continue a given type of wound care in the absence of 
wound improvement, it is expected that the wounds response to treatment will be documented in the medical 
record at least once every 30 days for each episode of wound treatment and made available to the contractor 
upon request. 
 
Documentation of response requires measurements of the initial ulcer, measurements at the completion of at 
least four weeks of appropriate wound care and measurements immediately prior to placement and with each 
subsequent placement of the bioengineered skin substitute or CTP. 
 
Definitions per CPT: 
 
Autografts/tissue cultured autografts: Include the harvest or application of an autologous skin graft. 
 
Skin substitute grafts: Include non-autologous human cellular and tissue products (e.g., dermal or epidermal, 
cellular and acellular, homograft or allograft), non-human cellular or tissue products (i.e., xenograft), and 
biological products (synthetic or xenogeneic) that are applied in a sheet over an open wound to augment wound 
closure or skin growth. 
 
Covered Indications 
 
Chronic Wounds are defined as wounds that do not respond to standard wound treatment for at least a 30 day 
period during organized comprehensive conservative therapy. 
 
For all wounds, documentation (as outlined in the documentation requirements of the policy) and a 
comprehensive treatment plan, before initiation of a specialized wound therapy product is required. 
 
For purposes of this LCD a Failed Response is defined as an ulcer or skin deficit that has failed to respond to 
documented appropriate wound-care measures, has increased in size or depth, or has not changed in baseline 
size or depth and has no indication that improvement is likely (such as granulation, epithelialization or progress 
towards closing). 
 
Medicare covers application of skin substitutes to Ulcers or Wounds with Failed Response that are: 
 
    Partial- or full-thickness ulcers, not involving tendon, muscle, joint capsule or exhibiting exposed bone or 
sinus tracts, with a clean granular base; 
    Skin deficit at least 1.0 square centimeter (cm) in size; 
    Clean and free of necrotic debris or exudate; 
    Have adequate circulation/oxygenation to support tissue growth/wound healing as evidenced by physical 
examination (e.g., Ankle-Brachial Index [ABI] of no less than 0.60, toe pressure greater than 30 millimeters of 
mercury [mmHg]); 
    For diabetic foot ulcers, the patient?s medical record reflects a diagnosis of Type 1 or Type 2 Diabetes and 
also reflects medical management for this condition. 
 
Wound healing is impaired by the systemic use of tobacco. Therefore, ideally patients who have smoked will 
have ceased smoking or have refrained from systemic tobacco intake for at least 4 weeks during conservative 
wound care and prior to planned bioengineered skin replacement therapy. 
 
Documentation (in the pre-service record) specifically addressing circumstances as to why the wound has 
failed to respond to standard wound care treatment of greater than 4 weeks and must reference specific 
interventions that have failed. Such record should include updated medication history, review of pertinent 
medical problems that may have occurred since the previous wound evaluation, and explanation of the planned 
skin replacement surgery with choice of skin substitute graft product.  
The procedure risks and complications should also be reviewed and documented. Documentation of smoking 
cessation counseling and cessation measures prescribed, if applicable, must also be documented in the patient's 
record. 
 
Application of a skin substitute graft for lower extremity chronic wound (DFU and VLU) will be covered when 
the following conditions are met for the individual patient: 
 
    Presence of neuropathic diabetic foot ulcer(s) having failed to respond to documented conservative wound-
care measures of greater than four weeks, during which the patient is compliant with recommendations, and 
without evidence of underlying osteomyelitis or nidus of infection. 
    Presence of a venous stasis ulcer for at least 3 months but unresponsive to appropriate wound care for at least 
30 days with documented compliance. 
    Presence of a full thickness skin loss ulcer that is the result of abscess, injury or trauma that has failed to 
respond to appropriate control of infection, foreign body, tumor resection, or other disease process for a period 
of 4 weeks or longer. 
 
In all wound management the ulcer must be free of infection and underlying osteomyelitis with documentation 
of the conditions that have been treated and resolved prior to the institution of skin substitute therapy. For 
purposes of this LCD, appropriate therapy includes, but is not limited to: 
 
    Control of edema, venous hypertension or lymphedema 
    Control of any nidus of infection or colonization with bacterial or fungal elements 
    Elimination of underlying cellulitis, osteomyelitis, foreign body, or malignant process 
    Appropriate debridement of necrotic tissue or foreign body (exposed bone or tendon) 
    For diabetic foot ulcers, appropriate non-weight bearing or off-loading pressure 
    For venous stasis ulcers, compression therapy provided with documented diligent use of multilayer 
dressings, compression stockings of greater than 20 mmHg pressure, or pneumatic compression 
    Provision of wound environment to promote healing (protection from trauma and contaminants, elimination 
of inciting or aggravating processes) 
 
You can find this information in Medicare's Local Coverage Determination (LCD): Application of 
Bioengineered Skin Substitutes to Lower Extremity Chronic Non-Healing Wounds (L35041). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.