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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 state that the addition of Skin Substitutes or Cellular or Tissue Based Products (CTPs) to certain 
wounds may afford a healing advantage over dressings and conservative treatments when these options appear 
insufficient to affect complete healing. 
 
There are currently a wide variety of bioengineered products available for soft tissue coverage to affect closure. 
These products may be derived from allogeneic, xenogeneic, synthetic sources or a combination of any or all of 
these types of materials. However, without the component of the recipient's own distinct epithelium and 
cellular skin elements, permanent skin replacement or coverage by the graft cannot be accomplished. 
 
Autologous skin grafts, also referred to as autografts, are permanent covers that use skin from different parts of 
the individual's body. These grafts consist of the epidermis and a dermal component of variable thickness. A 
split-thickness skin graft (STSG) includes the entire epidermis and a portion of the dermis. A full thickness 
skin graft (FTSG) includes all layers of the skin. Although autografts are the optimal choice for full thickness 
wound coverage, areas for skin harvesting may be limited, particularly in cases of large burns or venous stasis 
ulceration. Harvesting procedures are painful, disfiguring and require additional wound care. 
 
Allografts which use skin from another human (e.g., cadaver) and Xenografts which use skin from another 
species (e.g., porcine or bovine) may also be employed as temporary skin replacements, but they must later be 
replaced by an autograft or the ingrowth of the patient's own skin. 
 
Bioengineered Skin / Cultured Epidermal Autografts (CEA) are autografts derived from the patient's own skin 
cells grown or cultured from very small amounts of skin or hair follicle. Production time is prolonged. One 
such product is grown on a layer of irradiated mouse cells, bestowing some elements of a xenograft. Wide 
spread usage has not been available due to limited availability or access to the technology. 
 
Bioengineered Skin Substitutes or Cellular and Tissue Based Products (CTPs), referred to as Skin Substitutes 
by CMS, The Current Procedural Terminology (CPT) and The Healthcare Common Procedure Coding 
Manuals, have been developed in an attempt to circumvent problems inherent with autografts, allografts and 
xenografts. These constitute biologic covers for refractory wounds with full thickness skin loss secondary to 
3rd degree burns or other disease processes such as diabetic neuropathic ulcers and the skin loss of chronic 
venous stasis or venous hypertension. The production of these biologic skin substitutes or CTPs varies by 
company and product, but generally involves the creation of immunologically inert biological products containing protein, hormones or enzymes seeded into a matrix which may provide protein or growth factors 
proposed to stimulate or facilitate healing or promote epithelization. A variety of biosynthetic and tissue-
engineered skin substitution products marketed as Human Skin Equivalents (HSE) or Cellular or Tissue-based 
Products (CTP) are manufactured under an array of trade names and marketed for a variety of indications. All 
are procured, produced, manufactured, processed and promoted in sufficiently different manners to preclude 
direct product comparison for equivalency or superiority in randomized controlled trials. Sufficient data is 
available to establish distinct inferiority to human skin autografts and preclude their designation as skin 
equivalence. 
 
Bioengineered skin substitutes or CTPs are classified into the following types: 
 
    Human skin allografts derived from donated human skin (cadavers) 
    Allogeneic matrices derived from human tissue (fibroblasts or membrane) 
    Composite matrices derived from human keratinocytes, fibroblasts and xenogeneic collagen 
    Acellular matrices derived from xenogeneic collagen or tissue 
 
Human Skin Allografts are bioengineered from human skin components and human tissue which have had 
intact cells removed or treated to avoid immunologic rejection. They are available in different forms promoted 
to allow scaffolding, soft tissue filling, growth factors and other bioavailable hormonal or enzymatic activity. 
 
Allogeneic Matrices are usually derived from human neonatal fibroblasts of the foreskin that may contain 
metabolically active or regenerative components primarily used for soft tissue support, though some have been 
approved for the treatment of full-thickness skin and soft tissue loss. Most are biodegradable and disappear 
after 3-4 weeks implantation. 
 
Composite Matrices are derived from human keratinocytes and fibroblasts supported by a scaffold of synthetic 
mesh or xenogeneic collagen. These are also referred to as human skin equivalent but are unable to be used as 
autografts due to immunologic rejection or degradation of the living components by the host. Active cellular 
components continue to generate bioactive compounds and protein that may accelerate wound healing and 
epithelial regrowth. 
 
Acellular Matrices are derived from other than human skin and include the majority of bioengineered skin 
substitutes. All are composed of allogeneic or xenogeneic derived collagen, membrane, or cellular remnants 
proposed to simulate or exaggerate the characteristics of human skin. All propose to promote healing by the 
creation of localized intensification of an array of hormonal and enzymatic activity to accelerate closure by 
migration of native dermal and epithelial components, rather than function as distinctly incorporated tissue 
closing the skin defect. 
 
For the purpose of this LCD, consideration is given to the use of dermal or epidermal substitute tissue of 
human or non-human origin, with or without bioengineered or processed elements, with or without 
metabolically active elements, with a designated use as coverage for a superficial skin deficit that has persisted, 
despite optimal wound care for a period of 4 weeks or greater. These products are those referred to as Human 
Cellular or Tissue Based Products (CTPs) or Skin Substitutes. 
 
Evaluation of the clinical literature indicates that studies comparing the efficacy of bioengineered skin 
substitute to alternative wound care approaches with patients' autologous skin are limited in number, apply 
mainly to generally healthy patients, and examine only a small portion of the skin substitute products available 
in the United States. Therefore, all products with U.S. Food and Drug Administration (FDA) 
clearance/approval or designated 361 HCT/P exemption used in accordance with that product's individualized 
application guidelines will be equally considered for the purpose of this LCD and may be considered 
reasonable and necessary. You can find this rule at Centers for Medicare and Medicaid Services, Local Coverage Determination (LCD) 
L35041, Application of Bioengineered Skin Substitutes to Lower Extremity Chronic Non-Healing Wounds. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.