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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 application of a skin substitute graft for lower extremity DFU and VLU will be covered 
when the following conditions are met and documented as appropriate 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. 
- Presence of a chronic, non-infected venous stasis ulcer with failure to respond to documented 
conservative wound-care measures (outlined below) for greater than 4-6 weeks with documented 
compliance.  
- For purposes of this LCD, conservative wound care measures include, but are not limited to: 
o Comprehensive patient assessment (history, exam, ABI (Ankle-Brachial Index) & diagnostic 
test as indicated) and implemented treatment plan.  
o For patient with DFU-assessment of type I vs. II Diabetes Mellitus and management history 
with attention to certain comorbidities (vascular disease, neuropathy, osteomyelitis); review of 
the current blood sugars/ HgbA1c, diet and nutritional status, activity level, physical exam that 
includes assessment of skin and wound, ABI (Ankle-Brachial Index), check of off-loading 
prosthetics or shoes for signs of abnormal wear. 
o For patient with VLU- assessment of history (prior ulcers, thrombosis risks), physical exam 
(edema, skin changes), ABI (Ankle-Brachial Index), and duplex scan to confirm CEAP 
classification (Clinical-Etiology-Anatomy-Pathophysiology (*CEAP) classification categorizes 
chronic venous disorders to facilitate communication between physicians, to serve as a basis for 
standardized reporting during scientific analysis of management alternatives, and to identify 
segments of venous incompetence amenable to vein ablation therapies.  
o Implemented treatment plan as indicated. 
a. debridement 
b. pressure relief repositioning schedule, etc. for DFUs/VLUs; prior and on-going 
compression therapy (e.g., static compression includes compression hosiery (>20 mm 
HG) and compression bandages) for VLUs 
c. infection control d. management of exudate- maintenance of a moist environment (moist saline gauze, other 
classic dressings, bioactive dressing, etc.). (For indications of negative pressure wound 
therapy (NPWT) see DME MAC LCD Negative Pressure Wound Therapy Pumps 
(L5008)) 
e. Patient is a nonsmoker or has refrained from smoking for at least 6 weeks prior to 
planned skin replacement surgery or has received counseling on the effects of smoking 
on surgical outcomes and treatment for smoking cessation. 
- Applied to ulcers that have failed to respond to documented conservative wound-care measures. "Failed 
response" is defined as an ulcer that has increased in size or depth, or no change in baseline size or 
depth or no sign of improvement or indication that improvement is likely (such as granulation, 
epithelialization or progress towards closing). Documentation of response requires measurements of the 
initial ulcer, measurements at the completion of at least four weeks DFU (4-6 weeks for VLU) of 
conservative wound-care measures and measurements immediately prior to placement of the skin 
substitute graft. For VLUs, completion of conservative wound-care measures must include 4-6 weeks 
and on-going compression therapy. 
- A skin replacement surgery is considered an advanced treatment modality (not a conservative wound 
care measure). Pre-service record specifically addresses 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 based on the prior wound evaluation. Such record should include updated 
medication history, review of pertinent medical problems that may have arisen 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. 

Limitations: 
- One specific skin substitute graft product will be allowed for the episode of skin replacement surgery 
wound care (defined as 12 weeks from the first application of a skin substitute graft) assuming its use is 
not in conflict with FDA assessments and assuming there is one related wound.  
- Switching products in a 12-week episode of skin replacement surgery wound care or application of a 
product beyond 12-weeks is not expected.  
- Repeat applications of skin substitute grafts are not considered medically reasonable and necessary 
when a previous application was unsuccessful. Unsuccessful treatment is defined as increase in size or 
depth of an ulcer or no change in baseline size or depth and no sign of improvement or indication that 
improvement is likely (such as granulation, epithelialization or progress towards closing).  
- Application of skin substitute grafts are contraindicated and noncovered in patients with inadequate 
control of underlying conditions or exacerbating factors, or other contraindication (e.g., uncontrolled 
diabetes, active infection, active charcot arthropathy of the ulcer extremity, active vasculitis).  
- Application of skin substitute grafts are contraindicated in patients with known hypersensitivity to any 
component of the specific skin substitute graft (e.g., allergy to bovine). 
- Use of surgical preparation services in conjunction with routine, simple and/or repeat application of 
skin substitute grafts is not reasonable and necessary and will be denied accordingly. 
- Most repeat applications of skin replacement materials will not require separate debridement 
procedures. Such procedures may be subject to pre or post payment medical review. If documentation 
does not support cross contamination requiring extended cleansing and removal of appreciable amounts 
of devitalized tissue was performed, the service will be denied. 
- Only a reasonable amount of wastage (discarded amount) is covered.  
- Though arterial insufficiency ulcers, pressure sores, traumatic wounds, mixed ulcers, and post-surgical 
wounds are not directly addressed by this LCD, the comprehensive patient assessment and treatment 
plan requirement would apply to any patient with lower extremity ulcers/chronic wounds.  - The patient must be under the care of a qualified Physician/ NPP for their underlying chronic condition. 
Skin replacement surgery services must be performed by a qualified physician/NPP within their scope 
of practice. 
- The rare clinical circumstance necessitating switching to a different product must be clearly supported 
in the medical record and may be subject to pre or post payment medical review. Repeat application of 
a skin substitute graft within the 12 week episode of skin replacement surgery wound care may be 
considered upon re-assessment and must be supported in the medical record documentation for that 
encounter. Repeated application of a skin substitute graft after 12 weeks could result in claim denial(s) 
and/or initiate a request for records and complex medical review addressing DFU and VLU wound care 
services. 
- It is noted the FDA labeling for most skin substitute grafts include language suggesting frequency of 
applications. Some products highlight one application needed in an episode of care so no anticipated 
repeat applications and some products note the need for repeat application at varying intervals in the 12 
week episode of skin replacement surgery wound care. Medicare does not expect that every ulcer in 
every patient will require the maximum number of applications listed on the product label. The 
expectation is the fewest repeat applications and amount of product to heal the wound. 
- Utilization of more than one application of a skin substitute product in the 12 week episode of skin 
replacement surgery wound care, for all indications, may be subject to pre or post payment medical 
review (record requested). 
- Physician and allied providers demonstrating higher application utilization than peers for similar 
episodes of care may be subject to prepayment medical review (records requested) or post payment 
audit. 
- The risk versus benefit of the procedure and alternative options for care should be documented as 
discussed with the patient. 
- Documentation of smoking history and that the patient has received counseling on the effects of 
smoking on surgical outcomes and treatment for smoking cessation (if applicable). 
- One would not expect E/M with each procedure (application of skin substitute graft) in an episode of 
care unless a separately identified service. 
- Medicare coverage for wound care on a continuing basis, for a given wound, in a given patient, is 
contingent upon evidence documented in the patient's medical record that the wound is improving in 
response to the specific wound care being provided. It is neither reasonable nor medically necessary to 
continue a given type of wound care if evidence of wound improvement cannot be clearly demonstrated 
as documented in the medical record. 
As published in the CMS IOM Publication 100-08, Medicare Program Integrity Manual, Chapter 13, Section 
13.5.4, an item or service may be covered by a contractor LCD if it is reasonable and necessary under the 
Social Security Act Section 1862 (a)(1)(A). Contractors shall determine and describe the circumstances under 
which the item or service is considered reasonable and necessary. 

You can find this rule at the Medicare Local Coverage Determination (LCD) L36377: Application of Skin 
Substitute Grafts for Treatment of DFU and VLU of Lower Extremities. 
 
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.