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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 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 recipients own distinct epithelium and 
cellular skin elements, permanent skin replacement or coverage by the graft cannot be accomplished. 
 
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. 
 
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. 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. 
 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 patients medical record reflects a diagnosis of Type 1 or Type 2 Diabetes and 
also reflects medical management for this condition. 
 
Due to the propensity for misuse of skin substitute and biological dressing products, reimbursement may be 
made only when the medical record clearly documents that these products have been used in a comprehensive, 
organized wound management program. All listed products, unless they are specifically FDA-labeled or 
cleared for use in the types of wounds being treated, will be considered to be biologic dressings and part of the 
relevant Evaluation and Management (E/M) service provided and not separately reimbursed. Partial thickness 
loss with the retention of epithelial appendages is not a candidate for grafting or replacement, as epithelium 
will repopulate the deficit from the appendages, negating the benefit of over grafting. Skin substitute grafts will 
be allowed for the episode of wound care in compliance with FDA guidelines for the specific product (see 
utilization guidelines) not to exceed 10 applications or treatments. In situations where more than one specific 
product is used, it is expected that the number of applications or treatments will still not exceed 10. 
Simultaneous use of more than one product for the episode of wound is not covered. Product change within the 
episode of wound is allowed, not to exceed the 10-application limit per wound per 12-week period of care. 
Treatment of any chronic skin wound will typically last no more than twelve (12) weeks. Repeat or alternative 
applications of skin substitute grafts are not considered medically reasonable and necessary when a previous 
full course of applications 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) for a period of 4 weeks past start of 
therapy. Retreatment of healed ulcers, those showing greater than 75% size reduction and smaller than 0.5 
square cm, is not considered medically reasonable and necessary. Skin substitute grafts are contraindicated and 
are not considered reasonable and necessary in patients with inadequate control of underlying conditions or 
exacerbating factors (e.g., uncontrolled diabetes, active infection, and active Charcot arthropathy of the ulcer 
extremity, vasculitis or continued tobacco smoking without physician attempt to affect smoking cessation). Re-
treatment within one (1) year of any given course of skin substitute treatment for a venous stasis ulcer or 
(diabetic) neuropathic foot ulcer is considered treatment failure and does not meet reasonable and necessary 
criteria for re-treatment of that ulcer with a skin substitute procedure. You can find these rules in the 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. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.