*** This policy was implemented in the absence of National Coverage Determinations (NCD) or Local Coverage Determinations (LCD) coverage criteria. This policy applies to all Blue Medicare HMO, Blue Medicare PPO, Blue Medicare Rx members, and members of any third-party Medicare plans supported by Blue Cross NC through administrative or operational services. ***

*** For guidance of Skin Substitute usage in Diabetic Foot and Venous Leg ulcers, providers are instructed to refer to LCD DL39806 Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers (effective 01/01/2026) here:  LCD - Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers (L39806)

Description of Procedure or Service

Bioengineered skin and soft tissue substitutes may be either acellular or cellular. Acellular products (e.g., dermis with cellular material removed) contain a matrix or scaffold composed of materials such as collagen, hyaluronic acid, and fibronectin. Acellular dermal matrix products can differ in a number of ways, including as species source (human, bovine, porcine), tissue source (e.g. dermis, pericardium, intestinal mucosa), additives (e.g. antibiotics, surfactants), hydration (wet, freeze dried), and required preparation (multiple rinses, rehydration).

Cellular products contain living cells such as fibroblasts and keratinocytes within a matrix. The cells contained within the matrix may be autologous, allogeneic, or derived from other species (e.g., bovine, porcine). Skin substitutes may also be composed of dermal cells, epidermal cells, or a combination of dermal and epidermal cells, and may provide growth factors to stimulate healing. Tissue-engineered skin substitutes can be used as either temporary or permanent wound coverings.

There are many potential applications for artificial skin and soft tissue products. One large category is nonhealing wounds, which potentially includes diabetic neuropathic ulcers, vascular insufficiency ulcers, and pressure ulcers. A substantial minority of such wounds do not heal adequately with standard wound care, leading to prolonged morbidity and increased risk of mortality. For example, nonhealing lower-extremity wounds represent an ongoing risk for infection, sepsis, limb amputation, and death. Bioengineered skin and soft tissue substitutes have the potential to improve rates of healing and reduce secondary complications.

The preferred outcomes for the healing of lower-extremity ulcers and burn wounds are the percentage of individuals with complete wound healing and the time to complete wound healing. The percentage of individuals with 50% wound healing and time to 50% wound healing have also been considered appropriate outcomes for these conditions. The percent change in wound area at 4 weeks is predictive of complete healing at 12 weeks in individuals with diabetic foot ulcers. Thus, minimal improvement at 30 days can be considered as an indicator that a wound is unlikely to heal in individuals with comorbidities known to affect wound healing.

Peripheral nerve injuries may occur as a result of trauma or acute compression. The nerve injury may result in demyelination and/or axonal degeneration, which can disrupt sensory function, motor function or both in the injured nerve. Several methods of nerve grafting have been investigated when a large gap exists between the proximal and distal ends of the injured nerve. The use of autologous nerve grafts for bridging gaps in nerve continuity is the gold standard for nerve repair, however it requires the sacrifice of healthy nerves. Nerve allograft transplantation from cadavers offers an alternative without the morbidities associated with nerve autografts, but these grafts require appropriate immunosuppression. The limitations of nerve autografting and allografting have led to the engineering of processed, acellular nerve allografts and nerve guidance conduits. Acellular nerve grafts are processed to remove antigenic factors such as Schwann cells and myelin to reduce immunogenicity, while retaining the natural basement membrane and three-dimensional extra-cellular matrix to guide axonal regeneration. Nerve conduits, also known as nerve tubulation, involves the use of nonabsorbable or absorbable single-lumen tubes, designed to bridge the gap of a sectioned nerve. The tube serves to protect the nerve during nerve regeneration and guide the regenerating axons to the distal nerve stump. A closed tube system may also allow for accumulation of neurotropic factors.

Other situations in which bioengineered skin products might substitute for living skin grafts include certain postsurgical states (e.g., breast reconstruction) in which skin coverage is inadequate for the procedure performed, or for surgical wounds in individuals with compromised ability to heal. Second- and third-degree burns are another indication in which artificial skin products may substitute for auto- or allografts. Certain primary dermatologic conditions that involve large areas of skin breakdown (e.g., bullous diseases) may also be conditions in which artificial skin products can be considered as substitutes for skin grafts. Acellular dermal matrix products are also being evaluated in the repair of other soft tissues including rotator cuff repair, following oral and facial surgery, hernias, and other conditions.

Human amniotic membrane (HAM) consists of two conjoined layers, the amnion and chorion, and forms the innermost lining of the amniotic sac or placenta. When prepared for use as an allograft, the membrane is harvested immediately after birth, cleaned, sterilized, and either cryopreserved or dehydrated. Many products available using amnion, chorion, amniotic fluid, and umbilical cord are being studied for the treatment of a variety of conditions, including chronic full-thickness diabetic lower-extremity ulcers, venous ulcers, knee osteoarthritis, plantar fasciitis, and ophthalmic conditions. The products are formulated either as patches, which can be applied as wound covers, or as suspensions or particulates, or connective tissue extractions, which can be injected or applied topically.

Fresh amniotic membrane contains collagen, fibronectin, and hyaluronic acid, along with a combination of growth factors, cytokines, and anti-inflammatory proteins such as interleukin-1 receptor antagonist. There is evidence that the tissue has anti-inflammatory, antifibroblastic, and antimicrobial properties. HAM is considered nonimmunogenic and has not been observed to cause substantial immune response. It is believed that these properties are retained in cryopreserved HAM and dehydrated HAM products, resulting in a readily available tissue with regenerative potential. In support, one d-HAM (human amniotic membrane that has undergone decellularization, a process to remove its cellular components) product has been shown to elute growth factors into saline and stimulate the migration of mesenchymal stem cells both in vitro and in vivo.

HAM is an established treatment for corneal reconstruction and is being evaluated for the treatment of various conditions, including skin wounds, burns, leg ulcers, and prevention of tissue adhesion in surgical procedures. Additional indications studied in preclinical models include tendonitis, tendon repair, and nerve repair. The availability of HAM opens the possibility of regenerative medicine for a wide variety of conditions.

Policy Statement

Coverage will be provided for Skin and Soft Tissue Substitute when it is determined to be medically necessary when the medical criteria and guidelines shown below are met.

Benefit Application

Please refer to the member’s individual Evidence of Coverage (EOC) for benefit determination.  Coverage will be approved according to the EOC limitations if the criteria are met.  

Coverage decisions will be made in accordance with:

• The Centers for Medicare & Medicaid Services (CMS) national coverage decisions;
• General coverage guidelines included in original Medicare manuals unless superseded by operational policy letters or regulations; and
• Written coverage decisions of local Medicare carriers and intermediaries with jurisdiction for claims in the geographic area in which services are covered.

Benefit payments are subject to contractual obligations of the Plan.  If there is a conflict between the general policy guidelines contained in the Medical Coverage Policy Manual and the terms of the member’s particular Evidence of Coverage (EOC), the EOC always governs the determination of benefits.

Definitions

• Acellular - tissue-engineered graft that acts as a scaffold for wound healing by removing all cellular components from natural tissues (like human or animal skin) and leaving behind the collagen-rich extracellular matrix
• Allogenic - type of skin graft taken from a genetically non-identical donor of the same species (human) and used to cover wounds
• Antigenic - material designed to replace damaged skin that contains antigens, which are substances capable of triggering an immune response in the recipient
• Autologous - regenerative skin product or graft derived from a patient's own cells and tissues, designed to replace or promote the healing of damaged skin
• Axonal Degeneration - the process of structural breakdown of an axon, the long projection of a neuron that transmits signals, which can occur due to injury, aging, or disease, leading to neuronal dysfunction and loss of neurological function
• Cellular - relating to or consisting of living cells
• Demyelination - the loss or damage of the myelin sheath, a protective fatty layer that insulates and protects nerve fibers (axons) in the central (brain and spinal cord) and peripheral (outside the brain and spinal cord) nervous systems
• Elute - the controlled release of a therapeutic substance, such as an antibiotic or antiseptic, from a wound dressing or other device directly into the wound
• Immunogenicity - the ability of a material, like a wound dressing or implanted scaffold, to trigger an immune response from the body
• In vitro - an "in vitro" experiment or model occurs in a lab setting, outside of a living organism, rather than in a real wound or body
• In Vivo - experiment, study, or treatment that takes place within a whole, living organism, such as a human or animal, rather than in a lab dish (in vitro)
• Mesenchymal stem cells - type of adult stem cell found in various tissues throughout the body (MSCs have the ability to differentiate into multiple cell types, including bone, cartilage, fat, muscle, and connective tissue cells)
• Neurotropic - the role of nerve cells and nerve-related factors in the healing process
• Nonimmunogenic - a substance, molecule, or cell that fails to trigger an immune response from the body's immune system

Indications for Coverage

The use of skin and tissue substitutes have been scientifically validated and therefore may be medically necessary when criteria met for the following indications: 

1. Breast Reconstruction Post Mastectomy for Cancer 
2. Dystrophic epidermolysis bullosa 
3. Second- or third-degree burns 

There is insufficient evidence to support the efficacy of bioengineered Skin and Tissue Substitute to improve on health outcomes for all other indications and is therefore all other use not listed above is considered investigational and therefore not reasonable and necessary. 

All use of skin and soft tissue substitutes may be subjected to the Plan Medical Director Review. 

Clinical Inclusion Criteria

Use of skin and tissue substitute may be considered medically necessary when ALL the following are met: 

1. The skin substitute product must satisfy at least ONE of the following: 
   • AATB (American Association of Tissue Banks) Approval: The skin substitute product must meet all applicable regulation and standards established by the American Association of Tissue Banks for procuring and processing human cells, tissues, and cellular or tissue-based products (HCT/Ps), or 
   • FDA Approval: The skin substitute product must meet all product specific FDA requirements. 
2. And ALL the following are met: 
   • Documentation noting the member is a non-smoker, or has completed or is currently in smoking cessation therapy; and 
   • Wound characteristics and treatment plan are documented including ALL the following: 
     • Partial- or full-thickness skin defect, clean, and free of necrotic debris, exudate, or infection and 
     • Tissue approximation would cause excessive tension or functional loss; and 
     • No involvement of tendon, muscle, joint capsule, or exposed bone or sinus tracts; and 
     • No wound infection 
3. And the skin substitute product must be used in ONE of the following specific indications: 
   1. Breast Reconstruction - The following allogeneic ADM products may be considered medically necessary for breast reconstructive surgery following cancer treatment: 
      • AlloDerm^® 
      • AlloMend^® 
      • Cortiva^®, [AlloMax^™] 
      • DermACELL^™ 
      • DermaMatrix^™ 
      • FlexHD^® 
      • FlexHD^® Pliable^™ 
      • Graftjacket^®
        AND if one of the following is met: 
      • There is insufficient tissue expander or implant coverage by the pectoralis major muscle and additional coverage is required OR 
      • There is viable but compromised or thin postmastectomy skin flaps that are at risk of dehiscence or necrosis OR
      • The inframammary fold and lateral mammary folds have been undermined during mastectomy and reestablishment of these landmarks is needed. 
   2. Dystrophic Epidermolysis Bullosa - Treatment of dystrophic epidermolysis bullosa using the following tissue-engineered skin substitute may be considered Medically Necessary. 
      • OrCel^™ (for the treatment of mitten-hand deformity when standard wound therapy has failed and when provided in accordance with the humanitarian device exemption (HDE) specifications of the U.S. Food and Drug Administration [FDA]).
   3. Second Or Third-Degree Burns - Treatment of second- and third-degree burns using the following tissue-engineered skin substitutes may be considered Medically Necessary: 
      • Epicel^® (for the treatment of deep dermal or full-thickness burns comprising a total body surface area ≥30% when provided in accordance with the HDE specifications of the FDA) 
      • Integra^® Dermal Regeneration Template 
      • Transcyte^®

When Coverage Will Not be Approved

All other skin and soft tissue substitutes, as well as applications, are considered investigational and/or experimental for applications not specified in this policy.

Skin substitutes are NOT considered reasonable and necessary in patients with inadequate control of underlying conditions or exacerbating factors including but not limited to any of the following:

• Use of skin substitutes in wounds with signs of clinical infection.
• Use of skin substitutes when there is not adequate circulation to the affected area.
• Use of skin substitutes in wounds with exposed bone, tendon, or fascia.
• Use of skin substitutes in plan members with HbA1c >12%
• Use of skin substitutes in plan members with active Charcot arthropathy of the ulcer extremity for indications aside from diabetic foot ulcers.

Limitations: (per ulcer episode of care)

The following are considered NOT reasonable or necessary:

• Greater than four applications of a skin substitute graft/CTP within the episode of skin replacement therapy (defined as 12 weeks from the first application of a skin substitute graft/CTP). In exceptional cases in which 4 applications is not sufficient for adequate wound healing, additional applications may be considered with documentation that includes progression of wound closure under current treatment plan and medical necessity for additional applications subject to Plan Medical Director review.
• Application of a skin substitute graft/CTP beyond 12-weeks per episode within the episode of skin replacement therapy. In exceptional cases in which 12 weeks is not sufficient for adequate wound healing, additional duration of care may be considered treatment plan and benefit expected from additional applications subject to Plan Medical Director review.
• Repeat applications of skin substitute graft/CTP when a previous application was unsuccessful. Unsuccessful treatment is defined as increase in size or depth of an ulcer, no measurable change from baseline, and no sign of improvement or indication that improvement is likely (such as granulation, epithelialization, or progress towards closure). Unsuccessful therapy also includes reoccurrence of the ulcer in the same location within 12 months from initial application.
• Use of surgical preparation services (e.g., debridement), in conjunction with routine, simple or repeat skin replacement surgery with a skin substitute graft/CTP).
• Excessive wastage (discarded amount). The skin substitute graft/CTP must be used in an efficient manner utilizing the most appropriate size product available at the time of treatment. It is expected that use of product, size and preparation should conform to that most closely fitting the wound with the least amount of wastage.
• All liquid or gel skin substitute products or CTPs for ulcer.
• Placement of skin substitute graft/CTP on infected, ischemic, or necrotic wound bed.

The Plan may compare the cost-effectiveness of alternatives when determining which products will be covered.

Billing/ Coding/physician Documentation Information

This policy may apply to the following codes. Inclusion of a code in the section does not guarantee reimbursement. 

Applicable Codes: See Chart Below

Current Procedural Terminology (CPT) defines skin substitute grafts to include non-autologous skin (dermal or epidermal, cellular, or acellular) grafts (e.g., homograft, allograft), non-human skin substitute grafts (i.e., xenograft), and biological products that form a sheet scaffolding for skin growth. CPT does not include non-graft wound dressings (e.g., gel, powder, ointment, liquid) or injectable skin substitutes in the skin substitute graft codes.

HCPCS codes included in this list are FDA approved/ meeting necessary regulatory requirements for CTPs for chronic ulcer treatment as of publication. Each product has specific designated approved usage. This is not an all-inclusive list of CTPs as new products and HCPCS codes will be considered for coverage if meeting the regulatory requirements and criteria. Therefore, any HCPCS code that is not included in this list will not be separately reimbursed.

The above medical necessity criteria MUST be met for the following codes to be covered:

BREAST RECONSTRUCTIVE SURGERY Group 1 Codes: Breast Reconstruction following Mastectomy for Cancer

The following codes may be medically necessary when criteria met and reported with an ICD-10-CM Diagnostic Code from group 2 Codes in the following table for Breast Reconstruction.

Group 2 Codes: Breast Reconstruction following Mastectomy for Cancer 

A CPT/HCPCS code from the Group 1 Codes above must be reported with an ICD-10-CM Diagnosis code from the Group 2 Codes in the table below for Breast Reconstruction

DYSTROPHIC EPIDERMOLYSIS BULLOSA

Group 1 Codes: Dystrophic Epidermolysis Bullosa

The following code may be medically necessary when criteria met and reported with an ICD-10-CM Diagnostic Code from group 2 Code in the following table for Dystrophic Epidermolysis Bullosa.

Group 2 Codes: Dystrophic Epidermolysis Bullosa

A CPT/HCPCS code from the Group 1 Codes above must be reported with an ICD-10-CM Diagnosis code from the Group 2 Codes in the table below for Dystrophic Epidermolysis Bullosa.

SECOND- AND THIRD-DEGREE BURNS Group 1 Codes: Breast Reconstruction following Mastectomy for Cancer

The following codes may be medically necessary when criteria met and reported with an ICD-10-CM Diagnostic Code from group 2 Codes in the following table for 2nd and 3rd Burns.

Group 2 Codes: 2ND AND 3RD DEGREE BURNS

A CPT/HCPCS code from the Group 1 Codes above must be reported with an ICD-10-CM Diagnosis code from the Group 2 Codes in the table below for 2nd and 3rd Degree Burns

Special Notes

Billing for skin substitute application procedures is required to also include the appropriate high cost or low-cost skin substitute products.

BCBSNC may request medical records for determination of medical necessity. When medical records are requested, letters of support and/or explanation are often useful, but are not sufficient documentation unless all specific information needed to make a medical necessity determination is included.

References:

1. Blue Cross and Blue Sheild NC Corporate Policy Skin and Soft Tissue Substitutes; Originated January 1994 via Skin and Soft Tissue Substitutes | Providers | Blue Cross NC accessed on 08/11/2025
2. Proposed LCD-Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers (DL39806) accessed on 8/11/2025
3. Proposed Local Coverage Article (LCA) Billing and Coding: Skin Substitutes Grafts/Cellular Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers Draft Article - Billing and Coding: Skin Substitutes Grafts/Cellular Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers (DA59740 )accessed on 8/11/2025
4. BCBS of Michigan Medical Policy –Skin and Soft Tissue Substitutes Medicare Advantage; effective date 04/11/2025; Accessed on 08/28/2025 via chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bcbsm.com/amslibs/content/dam/public/mpr/mprsearch/pdf/2191560.pdf
5. Humana Medicare Advantage Medical Policy – Skin and Tissue Substitutes; effective date - 08/01/2025; accessed on 8/28/2025 via  https://mcp.humana.com/tad/tad_new/Search.aspx?sortfield=name&policyType=medical
6. Regence (MA) Medicare Advantage Policy – Bioengineered Skin and Soft Tissue Substitutes and Amniotic Products effective date 07/01/2025 accessed on 8/28/2025 via https://www.regence.com/provider/library/policies-guidelines/medical-policy/ma-medical-policy

Policy Implementation/Update Information:

Revision Dates: 

8/21/2025: Newly created policy in absence of current NCD, LCD and LCA.

Approval Dates: 

Medical Coverage Policy Committee: September 18, 2026                

Physician Advisory Group Committee:

Quality Improvement Committee:  

Policy Owner:
Name: Amy Russo, LPN
Title: Medical Policy Advisor