The price got fixed. Your coverage gap didn't.
Medicare Part B skin-substitute spend grew about 40x from 2019 to 2024 while patients only doubled.1 CMS responded with a flat $127.14/sq cm rate effective January 1, 2026, roughly a 90% cut.23 But the seven MAC coverage policies that would have restricted which products and which wounds qualify were withdrawn on December 24, 2025.4 And the dollars in this category draw fraud at scale: a single Arizona wound-graft scheme ran to $1.2 billion before guilty pleas and 15.5- and 14-year sentences.5
That fix does not reach you. If you are a commercial or Medicaid plan, you never had the CMS rate, and you now sit in the same open coverage gap with none of the transparency: there is no public dataset even sizing non-FFS skin-substitute spend.8 The underlying burden is not small. Chronic wounds cost Medicare alone more than $28 billion a year across 8.2 million beneficiaries, roughly one in seven, and the clinical burden is proportionally present in every other book of business.7 The exposure below is modeled from your own population; the diagnostic produces your real version.
| Illustrative — 250,000-life commercial/Medicaid book | Annual exposure |
|---|---|
| Chronic-wound population (~2% prevalence)~5,000 members with an active or recurrent wound | ~5,000 members |
| Skin-substitute / advanced product spendunguarded on product, indication, size, and applications | open-ended |
| Wound-related hospitalizations, ED, surgerythe bulk of the burden, not the graft | the real money |
| Major amputations & downstream cost~56.6% five-year mortality after major DFU amputation6 | highest unit cost |
| Total wound episode cost — what KEEP manages | the carve-out base |
Figures are modeled placeholders. The wound-spend diagnostic replaces them with your plan's real exposure before any commitment. Sizing is never cited as fact — it is built from your data.
From paying for grafts to managing the episode
A utilization rule alone manages the loud 10% — the graft line — and leaves the hospitalizations, surgeries, and amputations that drive the spend untouched. KEEP manages the whole wound episode through a credentialed home-care network, adds the right care, and removes the wasteful care.
- Flat rate rewards larger grafts; no medical-necessity gate
- Claims data cannot see whether the wound closed
- No vascular gate, offloading, or early home monitoring
- Amputations arrive at the end of a chain of missed steps
- No closure-rate data by product or provider to steer with
- Evidence-based formulary; vascular workup a hard gate before advanced product
- Photographic, measurement-based closure registry by product and provider
- Home nurse monitoring catches infection early — the limb-saving step
- Acuity managed both ways: escalate when threatened, step down as it closes
- Volume steered to the best real closure rates; tele-wound MD/NP supervision
The closure registry is the moat and the risk-enabler. A UM rule copies in a quarter; a longitudinal closure dataset takes years to build — and it is what makes capitation possible.
You don't pay to deny grafts. You pay to close wounds and keep limbs.
Savings are downstream of the outcome: a kept limb is the avoided hospitalization, surgery, and amputation. KEEP prices on a risk ladder so you start with no downside and add risk-sharing only once the registry proves the outcome on your population.
CCOC, not TCOC: KEEP takes risk on the wound episode — grafts, home nursing, wound meds, the vascular workup, offloading, and wound-related acute care and amputations. Diabetes, cardiac, renal, and unrelated admissions stay with the plan and the member's PCP or ACO.
90 days, one condition, your own data
Start narrow: the diabetic foot ulcer, a defined member cohort, the admin-fee rung. The pilot proves the exposure and the mechanism before any risk changes hands.
- Wound-spend diagnostic on your data — your own 40x chart
- Define the DFU cohort and the episode boundary
- Stand up the formulary and the vascular gate
- Credentialed home-care providers begin monitored visits
- Photographic closure documentation captured into the registry
- Tele-wound MD/NP supervision; acuity escalation live
- Closure rate by product and provider, segmented
- Limb-preservation readout vs. baseline
- Risk-ladder proposal sized to the proven cohort
The diagnostic needs no network to produce — it books the meeting and frames the pilot on day one.
Delivery, billing integrity, and payer growth — already run
Joe Nalley built and ran a 13-location integrated health system through acquisition. He founded and sold ClearBill, which returned $9.2M to payers in its first six months of full deployment. He is Staff Vice President of Carelon Growth (Elevance Health's specialty health-services arm), owning six clinical risk books across more than $50B in specialty spend. Across the companies he has led, more than 200,000 patients have been served. KEEP is the benefit manager that work points toward.
Approve a 90-day DFU diagnostic pilot
One defined cohort, the admin-fee rung, no risk transferred. At day 90 you have your real wound exposure, a closure registry segmented by product and provider, and a limb-preservation readout — enough to decide on the carve-out with evidence, not a forecast.
Contact joe.nalley@showyourwork.health to schedule the diagnostic.
We keep limbs. We keep people whole. At home.
Sources
- HHS-OIG, OEI-BL-24-00420 (September 2025). Medicare Part B skin-substitute spend $256M (2019) to over $10B (2024), ~40x; patient count roughly doubled.
- CMS-1832-F; Federal Register correction, November 28, 2025. Single flat rate of $127.14/sq cm, incident-to, office = hospital outpatient, effective January 1, 2026 (was $127.28 pre-correction).
- CMS press release / CY2026 Physician Fee Schedule. About a 90% cut; approximately $19.6B saved in CY2026, a single year.
- CMS LCD-withdrawal fact sheet. Seven MAC skin-substitute LCDs withdrawn December 24, 2025.
- U.S. Department of Justice (Apex Medical; Gehrke & King). $1.2B Arizona wound-graft scheme; guilty pleas; 15.5- and 14-year sentences; $309M civil.
- Armstrong et al., Journal of Foot and Ankle Research, 2020. Five-year mortality after major DFU amputation ~56.6% — exceeds the pooled all-cancer average (~31%) and is worse than breast, prostate, and colorectal cancer.
- Nussbaum et al., Value in Health, 2018. Chronic-wound burden $28.1B–$96.8B in Medicare; 8.2M beneficiaries (~15%).
- HHS-OIG, OEI-BL-24-00420. Medicare Advantage ~7% of FFS skin-substitute spend despite over half of lives, via prior authorization. No public dataset sizes non-FFS skin-substitute spend.