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In an about-face, the administration is cracking down on so-called skin substitutes, overused treatments that cost Medicare more than $10 billion last year.
By Sarah Kliff and Katie Thomas
Sarah Kliff and Katie Thomas have covered wasteful Medicare spending on treatments ranging from skin substitutes to catheters.
July 15, 2025, 2:05 p.m. ET
Medicare plans to slash payments for expensive and untested skin bandages that have cost the federal government billions of dollars, the Trump administration announced Monday.
The new proposed limit is an about-face for the administration, which twice delayed Biden-era rules to reduce spending on the bandages, known as skin substitutes. President Trump, who previously defended the payments on social media, received a large campaign donation last year from a leading bandage seller.
Spending on skin substitutes has increased fortyfold in the past five years, surpassing $10 billion in 2024. That sharp increase is one of the largest examples of Medicare waste in the program’s history, according to data analysts and industry experts.
Medicare, the government insurance plan for seniors, spent more last year on the bandages than on ambulance rides or anesthesia, despite limited evidence that they work. The bandages are made from dried bits of placenta and are used on wounds that won’t heal.
For years, lax Medicare rules have allowed makers of the bandage to essentially set their own prices. Companies have brought more than 100 new versions to market since 2023, some costing Medicare more than $21,000 per square inch.
The new Medicare policy proposes setting a flat payment of $806 per square inch. The lower fee is likely to stamp out a lucrative scheme that The New York Times reported on this year: Doctors can buy the coverings at large discounts and then charge Medicare the full sticker price, pocketing the difference.
