Accountable for Health Applauds Court Decision Upholding Medicare Payment Reform for Skin Substitutes
Decision preserves reforms that curb wasteful spending and strengthen accountability in Medicare
Washington, D.C. (March 23, 2026)
Accountable for Health, an advocacy organization of more than 60 providers, payers, and innovators founded to champion accountable care, today welcomed a federal court’s decision to dismiss a lawsuit challenging Medicare’s 2026 payment rule for skin substitutes, ensuring the policy remains in effect.
The lawsuit, brought by the CAMPs Initiative, a trade association representing skin substitute manufacturers and distributors, sought to overturn Medicare’s updated payment approach and reinstate a prior system that allowed spending to skyrocket from $250 million in 2019 to more than $10 billion in 2024. The Northern District of Texas dismissed the case on jurisdictional grounds, finding that providers must first pursue challenges through Medicare’s established administrative appeals process.
Last year, the Centers for Medicare and Medicaid Services (CMS) set a single rational payment rate of $127 per square centimeter, cutting spending by 90%, and required skin substitutes to be billed alongside other physician services.
“The previous payment system created clear incentives for overuse and abuse, driving up costs and harming patients in the process,” Accountable for Health CEO Mara McDermott said. “CMS took appropriate action to address those issues, and the court’s decision allows that work to continue.”
Accountable for Health led a coalition of value-based care organizations that filed an amicus brief in support of the federal government’s motion to dismiss. The brief highlighted how the prior payment structure encouraged arbitrage and fraud, contributed to unnecessary spending, and undermined efforts by accountable care organizations (ACOs) to manage total cost of care for Medicare beneficiaries.
By allowing the 2026 payment rule to stand, the decision reinforces a more sustainable and accountable Medicare program. The updated policy better aligns payment with value, reduces opportunities for wasteful spending, and supports providers working to deliver coordinated, high-quality care.
Contact:
Mara McDermott, CEO of Accountable for Health
mmcdermott@accountableforhealth.org
About Accountable for Health
Accountable for Health (A4H) is a 501(c)(4) national advocacy and policy analysis organization accelerating the adoption of sustainable, effective accountable care that improves health care quality and outcomes and lower costs. We represent a broad, diverse group of accountable care stakeholders working to improve the way health care is delivered to people across the county, across various payers, programs, and delivery models. A4H provides advocacy, research, and education to improve outcomes and patient experiences while lowering costs.
For more information, visit https://accountableforhealth.org/. Follow us on LinkedIn and Twitter (@acct4health). ###
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