The LCD Is Frozen, Now What?

On Monday during his first day in office, President Trump signed an Executive Order (EO) freezing the pending LCD policy that would limit access to skin substitutes for chronic wound care.  To be clear - this is a policy freeze pending further action.  While some debate the ability of Trump’s EO to cover LCDs on the basis that they are not regulations that are directly part of the Federal Register, it is required that all regulations, actions, and guidance be published in the Federal Register as part of the Medicare program in general.  The Regulatory Freeze Pending Review published on January 20th expressly prohibits any additional regulations being published that are not yet in the Federal Register for a period of 60 days or more pending review of the Trump appointee with this explicit sentence:  

“Thus, the requirements of this memorandum apply not only to “rules” as defined in section 551(4) of title 5, but also to any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking.  They shall also apply to any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.”

As expected, there are a variety of opinions being expressed in alignment with individually desired realities which postulate everything from the freeze being invalid for the LCDs, to the view that this freeze entirely eliminates any need to be concerned with fixing the exponentially rising prices in the skin substitute market.  

Neither of these is true, and no knows for certain how this freeze will ultimately impact the care of patients with chronic wounds after this 60-day freeze period.  As of now, this freeze should extend access to critically needed skin substitutes while longer-term solutions can be considered, but only for a very limited time.

One must look at many factors and trends to find the overwhelmingly likely path forward.  We live in a world obsessed with data.   The $500B project announced yesterday for AI infrastructure is all about data.  By mining data, it seems, we may be able to cure even cancer.  So, why would we think the skin substitute market will not be rigorously examined for its effectiveness in healing patients and in ways to save Medicare taxpayer dollars in that pursuit?   The only way we can create stability in a market that has been so distorted by misapplied, missing, or maliciously applied regulations is to do the hard work of establishing consistent, common-sense regulatory criteria while creating BOTH competition and incentive for innovation at the same time.  As stakeholders in healing these patients, we must come up with new and aligned regulatory, reimbursement, and payment infrastructure that is sustainable, predictable, profitable, and fair.  Absent any of those factors, product shortages, provider shortages, and continued anemic investment in the space, will compromise care and shorten the lives of many patients.  

Thus, while we consider this freeze a very big win, there is still much work to do. Over the past several months, we have already seen scores of claim denials and claw backs stating that the products used were experimental, simply because they were not on the “Group 2” covered list contemplated, but never yet implemented, by the future effective LCDs.  This has occurred in some MACs more frequently than in others, but it is a reminder that the computer systems at the MAC level have already been prepared to automatically deny claims after February 12th based on the Q- Code and ICD-10 codes.  That preparation is already being used inappropriately throughout the country.  Unravelling this extensive preparation at the MACs will require further action (force) as there is no codified penalty against the MACs for continually denying claims “in error.”    

In addition to these payment problems, which are likely to continue uninterrupted until forced to cease, there is the coverage challenge for all wounds beyond DFU and VLU.  

Pressure Ulcers themselves likely comprise 65% of the skin substitute products used.  We are busy trying to come to a consensus on when skin substitutes should be used in PU, but there is a dearth of data on effectiveness due to the near impossibility of performing RCTs on this population.  Randomized controlled trials were designed for pre-market approval of drugs and involve pesky things like patient consent, IRB approval, facility agreements and massive industry investment without which patients could be denied care we already know to be safe and beneficial.   Many are taking up new methods of studying these patients - for example, there is some registry and retrospective data analyses yet to be published that will likely show encouraging benefit.  But, what about use in chronic wounds that physicians know will not heal on their own?  What about complex chronic post-surgical wounds?   Before making a defense of any or all of these additional categories, a larger question needs to be answered:  Why did we allow regulators to create subdivisions or categories of chronic or non-healing wounds in the first place?  Was there any other purpose than to nudge them into drug trials which were never and should never have been required?    

In essence, the real work must now begin.  We have to acknowledge that there are major cost concerns associated with these products.  To ensure that the LCDs are permanently rescinded, we have 60 days to give the new administration confidence that there are indeed common-sense solutions that deliver optimum care to patients.   If too many parties simply complain and hang on to the status quo without delivering a proposed legislative and regulatory solution that compromises on everything but patient care, we risk relegating ourselves to the realm of irrelevance in a newly declared era of fixing the world’s biggest problems.

We must remember that care of patients with chronic wounds, while it impacts more than 7 million patients annually, is only one of thousands of urgent challenges to the new administration, and that the best way to guarantee our own success at keeping their attention and solving the problem is to assemble a beautifully aligned chorus of voices on the same sheet of music. We must harmonize together on solutions -  not pettiness, profit protection, or self-interest.   Over the next two months, we must work closely with the incoming administration to address all these concerns in a way that preserves access to appropriate patient care, reduces cost, improves outcomes, eliminates backhanded denials and recoupments - all while incentivizing companies and investors to innovate without overburdening the total healthcare spend.    

This is a tall order, but one we can accomplish. Be Bold, Be Prepared, Lead Change.

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