In response to the dramatic change in CTP (“skin substitute”) payment methodology, an organization representing many skin substitute manufacturers and distributors sued the Department of Health and Human Services (HHS). Dr. Ryan Mathis, Director of Global Medical Policy for Kerecis, has provided a summary of the CAMPS legal initiative and where it now stands.
–Caroline
On January 29, 2026, the MASS Coalition, an organization representing skin substitute manufacturers and distributors, sued the Department of Health and Human Services (HHS) regarding the finalized Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) final rule. In the rule, the Centers for Medicare & Medicaid Services (CMS) announced that it will treat skin substitutes paid under the PFS as incident-to supplies instead of as biologics. This change meant that PFS reimbursement for skin substitutes would no longer be paid based on its average sales price (ASP). Instead, CMS now pays for non-BLA skin substitutes based on their Food and Drug Administration (FDA) approval pathway at a fixed initial rate of $127.28 per cm2, dramatically reducing PFS reimbursement.
The CAMPs Initiative sued CMS in the U.S. District Court for the Northern District of Texas, seeking an injunction to overturn the skin substitute portions of the CY 2026 PFS final rule, arguing that CMS exceeded its statutory authority in promulgating the rule, as well as violating the Administrative Procedure Act (APA) and the U.S. Constitution. In addition to opposing the injunction, the government moved to dismiss the case, in part, because the CAMPs Initiative failed to first present its claim to CMS. When suing the federal government, prospective plaintiffs are often required to present their grievance or complaint to the appropriate administrative body before litigating in federal court. This “exhaustion,” “presentment,” or “channeling” requirement applies to cases arising under the Medicare Act.
In its motion to dismiss, HHS argued just that: the CAMPs Initiative – or a proxy acting on its behalf – should have presented its claims first to CMS/HHS before filing suit. The CAMPs Initiative countered that the channeling requirement applies only to entities that have an available administrative review process. But, because the CAMPs Initiative’s members are manufacturers or distributors who do not submit Medicare claims, they argued they have no such process. The CAMPs Initiative further claimed that they do not have an adequate proxy who can present their claims to CMS, as they “have unique interests” that are dissimilar to those of a provider or patient who can present administrative challenges to the rule. Of note, a group of providers, value-based care organizations, and the influential Paragon Health Institute, filed an amicus brief in support of the government’s motion to dismiss the case.
On March 12, 2026, the court agreed with HHS and dismissed the case. It held that the exhaustion requirement applies to the CAMPs Initiative since it does have an adequate proxy, namely providers who would have an incentive to challenge the rule since their reimbursement for impacted skin substitutes will decrease. The court stated that the shared interests of the CAMPs Initiative and of an adequate proxy do not need to be perfectly aligned, but so long as a third party has an incentive and an alignment to bring an administrative challenge, the presentment requirement must be met. Because it was not met, the court thus concluded that it had no jurisdiction to hear the case and dismissed it.
Because the case was decided on jurisdictional grounds, the court did not consider whether CMS’s payment policy for skin substitutes conflicts with the Medicare Act, APA, or the Constitution. Should CAMPs Initiative appeal and have the court’s decision overturned, it could then hear the statutory/constitutional claims, assuming there are no other jurisdictional issues. A potential appeal would likely take months at a minimum.
Put simply, the court did not decide whether CMS was right or wrong on the payment policy. Instead, it said the group went to court too soon. For Medicare-related disputes, parties usually must first go through the administrative process with CMS/HHS before suing in federal court. The CAMPS group argued that since they don’t submit Medicare claims themselves, the normal administrative path is not an option for them. The government’s position is that even if the manufacturers themselves can’t use the Medicare appeals process directly, someone else with a similar interest—like providers who get paid less under the rule—can raise the issue first. Because that hadn’t happened, the court said it lacked jurisdiction and dismissed the case.
The Bottom line: CMS’s payment cut on skin substitutes stays in place for now. The court did not rule on whether the Medicare policy is legal. The case was dismissed not because the companies lost on the merits, but because the judge said they had to go through Medicare’s administrative process first, likely through providers affected by the rule.
The CAMPs Initiative’s next steps are currently unknown. It has 60 days, or until May 11, 2026, to file an appeal to the U.S. Court of Appeals for the Fifth Circuit.
Ryan Mathis, MD
The post What Happened With the CAMPs Legal Initiative to Reverse Skin Substitute Payment Pricing? appeared first on Caroline Fife M.D..