Medicare Spending for Skin Substitutes/Allografts
Medicare spending on skin substitutes climbed to nearly $15 billion in 2025. This reflects one of the most dramatic increases in the program’s history. These products, often made from amniotic or placental tissue, were once limited-use treatments with mixed clinical support. However, a reimbursement loophole in the early 2020s allowed manufacturers to set their own prices, driving costs upward. Prices rose from just over $1,000 per square inch in 2019 to more than $21,000 by 2025. This resulted in total spending exploding from under $1 billion to $14.4 billion in just six years.
https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-455-defendants-charged-connection-over-65 (last visited June 25, 2026)
Widespread Wound Care Fraud Schemes
Federal prosecutors allege that the surge in spending was fueled by elaborate wound care fraud schemes involving kickbacks, bribes, and fraudulent billing. Across the country, medical professionals, sales representatives, and executives are accused of exploiting Medicare by promoting medically unnecessary skin substitutes and inflating reimbursement claims.
In one major case, sales executive Brian Rowan was charged in connection with a $1.2 billion kickback scheme. Prosecutors allege that these financial incentives led providers to target elderly patients, including those in hospice care, and apply treatments that were not medically necessary.
Other cases reflect similar patterns. Susie Kamien, a medical biller in Illinois, allegedly helped submit more than $918 million in fraudulent claims tied to kickback arrangements. Sandra Peters, a Florida sales representative, is accused of facilitating over $10 million in improper claims by recommending unnecessary products linked to bribery schemes.
Fraud Targeting Vulnerable Patients
Several prosecutions highlight how vulnerable patients were central to these schemes. Nurse practitioner Marizel Yukee is accused of orchestrating a $906 million fraud operation involving unnecessary treatments applied to elderly and terminally ill patients. Similarly, a Florida-based group allegedly billed more than $118 million for treatments that were unnecessary, not performed, or applied to wounds unlikely to heal.
In California, a nurse practitioner and her daughter were charged after billing Medicare for services that were not personally performed, including while the practitioner was incarcerated. In South Florida, another defendant allegedly set up multiple clinics that billed Medicare over $117 million for services never provided.
Policy Changes Reduce Skin Substitute Spending
In response to the spike in costs and fraud, federal policymakers closed the reimbursement loophole in 2025, establishing a fixed payment rate for skin substitutes. As a result, Medicare spending on these products has dropped sharply in 2026, falling to roughly $100 million so far.
The False Claims Act
The Federal False Claims Act is the U.S. Government’s primary weapon for combating fraud. It allows whistleblowers to initiate lawsuits against individuals defrauding the government and recover damages and penalties on the government’s behalf. The statute provides whistleblowers financial rewards as well as protection against retaliation.
We Help Whistleblowers Report Health Care Fraud
Our firm helps whistleblowers expose health care fraud, including abusive wound-care billing, kickback-driven allograft schemes, and medically unnecessary treatments. Our successes include settlements with Amgen, Mallinckrodt, AmeriSourceBergen, and others. If you have information about health care fraud, please contact us for a free consultation. We have the expertise and desire to help.
