Millions of dollars for wounds: Suspicion of massive medical fraud in the USA
Treatment for chronic wounds has become a focal point for massive expenditures and a series of investigations into suspected medical fraud in the US. At the center of the controversy are "skin substitutes," with spending in this sector skyrocketing over the past few years.
Treatment intended to help patients suffering from chronic wounds has become a focus of huge expenditures in recent years — and a series of investigations into suspected medical fraud in the United States. At the center of the affair are products known as "skin substitutes," intended, among other things, for the treatment of complex non-healing wounds. The volume of funds passing through the field has skyrocketed within a few years.
According to data from the Centers for Medicare & Medicaid Services (CMS) in the USA, Medicare expenditures on skin substitutes stood at about 256 million dollars in 2019, but in 2024 they crossed the 10 billion dollar threshold — an increase of almost 40 times. CMS attributes a significant part of the surge to the rise in reported prices of certain products and to problematic pricing methods. In some cases, the price paid for skin substitutes reached more than 2,000 dollars per square centimeter.
When wound treatment becomes a business of millions
Skin substitutes are biological products or materials based on tissue, used as part of the treatment for complex wounds, including foot ulcers in diabetic patients and chronic venous wounds. For suitable patients, the treatment of non-healing wounds has significant medical importance, due to the risk of infections and complications. However, the large sums of money entering the field have attracted the attention of law enforcement authorities.
In April of this year, the US Department of Justice announced the seizure of more than two million dollars from an account linked to an advanced wound care clinic in California. According to suspicions presented in court documents, the clinic submitted claims to Medicare between September 2025 and April 2026 in the amount of more than 46.6 million dollars for skin substitutes and wound care services attributed to 78 patients. Medicare approved payments of about 34 million dollars for these claims. The authorities claim that some of the charges included procedures that were apparently not performed at all. At this stage, these are allegations and legal proceedings, not a determination of guilt.
44 million dollars in charges by one doctor
This is not the only case. In May, an indictment was filed in Utah against a doctor and two nurses on suspicion of Medicare fraud using skin substitutes. According to the US Department of Justice, the doctor submitted claims in the amount of about 44 million dollars for skin substitutes, many of which, according to the indictment, were not medically necessary. Medicare paid more than 19 million dollars for the claims attributed to him. One of the nurses, according to the indictment, submitted additional claims in the amount of about 17 million dollars, of which more than 10 million dollars were paid.
Authorities are changing the rules of the game
The volume of expenditures and suspicions of fraud have already led to a significant change in Medicare policy. From the beginning of 2026, CMS changed the payment method for most skin substitutes, so that instead of a reimbursement based on the reported sales price of each product, a more uniform payment method was established. CMS estimated that the move could reduce Medicare expenditures on these products by almost 90%, without harming patients' access to treatment or the quality of care. At the same time, CMS's anti-fraud mechanisms stopped suspicious payments in the amount of almost 185 million dollars related to skin substitutes during 2025.
In one case alone, more than 4.3 million dollars in suspicious charges by a medical group were stopped — almost all for wound care services attributed to a single Medicare patient. The affair highlights one of the greatest challenges of public health systems: how to allow patients access to advanced medical technologies without the reimbursement mechanisms becoming an incentive for unnecessary treatments. Now the test will be whether the new payment rules will succeed in reducing the exceptional expenditures without harming patients who truly need treatment.
