The Department of Justice is preparing to investigate a growing number of False Claims Act cases involving skin substitutes, with more cases expected, according to a Feb. 6 blog post from law firm Akin, citing remarks from Deputy Assistant Attorney General Brenna Jenny.
Here are seven things to know:
1. The department is ramping up enforcement in the wound care space, particularly around skin substitutes. The focus comes as the agency continues to lean heavily on the False Claims Act, driven by record recoveries in 2025 and a surge in whistleblower filings.
2. Medicare spending on skin substitutes has allegedly soared, rising from $256 million in 2019 to more than $10 billion in 2024. CMS has said much of that growth is tied to alleged abusive pricing practices and products with limited clinical value.
3. Federal authorities have already taken major action in the sector. The department secured a $45 million settlement with Miramar, Fla.-based Vohra Wound Physicians Management over allegations of unnecessary debridement billing, while other wound care company owners received prison sentences and were tied to a $309 million civil settlement involving medically unnecessary skin substitutes and kickbacks.
4. The scrutiny extends beyond civil billing disputes. The department’s Civil and Criminal Fraud Sections are both involved, raising the stakes for companies that could face False Claims Act liability, criminal charges, corporate integrity agreements and continued investigations.
5. CMS also tightened oversight on reimbursement. Beginning Jan. 1, the agency cut payment rates for skin substitutes while publicly warning about pricing abuses in the market.
6. The broader federal fraud crackdown has intensified in recent months. On Feb. 26, CMS implemented a six-month nationwide moratorium on new Medicare enrollment for certain durable medical equipment suppliers, including initial enrollment applications and some changes in majority ownership, citing disproportionate high-risk billing by medical supply companies.
7. CMS also said it plans to publish a list of providers and suppliers that have been revoked from Medicare, along with the reasons for those revocations, in an effort to increase transparency for patients and insurers.
