Unpacking Medicare’s $15B skin substitute boom, with HHS-OIG Regional Inspector General David Tawes, M.A.

David Tawes, regional inspector general in the Office of Evaluation and Inspections at HHS’ Office of Inspector General, joins the show to discuss the agency’s new report on the massive rise in Medicare spending for skin substitutes.

He explains what’s driving the surge — from changing billing practices to outright fraud — and how policymakers can balance patient access with stronger oversight. Tawes also shares what physicians should know about potential red flags and how to report suspicious activity.

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Music Credits:
Cool Chill Summer Lo Fi Hip-Hop by Musinova - stock.adobe.com
Relaxing Lounge by Classy Call me Man - stock.adobe.com
A Textbook Example by Skip Peck - stock.adobe.com

Editor's note: Episode timestamps and transcript produced using AI tools.

Introduction and Overview (00:00:00) Explosive growth in Medicare Part B spending on skin substitutes; vulnerability to fraud, waste and abuse.

Podcast Introduction and Guest Background (00:00:33) Host introduces the episode, guests and outlines the focus on Medicare Part B skin substitute spending.

David Tawes’ Background and OIG Mission (00:01:50) David Tawes introduces himself and explains the Office of Inspector General’s mission and scope.

OIG’s Oversight and Specialization (00:02:28) Discussion of OIG’s focus areas, including prescription drugs, Medicare, Medicaid and other HHS programs.

How the Skin Substitutes Report Originated (00:04:20) Explanation of why OIG began investigating skin substitute payments and compliance with new reporting laws.

Findings on Increased Billing (00:05:56) Analysis of factors driving increased skin substitute billing: more enrollees, higher units per patient, rising costs.

Total Dollar Amounts and Growth (00:08:11) Details on the magnitude of spending: over $10 billion in 2024, projected $15 billion in 2025.

Fraud Indicators and Investigations (00:08:49) Discussion of fraud’s role in increased spending and the vulnerability of skin substitutes to abuse.

Major Fraud Case Example (00:09:28) Description of a $1.2 billion fraud case involving non-medical professionals and fraudulent billing schemes.

Medicare Part B vs. Medicare Advantage Trends (00:12:11) Comparison of skin substitute spending and utilization between Medicare Part B and Medicare Advantage.

Role of Prior Authorization in Medicare Advantage (00:13:49) How prior authorization in Medicare Advantage helps limit fraud compared to traditional Medicare.

Care Settings and Utilization Patterns (00:14:45) Trends in where skin substitutes are used most — physician offices, home care, and expenditure differences.

Enforcement and Compliance Process (00:16:32) How OIG detects trends, enforces compliance, and the lag between data anomalies and enforcement action.

Policy Recommendations to Curb Spending (00:18:47) OIG’s recommendations for policymakers: reconsider payment classification, explore alternative payment methods and learn from Medicare Advantage.

Ongoing OIG and CMS Actions (00:20:31) CMS’s proposed changes, use of AI, and OIG’s continued monitoring of skin substitute billing and fraud.

Prior Authorization as a Safeguard (00:21:28) Discussion of prior authorization’s role in preventing inappropriate or fraudulent skin substitute claims.

Advice for Physicians (00:22:22) Warning to physicians about aggressive marketing and fraudulent schemes involving skin substitutes.

Emphasis on Payment Incentives (00:23:08) Highlighting how reimbursement differences drive provider behavior and the need for payment reform.

Closing Remarks and Podcast Outro (00:24:21) Thanking the guest, summarizing the conversation, and providing subscription information for listeners.