Celularity Welcomes CMS Action on Medicare Local Coverage Determination for Skin Substitutes Products

Rhea-AI Summary

Celularity (NASDAQ: CELU) welcomes the Centers for Medicare & Medicaid Services (CMS) decision to delay the effective date of a Medicare Local Coverage Determination (LCD) for skin substitute products to January 1, 2026. The LCD, originally published in November 2024, concerns skin substitute grafts and cellular products used to treat diabetic foot ulcers and venous leg ulcers.

The delay follows President Trump's January 2025 executive order freezing regulatory guidance not yet in effect. Initially postponed from February 12, 2025, to April 13, 2025, CMS has now further extended the implementation date. This action, led by CMS Administrator Dr. Mehmet Oz, aims to ensure continued Medicare patient access to critical wound care products while allowing time for comprehensive payment system reform.

Positive

• Delayed implementation preserves current Medicare reimbursement structure through 2025
• Maintains market access for company's skin substitute products
• Additional time granted for payment system reform negotiations

Negative

• Regulatory uncertainty remains regarding final LCD implementation
• Temporary relief only - new coverage determination still pending for 2026

Insights

Healthcare Policy Analyst

The postponement of Medicare's Local Coverage Determination (LCD) for skin substitutes to January 2026 represents a significant regulatory development for Celularity. This delay provides Celularity with a 9-month extension of the current reimbursement framework for their regenerative products used in treating diabetic foot ulcers and venous leg ulcers.

The original Biden-era LCD, which was frozen by President Trump's January executive order, likely contained provisions that would have restricted coverage criteria or adjusted reimbursement rates for skin substitutes. By delaying implementation, CMS has preserved the status quo for Medicare reimbursement of these products, which is critically important for Celularity's near-term revenue stability.

For a smaller regenerative medicine company like Celularity ($37.3 million market cap), Medicare reimbursement policy directly impacts product adoption and utilization. The management's enthusiastic response suggests the original LCD may have contained unfavorable provisions that could have restricted patient access to their products.

This development allows Celularity additional time to engage with CMS on payment reforms while maintaining market access. Dr. Hariri's statement about averting a "looming healthcare crisis" indicates the original LCD may have substantially coverage, potentially impacting Celularity's addressable market in the Medicare population - a crucial demographic for wound care products given the higher prevalence of chronic wounds among elderly patients.

Action delays to January 1, 2026, the effective date of a Biden-era Medicare LCD for skin substitute products used to treat diabetic foot ulcers and venous leg ulcers

FLORHAM PARK, N.J., April 14, 2025 (GLOBE NEWSWIRE) -- Celularity Inc. (Nasdaq: CELU) (“Celularity” or the “Company”), a regenerative and cellular medicine company, welcomes action by the Centers for Medicare & Medicaid Services, or CMS, to revise to January 1, 2026, the effective date of the Medicare Local Coverage Determination, or LCD, titled “Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers” first published in November 2024.

An LCD is a determination by a Medicare Administrative Contractor, or MAC, whether to cover a particular service on a MAC-wide, basis. A MAC processes Medicare Part A and Part B claims for a defined geographic area, or jurisdiction, and develops LCDs within its particular jurisdiction.

The action by CMS follows a January 2025 executive order by President Trump freezing all regulatory guidance not yet in effect, which included the Biden-era LCD that is the subject of this action by CMS. Pursuant to President Trump’s January 2025 order, all MACs delayed the effective date of the November 2024 LCD by sixty days, from February 12, 2025, to April 13, 2025. This most recent action by CMS revises that effective date to January 1, 2026, in all MAC jurisdictions.

“We applaud the leadership of CMS Administrator Dr. Mehmet Oz to ensure continued access to these critical wound care products for Medicare patients who suffer from diabetic foot ulcers and venous leg ulcers,” said Dr. Robert J. Hariri, Celularity Chairman and CEO. “CMS’ action averted a looming healthcare crisis for diabetic Americans, for whom access to treatment with skin substitutes can be critical to avoiding serious complications like sepsis, amputations, and even premature death. We fully endorse payment system reform, which this action ensures can now occur on an inclusive, thorough basis that yields lower cost of care without compromising Medicare patient access.”

Dr. Stephen Brigido, Celularity’s President--Degenerative Diseases, added, “We believe innovative skin substitute products have been shown to contribute meaningfully to improved outcomes in treating chronic wounds, which benefits patients and reduces Medicare’s long-term cost of care. This action preserves patient access and allows CMS time to work with relevant stakeholders to shape payment system improvements, guided by three principles—first and foremost, ensure Medicare patient access to needed treatments; second, reimburse providers who care for these patients fairly and appropriately; and third, incentivize skin substitute product innovation which is shown to contribute to improved patient outcomes and lower Medicare’s long-term cost of care.”

About Celularity

Celularity Inc. (Nasdaq: CELU) is a regenerative and cellular medicine company developing and commercializing advanced biomaterial products and allogeneic, cryopreserved, placental-derived cell therapies, all derived from the postpartum placenta. Celularity believes that by harnessing the placenta’s unique biology and ready availability, it can develop therapeutic solutions that address significant unmet global needs for effective, accessible, and affordable therapies. For more information, visit www.celularity.com.

Forward Looking Statements

This press release includes “forward-looking statements” (as defined under Federal securities laws). All statements other than statements of historical facts are “forward-looking statements,” including those relating to future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “can,” “could,” “may,” “observed,” “potential,” “promise,” “should,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances). Forward-looking statements are based on Celularity’s current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks,” and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Many factors could cause actual results to differ materially from those described in these forward-looking statements, including those risk factors set forth under the caption “Risk Factors” in Celularity’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on July 30, 2024, and other filings with the SEC. If any of these risks materialize or underlying assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Celularity does not presently know, or that Celularity currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, these forward-looking statements reflect Celularity’s current expectations, plans, or forecasts of future events and views as of the date of this communication. Subsequent events and developments could cause assessments to change. Accordingly, forward-looking statements should not be relied upon as representing Celularity’s views as of any subsequent date, and Celularity undertakes no obligation to update forward-looking statements contained herein, whether because of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.

Carlos Ramirez
Senior Vice President, Celularity Inc.
Carlos.ramirez@celularity.com

FAQ

What is the new effective date for CMS's skin substitutes LCD affecting CELU products?

The new effective date is January 1, 2026, delayed from the previous April 13, 2025 deadline.

How does the CMS delay impact Celularity's (CELU) skin substitute products for Medicare patients?

The delay ensures continued access to Celularity's wound care products for Medicare patients with diabetic foot ulcers and venous leg ulcers through 2025.

What triggered the delay in implementing the skin substitutes LCD affecting CELU?

President Trump's January 2025 executive order freezing Biden-era regulatory guidance led to the initial delay, followed by CMS's decision to extend to 2026.

What are the key benefits of skin substitute products offered by Celularity (CELU) for Medicare patients?

These products help prevent serious complications in diabetic patients, including sepsis, amputations, and premature death, while potentially reducing Medicare's long-term care costs.