Medicare Policy Shift Secures Coverage Pathway for Celularity's Skin Substitute Products

A significant policy reversal from the Centers for Medicare & Medicaid Services (CMS) has locked in eligibility protections for Celularity Inc. (CELU) ahead of the January 1, 2026 implementation date. While CMS initially proposed Local Coverage Determinations (LCDs) that would have restricted reimbursement for skin substitute grafts and cellular tissue-based products used in treating diabetic foot ulcers and venous leg ulcers, the agency subsequently retracted these restrictive guidelines on December 24, 2025.

The policy decision, championed by CMS Administrator Mehmet Oz, essentially reset the playing field by eliminating the LCDs that had targeted 158 competing products. Despite this withdrawal, Medicare has established a standardized reimbursement model that positions Celularity’s Biovance and Biovance 3L as economically viable options within the healthcare system.

Navigating the New Reimbursement Framework

Under the Medicare 2026 Skin Substitute Update, a uniform flat-rate payment structure now applies across all skin substitute applications delivered in physician offices and hospital outpatient facilities. Medicare will reimburse providers at $127.28 per square centimeter for approved skin substitutes, with this rate maintained consistently regardless of specific product formulation. Dr. Robert Hariri, CEO and Chairman of Celularity, stated that the company’s products can operate profitably and sustainably under this standardized payment model.

Manufacturing Strength and Operational Excellence

Celularity’s competitive positioning extends beyond product efficacy to manufacturing infrastructure. The company operates a GMP/GTP-certified production facility in New Jersey that combines both commercial biomaterial production and investigational cell therapy development under one roof. This integrated approach enables operational efficiency and supply chain resilience critical to meeting ongoing market demand.

A distinguishing factor in Celularity’s operations involves the deployment of Industry 5.0 manufacturing methodologies, which integrate digital technologies and artificial intelligence into production systems. Dr. Hariri emphasized this strategic advantage, noting that the company has embedded advanced automation and data analytics throughout its value chain. “Our commitment to real-world clinical evidence informs every aspect of how we’ve structured production,” Dr. Hariri explained. “By incorporating digitalization and AI-driven systems, we’ve built manufacturing processes that are both adaptable and resilient in responding to market dynamics.”

Market Performance Context

Throughout the past year, CELU shares fluctuated between $1.00 and $4.35 per share. On Friday’s trading session, the stock closed at $1.34, reflecting a 1.52% increase on the day.