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CANTON, Mass. - Organogenesis Holdings Inc. (NASDAQ:ORGO) expressed support for the Centers for Medicare & Medicaid Services’ proposed new payment methodology for skin substitutes and cellular tissue-based products planned for 2026.
The regenerative medicine company welcomed CMS’s proposal to implement a per square centimeter payment structure based on FDA classification for skin substitutes in both physician office and hospital outpatient settings.
Gary S. Gillheeney, Sr., President, CEO, and Chair of the Board for Organogenesis, stated that the company believes the new payment approach will help address abuse in the current system and control Medicare spending while ensuring consistent payments across different care settings.
The company noted that CMS has recognized clinical differentiation of PMA (Premarket Approval) products and taken steps to expand access to these wound healing technologies.
Gillheeney added that with over forty years in regenerative medicine and a portfolio spanning all FDA categories, Organogenesis is positioned to adapt to changes in the wound care market.
The company stated it remains committed to working with CMS and other stakeholders to refine the proposed policies to promote stability and expand access to PMA products.
Organogenesis specializes in developing and manufacturing solutions for advanced wound care and surgical and sports medicine markets, according to the press release statement. The company has demonstrated strong market performance with a 55% return over the past year. For deeper insights into ORGO’s valuation and growth prospects, investors can access comprehensive analysis through InvestingPro, which offers 12 additional investment tips and detailed financial metrics.
In other recent news, Organogenesis Holdings reported a notable decline in its financial performance for Q1 2025, with net revenue decreasing by 21% year-over-year to $86.7 million. The company also faced an operating loss of $26.7 million, a significant increase from the $3.9 million loss in Q1 2024. Despite these challenges, Organogenesis reaffirmed its full-year 2025 revenue guidance of $480-$535 million, indicating confidence in its long-term prospects. The Centers for Medicare & Medicaid Services (CMS) proposed changes to reimbursement for skin substitutes, potentially affecting Organogenesis and other companies in the sector. The proposal includes treating these products as "incident-to supplies," which could reduce spending by nearly 90%. Cantor Fitzgerald reiterated an Overweight rating on Organogenesis, maintaining a $7.00 price target, while BTIG analyst Ryan Zimmerman maintained a buy rating, suggesting potential market consolidation. The company continues to navigate regulatory uncertainties, with CMS delaying the implementation of certain policies until 2026, impacting market dynamics.
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