10:08 AM EDT, 07/15/2025 (MT Newswires) -- MiMedx Group ( MDXG ) and Organogenesis ( ORGO ) shares were down in early Tuesday trading after the Centers for Medicare & Medicaid Services unveiled a new proposal that would cut spending on reimbursement of skin substitute products under Medicare.

The CMS said that current billing practices have resulted in a substantial increase in spending related to skin substitution products in recent years. The agency said Medicare spending on skin substitutes increased to over $10 billion in 2024 from $252 million in 2019.

For 2026, the federal agency said it is "proposing to pay for skin substitute products as incident-to supplies when they are used as part of a covered application procedure paid under the Physician Fee Schedule in the non-facility setting or under the Outpatient Prospective Payment System in the hospital outpatient department setting."

MiMedx ( MDXG ) and Organogenesis ( ORGO ), which develop skin substitutes and other wound care products, said they both support the agency's proposal. Organogenesis ( ORGO ) Chief Executive Gary Gillheeney said the company believes the "new payment structure will curb abuse under the current system."

Shares of MiMedx ( MDXG ) and Organogenesis ( ORGO ) were down 2.8% and 10%, respectively, in recent trading.

Price: 6.61, Change: -0.19, Percent Change: -2.79