Days after $5 million donation to MAGA Inc., Trump freezes Medicare waste crackdown

Trump pledged to root out "waste, fraud and abuse." Then a big contribution to his Super PAC came in.

On February 24, 2025, Extremity Care LLC, a company that sells very expensive bandages made from discarded placentas and other substances, donated $5 million to MAGA Inc., President Trump's Super PAC. Six days later, on Truth Social, Trump blasted a pending Biden administration rule that would have barred Medicare from covering Extremity Care’s products — which can cost thousands of dollars per square inch and lack scientifically proven benefits. "'Crooked Joe' rammed through a policy that would create more suffering and death for diabetic patients on Medicare," Trump posted. "The hardest hit: veterans and minorities."

The Biden rule was initially scheduled to go into effect in February 2025, but was previously delayed by the Trump administration until April 13 as part of a blanket regulatory freeze. On April 11, 40 days after Trump's post, the Centers for Medicare & Medicaid Services (CMS) announced the rule would be delayed until at least January 1, 2026, allowing Extremity Care to continue to charge Medicare for its products.

The February 24 donation was not made public until July 31, when MAGA Inc. filed its 96-page mid-year report. The Extremity Care donation appears on page 18:

The Biden rule was designed to crack down on a significant source of waste and abuse in Medicare. "Skin substitute" products went from a negligible source of Medicare spending in 2014 to $256 million in 2019, and then surged to more than $10 billion in 2024. One of Extremity Care's products, Coll-e-Derm, costs $11,051.10 per square inch. Another Extremity Care product, CompleteFT, costs $7,812.38 per square inch. The products are generally used on "diabetic foot and venous leg ulcers."

Trump's March Truth Social post claimed that Biden's rule would result in 431,429 lost limbs annually and 187,286 additional deaths. There is no evidence to support these claims. The Biden rule would preserve Medicare patients' access to skin substitutes, which are generally not covered by private insurance. Under the Biden rule, however, coverage would be limited to products "that are supported by evidence" that they are effective.

CMS, in preparation for implementing the Biden rule, determined that 17 products have proven their effectiveness in scientifically valid studies. The agency found that Coll-e-Derm, CompleteFT, and other Extremity Care products are not backed by scientific literature.

Medicare now spends more on skin substitutes than "ambulance rides, anesthesia or CT scans."

Many of the products with scientific backing are much less expensive than those offered by Extremity Care. Oasis wound matrix, a product that has proved effective in scientific research, charges Medicare $75.51 per square inch. Another scientifically-proven product, Apligraf, charges $195.58 per square inch.

Extremity Care submitted a comment opposing the Biden rule, claiming it was based on a "misunderstanding of wound healing mechanisms" and "the treatment of equivalent products is arbitrary." CMS responded that studies have shown "substantial differences between products" and therefore "these products are not equivalent and require evidence for the individual product, even if they are from the same class."

Between April (when the Biden rule was supposed to go into effect) and July, Medicare has spent another $2.3 billion on skin substitutes, according to a study by Early Read conducted for the New York Times. Although the precise breakdown is not available, the bulk of that spending is almost certainly on products lacking scientific support. 92% of the products currently covered by Medicare would be excluded if the Biden rule were ever permitted to go into effect.

The abusive practices of the skin substitute industry

Extremity Care and another company in the skin substitute industry, Legacy, formed a group called the "MASS Coalition" to oppose the Biden rule. Legacy's products would also be ineligible for Medicare under the Biden rule. Both companies have engaged in practices that abuse Medicare's rules and waste taxpayer money.

Medicare allows a company to set its reimbursement rate for the first six months of a product, regardless of what it charges doctors. The New York Times reports that Legacy and other companies in the industry have incentivized doctors to use their products by offering steep discounts. They can then bill Medicare the full rate and pocket the difference. At the end of the six months, the reimbursement is adjusted to the price doctors charge.

For example, "[i]n April 2023, Medicare began reimbursing $6,497 for every square inch of a bandage called Zenith," a product sold by Legacy. After six months, the reimbursement for Zenith was adjusted down to $2,746. Legacy responded by launching a new product, Impax, and charging Medicare $6,490.

The product descriptions are nearly identical, and the same photo is used for both.

According to an Early Read analysis for the New York Times, "spending on Zenith and Impax has exceeded $2.6 billion" since 2022. In the industry overall, companies "have brought more than 100 new versions to market since 2023."

Another tactic employed by Extremity Care, Legacy, and others in the industry is to offer "bulk discounts" to doctors, who are then allowed to charge Medicare the full price. Although bulk discounts are permitted under Medicare rules, skin substitute companies offer doctors discounts of up to 45%. In some Legacy contracts reviewed by the New York Times, "doctors had to buy only three products to qualify for a 40 or 45 percent discount."

Trump pledged to root out "waste, fraud, and abuse" in government programs, including Medicare. Billions are being spent on products that have not been proven beneficial to patients, and cheaper, more efficacious substitutes are available. But, after receiving a $5 million check to his Super PAC, Trump has gone the opposite direction, delaying a Biden rule that would have curbed wasteful spending.

Trump administration proposes a new rule that is more favorable to Extremity Care

On July 14, the Trump administration announced a new proposed Medicare rule for skin substitutes. The new proposal would cap payments for skin substitutes at $806 per square inch. This is lower than many companies, including Extremity Care and Legacy, currently charge, but it would not limit coverage to products that are scientifically proven to be effective. Further, many of those proven products are available for far less than $806 per square inch.

Although the new proposal is opposed by the MASS Coalition, it would be far more favorable than the Biden rule. That means, under the rule, doctors could continue to get reimbursed for products purchased from Extremity Care and Legacy.

It is far from clear, however, that either rule will ever go into effect. Both are now delayed until January 2026. Meanwhile, the owners of Extremity Care hired Brian Ballard, a Trump fundraiser and widely regarded as the lobbyist with the most influence in the Trump administration, $320,000 per year. Susie Wiles, who is Trump's Chief of Staff, was previously Ballard's employee.