AVITA Medical Announces National Medicare Physician Payment Framework and Simplified Billing Codes for RECELL Procedures in 2027

Four bundled billing codes will replace eight, with AVITA expecting simpler reporting and more predictable physician payment.

Rhea-AI Summary

AVITA Medical (NASDAQ: RCEL) announced finalized national Medicare physician valuations for RECELL procedures, effective January 1, 2027, replacing regionally set valuations. CMS will also replace eight billing codes with four codes for skin cell suspension autograft procedures, which use a patient's skin cells. The bundled structure covers skin harvesting, cell preparation and application, removing separate coding for manual and automated preparation.

AVITA expects the changes to simplify reporting and make physician payment more predictable. CMS also finalized facility payment assignments and rates for the new codes in hospital outpatient and ambulatory surgery settings. Physician payments remain separate from facility payments, and Medicare coverage policies continue to apply.

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Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.National physician valuations replace regional valuations January 1, 2027; AVITA expects greater payment predictability.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Four bundled billing codes replace eight, combining harvesting, preparation and application without separate manual-versus-automated coding.
• Minor pointFacility payment assignments and rates finalized for new codes in hospital outpatient and ambulatory surgery settings.
• Minor pointTrunk, arms and/or legs work RVUs: 10.97 for initial 100 square centimeters or less; 0.59 per additional increment.
• Minor pointSpecified areas including face and hands work RVUs: 11.28 for initial 100 square centimeters or less; 0.98 per additional increment.

Negative

• None.

Key Figures

Effective date: January 1, 2027 CPT code family: 4 codes, replacing 8 Treatment-area increment: 100 square centimeters +3 more

Effective date

January 1, 2027

National physician valuations and simplified CPT code structure take effect

CPT code family

4 codes, replacing 8

New SCSA procedure reporting structure

Treatment-area increment

100 square centimeters

Code reporting increment for treatment area

Pediatric reporting increment

1% of body area

Infants and children, as applicable

Physician work RVUs

10.97 initial; 0.59 each additional

Trunk, arms and/or legs; 100-square-centimeter units

Physician work RVUs

11.28 initial; 0.98 each additional

Specified areas including face, scalp, neck, hands and feet; 100-square-centimeter units

Key Terms

relative value units (rvus), current procedural terminology (cpt), medicare severity diagnosis-related group (ms-drg), skin cell suspension autograft (scsa)

4 terms

relative value units (rvus) regulatory

"nationally published Relative Value Units (RVUs), which Medicare uses to calculate physician payment"

Relative value units (RVUs) are standardized numeric weights assigned to medical services that measure the resources required to provide each service; they are set by the U.S. Medicare program and used by many payers to compare and price physician procedures. RVUs have three components—work RVU (physician time and effort), practice expense RVU (overhead and staff), and malpractice RVU—and the sum is multiplied by a dollar conversion factor (and adjusted for local cost differences via geographic indices) to determine the payment amount. RVUs are a standardized volume or productivity metric, not a dollar figure by themselves, and changes to the RVU values, conversion factor, or geographic adjustments affect resulting payments.

current procedural terminology (cpt) regulatory

"Current Procedural Terminology (CPT) billing codes to replace the current eight-code structure."

Current Procedural Terminology (CPT) is a standardized set of codes used to describe medical procedures and services for billing and record-keeping, maintained by a professional medical body. For investors, CPT codes matter because they determine how healthcare providers and companies get paid by insurers and government programs, influence revenue recognition, pricing and billing clarity, and can affect reimbursement rates and regulatory compliance — think of CPT like the universal barcode for medical services.

medicare severity diagnosis-related group (ms-drg) regulatory

"Medicare Severity Diagnosis-Related Group (MS-DRG) system"

A Medicare Severity Diagnosis-Related Group (MS-DRG) is the classification system Medicare uses to group inpatient hospital stays with similar clinical conditions and expected resource use for purposes of payment under the Inpatient Prospective Payment System. Each patient stay is assigned an MS-DRG based on the principal diagnosis, procedures performed, patient age, discharge status and the presence or absence of comorbidities and complications (including major comorbidities/complications, CCs, and non‑major CCs); each MS-DRG has a relative weight that reflects the average resources used, and hospital payment is calculated from that weight (with adjustments such as the hospital wage index, outlier payments, and other policy factors). The system applies to Medicare inpatient acute‑care hospital claims and does not govern outpatient billing or non‑Medicare payers.

skin cell suspension autograft (scsa) medical

"skin cell suspension autograft (SCSA) procedures performed using RECELL"

An autograft technique that treats skin wounds by taking a small sample of a patient’s own skin, processing it into a liquid suspension of skin cells (primarily keratinocytes, and often melanocytes and supporting cells), and applying that cell suspension to the prepared wound or burn area so the patient’s cells can repopulate and regenerate the skin surface. Unlike a traditional skin transplant that moves a sheet of tissue, a skin cell suspension spreads individual cells over a larger area; it still depends on a well-prepared wound bed and the patient’s healing capacity, and it can fail if the cells do not attach, if infection or poor blood supply occurs, or if the treated area requires deeper tissue reconstruction.

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• CMS finalizes nationally published physician valuations; CMS’s four-code structure simplifies procedure reporting beginning January 1, 2027
  

VALENCIA, Calif., Nov. 05, 2026 (GLOBE NEWSWIRE) -- AVITA Medical^®, Inc. (NASDAQ: RCEL, ASX: AVH), a leading therapeutic acute wound care company, today announced that the Centers for Medicare & Medicaid Services (CMS) has finalized national physician valuations for skin cell suspension autograft (SCSA) procedures performed using RECELL® under the Calendar Year 2027 Medicare Physician Fee Schedule.

Effective January 1, 2027, nationally published Relative Value Units (RVUs), which Medicare uses to calculate physician payment, will replace valuations set by regional Medicare Administrative Contractors (MACs). This change coincides with CMS putting into place a simplified family of four Current Procedural Terminology (CPT) billing codes to replace the current eight-code structure.

Together, these changes are expected to simplify procedure reporting and give physicians a clearer, more consistent basis for understanding Medicare payment when treating patients with burns and other serious skin injuries.

“Clinicians should be able to focus on helping patients heal, with clear expectations around physician payment,” said Cary Vance, President and Chief Executive Officer of AVITA Medical. “These changes bring simpler billing and greater payment predictability to physicians using RECELL. For AVITA, they strengthen the foundation for broader adoption as we continue to make RECELL a standard of care for patients with burn and wound injuries.”

Simpler reporting for treating clinicians

The new Category I CPT code family combines reporting for skin harvesting, cell preparation and application into a single, bundled SCSA procedure structure. Key changes include:

• Fewer codes: Four codes replace the existing eight-code family, simplifying reporting of the steps involved in treatment.
• Consistent treatment-area increments: Codes distinguish the body area treated and report treatment in increments of 100 square centimeters, with percentage-of-body-area reporting for infants and children.
• Simpler reporting across RECELL systems: The new structure removes separate coding distinctions for manual and automated cell preparation.
• National physician valuations: CMS-published RVUs replace regionally determined MAC valuations, providing a common national basis for calculating Medicare physician payment.

Medicare payment across care settings

In the inpatient setting, Medicare pays hospitals for cases involving RECELL through the Medicare Severity Diagnosis-Related Group (MS-DRG) system, a single, case-based payment determined by the patient’s condition and procedures performed. The RECELL System is not reimbursed separately but is included among the resources used to treat the patient. Physicians receive separate payment for their professional services.

In its separate 2027 hospital outpatient and ambulatory surgery center (ASC) payment rule, CMS finalized facility payment assignments and rates for the new SCSA code family in both settings.

The new physician valuations establish the basis for Medicare payment to physicians for the professional services associated with SCSA procedures performed using RECELL, separate from facility payments to hospitals and ASCs. Medicare coverage policies continue to apply.

Physician work RVUs for the new SCSA codes

CMS adopted the physician work RVUs recommended by the American Medical Association/Specialty Society RVS Update Committee, without modification:

Treatment area	Initial 100 square centimeters or less*	Each additional 100 square centimeters or part thereof*
Trunk, arms, and/or legs	10.97	0.59
Specified areas including the face, scalp, neck, hands and feet and/or fingers and toes	11.28	0.98

*For infants and children, the codes also provide for reporting based on 1% of body area and additional 1% increments, as applicable. Descriptions above summarize the code categories.

The physician work RVUs described reflect the time, skill, and intensity involved in providing a service. They are one component of Medicare payment which also accounts for practice expense and malpractice expense RVUs, geographic adjustments, and the annual dollar conversion factor.

About RECELL
RECELL uses a small sample of a patient’s own healthy skin to prepare a suspension of skin cells that clinicians can spray directly onto a wound. Depending on the wound and approved indication, clinicians use RECELL alone or with a skin graft to support healing while reducing the amount of donor skin required compared with conventional skin grafting.

About CPT Codes
Current Procedural Terminology, or CPT, codes identify medical procedures and services when clinicians and facilities submit insurance claims. The American Medical Association maintains the code set, while CMS establishes the relative values used to calculate Medicare physician payments. The new SCSA code family takes effect January 1, 2027.

About AVITA Medical, Inc.

AVITA Medical® is a leading therapeutic acute wound care company delivering transformative solutions. Our technologies are designed to optimize wound healing, effectively accelerating the time to patient recovery. At the forefront of our platform is RECELL®, approved by the FDA for the treatment of thermal burn and trauma wounds. RECELL harnesses the healing properties of a patient’s own skin to create Spray-On Skin™, offering an innovative solution for improved clinical outcomes at the point-of-care. In the U.S., AVITA Medical also holds the exclusive rights to market, sell, and distribute Cohealyx®, an AVITA Medical-branded collagen-based dermal matrix, and the exclusive rights to manufacture, market, sell, and distribute PermeaDerm®, a biosynthetic wound matrix.

In international markets, RECELL is approved to promote skin healing in a wide range of applications, including thermal burn and trauma wounds. RECELL and RECELL GO® are CE-marked in Europe, have TGA certification in Australia, and are listed with Medsafe in New Zealand; RECELL is PMDA-approved in Japan.

To learn more, visit www.avitamedical.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements generally may be identified by the use of words such as “could,” “expect,” “may,” “should,” “will,” and similar words or expressions, and the use of future dates. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation: industry market conditions; failure to obtain and/or maintain regulatory approvals and comply with applicable regulations; supply chain disruptions that could affect our ability to manufacture our products; market reaction to growth or product initiatives; market penetration of our products; changes in the legal or regulatory environments; and other business effects, including the effects of industry, as well as other economic or political conditions outside of the Company’s control. Any forward-looking statements made herein are made as of the date of this press release, and the Company undertakes no obligation to publicly update or revise any of these statements, except as required by law. For additional information and other important factors that may cause actual results to differ materially from forward-looking statements, please see the “Risk Factors” section of the Company’s latest Annual Report on Form 10-K and other publicly available filings for a discussion of these and other risks and uncertainties.

Investor & Media Contact:
Ben Atkins
Phone +1-805 341 1571
investor@avitamedical.com | media@avitamedical.com

Authorized for release by the Chief Financial Officer of AVITA Medical, Inc.

©2026 AVITA Medical. AVITA Medical®, the AVITA Medical logo, Cohealyx®, RECELL®, RECELL GO®, and Spray-On Skin^TM Cells are trademarks of AVITA Medical. PermeaDerm® is a registered trademark owned by Stedical Scientific, Inc. All other trademarks are the properties of their respective owners.

FAQ

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When do AVITA Medical's new RECELL Medicare physician valuations and billing codes take effect?

The national physician valuations and four-code billing structure take effect January 1, 2027. Nationally published Relative Value Units replace valuations set by regional Medicare Administrative Contractors, while four bundled procedure codes replace the existing eight-code family.

How are Medicare physician payments for RECELL calculated under the new framework?

The new physician work Relative Value Units (RVUs) are one component of Medicare payment, not dollar payment amounts. The calculation also accounts for practice expense and malpractice expense RVUs, geographic adjustments and the annual dollar conversion factor.

Does Medicare reimburse hospitals separately for RECELL in inpatient care?

Medicare does not reimburse the RECELL System separately in inpatient care. It is included among the resources covered by a single case-based hospital payment determined by the patient's condition and procedures performed. Physicians receive separate payment for professional services.

How do the new RECELL billing codes measure treatment area?

The codes distinguish the body area treated and use 100-square-centimeter increments, with each additional increment including a partial increment. For infants and children, reporting can instead use 1% of body area and additional 1% increments, as applicable.