Below The Knee · Independent market intelligence for wound care, limb salvage & foot and ankle.

The CMS Filter Is Being Felt. Six Earnings Reports Tell You Everything You Need to Know About the Next 18 Months.

Last week and over the past several weeks, six wound care companies reported earnings.

They operate in the same market. They sell to many of the same facilities. They faced the same CMS December 2024 skin substitute restructuring. They had 15 months to prepare for it.

The outcomes could not be more different — and the divergence between them is not random. It follows a specific logic. Once you see that logic, you can use it to read every earnings report, every product launch, and every commercial conversation in this market for the next 18 months.

Here's the data first. Then the framework.

Convatec (LSE: CTEC) InnovaMatrix sales declined approximately $30M year-over-year to $69M. From January 1, 2026, CMS introduced a rate of $127 per square centimeter — an 80% reduction from prior reimbursement. Management cited "significant market uncertainty" in skin substitutes throughout the earnings call. The rest of the business grew; infusion care was up 12.5% organic, continence care up 6.6%. The group remains on track for 5–7% annual organic revenue growth overall.

BioStem Technologies (OTC: BSEM) Full-year 2025 revenue of $47.5M versus $69.7M in 2024 — a 32% decline. Q4 revenue down 55%. Q1 2026 guidance of $5–6M. Physician office and mobile channels described as effectively gone. The company acquired BioTissue's hospital-facing assets in January 2026 in a deliberate pivot toward the hospital setting.

Organogenesis (NASDAQ: ORGO) FY2026 guidance of $350–420M — down 25–38% from a record 2025. Q1 2026 expected down approximately 50% year-over-year. The driver: CMS December commentary froze clinician utilization across the entire CTP category heading into Q1. Management expects H2 share gains and normalized growth in 2027 as the market stabilizes. The company holds $94.3M in cash, no debt, and a BLA rolling submission for ReNu in knee osteoarthritis expected to complete H1 2026.

MiMedx (NASDAQ: MDMX) The most nuanced story of the group. MiMedx has been actively repositioning away from the physician office channel and toward hospital and surgical settings since 2023 — management saw the reimbursement risk and started moving before the filter activated. The repositioning has created near-term revenue headwinds in the physician office channel, but the surgical segment has been growing. Not a clean winner, but not a casualty either.

Sanara MedTech (NASDAQ: SMTI) Full-year 2025 revenue of $103.1M (+19%), crossing $100M for the first time. Q4 gross margin 93%. Adjusted EBITDA more than doubled to $17.0M. 2026 guidance reaffirmed at $116–121M. BIASURGE received a Vizient Innovative Technology contract effective January 1, 2026. Hospital surgical channel. Documented clinical outcomes. Focused commercial strategy.

TELA Bio (NASDAQ: TELA) Full-year 2025 revenue of $80.3M (+16%). Record Q4 at $20.9M (+18%). OviTex PRS grew 20% for the year; LiquiFix more than tripled. 89 revenue-generating reps in the field. Largest commercial organization in company history. 2026 guidance of at least 8% growth. Hospital and surgical reconstruction channel. Strong gross margins. Clean balance sheet with $50.8M cash.

The instinct is to read this as a binary — winners and losers, good companies and bad companies. That's too simple, and it's wrong in a way that matters.

What the data actually shows is four distinct categories. Understanding which category a company falls into tells you more about its 2026 and 2027 trajectory than any individual earnings metric.

Category 1 — Built Right, Executing Sanara MedTech. TELA Bio.

Clinical evidence strong. Channel diversified across hospital and surgical settings. Commercial infrastructure built for the environment that exists after December 2024. These companies are growing through the filter because the filter rewards exactly what they built. Their 2026 guidance is confident because nothing about their business model depends on reimbursement dynamics that changed.

Category 2 — Built Right, Wrong Channel Organogenesis.

This is the category that matters most for understanding what the filter actually does — and what it doesn't do. Organogenesis is not a company that built on reimbursement arbitrage without clinical evidence. Apligraf and Dermagraft have decades of outcomes data. These are products with genuine clinical credibility. But Organogenesis was heavily concentrated in the physician office and outpatient wound care channels — and when those channels contracted, even products with strong clinical evidence took a significant revenue hit.

The ORGO story adds the most important nuance to the filter narrative: clinical evidence is necessary but not sufficient. Channel diversification is the second variable, and it operates independently of product quality. A company can have the right product and still get hurt if it's in the wrong channel at the wrong moment.

The recovery thesis for ORGO is intact — management expects H2 2026 share gains and normalized growth in 2027 as utilization stabilizes and the market sorts itself out. The cash position and pipeline support that thesis. But the 2026 guide makes clear that even the best products in the category are not immune from channel-driven revenue compression.

Category 3 — Saw It Coming, Adapting MiMedx.

This is the category that gets the least attention but may be the most instructive for commercial strategy. MiMedx started repositioning before the filter activated. Management read the reimbursement trajectory in 2023 and made deliberate moves to reduce physician office exposure and build hospital channel infrastructure ahead of the change. The result is a company that is carrying near-term revenue headwinds from the channel transition but is not facing an existential restructuring in the middle of a challenging market. The best outcome available to a company that was partially exposed is exactly what MiMedx appears to be executing: an orderly transition rather than a crisis pivot.

The MiMedx story matters for the forward-looking question. For companies still figuring out where they sit, the lesson is that the cost of repositioning before the filter activates is dramatically lower than the cost of repositioning after it does.

Category 4 — Built on Arbitrage, Restructuring BioStem. Convatec InnovaMatrix.

These are companies where physician office and mobile channel concentration intersected with products whose commercial success was disproportionately driven by the reimbursement structure rather than by documented clinical outcomes in well-selected patient populations. When CMS removed the reimbursement premium, the commercial case for those products in those channels collapsed quickly. BioStem's $5–6M Q1 2026 guidance — against a comparable period that was multiples higher — is what that collapse looks like in a revenue line.

This is not a judgment about whether these companies or their products have clinical merit. It is an observation about what happens when a commercial strategy is built primarily on a reimbursement premium that regulators determine is not justified by clinical outcomes. The filter is designed to produce exactly this result.

Adding Coloplast to this analysis opens a dimension that the rest of the earnings conversation is missing entirely.

Coloplast's wound care segment has been growing in European and international markets while facing the same U.S. reimbursement headwinds as its peers. The company operates in markets where outcomes-linked payment has been the standard for longer than it has in the U.S. — where tighter reimbursement criteria, mandatory clinical evidence thresholds, and health technology assessment requirements have shaped product development and commercial strategy for years.

The insight this unlocks: the U.S. wound care market is not undergoing a unique disruption. It is converging toward a reimbursement model we’ve seen before. One requiring that products demonstrate clinical and economic value before accessing premium reimbursement.

Companies with established international infrastructure and experience operating under tighter reimbursement standards have a structural advantage given the changes in the US woundcare market. They have already built the clinical evidence packages, the health economics data, the outcomes tracking, and the commercial strategies that the U.S. market is now beginning to require. That experience compounds. And it is not easily replicated by a company that has spent the last five years optimizing for a reimbursement environment that no longer exists.

The forward-looking implication: watch which wound care companies have meaningful international revenue. Not because international markets are a growth substitute for a difficult U.S. environment; but because international operational experience is the training ground for the commercial model the U.S. market is now demanding.

If you're a clinician: The products still financially viable in your practice after December 2024 are, almost by definition, the products with the clinical evidence to justify continued reimbursement under the new standard. That is actually useful signal. The restructuring functioned as a forced clinical evidence audit on the entire category.

What to do now: audit your documentation practices. The tighter reimbursement environment requires more rigorous patient selection, clearer documentation of wound characteristics and prior treatment failure, and outcome tracking that supports coverage decisions. The practices that are doing this well are the ones that will remain viable in the channel. The clinical message underneath the policy noise is this: the filter shifted the wound care market toward evidence. That is better for patients.

If you're in commercial or BD: The channel map changed in December 2024. Last week's earnings confirmed the extent of the change. The physician office and mobile channels are contracting — not permanently, and not to zero, but the reimbursement economics that made those channels attractive for high-cost biologics no longer exist in their prior form.

The hospital channel is where volume is migrating. Sanara MedTech's Vizient contract is the proof that hospital formulary access is the new commercial moat. McKesson's expansion of wound care distribution infrastructure across B2B and homecare is a structural bet by the largest medical distributor in the country on where wound care volume is going. If your commercial strategy doesn't include a serious homecare and outpatient channel plan for 2026 and 2027, you are behind where the market is heading.

The competitive window is open right now. Companies that were competing against hospital-channel players in the physician office channel are now scrambling to follow them into the hospital market. That creates a temporary opening for companies already positioned there. The question is how fast you can move.

If you're an investor: Last week produced a natural experiment. You can now see, with actual revenue data, which business models survived the filter and which didn't. The four-category framework above is the analytical tool — use it to evaluate every wound care company in your portfolio or pipeline against the same criteria.

The investable thesis has shifted. High prior revenue growth is no longer the primary signal — much of that growth was reimbursement-driven rather than demand-driven. The companies that will perform in 2026 and 2027 share three characteristics: documented clinical outcomes that justify reimbursement under tighter standards, diversified distribution across hospital, outpatient, and homecare channels, and commercial infrastructure positioned for site-of-care migration.

Three specific things to watch over the next 90 days. First, SAWC Spring in Charlotte, April 8–12 — the first major in-person gathering since the filter activated; the conversations there will reveal which companies are executing and which are still pivoting. Second, the CAMPs Initiative litigation — the Northern District of Texas ruling on the government's motion to dismiss has direct valuation read-through across the CTP category. Third, Organogenesis H2 2026 execution — their recovery thesis depends on market stabilization in the back half of the year; if utilization recovers as management expects, it validates the Category 2 framework and creates a re-rating opportunity.

The CMS filter didn't break the wound care market — it revealed that four different types of companies were operating in it, and only one of them was built for what comes next.

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See you Friday — Scott

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