Skin Substitute Access and Payment Reform Act

This bill changes how Medicare pays for skin substitute products, adds new oversight rules for providers, and defines these products. It applies starting January 1, 2026.

Sec. 2, Payment reform for skin substitute products: The bill adds skin substitute products to Medicare's covered items. Starting in 2026, payment for these products will be set under a new formula: for 2026, the payment amount is the volume-weighted average of 2023 Medicare payment limits for each billing code, calculated using 2023 claims data. For 2027 and later, the amount is updated by the Consumer Price Index for All Urban Consumers. Medicare will pay 80% of the lesser of the actual charge or this payment amount. The bill also defines a skin substitute product as a cellular, tissue, biological, or synthetic material applied to a wound and intended to stay in the wound bed, marketed under certain FDA or Public Health Service Act pathways, but not including temporary dressings or liquids, gels, powders, or similar items. Starting in 2026, these products are excluded from manufacturer reporting requirements for average sales price. The Secretary of Health and Human Services must create a single billing and payment code for all skin substitute products by January 1, 2026.

Sec. 3, Enhancing program integrity for skin substitute products: By December 1, 2025, and every two years through 2035, the Secretary must identify the top 3% of providers (by national provider identifier) who received the most Medicare payment for skin substitute products in the prior year. These outlier providers will be listed publicly and referred to the HHS Inspector General for potential fraud, waste, or abuse. Starting January 1, 2026, the Secretary must conduct prepayment review of claims from these outlier providers, unless the provider is already subject to prior authorization, has a claim approval rate over 90%, or has billing practices consistent with Medicare rules. Starting no later than January 1, 2027, the Secretary must apply prior authorization for skin substitute products furnished by outlier providers, but can stop if the provider's prior authorization approval rate exceeds 90%. Funding of $5 million per year from 2027 through 2030 is transferred from the Medicare trust fund to CMS for this program. Starting January 1, 2028, if an outlier provider's prior authorization denial rate exceeds 75% over six consecutive months, the Secretary must find an abuse of billing privileges and refer the provider for possible exclusion from federal health programs. For 2026, all skin substitute products must be subject to the same Medicare coverage criteria, unless the Secretary finds a product unsafe due to contamination, infection, or serious adverse reactions. Neither the Secretary nor Medicare contractors may deny coverage for a specific product in 2026 based solely on clinical evidence analysis.