This bill changes how Medicare pays for "skin substitute products" used in wound care. It adds a definition of skin substitute products and treats them separately from drugs and biologics under the Medicare drug payment rules. For 2026 the bill sets a single national payment rate for these products equal to the volume-weighted average of Medicare payment limits from the April 2023 ASP Pricing File, using 2023 billing units. After 2026 the rate is updated each year by the Consumer Price Index for All Urban Consumers (CPI-U). Medicare payment to providers would be 80 percent of the lesser of the actual charge or the new payment amount. The bill requires a new billing and payment code by January 1, 2026, and says outpatient sites must receive equivalent reimbursement for use and application of these products.
The bill adds several program integrity rules: every two years CMS must identify the top 3 percent of providers by total Medicare payments for skin substitutes, publish that list, and send it to the HHS Inspector General. CMS must start prepayment claim review for those outlier providers beginning March 1, 2026 (with some exceptions). Starting January 1, 2027, CMS may require prior authorization for skin substitutes furnished by outlier providers; providers may be removed from prior authorization if their approval rate exceeds 90 percent. If an outlier provider has prior-authorization denial rates above 75 percent for six or more consecutive months, CMS must treat that as abuse of billing privileges and refer for possible exclusion from federal programs. The bill also limits payment for product "wastage": payment is limited to the greater of 3 square centimeters or 120 percent of wound size.
The bill also directs HHS and the FDA to review approval processes for human cellular and tissue allografts and autografts that are not regulated solely under section 361. The agency must complete a review within 18 months, consider a tiered risk-based review, consult stakeholders, issue draft guidance within 24 months, finalize guidance after public comment, and report findings and recommendations to Congress within 30 months. The bill says these steps should not reduce safety or efficacy standards.
If you are a Medicare patient who receives a skin substitute product, the bill aims to standardize how Medicare pays for those products and to make billing consistent across places where the product is applied. If you are a provider, the bill creates a single payment rate, a new billing code, and new rules for audits, prepayment review, and possible prior authorization for high-use providers. If you are a manufacturer or someone who makes tissue products, the bill asks FDA to review and possibly streamline regulatory review paths for some tissue-based products.
The bill authorizes a transfer of $5,000,000 from the Federal Supplementary Medical Insurance Trust Fund to the CMS Program Management Account for each of fiscal years 2027 through 2030 to support prior authorization activities. No publicly available information on the bill's total budgetary impact or other cost estimates is provided in the bill text.
The text frames these changes as a way to set a consistent Medicare payment for skin substitute products, improve payment accuracy, reduce waste through a wastage rule, target and limit improper billing by identifying outlier providers, and modernize regulatory review to improve access to tissue and cellular products while keeping safety standards.
No publicly available information.