Skin Substitute Access and Payment Reform Act
- Sponsor
- Rep. Carter, Earl L. "Buddy" [R-GA-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Oct 17, 2025
Bottom line
This bill seeks to stabilize Medicare payments for skin substitute products by establishing a new fixed payment rate and enhancing oversight to curb potential fraud and abuse among high-volume providers.
What it actually does
This bill amends Medicare Part B to establish a new payment methodology for skin substitute products, moving from the current Average Sales Price (ASP) plus 6% to a volume-weighted average of 2023 payment limits, updated annually by the Consumer Price Index. It also introduces a series of program integrity measures, including identification of outlier providers, prepayment claim review, prior authorization, and potential exclusion from federal health care programs for non-compliant providers.
Proponents argue
Proponents argue that the current payment system for skin substitutes is unstable and creates uncertainty for providers and manufacturers, potentially discouraging innovation and limiting patient access. This bill would create a more predictable and sustainable payment model, ensuring continued access to critical wound care products while also proactively addressing concerns about overutilization and fraud through robust program integrity measures.
Opponents contend
Opponents might contend that fixing the payment at a 2023 volume-weighted average, updated only by CPI, could lead to underpayment for newer, more advanced products or overpayment for older ones, potentially stifling innovation. They may also argue that the aggressive program integrity measures, while well-intentioned, could create significant administrative burdens for legitimate providers, delay patient access to care, and unfairly target high-volume specialists.
The bill is relatively short and clearly structured, making its core provisions accessible for an informed reader to understand within a reasonable timeframe.
Section 2(a)
Explicit Medicare Part B Coverage for Skin Substitutes
This provision formally adds 'skin substitute products' to the list of items and services explicitly covered under Medicare Part B. This ensures that these products are recognized as a distinct category for coverage and payment purposes within the Medicare program.
Supporters argue
Supporters argue that explicitly listing skin substitute products as a covered service provides essential clarity and consistency, removing ambiguity that could hinder patient access or create billing complexities for providers.
Critics contend
No specific opposition is typically raised against this provision, as it primarily clarifies existing or intended coverage rather than introducing new, contentious policy.
Tradeoffs
This provision primarily clarifies coverage, setting the stage for the more contentious payment reforms. The main tradeoffs are not within this specific provision but in how these products will be paid for.
Section 2(b)(1)
New Volume-Weighted Average Payment for Skin Substitutes
For 2026, this provision establishes a new payment amount for skin substitute products under Medicare Part B. It will be calculated as a volume-weighted average of Medicare payment allowance limits from the October 2023 Average Sales Price (ASP) Pricing File, using 2023 claims data. For 2027 and subsequent years, this amount will be updated annually by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U). This replaces the current ASP plus 6% payment methodology.
Section 2(c)
Standardized Definition of Skin Substitute Product
This provision adds a new definition for 'skin substitute product' to the Social Security Act. It specifies that such products are cellular, tissue, biological, or synthetic materials applied to a wound, intended to remain within the wound bed, and marketed under specific FDA regulatory pathways. Crucially, it explicitly excludes temporary dressings, liquids, gels, powders, or other similarly constituted items.
Section 3, subsection (aa)(1)
Outlier Provider Identification and OIG Referral
This provision mandates the Secretary of Health and Human Services to identify the top 3% of providers who receive the greatest total Medicare payments for skin substitute products. This determination will be made every two years from December 1, 2025, through December 1, 2035, based on the preceding year's claims data. The list of these 'outlier providers' will be made public and transmitted to the Inspector General (OIG) of the Department of Health and Human Services for assessment of potential fraud, waste, or abuse.
Section 3, subsection (aa)(2)
Prepayment Review for Outlier Providers
Beginning January 1, 2026, claims for skin substitute products submitted by identified 'outlier providers' will be subject to prepayment review. This means claims will be reviewed before payment is issued. However, this review can be waived if the provider is already subject to prior authorization, maintains a high claim approval rate (exceeding 90%) under prepayment review, or if the Secretary determines their billing practices are consistent with Medicare coverage criteria.
Section 3, subsection (aa)(3)
Prior Authorization for Outlier Providers
Starting no later than January 1, 2027, outlier providers will be subject to prior authorization for skin substitute products. This means providers must obtain approval from Medicare before furnishing these products. However, if an outlier provider demonstrates a prior authorization approval rate exceeding 90% over a specified period, the Secretary must cease applying prior authorization to that provider. The bill also appropriates $5 million annually from the Federal Supplementary Medical Insurance Trust Fund to CMS for fiscal years 2027 through 2030 to carry out this paragraph.
Section 3, subsection (aa)(4)
Penalties for Persistent Non-Compliance
Beginning January 1, 2028, if an outlier provider's prior authorization denial rate for skin substitute products exceeds 75% over a period of six or more consecutive months, this will be deemed an 'abuse of billing privileges.' This determination triggers a directive for the Secretary to refer the provider to the Inspector General of HHS to determine whether they should be excluded from participation in any Federal health care program.
Requires the Secretary of Health and Human Services to establish a new, consolidated billing and payment code for all skin substitute products by January 1, 2026.
Section 2(e)
Why it matters:While operationally significant, the establishment of a billing code is often considered a technical implementation detail rather than a core policy change, leading to its placement at the end of a section focused on substantive amendments. This is standard legislative practice for administrative directives.
Case for: Supporters argue that a consolidated billing code simplifies administrative processes for providers and Medicare administrative contractors, reducing complexity and potential for billing errors. It also aligns with the new payment methodology by treating all defined skin substitutes under a single payment framework.
Case against: Critics might contend that consolidating all skin substitute products under a single billing code could obscure differences in product cost, efficacy, or innovation. This could make it difficult to appropriately reimburse more advanced or costly products, potentially hindering patient access to the most clinically appropriate options.
Estimated impact: This provision will streamline billing for all skin substitute products under Medicare Part B, impacting all providers and manufacturers of these products.
States that any defined skin substitute product furnished during 2026 will be subject to the same coverage criteria, unless deemed unsafe. Crucially, it prohibits the Secretary or any Medicare administrative contractor (MAC) from denying coverage for a specific skin substitute product in 2026 based solely on an analysis of its clinical evidence.
Section 3, subsection (aa)(5)
Why it matters:This appears to be a transitional provision, designed to provide a grace period for the industry and Medicare to adapt to the new payment and integrity framework without immediate, potentially disruptive, MAC-specific clinical evidence reviews. Its temporary nature and specific focus on coverage criteria rather than payment amounts contribute to its less prominent placement.
Case for: Supporters would argue this provision provides essential stability and consistency during the transition to the new payment system. It prevents arbitrary or inconsistent coverage denials by MACs based on varying interpretations of clinical evidence, ensuring predictable access for beneficiaries and a stable market for providers and manufacturers in 2026.
Case against: Critics might contend that temporarily suspending MACs' ability to deny coverage based on clinical evidence analysis could lead to the coverage of less effective or more costly products for a year. This could result in inefficient Medicare spending and potentially delay the adoption of more rigorous, evidence-based coverage decisions.
Estimated impact: This provision ensures consistent Medicare coverage for all defined skin substitute products in 2026, temporarily overriding MACs' ability to deny coverage based on their own clinical evidence reviews, potentially impacting millions in Medicare spending for that year.