Enhancing program integrity for skin substitute products

Section 1834 of the Social Security Act (42 U.S.C. 1395m) is amended by adding at the end the following new subsection: (aa) Special payment rules for skin substitute products (1) Identification of outlier providers of skin substitute products (A) In general Not later than March 1, 2026, and every 2 years thereafter through March 1, 2035, the Secretary shall determine the 3 percent of the total number of providers of skin substitute products that are outlier providers of skin substitute products. (B) Outlier providers of skin substitute products The determination of an outlier provider of skin substitute products under this paragraph shall be based upon the providers (as identified by national provider identification number) that received the greatest total payment under this title for skin substitute products furnished in the year preceding the year in which the determination under subparagraph (A) is made. (C) Referral to oig The Secretary shall— (i) make publicly available the list of outlier providers of skin substitute products identified under each determination under subparagraph (A); and (ii) transmit such list to the Inspector General of the Department of Health and Human Services for the assessment of potential fraud, waste, or abuse. (2) Initial prepayment claim review for certain outlier providers (A) In general Beginning March 1, 2026, the Secretary shall conduct prepayment review of claims for skin substitute products submitted under this title by an outlier provider of skin substitute products unless 1 or more of the conditions described in subparagraph (B) is met with respect to such provider. (B) Limitation For purposes of subparagraph (A), the conditions described in this subparagraph are, with respect to an outlier provider of skin substitute products, the following: (i) Skin substitute products furnished by the provider are subject to prior authorization under paragraph (3). (ii) The rate of approval for claims for skin substitute products furnished by such provider that are subject to prepayment review under this paragraph exceeds 90 percent (as determined over a period of time or number of claims specified by the Secretary). (iii) The Secretary determines that the billing practices of the provider are consistent with the applicable coverage criteria and requirements under this title. (3) Prior authorization for outlier providers of skin substitute products (A) In general Beginning not later than January 1, 2027, subject to subparagraph (B), the Secretary shall, for a period determined appropriate by the Secretary, apply prior authorization for skin substitute products that are furnished by an outlier provider of skin substitute products identified under paragraph (1). (B) Removal from prior authorization In the event that the Secretary determines, with respect to an outlier provider of skin substitute products, that the rate of approval for requests for prior authorization under this paragraph for skin substitute products furnished by such provider exceeds 90 percent (as determined over a period of time or number of claims specified by the Secretary), the Secretary may cease to apply prior authorization under this paragraph for skin substitute products furnished by such provider. (C) Funding For purposes of carrying out this paragraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841, to the Centers for Medicare & Medicaid Services Program Management Account, of $5,000,000 for each of fiscal years 2027 through 2030, to remain available until expended. (4) Enrollment revocation or exclusion of noncompliant outlier providers (A) In general Beginning January 1, 2028, if the rate of denial for requests for prior authorization under paragraph (3) for skin substitute products furnished by an outlier provider of skin substitute products exceeds 75 percent over a period of 6 or more consecutive months, the Secretary shall determine that an abuse of billing privileges exists with respect to such provider for purposes of section 424.535(a)(8)(ii) of title 42, Code of Federal Regulations. (B) Referral for exclusion If the Secretary determines under subparagraph (A) that an abuse of billing privileges exists with respect to an outlier provider of skin substitute products, the Secretary shall direct the Inspector General of the Department of Health and Human Services to determine whether such provider should be excluded from participation in any Federal health care program under section 1128(b)(6). (5) Skin substitute product wastage (A) With respect to skin substitute products furnished for the treatment of chronic or acute wounds, payment shall be only made for the reasonable and necessary portion of the skin substitute product used in the treatment of the wound, excluding wastage. (B) For the purpose of subparagraph (A), the reasonable and necessary portion of the skin substitute product is defined as the greater of (i) 3 square centimeters, or (ii) 120 percent of the size of the treated wound. (6) Skin substitute product defined In this subsection, the term skin substitute product has the meaning given such term in section 1847A(c)(6)(J)..