Payment reform for skin substitute products

(a) Coverage of skin substitute products Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)) is amended— (1) in subparagraph (JJ), by striking and at the end; (2) in subparagraph (KK), by adding and at the end; and (3) by inserting after subparagraph (KK) the following new subparagraph: (LL) skin substitute products (as defined in section 1847A(c)(6)(J)).. (b) Payment (1) Payment amount Section 1847A of the Social Security Act (42 U.S.C. 1395w–3a) is amended— (A) in subsection (a)(1)— (i) by striking the period at the end and inserting; and; (ii) by striking shall apply to and inserting shall apply— (A) to; and (iii) by adding at the end the following new subparagraph: (B) to payment for skin substitute products (as defined in subsection (c)(6)(J)) that are furnished during the period beginning on January 1, 2027, and ending on December 31, 2030.; and (B) in subsection (b)— (i) in paragraph (1)— (I) in the text preceding subparagraph (A), by inserting or a skin substitute product after drug or biological; (II) in subparagraph (B), by striking or at the end; (III) in subparagraph (C), by striking the period at the end and inserting; or; and (IV) by adding at the end the following new subparagraph: (D) in the case of a skin substitute product (as defined in subsection (c)(6)(J)) furnished during the period beginning on January 1, 2027, and ending on December 31, 2030, $457 per square centimeter.; and (ii) in paragraph (2)— (I) in subparagraph (A), by inserting or a skin substitute product after drug or biological; and (II) in subparagraph (B), by inserting, and, with respect to a skin substitute product, a square centimeter after pertaining to liquids. (2) Conforming amendments Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is amended— (A) in subparagraph (S)(i), by striking subject to subparagraph (EE) and inserting subject to subparagraphs (EE) and (II); (B) by striking and (HH) and inserting (HH); and (C) by inserting, and (II) with respect to skin substitute products under section 1861(s)(2)(LL) furnished during the period beginning on January 1, 2027, and ending on December 31, 2030, the amount paid shall be 80 percent of the lesser of the actual charge or the payment amount established under section 1847A(b)(1)(D) before the semicolon at the end. (c) Skin substitute product defined Section 1847A(c)(6) of the Social Security Act (42 U.S.C. 1395w–3a(c)(6)) is amended by adding at the end the following: (J) Skin substitute products (i) In general Subject to clause (ii), the term skin substitute product — (I) means a cellular, tissue, biological or synthetic material that— (aa) is applied to a wound and intended to remain within the wound bed; and (bb) is marketed pursuant to section 510(k), 513(f)(2), or 515 of the Federal Food, Drug, and Cosmetic Act, or section 361 of the Public Health Service Act; and (II) includes any products reimbursed pursuant to skin substitutes codes under this title at any time prior to January 1, 2027. (ii) Exclusions The term skin substitute product does not include— (I) any product that is intended to temporarily protect or cover the wound bed and be removed without resorption such as a dressing; or (II) any product that does not meet the domestic sourcing and distribution requirements described in clause (iii), unless a waiver under clause (iv) is in effect with respect to such product. (iii) Domestic sourcing and distribution requirements For purposes of clause (ii), the domestic sourcing and distribution requirements described in this clause are, with respect to a product described in clause (i), the following: (I) All human cellular or tissue material contained in such product was donated by citizens or nationals of the United States, or aliens lawfully admitted for permanent residence in the United States, and any such donation was made within the United States in accordance with applicable Federal law. (II) All harvesting and processing (as applicable) and all manufacturing of such product occurred exclusively within the United States, and such harvesting, processing, and manufacturing was performed in compliance with all applicable standards of the Food and Drug Administration and the American Association of Tissue Banks. (III) The product is distributed solely by the entity holding the applicable clearance, approval, or registration for such product under section 510(k), 513(f)(2), or 515 of the Federal Food, Drug, and Cosmetic Act, or section 361 of the Public Health Service Act, and no intermediaries, or agents were involved in the distribution of such product to the furnishing provider, except that a third-party distributor that adheres to and is able to perform the contractual requirements associated with the scope of work and is qualified and able to adhere to the legal and regulatory requirements defined in the scope of work may be involved in such distribution. (IV) The entity described in subclause (III) with respect to the product submits to the Secretary, in such form and manner as the Secretary shall specify (but not less frequently than annually), an attestation that the product meets each of the requirements under subclauses (I) through (III). (iv) Waiver The Secretary may waive the requirements under clause (iii) with respect to a specific product, for a period not to exceed 180 days, if the Secretary determines that a domestic supply shortage exists and that a waiver is necessary to protect patient access to care.. (d) Exclusion from reporting requirements Section 1847A(f)(2)(A) of the Social Security Act (42 U.S.C. 1395w–3a(f)(2)(A)) is amended by inserting (except that, beginning January 1, 2027, a drug or biological so described does not include a skin substitute product (as defined in subsection (c)(6)(J))) after products that are payable under this part as a drug or biological. (e) Consolidated billing and payment code Not later than January 1, 2027, the Secretary of Health and Human Services shall establish a new billing and payment code for all skin substitute products (as defined in subparagraph (J) of section 1847A(c)(6) of the Social Security Act (42 U.S.C. 1395w–3a(c)(6)), as added by subsection (c)).