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: (bb) Special payment rules for skin substitute products (1) Prepayment claim review and prior authorization (A) Initial prepayment claim review for certain providers (i) In general Beginning January 1, 2027, the Secretary shall conduct prepayment review of claims for skin substitute products submitted under this title by a specified provider of skin substitute products unless 1 or more of the conditions described in clause (ii) is met with respect to such provider. (ii) Limitation For purposes of clause (i), the conditions described in this subparagraph are, with respect to a specified provider of skin substitute products, the following: (I) Skin substitute products furnished by the provider are subject to prior authorization under subparagraph (B). (II) The rate of approval for claims for skin substitute products furnished by such provider that are subject to prepayment review under this subparagraph 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. (B) Prior authorization for specified providers of skin substitute products (i) In general Beginning not later than January 1, 2028, subject to clause (ii), the Secretary shall, for a period of 180 days, apply prior authorization for skin substitute products that are furnished by a specified provider of skin substitute products. (ii) Removal from prior authorization In the event that the Secretary determines, with respect to a specified provider of skin substitute products, that the rate of approval for requests for prior authorization under this subparagraph 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 shall cease to apply prior authorization under this paragraph for skin substitute products furnished by such provider. (C) Enrollment revocation or exclusion of noncompliant outlier providers (i) In general Beginning January 1, 2029, if the rate of denial (as determined after the exhaustion of all appeals and reviews) for requests for prior authorization under subparagraph (B) 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. (ii) Referral for exclusion If the Secretary determines under clause (i) 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). (D) Specified provider of skin substitute products defined (i) In general For purposes of this paragraph, the term specified provider of skin substitute products means— (I) an outlier provider of skin substitute products, as determined under clause (ii); (II) a provider with respect to which, of all claims for payment under this title submitted in the preceding year, 15 percent or more of such claims were for the provision of skin substitute products; and (III) as the Secretary determines appropriate, a provider of skin substitute products that— (aa) is newly enrolled under section 1866(j); (bb) has undergone a change in ownership during the preceding year; (cc) is a high risk provider (as determined by the Secretary under section 424.518 of title 42, Code of Federal Regulations); or (dd) has a pattern or practice of noncompliance with conditions of participation under this title or a high percentage of previously denied claims (as determined by the Secretary). (ii) Identification of outlier providers of skin substitute products (I) In general Not later than December 1, 2026, and every 2 years thereafter through December 1, 2036, 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. (II) 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 subclause (I) is made. (III) Referral to OIG The Secretary shall— (aa) make publicly available the list of outlier providers of skin substitute products identified under each determination under subclause (I); and (bb) transmit such list to the Inspector General of the Department of Health and Human Services for the assessment of potential fraud, waste, or abuse. (E) 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 $2,500,000 for each of fiscal years 2028 through 2031, to remain available until expended. (2) Medicare coverage criteria for skin substitute products Any skin substitute product furnished during 2027 shall be subject to the same coverage criteria when determining whether the skin substitute product is covered under section 1862(a)(1)(A), unless such product is determined by the Secretary to be unsafe based on evidence of contamination, serious infectious disease, or serious adverse reactions caused by the product. Neither the Secretary nor any Medicare administrative contractor may determine, including through a determination made pursuant to the prepayment review program or prior authorization program described in paragraphs (2) and (3), that a specific skin substitute product furnished in 2027 is not covered under this title based solely on analysis of the clinical evidence relating to that skin substitute product. (3) Skin substitute product wastage (A) In general With respect to skin substitute products furnished for the treatment of chronic or acute wounds, payment may only be made under this title for the reasonable and necessary portion of the skin substitute product used in the treatment of the wound, excluding wastage. (B) Reasonable and necessary defined For the purpose of subparagraph (A), the term reasonable and necessary portion of the skin substitute product means the greater of— (i) 350 square centimeters; or (ii) 120 percent of the size of the treated wound. (4) Limitation on repeated applications Payment may not be made under this title for more than 3 distinct applications of a skin substitute product with respect to the same wound if, in the clinical judgment of the provider furnishing such product, there has been no improvement in the wound. (5) Certification requirement Payment may only be made under this title for a skin substitute product if the provider furnishing such product is certified— (A) by the American Board of Wound Management as a certified wound specialist or a certified wound care specialist physician; (B) by the Wound, Ostomy and Continence Nursing Certification Board as a certified wound care nurse practitioner; (C) by the National Alliance of Wound Care and Ostomy as wound care certified; or (D) by the American Foot Care Nurses Association as a certified foot care specialist. (6) Limitation on provider discounts For the period beginning on January 1, 2027, and ending on December 31, 2030, payment may not be made under this title for a skin substitute product if the provider furnishing such product obtained such product for less than $342.75 per square centimeter. (7) Skin substitute product defined In this subsection, the term skin substitute product has the meaning given such term in section 1847A(c)(6)(J)..