This bill changes how Medicare pays for skin substitute products—medical materials made from cells, tissues, or synthetic materials that are placed in wounds to help them heal. Right now, these products are paid for using the same rules as regular drugs and biologics. This bill creates a separate payment system for them starting January 1, 2026.

Here's what changes: Medicare will set a specific payment amount for skin substitutes based on what it actually paid for these products in 2023. After 2026, that payment amount will increase each year by the same percentage as inflation. Patients will pay 20% of the cost (their normal Medicare coinsurance), and Medicare will cover 80%. The bill also requires Medicare to create new billing codes specifically for skin substitute products so they can be tracked and paid separately.

To prevent fraud and overuse, the bill includes oversight measures. Medicare will identify the top 3% of providers who bill the most for skin substitutes and review their claims more carefully. If a provider's claims keep getting denied at high rates, Medicare can investigate whether they're abusing the system. However, during 2026, Medicare cannot deny coverage for a skin substitute product just because there's debate about whether it works—the product has to be proven unsafe due to contamination or serious side effects to be excluded. The bill provides $5 million per year from 2027-2030 to help Medicare manage these new review processes.