American Patients First Act of 2026

This bill aims to reform Medicare payment policies for skin substitute products. It introduces new coverage and payment rules, along with robust program integrity measures, effective primarily from January 1, 2027. The legislation seeks to ensure appropriate reimbursement for these products while combating potential fraud and abuse in the wound care industry.

The bill establishes a temporary fixed payment rate of $457 per square centimeter for skin substitute products furnished under Medicare Part B between January 1, 2027, and December 31, 2030. It defines a "skin substitute product" as a cellular, tissue, biological, or synthetic material applied to a wound, marketed under specific federal acts, and meeting stringent domestic sourcing and distribution requirements. These requirements mandate that all human cellular or tissue material originate from U.S. citizens or permanent residents, with all processing and manufacturing occurring exclusively within the United States, unless a waiver is granted for supply shortages.

To enhance program integrity, the legislation introduces prepayment claim review for certain providers starting in 2027 and mandatory prior authorization for "specified providers" of skin substitute products beginning in 2028. "Specified providers" include those identified as "outlier providers" (the top 3% by total Medicare payment for skin substitutes), providers with a high percentage of claims for these products, and certain high-risk entities. The Secretary is required to identify these outlier providers every two years and refer them to the Inspector General for assessment of potential fraud, waste, or abuse, with potential exclusion from federal healthcare programs if denial rates exceed 75%.

Additional integrity provisions include limiting payment to the reasonable and necessary portion of the product, defined as the greater of 350 square centimeters or 120% of the treated wound size, explicitly excluding wastage, and restricting payment to a maximum of three distinct applications per wound if no clinical improvement is observed. Providers furnishing these products must hold specific certifications from recognized wound care organizations. Moreover, between 2027 and 2030, payment is prohibited if the provider acquired the product for less than $342.75 per square centimeter, aiming to prevent certain discount practices.

The bill mandates the Secretary of Health and Human Services to establish a new consolidated billing and payment code for all skin substitute products by January 1, 2027. It also ensures consistent coverage criteria for skin substitute products in 2027, unless deemed unsafe due to contamination or adverse reactions. Finally, a report is required by January 1, 2030, to analyze the wound care industry, including production costs and patient access to and effectiveness of these products.