H.R. 9972: American Patients First Act of 2026

This bill would change how Medicare pays for skin substitute products, which are materials placed on wounds to help them heal. In plain terms, it creates a new payment system, adds limits and oversight, and sets special rules for who can bill Medicare for these products.

What counts as a skin substitute product

The bill defines skin substitute products as certain cellular, tissue, biological, or synthetic materials that are applied to a wound and meant to stay in the wound bed. It also includes products that were already being reimbursed under skin substitute billing codes before January 1, 2027.

The definition excludes:

• temporary coverings or dressings that are removed and not absorbed
• products that do not meet new domestic sourcing and distribution requirements, unless a waiver is granted

New Medicare payment rules

Starting January 1, 2027, and through December 31, 2030, the bill would place skin substitute products under a new Medicare payment structure. For these products, Medicare payment would be set at $457 per square centimeter.

For patients, Medicare would generally pay 80% of the lesser of the actual charge or the set payment amount, as is common under Medicare’s standard cost-sharing rules.

The bill also directs the Secretary of Health and Human Services to create a single billing and payment code for all skin substitute products by January 1, 2027.

Domestic sourcing requirements

To qualify as a covered skin substitute product, the bill requires that:

• the human cellular or tissue material come from U.S. citizens, nationals, or lawful permanent residents
• the donation take place in the United States under federal law
• harvesting, processing, and manufacturing happen entirely in the United States
• distribution be handled by the entity holding the product’s FDA-related clearance, approval, or registration, with limited room for a qualified third-party distributor
• the manufacturer or responsible entity submit at least annual attestations to HHS that the requirements are met

The Secretary could waive these requirements for a specific product for up to 180 days if there is a domestic shortage and the waiver is needed to protect patient access.

Program integrity and claim review

The bill adds several anti-fraud and utilization controls for Medicare billing:

• Prepayment review: Beginning January 1, 2027, Medicare would review certain claims before paying them for providers identified as “specified providers.”
• Prior authorization: By January 1, 2028, Medicare would apply prior authorization to skin substitute products furnished by those providers for 180 days at a time, unless the provider’s approval rate is high enough to justify stopping that requirement.
• Outlier provider monitoring: Beginning in 2029, if a provider’s prior authorization requests are denied at a very high rate, the provider could be treated as abusing billing privileges and referred to the Inspector General for possible exclusion from federal health care programs.
• Public lists: HHS would publish lists of outlier providers and send them to the Inspector General for review.
• Funding: The bill provides $2.5 million per year from fiscal years 2028 through 2031 to carry out these oversight activities.

Coverage and product-use limits

The bill says that skin substitute products furnished in 2027 would be subject to the same general Medicare coverage criteria as other covered items, unless the Secretary finds a product unsafe because of contamination, serious infectious disease, or serious adverse reactions. It also says Medicare cannot deny coverage for a specific 2027 product solely based on clinical evidence analysis done through the new review or authorization processes.

It would also limit payment for:

• wastage: Medicare would only pay for the reasonable and necessary amount used on the wound, not unused excess material
• repeat applications: Medicare would not pay for more than three separate applications for the same wound if the provider believes the wound has not improved
• provider qualifications: payment would only be allowed if the provider has one of several listed wound-care certifications
• low-cost acquisition: from 2027 through 2030, payment would not be made if the provider obtained the product for less than $342.75 per square centimeter

Report to Congress

By January 1, 2030, HHS would have to send Congress a report on the wound care industry, including manufacturers of skin substitute products, wound dressings, and related technologies. The report would look at the cost of producing these products in the United States and the evidence on patient access and effectiveness.

Relevant Companies

• AVTX - Avita Medical makes wound care and skin repair products that could be affected by Medicare’s new payment, billing, and utilization rules.
• MISI - Milestone Scientific is not a direct skin substitute producer, but companies in adjacent wound care markets could be affected indirectly if provider purchasing patterns change.
• SY - So-Young does not appear directly tied to skin substitutes; none of the major publicly traded companies readily identifiable from the bill text are clearly direct targets beyond wound-care product suppliers.