Contact your Congressional Office to Support Access to Skin Substitutes

The House Appropriations Committee has set deadlines for Members of Congress to submit appropriations requests. For the Labor, Health and Human Services, Education, and Related Agencies subcommittee, the official deadline is March 20, though many Congressional offices set earlier internal deadlines. 

AATB is asking members and stakeholders to contact their Congressional offices in support of appropriations report language addressing Medicare payment policy for skin substitutes. 

AATB’s Appropriations Request
AATB is asking Congress to include report language in the FY 2027 Labor-HHS appropriations bill that would:

• Acknowledge concerns regarding CMS’s current payment methodology
• Encourage CMS to reconsider payment for skin substitutes under the Medicare Physician Fee Schedule
• Direct CMS to consult with stakeholders to develop a sustainable payment approach across sites of care
• Ensure payment rates more accurately reflect the costs associated with acquiring and processing allograft tissue
• Request that CMS report to Congress within six months on any new authorities needed to establish a more sustainable model

The goal is to support responsible oversight of Medicare spending while preserving patient access to medically necessary products.

How to Participate
AATB urges tissue establishments and stakeholders to contact their Congressional offices to support AATB’s request for the appropriations language below. We are asking Congress to include this language in the fiscal year 2027 Labor, Health and Human Services, Education, and Related Agencies report. If you contact your Congressional office, please copy Andrew Vogt, AATB’s Director of Governmental Affairs, at vogta@aatb.org. Some offices may ask you to fill out a request form, and AATB is happy to assist you with that.

Skin Substitutes—The Committee recognizes the significant increase in Medicare Part B payments for skin substitutes between 2019 and 2025 and appreciates the agency’s commitment to reducing spending in this area. We are concerned, however, that patient access to these products is threatened by the agency’s decision to finalize flawed policies for the payment of skin substitutes in office and outpatient hospital settings for 2026 onward, including to move payments for these important products when furnished in the office setting into the Medicare Physician Fee Schedule as incident to supplies and to use a non-representative data set to establish a payment rate of $127.14/cm2 for 2026. The Committee is further concerned that this payment rate could be further reduced due to the agency’s plan to use the most recently available calendar quarter(s) of average sales price data to set the rates for future years. The Committee encourages the agency to reverse the decision to pay for skin substitutes under the Medicare Physician Fee Schedule and to consult with stakeholders to develop a sustainable payment approach for skin substitutes across office and outpatient hospital settings that more accurately reflects the costs associated with acquiring and processing allograft tissue used as skin substitutes in order to preserve access to these important medical products for patients who need them. Such an approach should consider historic spending for skin substitutes in both the physician office and outpatient hospital setting prior to the effectuation of the 2026 changes. The Committee further encourages the agency to report to Congress within six months of passage of this bill on any new authorities that may be needed to establish a more sustainable payment model for skin substitutes in future years.

Background
In the calendar year (CY) 2026, Medicare Physician Fee Schedule (PFS) and Hospital Outpatient Prospective Payment System (OPPS) Final Rules, Centers for Medicare and Medicaid Services (CMS) established a payment rate of $127.14/cm2 for skin substitutes in both physician offices and outpatient hospital settings.

AATB is concerned that this rate was established using utilization data from only the hospital outpatient department setting, where payment has historically been bundled and capped, leading to disincentives to treat patients with large wounds. As a result, this data does not reflect the full costs associated with furnishing skin substitutes in physician office settings.

To establish an accurate payment rate applicable to both facility and non-facility settings, CMS should incorporate data from both settings and account for costs that physician offices incur. 

AATB submitted formal comments to the CMS on September 10, 2025, regarding the PFS Proposed Rule; September 12, 2025, regarding the OPPS Proposed Rule, and December 4, 2025, regarding the PFS Final Rule.

Impact of the CY 2026 Policies
Since the CY 2026 policies were finalized, AATB members have reported: 

• Workforce reductions 
• Decreased production and product returns
• Suspension of clinical studies
• Delays in research and development

 There is also concern that reduced reimbursement may limit patient access to skin substitutes, particularly for patients who cannot receive care in hospital outpatient settings. 

In fact, on February 3rd, 2026, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing titled “Common Schemes, Real Harm: Examining Fraud in Medicare and Medicaid,” where one witness (Stephen W. Nuckolls, CEO, Coastal Carolina Health Care and former Board Chair, National Association of Accountable Care Organizations (NAACOs)) stated in response to a question asking if the artificially low reimbursement rate risks restricting access for legitimate patients and providers, “I can tell you that no one will give skin substitutes. Patients will not receive skin substitutes based on the current regulations that were passed by the Secretary and HHS.”