On December 17, 2021, CMS issued a final rule with comment period addressing certain provisions of the fiscal year 2022 IPPS/LTCH PPS proposed rule that were designated to be addressed in “future rulemaking,” including proposed changes to organ acquisition payment policies for transplant hospitals and organ procurement organizations. In this final rule, and in further consideration of the concerns initially raised by commenters, CMS decided not to finalize a significant proposal with respect to how transplant hospitals and organ procurement organizations can count organs on their Medicare cost reports for reimbursement purposes. CMS did, however, finalize other of its organ acquisition payment policy proposals and indicated that it may address its organ counting policy again in future rulemaking.
Medicare reimburses transplant hospitals for organ acquisition costs under reasonable cost principles based on the transplant hospital’s ratio of Medicare usable organs to total usable organs. Similarly, Medicare authorizes payment to organ procurement organizations (OPOs) for kidney acquisition costs under reasonable cost principles based on the OPO’s ratio of Medicare usable kidneys to total usable kidneys.
For over three decades, Medicare cost reporting instructions presumed that because the ultimate organ transplant recipient was unknown at the time an organ was excised, that organ would be “counted” as being transplanted into a Medicare beneficiary—and counted as a “Medicare” organ—for cost reporting purposes on a transplant hospital’s or OPO’s cost report. 86 Fed. Reg. 25070, 25665 (May 10, 2021) see also 54 Fed. Reg. 5619, 5621 (Feb 6, 1989). In fact, CMS expressly acknowledged that knowing at the time of organ procurement whether the organ will be transplanted into a Medicare or non-Medicare beneficiary is “impossible.” 54 Fed. Reg. at 5621. As a result, organs sent to and between transplant hospitals and OPOs are “assumed” to be Medicare usable organs under CMS’s current policy. Id.
CMS announced its intention to reform organ acquisition payment for transplant hospitals and OPOs in its FY 2022 IPPS proposed rule. There, CMS introduced several proposed changes to organ acquisition payment policies. Most significantly, CMS proposed to end the decades-long presumption that all organs excised for recipients in the United States are considered “Medicare” organs in the Medicare ratio on the OPO’s and transplant hospital’s Medicare cost report. See 86 Fed. Reg. at 25664-67. CMS instead proposed that transplant hospitals and OPOs would need to identify whether the ultimate recipient of an organ was indeed a Medicare beneficiary and required these entities to provide auditable support for these determinations. Id.
Under CMS’s proposal, transplant hospitals and OPOs would not be able to claim as many “Medicare” organs in their Medicare ratio, and thus receive lesser Medicare reimbursement. CMS estimated that the proposed changes to the calculation of Medicare’s share of organ acquisition costs would result in “annual cost savings to the Medicare trust fund of $230 million in FY 2022, $1.74 billion over five years, and $4.150 billion over ten years.” Id. at 25771.
As discussed here, on August 2, 2021, CMS did not finalize its proposals related to the organ acquisition payment policies for transplant hospitals and OPOs. Instead, CMS deferred; indicating that “[d]ue to the number and nature of the comments that we received on the organ acquisition payment policy proposals we will address public comments associated with these issues in future rulemaking.”
On December 17, 2021, CMS announced through final rule that it would not be finalizing the proposed policy for counting organs for purposes of determining Medicare’s share of organ acquisition costs for organs transplanted into Medicare beneficiaries. Specifically, CMS “heard stakeholders’ concerns” that the processing of tracking whether an organ is ultimately transplanted into a Medicare beneficiary is unduly burdensome and that the policy would result in a significant financial impact from the loss of revenue. CMS, therefore, decided not to finalize its policy at this time, giving it “more time to better understand these and other concerns that commenters have raised, including those related to organ tracking processes.”
The final rule does, however, finalize certain policies requiring donor community hospitals and transplant hospitals to bill OPOs the lesser of customary charges that are reduced to costs, or negotiated rates, in line with Medicare reasonable cost principles. The final rule also codifies and clarifies certain organ acquisition payment policies relative to definitions, standard acquisition charges, Medicare coverage of living donor complications, Medicare as a secondary payor for organ acquisitions, and kidney paired donations.
CMS’s final rule is available here.
