News | Medicare Payment and Reimbursement

CMS proposes to pull support from organ acquisitions: A grave threat to the future of U.S. organ transplants and donor programs

News | Medicare Payment and Reimbursement

CMS proposes to pull support from organ acquisitions: A grave threat to the future of U.S. organ transplants and donor programs

  • CMS proposes to pull its support from donor community hospitals excising organs for non-Medicare patients waiting on year-long transplant lists.
  • CMS states that unless the donor community hospital tracks and verifies that the excised organ eventually makes it to a Medicare patient, they will no longer support the organ acquisition costs.
  • HFMA calls on providers, transplant program experts and healthcare leaders to join in educating the agency on the importance of a sustainable national transplant program by submitting comments and recommendations before the June 28, 2021, deadline.

During a time when health equity, quality outcomes, healthcare spend and patient-centered care are all key focus areas of the future of healthcare, CMS, in its FFY 2022 IPPS Proposed Rule, has proposed to turn its back on life- and cost-saving transplant programs.

  • CMS proposes to pull its support from donor community hospitals excising organs for non-Medicare patients waiting on year-long transplant lists. CMS states that unless the donor community hospital tracks and verifies that the excised organ eventually makes it to a Medicare patient, they will no longer support the organ acquisition costs.
  • The agency also proposes to require that donor community hospitals unnecessarily (in my opinion) take on the administrative burden and expense to adjust all billed charges to cost when billing organ acquisitions to organ procurement organizations (OPOs), which currently pay donor community hospitals under negotiated contract rates that are not typically charge based.
  • CMS proposes to codify items and services it considers Medicare Part A covered organ acquisition costs for both renal and non-renal organs in rules that lack clarity when defining the allowable costs associated with various organ and donor types.

According to a report published by Fior Markets last month, the global organ care products market is expected to grow from $95M in 2020 to $271M by 2028, at a compounded annual growth rate (CAGR) of 14% for the forecast period.

Factors driving demand for organ transplants

The factors driving the huge demand for organ transplantation in the market are:

  • Increasing organ failure in the elderly population
  • Growth of chronic cardiovascular diseases
  • Rising prevalence of kidney failure
  • Expansion of unhealthy habits, such as eating fast food, not exercising and lack of sleep
  • Increasing consumption of alcohol
  • Emerging occurrence of obesity
  • Adoption of smoking
  • Mounting air pollution

 Technological advancements in organ transplantation and preservation methods also have made it possible for more people to be able to benefit from an organ transplant.  

Factors inhibiting market growth for organ transplants

The factors restraining the market growth are lack of human donors, lack of awareness about organ donation and the high cost of organ transplantation.

Looking at end-stage renal disease alone, Medicare fee-for-service spends $114 billion a year, or about 20% of its budget, on beneficiaries with kidney disease. Of that $114 billion, Medicare expects to pay $10.3 billion to approximately 7,400 ESRD facilities for renal dialysis services. More than 100,000 Americans begin dialysis to treat ESRD each year, and one in five die within a year.

The National Kidney Foundation recently stated, “Kidney transplant is the gold standard treatment for kidney failure for most patients, providing better health outcomes, an improved quality of life and cost savings when compared to dialysis.”

Takeaways:

CMS’s misguided proposal to redefine “Medicare organs” requires donor community hospitals to take on unjustified administrative cost and burden and to codify items and services in current rules, which  leaves the agency, Medicare administrative contractors and providers operating in a haze.

HFMA calls on providers, transplant program experts and healthcare leaders to join us in educating the agency on the importance of a sustainable national transplant program by submitting comments and recommendations before the June 28, 2021, deadline.

HFMA will be addressing the proposed changes that threaten the future of organ acquisition and hospital transplant programs in our comment letter to CMS this month. We encourage all impacted  healthcare providers submit comment letters outlining their position regarding this and all proposals in the FFY 2022 IPPS Proposed Rule.

About the Author

Shawn Stack

is HFMA's director of Perspectives & Analysis based in Washington, D.C.

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