Organ payment changes include patient risks, hospitals warn

Hospitals are warning that planned changes to Medicare’s organ acquisition payments could make it harder for older adults to get organ transplants, according to comments on the inpatient prospective payment system proposed rule.

CMS announced in April that it intends to overhaul its policies to ensure that Medicare accurately records and pays its fair share of organ acquisition costs, as federal watchdogs and Congressional investigators have found evidence that some organ procurement organizations may have billed the program for unallowable expenses.

The proposed changes would affect transplant hospitals, donor hospitals and organ procurement organizations. CMS expects them to save Medicare $230 million in 2022 and $4.15 billion over 10 years by decreasing improper payments.

A key provision of the proposed rule centers on how Medicare treats “usable organs.” Under the current policy, CMS assumes that organs sent from hospitals to transplant hospitals or independent organ procurement organizations help Medicare beneficiaries, even though some organs go to patients that Medicare doesn’t cover. That policy made sense in the past because most organ recipients were Medicare beneficiaries, and there were no effective ways to track the identity and insurer for transplant recipients. But CMS thinks that’s no longer a problem and that the current policy has led Medicare to reimburse transplant hospitals and organ procurement organizations for organs that haven’t gone to Medicare beneficiaries.

“However, this assertion is flawed, and the agency does not provide any support for it. In contrast, our members report that such tracking capabilities simply do not exist to the degree necessary and that obtaining the relevant information from the OPOs is impossible. OPOs have neither the responsibility nor the expertise to ascertain recipients’ payer information,” the American Hospital Association wrote in a comment letter.

Hospitals further argued that requiring them to report additional information about organ recipients is both impractical and undesirable. They claimed greater anonymity encourages providers and organ procurement organizations to allocate organs based on medical and clinical need rather than race, socioeconomic status or gender.

“The current system operates under this framework to restrict information flow between donor and recipient providers so that the allocation of these scarce resources can be fair and equitable,” AHA wrote.

Providers also balked at CMS’ suggestion that hospitals manually track information about organ recipients if they can’t track it electronically or get the information from an organ procurement organization.

“It would be virtually impossible for hospitals to comply with CMS’ proposed policies,” AHA wrote.

According to the AHA, nearly 30% of transplant hospitals would have their Medicare transplant reimbursed slashed in half. That, combined with higher compliance costs, could lead to them stop performing certain types of transplants or not invest in new transplant programs.

“The consequences to transplantation programs and beneficiaries would be devastating,” AHA wrote.

Hospitals also said that CMS might have underestimated how much the changes would cost transplant hospitals. According to the Association of American Medical Colleges, transplant hospitals could lose up to $383 million per year, in part, because commercial payers do not cover organ acquisition costs in many cases. CMS said in the proposed rule that individuals or third-party payers would have to pay those costs for kidneys not used by Medicare beneficiaries. But hospitals argue they’ll be the ones left holding the bag.

“Medicare is proposing to reduce reimbursement for these organs under the assumption that other payers will assume the costs of organ acquisition. This is a bold assumption that is very unlikely to actually materialize in reality,” America’s Essential Hospitals said in a comment letter.

Transplant hospitals might have to renegotiate their contracts with commercials payers, but that would be a massive and time-consuming undertaking, AAMC wrote.


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