Medicare Paid Nearly $400M for Organs Never Used for Enrollees

 Medicare paid an estimated $380 million over a 6-year period for acquiring organs that weren't transplanted in Medicare enrollees because of conflicting federal program rules, according to a report from the HHS Office of Inspector General (OIG).

"Fifty-five of the 180 sampled organs were not used in Medicare-covered transplants even though they were reported as Medicare usable organs, which resulted in $2,847,855 in Medicare reimbursement to certified transplant centers (CTCs)," the authors wrote in the report, which was issued last week. "On the basis of our sample results, we estimated that of the $1,406,040,094 in Medicare reimbursement that CTCs received for the cost of acquiring organs during our audit period, CTCs received $379,895,793 for organs that were not used in Medicare-covered transplants."

Medicare reimbursed the transplant centers more than $3 billion for the acquisition of approximately 39,000 organs in calendar year 2023 (the most recent year for which these data are available), according to the report. Medicare reimburses CTCs for the cost of acquiring viable human kidneys, livers, hearts, lungs, pancreases, and intestines.

Federal law limits Medicare's reimbursement to the cost of acquiring organs that are transplanted into Medicare enrollees, also known as "Medicare usable organs," so the OIG conducted the audit to find out how much Medicare paid the transplant centers for the cost of acquiring organs that were not transplanted into Medicare enrollees, the authors explained.

To conduct the audit, the OIG used data from the CMS Healthcare Cost Report Information System to identify all Medicare cost reports for hospitals with transplant centers that had provider cost reporting periods ending between calendar years 2017 and 2022. Random sampling resulted in a total sample of 180 Medicare usable organs that were reported on the hospitals' Medicare cost reports, with associated Medicare reimbursement totaling $12,288,194 to 12 transplant centers.

The OIG determined that 125 of the 180 sampled organs that CTCs reported as Medicare usable organs were used in Medicare-covered transplants. However, 43 were used in transplants that were not covered by Medicare and 12 were not transplanted at all even though they were reported on Medicare cost reports as Medicare usable organs, which resulted in $2.85 million in Medicare reimbursement to CTCs.

Much of the problem stems from two conflicting rules regarding Medicare transplant payment, the report explained. CMS guidance instructs transplant centers to count any organ that is furnished to another organ procurement organization or transplant center as a Medicare usable organ. But the federal Social Security Act says Medicare cannot pay for any services that are provided to patients not enrolled in Medicare. "Medicare reimbursed these amounts because it applied the provisions of relevant CMS guidance that conflict with the [Social Security Act]," the authors wrote.

"Furthermore, while developing our sampling frame, we found that two CTCs could not provide any documentation to support that a total of five organs were Medicare usable organs, as claimed on their Medicare cost reports," they added. "Because these CTCs did not maintain adequate documentation to support their claims, we determined that these five organs should not have been reported as Medicare usable organs on the two cost reports. The incorrect inclusion of these organs on the two Medicare cost reports resulted in unallowable Medicare reimbursement totaling $154,210."

The OIG made several suggestions for improvement, including that CMS revise its Medicare guidance to align with the Social Security Act so it only pays acquisition costs for organs transplanted into Medicare recipients. CMS responded that it would take the recommendations into consideration "as it determines appropriate next steps."

The OIG report "should prompt us to ask whether the federal structure overseeing transplantation is sufficiently coordinated for the system we have today," Macey Levan, JD, PhD, director of the Center for Surgical and Transplant Applied Research Qualitative Core at NYU Grossman School of Medicine in New York City, said in an email. "Organ transplantation is a complex national healthcare system involving organ procurement, allocation, patient safety, hospital regulation, Medicare reimbursement, [and] data infrastructure, and most importantly, [it] relies on public trust."

"I have argued that modernization should therefore include much stronger coordination of federal transplant oversight, whether through a dedicated transplantation bureau or another centralized structure with clear authority and accountability across these functions," Levan said. "Fixing individual policies is important, but if the underlying governance remains fragmented, we should expect inconsistencies like this to continue to emerge."

The report is the latest wrinkle in the continuing controversy over the management of the organ transplant system nationwide. Last September, HHS moved to close the University of Miami's organ procurement center, citing "unsafe practices, poor training, chronic under-performance, understaffing, and paperwork errors." Last December at a Senate hearing, senators raised concerns about too many organs getting transported out of their original geographic area to better-resourced parts of the country.

And in July, HHS announced "a major initiative to begin reforming the organ transplant system" after an investigation by the Health Resources and Services Administration found "disturbing practices" by an organ procurement organization serving Kentucky, southwest Ohio, and parts of West Virginia.

"Our findings show that hospitals allowed the organ procurement process to begin when patients showed signs of life, and this is horrifying," HHS Secretary Robert F. Kennedy Jr. said in the release. "The organ procurement organizations that coordinate access to transplants will be held accountable. The entire system must be fixed to ensure that every potential donor's life is treated with the sanctity it deserves."

https://www.medpagetoday.com/publichealthpolicy/medicare/122933