CALL TO ACTION:  CMS Proposal Would Reduce Medicare Payment for Organ Acquisition Costs by $230 million in FY 2022, $4.150 billion over 10 years  

The 2022 Inpatient Prospective Payment Proposed Rule (2022 IPPS Proposed Rule) includes a number of transplant-related proposals that would substantially impact organ acquisition costs. Some Transplant Centers located at hospitals with active organ procurement programs face acute multimillion dollar losses. Your help is critical.  The Deadline for comments filed with CMS is June 28, 2021.  


 The 2022 IPPS Proposed Rule includes proposals to limit Medicare payment for organ acquisition costs in a number of ways, including limiting Medicare payment for non-Transplant Center donor hospitals and payment for certain costs associated with living donors. The most critical change would substantially modify the method for determining the portion of organ acquisition costs payable by Medicare. Deceased donor organs procured at hospitals that are Medicare-certified Transplant Centers are currently “counted” as Medicare organs for the purpose of determining the portion of that Transplant Center’s organ acquisition costs payable by Medicare, no matter where (or to whom) those organs are ultimately allocated for transplantation. This feature of cost apportionment was initially adopted when the organ acquisition cost reporting rules were put in place three decades ago to incentivize Transplant Centers to retrieve organs. This incentive works: in 2020, despite representing <15% of acute care hospitals, hospitals with transplant programs contributed 35% of livers and lungs; 36% of kidneys; 38% of hearts; 41% of pancreas; and 48% of intestines. 

The 2022 Inpatient Prospective Payment System Proposed Rule (Proposed Rule) would eliminate this longstanding incentive. The Proposed Rule would require a Transplant Center to ascertain the insurance status of all recipients of organs recovered in their hospital by the OPO for placement at another center regardless of the location of that center. Transplant programs would be allowed to count as Medicare organs only those organs transplanted into recipients at other centers whose procedure was covered by Medicare Fee for Service as the primary payer or organs transplanted to recipients for whom Medicare makes a payment as the recipient’s Secondary Payer. For patients with Medicare Advantage Plans, only kidney transplants could be counted.

Finally, the IPPS Proposed Rule solicits comments on whether CMS should consider revising surgeons fees payable for kidney procurement, although no specific proposal is under consideration at this time.


  • While the Proposed Rule Impact Analysis details the dollar impact of most of the policy and payment changes that CMS is proposing for FY 2022, the Impact Analysis does not calculate the impact of the transplant-related provisions of the Proposed Rule. For Transplant Centers that include active organ donor programs, the impact can amount to millions of dollars. Because the proportion of transplant recipients covered by Medicare is lower for extra-renal than for renal organs and because Medicare Advantage recipients will not “count” as Medicare patients for the purposes of determining the Medicare ratio under the new rules, it is anticipated that Medicare payment for extra-renal organs will be especially adversely impacted.  

    In addition, the Proposed Rule would place an extraordinary administrative burden on Transplant Centers, which would be required to trace organs recovered in their hospital and transplanted elsewhere and contact the other transplant program to determine the insurance coverage for every recipient of a deceased donor organ recovered at their hospital. OPOs do not have the expertise to ascertain or question primary insurance types, question retroactive eligibility periods for kidney transplants, nor to obtain the evidence proposed to ascertain if a recipient transplanted indeed has a Medicare Secondary Liability. Therefore, this enormous burden will almost certainly fall on Transplant Center administrative staff. For recipients with Medicare as a Secondary Payor (MSP), the Transplant Center would need to determine not only whether the recipient is eligible for MSP coverage, but whether Medicare actually makes a payment in its capacity as a Secondary Payer within the allowable period covered by the Medicare cost report. Different rules would apply to Medicare Advantage recipients, depending on whether the organ involved is a kidney or extra-renal organ. Recent changes to organ allocation policies have broadened the distribution of organs to include so many more potential transplant hospitals and have multiplied the number of OPOs from which transplant centers accept organs, significantly increasing the number of organs subject to the proposed change and increasing the complexity of the administrative burden. 

    Because the Proposed Rule likely is designed to reduce the proportion of organ acquisition costs paid by the Medicare program (especially for extra-renal organs), it is anticipated that, if the Proposed Rule is adopted without change, Transplant Centers will need to renegotiate their contracts with non-Medicare payers, to increase organ acquisition costs payable from these sources. However, there is no guarantee that private payers will be willing to increase global payments to offset further losses from Medicare.


    The current policy has led hospital and transplant leaders to take an active role in systems, processes, and training to improve organ donation referrals, authorization, and management practices. This system works: In 2020, 35% of deceased organ livers and lungs; 36% of deceased donor kidneys; 38% of hearts; 41% of pancreas; and 48% of intestines were retrieved as the result of the efforts of Transplant Centers. The ability to “count” all donor organs provided to other transplant centers as Medicare organs has been a critical driver of these efforts and of new innovative partnerships between Transplant Centers and OPOs to increase organ yield.   


    The 2019 AAKH notes “In 2016, Medicare fee-for service spent approximately $114 billion to cover people with kidney disease, representing more than one in five dollars spent by the traditional Medicare program.” Transplantation of ESRD patients is by far the most cost effective and clinically superior treatment option ESRD patients. If adopted, the Proposed Rule will increase Medicare expenditures on kidney disease as a reduction in available donor kidneys will drive increases in morbidity, mortality and prolong already long waiting times. 


    ASTS and a number of other groups plan to request that CMS conduct a study of the potential impact of the Proposed Rule on transplantation and to consider alternative approaches, and that the agency refrain from implementing transplant-related provisions of the Proposed Rule in FY 2022, pending the completion of the study.  ASTS also plans to respond to CMS’ solicitation of comments on the need to update the professional fees payable for kidney procurement.


    We are requesting that Transplant Leaders take the following Six Steps Immediately: 

    • Review this Memo carefully and contact us with your questions and concerns. 

    • Forward this Memo to your Hospital’s Cost Report Specialist to enable your hospital to assess the potential impact of the proposed change on your hospital.     

    • Forward this Memo to your Hospital, Medical & Surgical Leadership to ensure they are aware of Proposed Rule. 

    • Urge your Hospital leadership to involve the hospital’s government relations team in advocacy efforts and let us know if your hospital plans to engage members of Congress. 

    • Submit a Public Comment in response to the Proposed Rule by no later than the 11:59 p.m. (EDT) Monday, June 28 comment deadline.  A model comment letter is attached as a sample.

    • Ask your hospital leadership to sign on to this ASTS Stakeholder Letter. Sign on to the letter by using this SIGN ON LETTER FORM by June 22.  

    If you want to share comments or concerns, you can forward them to Jen Nelson-Dowdy  at

    Template Letter:

    [To File comment, go to; SEARCH for  CMS-2021-0070-0002; Click on “COMMENT.”] 

    Comments Due June 28,2021 

    Re: Medicare Program: Hospital Inpatient Prospective Payment Systems [IPPS] for Acute Care Hospitals… and Proposed Policy Changes and Fiscal Year 2022 Rates (the “2022 IPPS Proposed Rule”)  

    Dear Administrator Brooks-LaSure: 

    As the [insert your job title] of [Name of Transplant Center or Other Organization], I am writing to you to request that CMS conduct a comprehensive study of the potential impact of the transplant-related provisions in the 2022 IPPS Proposed Rule on patient access to transplantation and to delay implementation of these provisions of the Proposed Rule until that study is completed.    

    Over the past several years, CMS has made it clear that it recognizes the significant clinical and cost effectiveness and advantages of kidney transplantation over other forms of treatment for ESRD-eligible Medicare beneficiaries. In fact, CMS has instituted major regulatory changes to increase access to transplantation. The substantial limitations on Medicare payment for the costs associated with procuring organs for transplantation that are now proposed are completely inconsistent with these initiatives:  These extraordinary payment cuts threaten to significantly disrupt the organ procurement programs operated by Transplant Centers, which currently procure 36% of deceased donor organs. Such disruption will undercut CMS efforts to increase access to transplantation and rather will increase wait times, waitlist mortality and morbidity for ESRD-eligible Medicare beneficiaries.     

    I am particularly concerned about the proposed change that would require a Transplant Center that procures an organ that is subsequently transplanted elsewhere to determine the insurance status of the recipient. The current rule, which essentially assumes that the recipient is a Medicare beneficiary, was intended to incentivize hospitals with Transplant Centers to institute effective organ procurement programs. Our own hospital has done so: We procure an estimated ___organs per year that are transplanted by other Transplant Centers. Precipitously eliminating this longstanding incentive has the potential to undermine the financial viability of these organ procurement efforts.    

    Also, under this proposal, our administrative costs would increase, because we would be responsible for obtaining evidence of the Medicare status of the recipients of all of the organs that we procure and that are transplanted elsewhere. Contrary to the assertions in the Proposed Rule, there is no established system for obtaining this information, and obtaining evidence of Medicare liability-- especially when Medicare is functioning as a Secondary Payer (MSP) will be time consuming and complex.     

    Finally, unlike other changes proposed in the IPPS Proposed Rule, the proposed limitations on payment of organ acquisition costs were not included in the hospital-specific analysis that most hospitals rely on in assessing IPPS proposed changes  For this reason, many hospitals that operate Medicare-certified Transplant Centers still may be unaware that these changes could significantly impact their patients and their transplant programs.  

    I strongly urge CMS to study the potential impact of all of the proposed changes that would limit Medicare payment for the costs of acquiring organs for transplantation on access to transplantation and to refrain from implementing any of these changes pending the completion of the study.    

    Sincerely yours, 

    [Full name]