In the FY 2022 IPPS Proposed Rule issued by CMS on May 10, 2021, CMS has proposed significant changes to how Medicare useable organs are defined and counted in the Medicare cost report under the pretense that these changes will ensure the Medicare program is only paying its share of organ acquisition costs.
Under current rules and regulations, CMS includes organs sent to other Transfer Hospitals (“TH”)/Independent Organ Procurement Organizations (“IOPO”) and kidneys transferred to a United States Military Renal Transplant Center (“MRTC”) with a reciprocal sharing agreement in effect prior to March 3, 1988 and approved by the contractor in the Medicare useable organ count. However, CMS now proposes to exclude organs sent to another TH/IOPO which are not transplanted into a Medicare beneficiary as well as all organs transferred to a MRTC, regardless of whether a long-standing arrangement prior to March 3, 1988 exists.
In addition, CMS has clarified their policy on organs designated for research and organs determined to be unusable and discarded or donated to research. Organs procured and used for research regardless of whether it is transplanted as part of clinical care (with the exception of Pancreas procured for the purpose of acquiring pancreatic islet cells acquired for transplantation for Medicare beneficiaries participating in a National Institute of Diabetes and Digestive and Kidney Diseases clinical trial, which are included in the current and proposed definition of Medicare useable organs) are excluded from the Medicare useable organ count. However, these organs are included in the total useable organ count. Organs designated for transplant prior to the time the donor entered the hospital’s operating room for surgical removal of the organs but subsequently determined to be unusable and donated to research are excluded from both the Medicare and total useable organ counts; however, the costs are included in the total organ acquisition cost to be allocated amongst all remaining useable organs.
Furthermore, for Donor Community Hospitals who excise organs and provide to THs/OPOs, the proposed rule states that the hospital must reduce the chares billed to reasonable cost using their most recently available hospital specific cost to charge ratio, effective for cost report periods beginning on or after October 1, 2021. There have been no significant changes proposed by CMS to the rules for en bloc organs, organs where Medicare is a secondary payor, organs sent to a foreign transplant center, or kidney paired exchanges.
The impact to reimbursement for THs and OPOs is clear: A reduction in the total Medicare useable organs will decrease Medicare’s share of organ acquisition costs on the cost report and increase the administrative burden of these organizations to track the payor information of the organ recipient. In addition, Donor Community Hospitals who participate in organ excising will experience a potentially significant reduction in payments received from THs/OPOs. Furthermore, the proposed rules do not clarify how the offset of revenues on worksheet D-4 should be handled. It is our opinion that the revenue offset on worksheet D-4 should only include revenues where the organ was transplanted into a Medicare beneficiary to avoid overly reducing the Medicare portion of allowable organ acquisition costs. We encourage providers to submit their comments to CMS before the deadline of June 28, 2021 at 5 pm EDT.
To register for Josh Weissenborn's upcoming FY 2022 IPPS Final Rule webinar, click here: 
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