Why It Matters

The Department of Health and Human Services is changing Medicare and Medicaid rules governing all 54 organ procurement organizations, allowing service areas to open for competition without first decertifying the organization serving them, effective Jan. 4, 2027. ​

The rule builds on the tiered outcome-measure framework established in the December 2020 OPO final rule, which it leaves intact, while revising procedural rules around designation, competition and appeals. The Centers for Medicare & Medicaid Services (CMS) says the rule's purpose is to "clarify outstanding procedural questions and provide additional operational flexibility for OPOs to achieve high performance resulting in the successful procurement, distribution, and transplantation of more life-saving organs," implementing Executive Order 13879, "Advancing American Kidney Health."

The Big Picture

CMS estimates that 35 of the 55 donation service areas (DSAs) will open for competition under the new triggers, 14 assigned to tier 3 and 21 assigned to tier 2, and that up to 14 OPOs may expand to serve multiple DSAs. The estimate does not mean 35 OPOs will be decertified or that every competitive service area will change operators. At any given time, at least 100,000 people are on the waiting list for a lifesaving organ transplant, and another person is added every eight minutes, according to organdonor.gov.

The final rule dropped two provisions from the January proposed rule: definitions of "medically complex donor" and "medically complex organ," and a licensure requirement for clinical personnel.

What Changes for OPOs

Under current 42 C.F.R. § 486.308, a service area opens for competition when an OPO is decertified, and all administrative appeals are exhausted. The new text lists four circumstances that can open a DSA for competition: tier 3 assignment after appeals are exhausted; tier 2 assignment in the final assessment period; noncompliance with process performance measures, after appeals are exhausted and while decertification is pending; and voluntary termination of an OPO's agreement, except in certain merger-related circumstances. Tier 2 assignment is an independent trigger; a DSA can be competed without decertification of the OPO serving it.

The rule revises 42 C.F.R. § 486.309 to govern OPO designation to more than one DSA. An OPO designated to multiple DSAs may consolidate them, maintain them separately or use a combination of those approaches, subject to the rule's conditions. When DSAs are maintained separately, CMS may remove designation to a tier 3 DSA without decertifying the OPO unless it loses all its DSAs.

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Under amended 42 C.F.R. § 486.316, each OPO DSA is assigned to tier 1, tier 2, or tier 3, and that tier assignment determines the DSA's designation and competition status. A tier 3 DSA is subject to removal of designation following applicable appeals, while a tier 2 DSA may be opened for competition without decertification. The rule also protects certain OPOs assigned additional DSAs by CMS from having tier 2 DSAs opened for competition before a full recertification cycle is completed.

The rule also revises the definitions of "donor" and "organ" at § 486.302, removing pancreata used solely for islet cell bench research from the organ transplantation rate outcome measure while retaining qualifying pancreata in the donation rate, beginning with the 2027 assessment period. Pancreatic islet cells actually transplanted into recipients continue to count toward the transplantation rate.

The Cost

CMS estimates first-year implementation costs at approximately $16.4 million, $15.11 million for OPOs and $1.37 million for CMS, against a recurring annual baseline cost of $126.7 million established by the December 2020 rule. The new costs are incremental to that baseline. Recurring costs and benefits break down as follows:

  • Recurring annual costs: Approximately $7.9 million ($7.56 million for OPOs and about $340,000 for CMS), estimated.
  • Recurring annual cost for multi-DSA operations: Approximately $7 million, based on an estimated 14 OPOs at $500,000 each per year.
  • Total OPO competition-application cost across the cycle: Approximately $5.21 million, based on an estimated 140 applications at $37,200 each.
  • Recurring annual benefits: Approximately $583,000 from reduced compliance-interpretation and implementation-inquiry burdens, estimated.
  • One-time benefits: Approximately $500,000 from increased operational flexibility for OPOs designated to multiple DSAs.

The $7 million in annual multi-DSA operating costs is included in the broader recurring cost estimate, rather than being an additional expense on top of the $7.9 million.

The Fight Over the Rule

CMS received 129 timely pieces of correspondence in response to the January proposed rule from OPOs, transplant hospitals, national associations, academic researchers, advocacy organizations and members of the public. Key objections and CMS responses:

  • Many OPOs and associations argued that the outcome metrics are biased against large OPOs and evaluate factors outside their control, recommending an observed-to-expected model. CMS responded that these concerns are outside the scope of this rule and that it stands by the underlying outcome-measure framework established in the December 2020 OPO final rule.
  • Several commenters recommended corrective action plans as alternatives to decertification. CMS responded that alternative remediation pathways already exist, but that retaining a low-performing OPO in a service area where it failed to meet regulatory standards "would not best serve the people in that DSA."
  • Some commenters raised concerns about OPOs being disadvantaged by involuntary DSA assignments. CMS responded by modifying the rule to protect OPOs assigned additional DSAs from having their existing or newly assigned DSAs opened for competition solely because they qualify for tier 2 before completion of a full recertification cycle for the newly assigned DSA.

The Bottom Line

The rule takes effect Jan. 4, 2027. It preserves the outcome-measure framework established in 2020 while expanding competition, clarifying designation and appeal procedures, and allowing OPOs to operate across multiple donation service areas.

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