Medicare and Medicaid Programs; Conditions of Coverage for Organ Procurement Organizations (OPOs)

SUMMARY: This final rule with comment period sets forth changes to the

conditions of coverage for organ procurement organizations (OPOs). It

provides for exceptions to the OPO qualification and performance

standards under certain circumstances, revises the methodology for

counting organs, and extends the period for interim OPO designations

and notification of termination. It also adds new regulations relating

to hospitals that change OPO designations when there is a change in the

OPO service area.

This final rule with comment period modifies conditions of coverage

previously set forth in an interim final rule. These changes are being

made in response to public comments received on that interim rule. New

regulations contained in this final rule implement provisions of the

Social Security Act Amendments of 1994.

DATES: Effective date: This final rule is effective May 31, 1996.

Comment date: Written comments on the definition of ``donor''

(Section VI of the preamble) or the hospital waiver process (XI of the

preamble) will be considered if we receive them at the appropriate

address, as provided below, no later than 5 p.m. on July 1, 1996.

ADDRESSES: Mail written comments (One original and three copies) to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: BPD-646-FC, P.O. Box 7518,

Baltimore, MD 21207-0518.

If you prefer, you may deliver your written comments (one original

and three copies) to one of the following addresses: Room 309-G, Hubert

H. Humphrey Building, 200 Independence Avenue SW., Washington, DC or

Room C5-09-26, 7500 Security Boulevard, Baltimore, MD.

Due to staffing and resource limitations, we cannot accept comments

by facsimile (FAX) transmission. In commenting, please refer to file

code BPD-646-FC. Comments received timely will be available for public

inspection as they are received, generally beginning approximately 3

weeks after publication of a document, in Room 309-G of the

Department's offices at 200 Independence Avenue SW., Washington, DC, on

Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone:

(202) 690-7890).

See section XV of this preamble for special instructions regarding

the submission of comments and recommendations regarding the

information collection requirements contained in these regulations.

FOR FURTHER INFORMATION CONTACT: Jackie Sheridan, (410) 786-4635.

SUPPLEMENTARY INFORMATION:

I. Background

A. Legislative History

Medicare coverage of services furnished to individuals with end-

stage renal disease who require dialysis or kidney transplantation is

authorized under section 1881 of the Social Security Act (the Act).

Medicare also covers certain other organ transplants that HCFA has

determined are ``reasonable and necessary'' under section 1862 of the

Act, and pays for those transplants and related organ procurement

services.

Under the Medicaid program, payment is made for ``medical

assistance'' as defined in section 1905(a) of the Act and in our

regulations at 42 CFR Part 440. Each State has a considerable degree of

flexibility to supplement Medicaid-required services with optional

services the State elects in its State plan. States must pay Medicare

coinsurance and deductible amounts for transplant services for

``qualified Medicare beneficiaries,'' and must pay for transplant

services to individuals under the age of 21 who receive early and

periodic screening, diagnostic, and treatment services. In addition,

States may pay for other transplant services based on written standards

which provide that similarly situated individuals are treated alike.

Payment may be made under the Medicare and Medicaid programs for

organ procurement costs attributable to payments to an organ

procurement organization (OPO) only if the organization has been

designated by the Secretary as meeting the conditions for coverage as

an OPO. OPOs are generally paid indirectly for organ procurement costs.

Usually, the transplanting hospital pays those costs to the OPO and

claims them on its cost report. An OPO, however, does have to file a

cost report with us at the end of its fiscal year. At that time, we

settle any overpayments or underpayments with the OPO.

Section 1138(b) of the Act sets forth the statutory qualifications

and requirements that an OPO must meet for coverage of the costs of its

services in procuring organs for hospitals under the Medicare and

Medicaid programs.

Title IV of the Health Omnibus Programs Extension Act of 1988

(Public Law 100-607) contained the Transplant Amendments Act of 1988.

This Act contained amendments to section 371 of the Public Health

Service Act (PHS Act) (42 U.S.C. 273), which defines OPOs.

Specifically, section 402(c)(1)(A) of Public Law 100-607 amended

section 371(b)(1)(E) of the PHS Act by revising the definition of

``service area'' that must be encompassed by an OPO. Public Law 101-

274, enacted on April 23, 1990, postponed until January 1, 1992, the

effective date of section 402(c)(1)(A) of Public Law 100-607.

Additional legislation regarding the definition of a service area was

included in the Transplant Amendments Act of 1990 (Public Law 101-616).

The details of these provisions are discussed under section II

``Service Area'' of this preamble.

Section 201(d)(1) of Public Law 101-616 redesignated section

371(b)(2) of the PHS Act as section 371(b)(3). That section sets forth

the functions of an OPO. However, the Congress did not amend two

textual references in section 371(b)(1) to the OPO functions formerly

specified in paragraph (2). Since that was clearly an oversight and

failure to read the section 371(b)(1) text as if those ``paragraph

(2)'' references had been changed to ``paragraph (3)'' would make part

of the statute meaningless, we are using the corrected references in

this document.

Additional legislation regarding OPOs was included in section 155

of the Social Security Amendments of 1994 (Public Law 103-432, enacted

on October 31, 1994). This legislation amended section 1138(a)(1) of

the Act to require a hospital to have an agreement for notification of

potential organ donation only with the OPO designated for the area in

which the hospital is located. Because this legislation was passed

after our issuance of proposed and interim final rules in 1991 and 1994

respectively to implement statutory provisions, we did not include any

revisions regarding this subject in those publications. We are,

however, including revisions to the regulations in this final rule to

reflect the provisions of Public Law 103-432. These

[[Page 19723]]

provisions are discussed under section XI. ``Waiver of Service Area

Designations'' of this preamble.

B. Regulations

Regulations regarding organ procurement are currently found at 42

CFR part 486 (``Conditions for Coverage of Specialized Services

Furnished by Suppliers'') under subpart G (``Conditions of Coverage:

Organ Procurement Organizations''). The existing regulations were

recently redesignated from subpart D of 42 CFR Part 485 in a final rule

with comment period published in the Federal Register on September 29,

1995 (60 FR 50446). For the benefit of the reader, we are including a

redesignation table. All succeeding regulations references will be to

the redesignated sections. Throughout this preamble, we generally use

the new section numbers in our discussion of specific sections. In some

cases, we use both the old and the new section numbers for ease of

reference.

------------------------------------------------------------------------

Old section (subpart D of part 485 New section (subpart G of part 486

------------------------------------------------------------------------

485.301............................ 486.301

485.302............................ 486.302

485.303............................ 486.304

485.304............................ 486.306

485.305............................ 486.308

485.306............................ 486.310

485.307............................ 486.314

485.308............................ 486.316

485.309............................ 486.318

485.311............................ 486.325

------------------------------------------------------------------------

On June 21, 1991, we published a Notice of Proposed Rulemaking in

the Federal Register (56 FR 28513). In it, we proposed to implement

section 402 of Public Law 100-607 and section 201 of Public Law 101-616

by amending certain sections of 42 CFR part 482, which set forth the

Medicare conditions of participation for hospitals, and subpart D of 42

CFR part 485, which, at that time, set forth the Medicare and Medicaid

conditions of coverage for OPOs.

In addition to the provisions necessary to implement these laws, we

proposed some other revisions to the existing regulations. These

additional regulations were derived from our experience in

administering the OPO program and not related to legislation. The most

noteworthy of these latter provisions dealt with change of ownership of

an OPO and with termination of participation in the Medicare and

Medicaid.

These proposed regulations were updated, revised, and adopted in an

interim final rule with comment period issued on September 8, 1994 (59

FR 46513). Provisions in the interim final rule which contained changes

based on public comments included:

Participation in the Organ Procurement and Transplantation

Network (OPTN) as one of the Medicare conditions of participation for

hospitals.

Certification requirements for an OPO.

Requirements for an OPO service area.

Requirements that an OPO obtain HCFA approval before

entering into any change of ownership, merger, consolidation, or change

in its service area.

Medicare payment provisions.

OPO performance standards.

We have included detailed information regarding the provisions of

the proposed and interim final rule with comment period as background

in the discussion of individual topics.

We received 33 timely items of correspondence in response to the

September 8, 1994, interim final rule with comment period. This final

rule with comment period responds to the comments we received on the

interim final rule with comment period. It also contains revisions to

the regulations to implement provisions of the Social Security Act

Amendments of 1994 (Public Law 103-432). These changes to the

conditions of coverage for OPOs (42 CFR Part 486) are discussed below.

II. Service Area (Sec. 486.307)

A. Background

Before enactment of Public Law 100-607, the PHS Act provided that,

unless an OPO service area comprised an entire State, it had to be of

sufficient size to include ``at least 50 potential organ donors'' each

year.

Section 402(c)(1)(A) of Public Law 100-607 amended section

371(b)(1)(E) of the PHS Act to require the service area to be large

enough that the OPO ``can reasonably expect to procure organs from not

less than 50 donors each year.''

We determined that this change would have resulted in a substantial

number of existing OPOs failing to qualify for redesignation, because

we interpreted the requirement that the OPO ``can reasonably expect to

procure organs from not less than 50 donors'' to be more stringent than

the requirement that the service area include ``at least 50 potential

organ donors.'' According to a Departmental study cited in the Report

of the Committee on Energy and Commerce on a precursor to the 1988

legislative amendments to the Transplant Amendments Act of 1987 (H.R.

Rep. No. 383, 100th Cong., 1st Sess. 5-6 (1987)), the average OPO was,

at the time of the report, procuring organs from only 44 donors per

year. (Because more than one organ may be obtained from a donor, the

average number of organs obtained per OPO per year was about 110.)

Currently, the average number of donors per OPO is 77, resulting in an

average of 279 organs per OPO.

Most of the designated OPOs were scheduled for redesignation

beginning in March 1990 and would have been required to meet the new

requirement imposed by Public Law 100-607. Information obtained from

many representatives of organ procurement organizations (OPOs) revealed

that almost one-half of the OPOs would not have been able to meet the

new requirement. Some organ procurement and transplantation experts

believed that many of the OPOs that did not have a realistic

expectation of procuring organs from at least 50 donors were

nonetheless effective and efficient entities. Consequently, the

Department and other interested parties sought statutory relief to

avoid disruption to the nation's organ procurement system.

On April 23, 1990, Public Law 101-274 was passed. It postponed

until January 1, 1992, the effective date of section 402(c)(1)(A) of

Public Law 100-607, which changed the definition of ``service area.''

Therefore, the ``at least 50 potential donors'' requirement would have

remained in full force and effect until that date. However, Public Law

101-616 further amended section 371(b)(1)(E) of the PHS Act to require

an OPO to have a defined service area that (1) is of sufficient size to

assure maximum effectiveness in the procurement and equitable

distribution of organs, and (2) either includes an entire Metropolitan

Statistical Area (MSA) or does not include any part of the area.

Section 201(d)(2) of Public Law 101-616 required the Secretary to

publish a proposed definition of ``service area'' by February 14, 1991,

and final regulations defining ``service area'' by November 16, 1991.

In the June, 1991 proposed rule, we specified in Sec. 485.304(d)

that an OPO cover a service area ``* * * of sufficient size to assure

maximum effectiveness in the procurement and equitable distribution of

organs and that either includes an entire metropolitan statistical area

as specified by the Office of Management and Budget or does not include

any part of such area * * * *''.

In the September 1994 interim final rule, we revised proposed

Sec. 485.304(d) (now Sec. 486.306(d)) to provide that, for designations

in 1996 and thereafter, an

[[Page 19724]]

OPO's service area must include an entire State or the OPO must procure

organs from an average of at least 24 donors per calendar year in the 2

years before the year of designation. We provided that an OPO operating

in a noncontiguous U.S. State, a U.S. Territory, or a U.S.

Commonwealth, such as Hawaii or Puerto Rico, was subject to a

specified, alternative standard beginning January 1, 1996. We also

provided that if an entity has not previously operated as a Medicare-

certified OPO, it must demonstrate that it can procure organs from at

least 50 potential donors per calendar year.

B. Public Comments and Our Responses

Comment: One commenter suggested that we require that every

transplant center have a working relationship with an OPO.

Response: Existing law and regulations already require this

relationship. Sections 1138(a)((1)(C) and 1138(a)(3) of the Act require

that a hospital have an agreement, as described in section 371(b)(3)(A)

of the PHS Act, with its designated OPO if it is to participate in the

organ procurement program. Medicare regulations at 42 CFR 405.2163

require that every renal transplant center ``* * * participates in a

patient registry program with an OPO designated or redesignated under

Part 485, Subpart D * * * ''. (We are changing this reference to Part

486, Subpart G in this final rule with comment period to reflect the

redesignation). In addition, we have published in the Federal Register

notices containing the Medicare coverage criteria for heart (52 FR

10935, April 6, 1987), liver (56 FR 15006, April 12, 1991), and lung

(60 FR 6537, February 2, 1995) transplantations. Each of these notices

requires that a hospital submit documentation demonstrating the

hospital's agreement with a Medicare-certified OPO as one of the

conditions necessary for Medicare approval as a facility for which

respective organ transplantation may be covered. We believe that these

requirements meet the commenter's suggestion.

Comment: One commenter suggested that more consideration be given

to regional MSAs than to State boundaries. The commenter believed the

current policy results in poor service to remote areas.

Response: It is not clear to us how the current policy would

inappropriately effect organ distribution to remote areas. We believe,

however, that the law is clear regarding the MSAs and provides little

latitude for alternative interpretation. Section 371(b)(1)(E) of the

PHS Act provides that an OPO ``* * * has a defined service area that is

of sufficient size to assure maximum effectiveness in the procurement

and equitable distribution of organs, and that either includes an

entire MSA (as specified by the Director of the Office of Management

and Budget) or does not include any part of the area.'' Thus, we have

no authority to split MSAs in designating OPO service areas. Other than

repeating this statutory language, our Medicare regulations do not

address MSAs.

As a matter of practice, we designate OPO service areas on a county

specific basis. An OPO's service area will include all of the counties

within the MSA and as many other counties as it desires and is awarded

based on the criteria in Sec. 485.308 (now redesignated as

Sec. 486.316). We note that all counties that contain a hospital are

assigned to one of the designated OPOs. In addition, in principle, we

believe that organ donation is most likely to be enhanced where there

is a willing and cooperative arrangement between the hospital and the

OPO. Therefore, we believe that it could be potentially deleterious

rather than helpful to force hospitals in counties that are not

officially part of an MSA to be served by the OPO servicing the MSA.

However, if the parties agree that designation of a regional MSA would

be helpful, we would not preclude such designations.

Comment: One commenter noted that current terminology used by the

Office of Management and Budget (OMB) refers to ``Metropolitan Area''

(MA) rather than MSA as the general term describing urban

classifications. Within MAs, there are several categories: MSA,

Consolidated MSAs (CMSAs), Primary MSAs (PMSAs), and New England County

Metropolitan Areas (NECMAs). The commenter requested clarification as

to which MA categories are applicable to the OPO regulations.

Response: For purposes of the OPO regulations, MSAs encompass the

current MA categories of MSA, PMSA, and NECMA. A CMSA is comprised of a

number of PMSAs that are considered separately for purposes of defining

OPO service areas. In New England, we use NECMAs rather than MSAs and

PMSAs which are based on townships rather than county areas. Since OPO

service areas are defined based on counties, we believe it is more

appropriate to use the county equivalent MA designations in New England

(that is, NECMAs). The law clearly states that we may not divide an MSA

into the service areas of multiple OPOs. If an OPO's service area

includes any part of an MSA, PMSA, or NECMA, it must include the entire

area.

Comment: One commenter noted that a newly established OPO could

qualify based on a determination that it has the potential to procure

organs from at least 50 potential donors. The commenter requested

clarification as to how the organization would demonstrate this fact.

The commenter also noted that currently OPOs convert fewer than 50

percent of the potential donors to actual donors. Therefore, it is

unlikely that an organization with only a 50-donor potential can meet

the 24-donor criterion.

Response: The current criterion for qualification as an OPO

servicing an area of fewer than 2.5 million people is that the

organization demonstrate that it has the potential to procure organs

from 50 donors. Thus, the criterion we have established for newly

functioning OPOs is identical to that currently applied to the existing

OPOs. We have historically not prescribed how an OPO must demonstrate

this standard is met. Rather, when making such a determination, we have

accepted the information submitted by the OPO, evaluated it, and

requested clarification if necessary. We believe it is appropriate to

hold newly established OPOs to the condition in place for existing

OPOs. Thus, we do not intend to specify how such a standard is to be

met. We will continue to allow flexibility for the OPO to come forward

with reasonable information to demonstrate its position.

We do, however, intend to take a more rigorous look at the

information than we have previously. Newly established OPOs need to

qualify at the end of a 2-year period based on one of the other

criteria. In most cases, this criterion will be an average 24 donors

per year over a 2-year period. We believe it would be disruptive to the

organ procurement industry to allow OPOs to enter the arena only to

exit 2 years later if they cannot meet the qualification criteria.

Consequently, we expect OPOs to act responsibly and to have a specific

plan for achieving the long-term qualification criteria.

Comment: Several commenters expressed concern about the 24-donor

rule. For the most part, these commenters believed that some very small

OPOs are performing efficiently as is evidenced by the fact that they

meet the performance criteria. The commenters believed that the 24-

donor criteria is not an appropriate measure of performance. They

recommended that no size limitations be part of the qualification

criteria for designation as a Medicare-approved OPO.

One commenter believed that we should continue to permit an OPO

that meets the performance criterion to

[[Page 19725]]

qualify if it has an alternative local unit (ALU) to address the

equitable distribution issue. An ALU is an area developed by the OPO

and approved by the OPTN contractor as an alternative area as an aid to

equitable distribution. An ALU may be treated as a substitute for the

OPO's service area in the allocation scheme. The commenter, from a very

small OPO that is one of three OPOs operating in a single medium-size

State, believed that HCFA should continue to permit an OPO that meets

the performance criterion to qualify if it has an ALU to address the

equitable distribution issue. In the commenter's State, the three OPOs

share certain matched organs on a broader scale than they would if the

ALU were not in place, but the majority of organs are allocated

locally. The commenter believed that the regulations should be modified

to provide for an exception criterion that would allow this small OPO

to continue to qualify.

Response: The qualification criteria are intended to implement

section 371 of the PHS Act. Section 371(b)(1)(E) of the PHS Act

provides that an OPO must have a defined service area that ``* * * is

of sufficient size to assure maximum effectiveness in the procurement

and equitable distribution of organs * * *.'' We believe the use of

the explicit words ``of sufficient size'' in the statutory language is

a clear expression that the Congress intended the Secretary to

establish some measures of size in response to this mandate in the law.

Further, when we look at the legislative history, we believe that

the Congress intended that the service area size criterion be rigorous.

Section 371 initially set the qualification criterion at 50 potential

donors. However, the Congress recognized that this criterion was too

lax. The Congress subsequently modified section 371(b)(1)(E) in section

402 of Public Law 100-607 to require the service area to be large

enough that the OPO ``* * * can reasonably expect to procure organs

from not less than 50 donors each year''.

When this legislation was enacted, we recognized that setting the

qualification standard at this level at that time would have resulted

in decertification of approximately one-half of the OPOs approved by

Medicare. Consequently, we sought legislative relief from the statutory

standard. The Congress responded to our request with Public Law 101-

616.

We acknowledge that the fact that an OPO procures 24 donors per

year is not in and of itself assurance of ``maximum effectiveness'' in

organ procurement. We believe, however, that this criterion certainly

contributes to the retention of OPOs that are more likely to be

effective in organ procurement. This is true particularly for OPOs with

service areas that have populations under 1.5 million. We do not

believe that it is productive and cost effective to continue to retain

several OPOs operating within a single, often small, State. In these

cases, often too much time and effort are spent in competition with the

neighboring OPO rather than in organ outreach. Generally, a merger of a

number of small competing OPOs is cost effective because it results in

shared overhead, shared optimal practices, and a higher ratio of organs

to fixed operating costs.

Our decision to proceed with the 24-donor rule, however, is not

solely based on the maximum effectiveness portion of the statutory

language. The law also specifically requires that service area

designations be sufficiently large to ensure equitable distribution of

organs. Organs available for transplant are a scarce resource. There

are many more people on the transplant waiting list than there are

available organs. Both the Congress and this Administration support

transplant policies that contribute to the equitable distribution of

organs. We believe a proliferation of a large number of very small OPOs

does not contribute to this goal. The organ allocation policies give

priority, in most cases, to distribution of organs within the service

area. Consequently, OPOs must give first priority to keeping organs

procured within their service areas for transplant rather than

dispersing them to a larger area. The existence of a substantial number

of small OPOs could be disruptive to an effective large organ

allocation system because each of these OPOs would be keeping organs

for transplant within its own small service area.

For example, a small hospital-based OPO may have only a single

transplant center (itself) within its service area. In most cases, all

the organs procured in the service area are then transplanted to

patients on the waiting list at the transplant center instead of being

allocated to patients on a regional or national basis. The OPO, in

accordance with the national allocation rules, is transplanting the

procured organs to the highest-ranking appropriate patients in the

local area. These patients may have been on the waiting list a very

short time. Equally appropriate patients in the region who have been

waiting a much longer period of time would not receive the organs

because they are outside the local area. Since the OPO is servicing

only itself, it has an incentive to be a high-performing OPO. The

patients at this center have a shorter wait time.

However, in a neighboring town that is part of a larger OPO service

area, there may be several hospitals that must share the organs

procured from an OPO that is as effective in procuring organs as the

small OPO. Because this OPO must share organs among several transplant

centers, patients in these centers must wait considerably longer for

the needed lifesaving organs. As a result, there is significant

disparity among the transplant center waiting times. In various

hearings on organ transplantation over the years the Congress has

expressed concern about the disparity in waiting times for organ

transplantation among various geographic areas. Many members of the

Congress have expressed a strong desire to move toward a national

allocation methodology to mitigate this condition. We believe that the

definition of service area in the statute that addresses the idea that

an OPO's service area be of sufficient size to assure equitable

distribution is direction to the Secretary to not only look at OPO

performance or effectiveness but to also consider the impact of service

area size on organ distribution since very small OPO service areas tend

to result in disproportionately short waits in some areas and

disproportionately long waits in other areas. We conclude that a

proliferation of very small OPOs may not be consistent with an

equitable distribution system as required in the statute.

While we acknowledge the existence of an ALU for the purpose of

organ distribution may potentially mitigate some of the concern

regarding equitable distribution, we believe that there are other

values associated with establishing OPO minimal service area size that

cause us to continue to support this position. There are many benefits

of the consolidation of OPOs, such as the sharing of best practices,

shared overhead, expediency in reacting to emergency situations,

consistent procurement and transplant practices, and promotion of

equitable treatment. We find no benefit to the program or the American

public in retaining very small OPOs under a system of exceptions when

there is no potential that these OPOs would ever meet the size

criterion.

On the other hand, we have not arbitrarily set up criteria that

restrict OPOs to a certain size or population base. We recognize that

small OPOs can be very effective in procuring and distributing organs

despite serving a small population area in certain circumstances. OPOs

may qualify if they service an entire State, regardless of the

population or the number of donors

[[Page 19726]]

available. Similarly, we have established special qualifying criteria

for OPOs servicing areas that are not contiguous to the rest of the

nation. OPOs servicing Hawaii, Alaska, and U.S. territories must meet

alternative criteria as discussed below.

We also point out that the criterion is applied based on a 2-year

average. Thus, if an OPO fails to meet the criterion in one year due to

uncontrollable or unforeseen circumstances, it will have an opportunity

to make up for lost donors in the following period. Since this is a

static number, OPOs will be able to continually monitor themselves

against this criterion and take corrective actions as necessary to

improve.

In evaluating the impact of this criterion on the existing OPOs

using historical data, we are comfortable that the criterion will not

have a major adverse impact on the existing OPOs.

Based on 1994/1995 data, three OPOs that would have met the

performance criterion if it had existed in that period would not have

met the 24-donors per year criterion. However, one of these OPOs would

have qualified under the statewide criterion. The remaining two OPOs

are small organizations located in States with alternative, OPOs. We

believe alternative, high-performing OPOs could service the respective

areas adequately, while providing for a broader allocation area that is

likely to promote more equity in organ distribution. Consequently, we

continue to believe that the 24-donor rule is appropriate as one of the

qualification criteria.

In response to the comment that the 24-donor rule is not an

appropriate measure of performance, we have reviewed this requirement.

We agree that the 24-donor rule is not a measure of performance but a

measure of service area size. Furthermore, it is redundant to maintain

this requirement as both a performance and a qualification criterion.

All OPOs must meet all of the qualification criteria to be recertified.

It serves no purpose to place the requirement in two separate sections.

Therefore, we are deleting Sec. 486.310(b)(2) (formerly

Sec. 485.306(b)(2)) from this final rule with comment period.

Comment: Some commenters noted that this same criterion was both a

qualification standard and a performance standard. The performance

standard is one that is subject to a corrective action plan. However,

it was not clear whether the qualification criterion is subject to

corrective action.

Response: As noted above, we are deleting the 24-donor rule as a

performance criterion. Nonetheless, we think the commenters' concern

that there is no provision for exception to the qualification criteria

is important.

The law specifically requires that an OPO be of sufficient size to

assure maximum effectiveness in the procurement and equitable

distribution of organs. As discussed above, we do not believe it is in

the best interests of the program or the public to establish an

exception system for very small OPOs that historically do not possess

the base to achieve 24 donors. Even though such a small OPO may be

performing adequately based on its population base, we are concerned

that the proliferation of extremely small service areas runs counter to

the objectives of an equitable national organ allocation system.

However, we recognize that an OPO may experience unforeseen

circumstances beyond its control that result in the OPO failing to meet

the qualification criterion during a single recertification period.

Consequently, we are adding a new Sec. 486.307(d)(3) to provide for an

exception process.

This exception process is explicitly limited to those OPOs that

have historically met the criteria and that have a specific plan to

achieve 24 donors per year in the future. We are also allowing a one-

time exception for the transitional period. This exception allows an

OPO that meets the performance standards in Sec. 486.310 to continue

Medicare and Medicaid participation for 2 years while it puts in place

a plan to achieve 24 donors per year in the future. (See Section X of

this preamble)

To receive the exception, an OPO must file its request with HCFA at

least 15 days before its recertification date. The request must be in

narrative form. If the exception is based on unusual circumstances the

narrative must explain in detail the unusual circumstances that

contributed to the OPOs failure to procure 24 donors per year. The

exception request must also include data regarding the number of donors

per year for the 5 years immediately preceding the present designation

period. For example, if an OPO fails to meet the qualification standard

for the 1996 designation period and it requests an exception, it must

submit data, by year, for donors procured from 1991 through 1995. The

exception request must also detail the specific actions the OPO intends

to take to increase organ donors to 24 per year. Detailed instructions

concerning the exception process and the corrective action will be

included in the manual instructions.

Comment: One commenter wrote encouraging us to view the

qualification criteria as bare minimum which should not be weakened for

any reason. The commenter was concerned with the discrepancy between

the qualification standards for new OPOs and currently existing OPOs.

Response: We appreciate support for the qualification standards

adopted. As noted above, we believe it is important to maintain high

standards to encourage OPOs to make every effort to procure all

available organs. However, we are not aware of any means to avoid a

discrepancy in standards between new and existing OPOs. That is, a new

OPO will not have actual data on any objective measure of organ

recovery or transplant rates. Consequently, we have no alternative than

to use a measure of potential procurement for the initial designation.

On the other hand, if an OPO is not recovering the potential

organs, despite the fact that the area is large enough to support

minimum recovery level, we believe it would be irresponsible to

continue to allow that OPO to service the area. Thus, while there may

be some discussion as to what exactly is the most appropriate

qualification standard for existing OPOs, we believe that there should

be no alternative to setting the standard using actual experience

measures as opposed to potential. Since it is impossible to use actual

data for new OPOs and we are wedded to using actual data for existing

OPOs, there appears to be no alternative but to use different standards

for new and existing OPOs.

However, from the context of the comment, it appears that the

commenter believes the standard for new OPOs, which uses potential

recoveries, is more difficult than the standard for existing OPOs. We

point out that while the number of potential donors for new OPOs is

higher than the number of actual donors for existing OPOs, we do not

believe the standard for new OPOs is more rigorous. We have been told

by some OPOs that the average conversion rate of potential organs is

approaching 3 to 1. This means that to achieve the standard for

existing OPOs of 24 donors, a new OPO should have an area big enough to

have close to 72 potential donors.

We did not use the 72-donor criterion for several reasons. First,

we believe it is inappropriate to hold new OPOs to a different initial

standard than that which had to be met by their competitors when they

first entered the program. Second, we believe that new OPOs deserve the

benefit of the doubt in achieving a conversion rate that is above the

national average. That is, a new OPO may have only 50 potential

[[Page 19727]]

donors, but because of effective practices is able to achieve a

conversion rate of 2 to 1, and thus would continue to meet the

qualification criterion at recertification time.

Comment: One commenter noted that not all OPO service areas are

contiguous territories. The commenter requested that HCFA prohibit OPOs

from developing noncontiguous areas, citing difficulty in organ

allocation when service areas are separated.

Response: The commenter did not present any data or examples

demonstrating that noncontiguous areas are problematic. Further, the

issue of noncontiguous service areas has not presented a significant

problem for organ allocation or procurement to the best of our

knowledge. Most OPOs that have noncontiguous service areas have

established field offices in each territory. Often, they have secured

approval for alternative allocation policies for each portion of the

service area. While there may be some administrative complexities

associated with noncontiguous areas, this concept has appeared to work

very well. We find no reason to prohibit the practice in the future.

C. Provisions of This Final Rule With Comment Period

We are making the following changes to the interim final rule.

We are revising Sec. 486.306(d). We are retaining the

general requirements for documentation of service area in paragraph (d)

and moving the specific detailed requirements in that paragraph to new

Sec. 486.307 OPO service area requirements and documentation and

including a cross-reference to Sec. 486.307 in Sec. 486.306(d). We are

making this change as a technical change to allow for a better

organization and readability of the regulations.

We are adding Sec. 486.307(d)(3) to provide for an

exception process when an OPO experiences unforeseen circumstances

beyond its control that result in the OPO failing to meet the

qualification criterion during a single certification period. To

qualify for an exception, the OPO must demonstrate that (1) it failed

to meet the 24-donor criterion due to unusual circumstances beyond its

control, (2) it has historically maintained a service area sufficient

to assure effective procurement and equitable distribution (that is, it

has historically achieved 24 donors per year), and (3) it has a

specific plan to achieve 24 donors per year in the future.

We are deleting Sec. 486.310(b)(2) (formerly

Sec. 485.306(b)(2)). This paragraph contains the 24-donor rule as a

measure of performance. As noted above, we are keeping this measure as

a qualification criterion.

Although we did not receive a comment to this effect, we

are redesignating Sec. 486.310(a)(3) (formerly Sec. 485.306(a)(3)),

that requires OPOs to enter into a working relationship with any

hospital or transplant center in the OPO's service area that requests a

working relationship, as Sec. 486.304(b)(8). We believe that this

requirement is more appropriately considered as a qualification

standard for OPOs rather than as a performance standard.

III. Composition of the Board of Directors of an OPO

(Sec. 486.306(f))

A. Background

Section 485.304(f) (redesignated as Sec. 486.306(f)) requires that

as one of the conditions for qualification as an OPO under the Medicare

and Medicaid programs, an OPO must have a board of directors or an

advisory board that has the authority to recommend policies relating to

the donation, procurement, and distribution of organs. That section

also specifies that the board must include members with various

backgrounds and areas of interest. In the proposed rule, we included a

revision to Sec. 485.304(f)(3) (now Sec. 486.306(f)(3)) to allow either

a physician or an individual with a doctorate degree in a biological

science with knowledge, experience, or skill in the field of

histocompatibility to serve on an OPO board of directors or advisory

board. In the interim final rule, we changed the requirement from ``a

physician with knowledge, experience, or skills in the field of human

histocompatibility'' to ``a physician with knowledge, experience or

skill in human histocompatibility, or an individual with a doctorate

degree in a biological science and with knowledge, experience, or

skills in the field of human histocompatibility.''

In addition to this requirement, Sec. 486.306(f) specifies that the

board must also consist of:

Members who represent hospital administrators, tissue

banks, voluntary health associations in its service area, or emergency

room personnel.

Members who represent the public residing in that area.

A neurosurgeon or another physician with knowledge or

skills in the field of neurology; and

A transplant surgeon from each transplant center in its

service area with which the OPO has an arrangement to coordinate its

activities.

While an OPO may have more than one board, the membership

composition specified in Sec. 486.306(f) must exist on a single board.

B. Public Comments and Our Responses

Comment: Several commenters questioned the composition of the

policy board. Some commenters expressed concern with the involvement of

a transplant surgeon from each transplant center. They interpreted the

regulation as requiring that each transplant surgeon from each center

be placed on the board. They commented that this provision would

produce very large and costly boards and would give transplant surgeons

control.

Response: The commenters misinterpreted the regulation. We are not

requiring that each transplant surgeon be included on the OPO policy

board. Rather, we are including in the regulations the statutory

requirement contained in section 371(b)(1)(G)(i)(V) of the PHS Act.

This section requires that there be one transplant surgeon from each

transplant center within the OPO service area included on the policy

board.

We agree with the commenter that to include all transplant surgeons

would be inappropriate. Such a situation would give transplant surgeons

a disproportionate influence over OPO policies. We did not intend to

require the inclusion of every transplant surgeon. In fact, we read the

statute as prohibiting this composition. That is, we believe the

statute does not provide the OPO an opportunity to alter the

composition of the board from that provided in the law. Section

371(b)(1)(G)(i) of the PHS Act states clearly that the board ``is

composed of * * * from each transplant center * * * a member who is a

surgeon * * *.'' We believe the use of the article ``a'' to modify

transplant surgeon members, expresses the will of the Congress that the

board be composed using only a single transplant surgeon from each

transplant center within the service area. The statute does not say

that the board must include at least the following members. Rather it

clearly states that the board is composed as directed. Thus, OPOs may

not add additional members to the policy board other than those

specified in Sec. 486.306(f). We are modifying this section to specify

that the board must ``be composed of'', rather than say ``include'' to

clarify this provision.

Comment: Another commenter recommended that Sec. 486.306(f) be

modified to include only a single representative from one of the

disciplines from each transplant center on the policy board. The

commenter was concerned that the current regulation gives surgeons a

disproportionate influence on the board

[[Page 19728]]

or requires very large boards to balance their influence.

Response: As noted above, the statute is very clear in describing

the composition of the policy board. To alter the composition would

require a change in the law. However, we are not convinced that the

composition mandated in the law is problematic in most cases.

The law requires both a neurologist and a histocompatibility expert

on the board. In addition, it requires an unspecified number of other

people that may be included; for example, representatives of hospital

administrators, intensive care and emergency room personnel, tissue

banks, voluntary health associations, and members of the public.

Although the law does not specify the number of these representatives,

it is clear that there must be multiple representatives through the use

of the plural of the word ``members'' in sections 371(b)(1)(G)(i) (I)

and (II) of the PHS Act. In all but a few extremely large urban OPO

service areas, using only the minimum representation from these other

categories will result in a fairly small and balanced policy board.

We acknowledge that there will be isolated cases where the

requirement for a surgeon from each transplant center may be

problematic. For example, we are aware of one OPO that services 17

transplant centers. The inclusion of 17 transplant surgeons will result

in a very large and potentially difficult policy board. Therefore, we

are considering recommending a statutory change to the Congress

regarding the law governing OPO board composition. In the meantime, the

boards must be composed as directed in the law.

Comment: Other commenters recommended that OPOs be allowed to

establish committees, such as a quality of organs recovered committee

or a medical committee, in lieu of full representation on the policy

board by all surgeons. Still other commenters expressed support for

inclusion of one transplant physician from each transplant center on

the policy board.

Response: As noted above, the composition of the board is explicit

in the statute. We do not have the authority to condone alternative

governing strategies. We will consider developing a recommendation for

statutory change in this regard. However, we believe that the statute

would not prohibit OPOs from establishing the committees that have been

suggested. Such committees could advise the board and may be very

helpful in developing the OPO's policies and influencing its practices.

We strongly encourage OPOs to seek opinions from their customers and

others affected by their decisions. The only problem we find with the

commenter's recommendation is that such committees cannot be used in

lieu of full representation.

Comment: One commenter suggested that Sec. 485.304(f)(3) (now

Sec. 486.306(f)(3)) relating to histocompatibility representation on

the board be broadened further to include a doctorate level individual

in bioethics or a nursing specialty.

Response: We are not certain if the commenter intended that the

histocompatibility requirement be met by someone with bioethic or

nursing doctorate level education or that such individuals be added in

addition to the histocompatibility person. We believe that the

histocompatibility requirement is extremely important to the policy

board composition. Histocompatibility testing is paramount in

discussing policies related to equitable distribution of organs. We

believe that the histocompatibility representative on the policy board

must be someone with a medical degree or a biological science degree

with experience in human histocompatibility.

The requirement included in Sec. 486.306(f)(3) is a reiteration of

the requirement in the statute. The current law does not authorize

alternative education for this requirement. However, the current

regulations do not prohibit an OPO from including someone with a

doctorate level education in nursing or bioethics on the board. The

statute does not provide specific direction as to the education or

number of representatives from hospitals and the public. An OPO could

certainly choose to include a person with advanced nursing and

bioethics training, or both, as one of these board representatives.

Comment: One commenter recommended that the OPO boards be comprised

of not more than 50-percent representation from transplant centers.

Response: As noted above, we have described the composition of the

OPO boards in this regulation in accordance with section 371 of the PHS

Act. We note that the law does not prescribe the number or skills mix

of representatives from hospitals or the public. We expect that, given

that the boards must include a transplant surgeon from each transplant

center, in most cases the transplant centers will be heavily

represented on the boards.

We believe, however, that it is unnecessary and inappropriate to

dictate the percentage of transplant center representatives on the

board. We believe that each OPO is best equipped to determine the needs

of its operation and the community. Given the number of transplant

centers in the OPO's service area, such a requirement could result in

extremely large boards which could be costly to the OPO and,

consequently, the Medicare and Medicaid programs. Further, we do not

believe that the statute supports such a requirement because the law

was deliberately vague in its use of the term ``representatives'' as

opposed to use of limiting article ``a'' in the requirements regarding

members of the board.

However, given the rigorous performance standards that OPOs must

meet, we expect that each OPO will ensure as broad a representation as

practicable in setting up its policy board. We expect that it would

want to seek out increased involvement with donor hospitals and public

representatives to achieve innovative strategies to increase donation

rates. OPOs that fail to modify their boards to achieve a balance in

representation from the donor community and the transplant community

are likely to feel the consequences in failure to meet performance

standards. Thus, although we are not specifying the percentage of

representatives, we are holding OPOs accountable for appropriate

decisions.

C. Provisions of this Final Rule With Comment Period

We are clarifying Sec. 486.306(f) by revising the language

describing the OPO board. The revised language, ``the advisory board

must be composed of the following,'' more clearly indicates that there

is no discretion to add or remove skills to the mix on the board.

IV. Equitable Distribution of Organs (Sec. 486.306(i))

A. Background

In a proposed revision to Sec. 485.304(i) (now Sec. 486.306(i)), we

specified that an OPO must have a system to allocate donated organs

equitably among transplant centers and patients according to

established medical criteria. This revision was made to include the

word ``equitably'' in the previously existing requirement. In the

interim final rule with comment period, we changed the requirement to

eliminate the allocation of organs among ``centers'' and to specify the

medical criteria that the system must operate under; that is, they must

be consistent with Centers for Disease Control and Prevention (CDC)

standards and with OPTN rules. We made the former change to be

consistent with section 371(b)(3)(E) of the PHS Act.

[[Page 19729]]

B. Public Comments and Our Responses

Comment: One commenter believed there was now an absence of a

requirement for OPOs to equitably distribute organs. Another commenter

recommended that there be a follow-up mechanism to ensure that OPOs use

a system to allocate organs according to established medical criteria.

Response: The regulations at Sec. 486.306(i) require OPOs to have a

system to equitably allocate donated organs among transplant patients

that is consistent with the CDC and the OPTN rules. We made the change

in the interim final rule to specifically add the word ``equitably'' to

the distribution requirement. Currently, the OPTN develops a national

organ allocation system. The system is developed by the membership and

is medically based.

Although we are aware of isolated instances of OPOs using

allocation systems that do not comport with the national OPTN rules, we

do not believe that this situation is widespread. Consequently, we

believe it is unnecessary to establish a formal mechanism to evaluate

OPO allocation methodologies at this time. However, we invite the

public to advise the Department of incidents of organ allocation that

fall outside the established system. Incidents should be reported to

Judith B. Braslow, Director, Division of Organ Transplantation, Room 7-

18, 5600 Fishers Lane, Rockville, MD 20857.

Comment: Two commenters requested clarification regarding the

reference to the CDC standards. They noted that the CDC guidelines were

published as guidelines, not rules. They inquired if inclusion in

Sec. 485.304(i) (now Sec. 486.306(i)) sets these guidelines as

standards of practice for the entire transplant community.

Response: Section 486.306(i) requires that an OPO's system of

distribution of organs among patients be consistent with the CDC

standards. For the most part, these CDC standards relate to screening

potential organ donors and organs recovered for Human Immunodeficiency

Virus (HIV) infection. We believe that the monitoring for HIV infection

is critical and is an essential element for Medicare certification of

OPOs. In fact, in section 371(b)(3)(C) of the PHS Act, the Congress has

specifically required that OPOs evaluate an organ for HIV infection.

Exclusion of prospective blood donors based on their acknowledged

risk factors for HIV infection began in 1983. In 1985, when the test

for the HIV antibody became available, screening of prospective donors

of blood, tissue and organs began. Both measures have reduced

remarkably the transmission of HIV via these routes. A 1991

investigation, however, determined that several recipients had been

infected with HIV by an organ/tissue donor who had negative HIV

antibodies at the time of the donation. This occurrence raised

questions about the need for additional Federal oversight of

transplantation of organs and tissues.

A work-group was formed by the Public Health Service (PHS) to

address transmission of HIV through transplantation of human tissue.

This group produced a set of recommendations that were included in the

CDC Guidelines that we have included as an appendix to subpart G of

part 486 and referenced in the OPO regulations. OPOs must abide by the

CDC guidelines to qualify for Medicare and Medicaid certification.

In developing the recommendations, the PHS sought assistance from

public and private health professionals and representatives of the

transplant community, public health and other organizations. A total of

37 external consultants and 18 government staff formulated the

recommendations. These recommendations address issues such as donor

screening; quarantine of tissue from a living donor; inactivation or

elimination of infectious organisms in organs and tissues before

transplantation; timely detection, reporting, and tracking of

potentially infected tissues, organs and recipients; and recall of

stored tissues from donors found after donation to have been infected.

Factors considered in the development of these guidelines included

differences between the screening of living and cadaveric donors; time

constraints due to organ/tissue viability that may preclude performing

certain screening procedures; differences in the risk of HIV

transmission from various organs and tissues; differences between

systems for procuring and distributing organs and tissues; the effect

of screening practices on the limited availability of organs and some

tissues; and the benefit of the transplant recipients.

The CDC guidelines are intended to promote public health and

safety. They were not arrived at without appropriate assessment of the

risks and benefits for the public health of Americans. We fully support

the CDC guidelines and have attempted to assure compliance with them

through inclusion in the Medicare conditions of coverage. Thus, the

inclusion of the CDC guidelines as a requirement for OPOs does give the

CDC guidelines regarding organ allocation the force of regulation. That

is, any OPO found to be failing to conduct appropriate screening or

distributing organs that are not in compliance with the CDC guidelines

for organ allocation can be found out of compliance with the

qualifications for becoming a Medicare- or Medicaid-certified OPO and

have its certification terminated.

However, we acknowledge that the reference to the CDC guidelines

contained in the interim final rule with comment period is not

sufficiently clear on this point. Consequently, we are revising

Sec. 486.306(i) to specifically incorporate by reference the CDC

guidelines. The guidelines were issued as one of the CDC Morbidity and

Mortality Weekly Reports, ``Guidelines on Preventing Transmission of

Human Immunodeficiency Virus Through Transplantation of Human Tissue

and Organs,'' Vol. 43, No. RR-8, May 20, 1994.

We did not receive a formal comment on the application of the CDC

guidelines during the public comment period for the interim final rule.

We understand, however, that OPOs have taken the position that

acceptance of recovered organs is a matter of patient choice. Some

patients are so dangerously close to death while on the waiting list

that they are willing to risk receiving an organ potentially infected

with a fatal virus rather than risk the chance of not finding in a

timely manner an appropriate healthy organ. Some OPOs support the

patient having the opportunity to make this choice for themselves and

believe the CDC guidelines prohibit this practice.

The law at section 371(b)(3)(C) of the PHS Act is clear regarding

testing for infection with the etiologic agents (HIV-1 and HIV-2) for

acquired immune deficiency syndrome and taking steps to prevent

exposure to HIV through transplantation of these organs. Regardless of

the personal preference of a potential recipient or the opinion of the

OPO staff, the law requires that potential donors be tested for viral

markers for HIV-1 and HIV-2, and if found to be infected, organs from

that donor are not to be transplanted.

The CDC guidelines, however, do permit some measure of judgment for

organs tested negative for HIV etiological agents, but procured from

donors who have demonstrated high-risk behaviors. The recommendation in

the CDC guidelines on donor screening state that ``* * * Regardless of

the HIV antibody test results, persons who meet any of the high-risk

criteria should be excluded from donation of organs or

[[Page 19730]]

tissues unless the risk to the recipient of not performing the

transplant is deemed to be greater than the risk of HIV transmission

and disease. In such a case, informed consent regarding the possibility

of HIV transmission should be obtained from the recipient. * * *''

Thus, while compliance with the CDC guidelines requires OPOs to

conduct screening of donors through asking questions about the

potential donor's behavior relative to HIV-risk factors, the guidelines

do not unilaterally prohibit transplantation of the organs from donors

found to have high-risk behavioral criteria who have negative HIV-1 and

HIV-2 serologic tests. The OPO may procure the organs from such donors

and make the information concerning HIV-risk factors available to the

transplant surgeon. The transplant surgeon will then assess the risk

factors for HIV against the risk associated with delaying

transplantation and together with the potential recipient (and his or

her family if appropriate) make a decision to accept or reject the

organ. It is imperative, however, that full information regarding the

risk factors be disclosed by the appropriate transplant surgeon to the

potential recipient.

C. Provisions of this Final Rule With Comment Period

We are including the specific CDC guidelines cited in the interim

final rule as appendix A of part 436 subpart G. We are also clarifying

the reference to the CDC guidelines in Sec. 486.306(i). As a result of

these revisions, we are making the guidelines required standards for

OPOs.

V. Testing of Organs (Sec. 486.306 (q) and (s))

A. Background

In the proposed rule, we added a new Sec. 485.304(r) (now

Sec. 486.306(q)) to require OPOs to assure appropriate tests consistent

with OPTN standards and CDC guidelines are performed to prevent the

acquisition of organs that are infected with the HIV-1 and HIV-2

etiologic agents for acquired immune deficiency syndrome. In the

interim final rule, we redesignated the contents of paragraph (r) as

paragraph (q) and the contents of paragraph (q) as paragraph (r) and

added a new paragraph (s). Revised paragraph (r) required OPOs to

assist hospitals in establishing and implementing protocols for making

routine inquiries about organ donations by potential donors. New

paragraph (s) required OPOs to ensure that serologic testing for HIV-1

and HIV-2 viral markers is performed on potential donors consistent

with OPTN rules and CDC guidelines for solid organ donation.

B. Public Comments and Our Responses

Comment: One commenter recommended that we include standard

provisions that are required for all hospital donation protocols. The

two provisions the commenter specifically suggested were that (1)

hospitals refer all potential donors to the OPO before donation has

been mentioned, and (2) a trained professional be involved in all

donation requests.

Response: We believe that the suggested protocols are good and are

likely to work quite effectively for many OPOs and hospitals. However,

it is inappropriate to regulate specific donation protocols at this

time. There are many different protocols that can be highly effective

in organ donation. We do not wish to stifle the development of

innovative means of increasing the procurement rate by regulating

specific methodologies or protocols.

Comment: One commenter expressed concern with the requirement in

Sec. 485.304(s) (now Sec. 486.306(s)) regarding CDC guidelines for

preventing transmission of HIV through transplantation of human tissue

and organs. The commenter noted that an OPO has no knowledge of what

information the transplant center provided to the potential recipients

regarding their informed consent to the risks of transmission of

infections. The commenter suggested alternative language describing an

OPO's responsibility to make information available to the transplant

center. This language would state that an OPO is not responsible for

the decision to transplant high-risk organs in life-threatening

situations.

Response: Section 485.304(s) (now Sec. 486.306(s)) requires that

OPOs ``Ensure that donors are tested for human deficiency viral markers

consistent with OPTN rules and CDC guidelines for solid organ

donation.'' Similarly, Sec. 485.304(i) (now Sec. 486.306(i)) requires

that the OPO allocate organs in accordance with these guidelines. OPOs

are responsible for testing and allocating organs in accordance with

these guidelines.

If an OPO only allocates organs that comply with the guidelines to

a transplant hospital, a transplant center would receive a high-risk

organ to transplant to the recipient only on a very rare and carefully

selected basis. The OPO is required to ensure that informed consent of

the recipient is obtained. Thus, while the commenter is accurate in the

statement that an OPO does not formally have direct contact with the

recipient, we do not agree that such a situation in any way alters the

responsibility of an OPO to follow the CDC guidelines regarding testing

and allocation of organs. We expect that in these rare cases the OPO

will work closely with the transplant center to impress upon the center

the importance of getting informed consent documentation to the OPO

timely. We expect hospitals will cooperate with the OPOs in meeting

this requirement.

An OPO's responsibility does not stop with testing the donor and

making information available to the transplant center. The regulations

go beyond this to require the OPOs to allocate organs in accordance

with CDC guidelines. We believe it is appropriate to continue to hold

OPOs responsible for compliance with the CDC guidelines for allocation

as well as testing. Therefore, we are not modifying the regulations as

recommended by this commenter. However, as we stated above in

discussing Sec. 486.306(i), we believe that the nonspecific reference

to the CDC guidelines could be confusing. Thus, we are clarifying the

regulations to include a reference to the CDC guidelines in

Sec. 486.306(s). The guidelines are also included as an appendix to

part 486 subpart G.

Comment: One commenter suggested we also require OPOs to use the

guidelines and recommendations of the PHS workgroup on the testing of

organ donors for the presence of hepatitis.

Response: Unlike the requirement for testing for HIV viral markers,

which is contained in section 371(b)(3)(C) of the PHS Act, there is no

express legislative authority to mandate a requirement for hepatitis

testing. Although we believe that hepatitis testing is not precluded by

the law, there is no clear indication in either the statutory language

or the legislative history indicating the Congress intended that the

direction provided for HIV testing be expanded to other infectious

diseases.

We believe that it would be permissible to issue a regulation

requiring hepatitis testing for potential organ donors. However, we

believe that it would be imprudent to proceed with such a requirement

without the benefit of a prior public comment period to solicit the

input of the industry and other interested parties. We recognize that

there are significant OPO concerns that must be considered before we

proceed with any proposal to require testing for hepatitis. We

especially want to consider any cost impact and potential for decline

in organ donations before we develop a regulatory change of this

nature. Consequently, we are inviting public comment on this issue at

[[Page 19731]]

this time. If, after considering any comments we receive, we believe

that change in the regulations is appropriate, we will issue a new

regulation.

C. Provisions of the Final Rule With Comment Period

We have revised Sec. 486.306 (q) and (s) to include a reference the

CDC guidelines as standards in this final rule with comment period. We

have also included the CDC guidelines as an appendix to part 486

subpart G.

VI. Qualification Data (Sec. 486.306(t))

A. Background

In the interim final rule with comment period, we added

Sec. 485.304(t) (now Sec. 486.306(t)) to enable us to verify an OPO's

compliance with the performance standards. Section 486.306(t) requires

an OPO to submit accurate data to us within 15 days following the end

of a calendar year (unless otherwise notified), giving information on

the--

Population of designated service areas based on the most

recent U.S. Bureau of the Census data;

Number of actual organ donors;

Number of kidneys procured;

Number of kidneys transplanted;

Number of extrarenal organs by type procured; and

Number of extrarenal organs transplanted.

B. Public Comments and Our Responses

Comment: One commenter believed that there are multiple

interpretations for the terms for ``actual donor'' and ``procured''

that are used in the performance standards. The commenter recommended

that HCFA adopt the definitions that have been developed by the OPTN

contractor.

Response: Because, in the case of the OPO performance criteria, we

are using criteria that are based on the performance of peers, it is

important that all OPOs use the same data definitions to report data

uniformly. We surveyed the use of various terms within the industry,

including the OPTN contractor, and developed the following definitions:

Kidneys recovered--The number of kidneys recovered is the

actual number of kidneys the OPO recovers with the intent to

transplant. Kidneys recovered that are intended for research are not to

be included in the count. However, if a kidney was recovered with the

intent to transplant but was not actually transplanted due to

unforeseen circumstances, it may be counted. Kidneys recovered en bloc

are counted as two kidneys.

Kidneys transplanted--The number of kidneys transplanted

is the actual number of kidneys that were transplanted into recipients.

Kidneys transplanted en bloc are counted as two kidneys. Kidneys

transplanted as part of multiple organ transplants, for example,

kidney-pancreas transplants, are counted as both a kidney transplant

and an extrarenal transplant.

Extrarenal organs recovered--The number of extrarenal

organs recovered is the actual number of hearts, livers, lungs, and

pancreas the OPO recovers with the intent to transplant. Each organ is

counted individually regardless of the number of organs transplanted

into the same recipient.

Extrarenal organs transplanted--The number of extrarenal

organs transplanted into recipients. Each organ is counted individually

regardless of the number of organs transplanted into a single

recipient.

We had initially collected data from the OPOs using alternative

definitions that may have disadvantaged some OPOs serving hospitals

that frequently engaged in multiple organ transplants, such as heart-

lung transplants, bilateral lung transplants, and kidney-pancreas

transplants. We believe these revised definitions treat OPOs fairly. We

note that the OPTN contractor has agreed to use these common

definitions in its data gathering activities. Consequently, the

feedback that the OPTN contractor provides to an OPO throughout the

performance period to monitor an OPO's performance against its peers

should be consistent with the HCFA performance standards. Moreover,

based upon our impact analysis, we believe that changing the

definitions from those contained in the interim final rule with comment

period will not adversely impact any OPO's ability to meet the

performance standards.

We defined ``donors'' in our previous collections as ``the number

of cadavers from which the OPO actually recovers at least one viable

organ.'' Some OPOs advised us that differences in OPO protocols may

result in unintended differences among the OPOs through the use of this

definition. They recommended that we alter the definition to count only

those cadavers from which at least one organ was ultimately

transplanted.

Unlike the changes in other definitions that increase the number of

organs counted for nearly all OPOs, this recommendation for the change

in the definition of ``donors'' would decrease the count of donors for

many OPOs. Further, in conducting an impact analysis, we found at least

one OPO that would have met the performance standard under the

previously announced definition would not meet the standard under the

recommended revision.

We do not want to change the standard without benefit of comment

from the full industry, particularly in light of the fact that OPO

representatives differ in their views of the most appropriate

definition. Similarly, we are concerned that making a change in the

definitions that would adversely impact some OPOs at this late time in

the performance period without providing those entities an opportunity

for comment is not equitable. Consequently, we are retaining the

definition of ``donors'' that we used when we initially collected data

to calculate performance standards for the 1996 designations. We are,

however, open to altering the definitions for the 1998 recertification

process. Therefore, we specifically invite the public to comment on

this provision. If, after analysis of the comments, we believe that

changes are appropriate, we will advise the public, including all OPOs,

of these changes on a timely basis.

We advised OPOs of these definitions in our letters to them

regarding the collection of data throughout the performance period.

Similarly, we intend to include these definitions in the manual

instructions being prepared on the OPO conditions of coverage. We

believe that this way of proceeding will give us more flexibility in

adopting more appropriate definitions that become evident through

continued work with the data. We are also soliciting comments on

whether changes in the definitions should be made through rulemaking.

Comment: Several commenters objected to our requirement that organs

procured and transplanted en bloc, such as a pair of kidneys or lungs,

be counted as a single organ. The commenters believed that each organ

should be counted separately.

Response: We had intended that the organs be counted in accordance

with industry standards. Mistakenly, we utilized the HCFA standard for

counting organs that is applied during the cost reporting process. We

have now changed our definitions to be consistent with industry usage.

Each organ will be counted separately. OPOs are not able to influence

the transplantation of multiple organs and therefore should not be

penalized for serving centers that engage in this practice at a greater

frequency than the national average.

We note that we have already clarified this in our operational

instructions to the OPOs in verifying the performance data. Thus, the

performance standards

[[Page 19732]]

applied for the 1996 recertification process have been calculated based

on these revised definitions. Moreover, we are deleting any regulatory

reference to how organs are to be counted. We believe that this type of

detailed operational instruction is more appropriately placed in a

manual where it can be revised more easily as appropriate.

Comment: A few commenters recommended that HCFA use only verified

data from the OPTN contractor to monitor performance.

Response: We have analyzed portions of the OPTN data relative to

organ recovery and transplantation. We found the donor data reasonably

consistent with that reported to HCFA directly. Thus, the idea of using

the OPTN data for calculating performance standards is very appealing.

This method would reduce the reporting burden on the OPOs and is

consistent with the Administration's goal of reducing the Federal

regulatory burden. If we make such a change, we will, of course, first

notify all OPOs timely.

However, we have two concerns before we can implement such a

strategy. First, to make the performance standards as current as

possible while still meeting the recertification schedule, we require

that the calendar year data be reported as close to the end of the year

as possible. Currently, we require the OPOs to report this data to us

by January 15 annually. Because of the lag time of hospitals notifying

the OPTN of recipient registrations, the OPTN contractor questions if

the data reported by the 15th of the following month through routine

channels are comprehensive.

Second, we are concerned that OPOs have an avenue to request

adjustment of the data or to provide any necessary explanatory

material. For example, all of the performance criteria are population

based. Due to hospitals dealing with OPOs other than the one designated

for the service area or census changes, changes in the actual

population data for an area may be necessary. The OPTN data on

population is not, to the best of our knowledge, specific to the actual

hospitals served by OPOs. Thus, to use the OPTN data without the

benefit of adjustment could unfairly penalize some OPOs.

We established a process for collecting data from the OPOs. Each

OPO has been asked to submit its data in accordance with our directions

defining the variables. OPOs have the opportunity to identify necessary

adjustments to the population for its designated service area to take

into account hospitals that deal with multiple OPOs or an OPO other

than the one designated for the area. When an OPO requests a population

adjustment, we will work with the alternative OPO and our regional

offices using appropriate census data to accurately apportion the

population in question.

National averages and performance criteria are calculated and

forwarded to the OPOs, along with our recorded data from that OPO, to

provide an opportunity to review the data recorded. The OPO has an

opportunity to assure that data entry errors or other mistakes have not

been made and provide any necessary corrections to the data base. We

believe it is essential to provide OPOs this form of opportunity for

input before we use the data for purposes that could potentially result

in termination of the OPO from Medicare and Medicaid participation.

Initially, we were concerned that this opportunity for input would

not be available if we were to use the OPTN data. However, we

anticipate that once the initial population for the OPO service areas

has been calculated, future changes or adjustments, or both, will be

minor and infrequent. Thus, we may be able to develop a process that is

based on calculation of the standards using OPTN data, yet incorporates

a process for individual OPO adjustment requests.

Despite these concerns, we are supportive of the concept of using

the OPTN data to calculate the performance standards. We, together with

the OPTN contractor, will work with the OPOs and the transplant centers

throughout the year to obtain the necessary data as timely as possible

and develop a process for appropriate adjustments to achieve this goal.

We intend to test the 1995 and 1996 OPTN contractor data submissions

and analyze differences between the OPTN data and the OPO data. If the

OPTN data prove satisfactory, we will begin using them to set the 1998

standards rather than collecting the data individually from the OPOs.

We would, however, continue to allow OPOs to review the data and

request changes as appropriate. We note that adopting the OPTN data may

require revisions to the regulation or paperwork requirements or both.

We invite OPOs to participate with us in this process during the

ongoing evaluation.

Comment: One commenter believed that the requirement that the data

be submitted within 15 days of the end of an calendar year is

unreasonable. The commenter recommended that OPOs be given 60 days in

which to submit data.

Response: We acknowledge that a 15-day period for submission of

data after the end of the year may appear unnecessarily onerous. But,

upon closer examination, we believe that the request is quite

reasonable. The data are for items routinely collected by nearly all

OPOs, there are only six data elements, and the data for the first 11

months may be gathered in advance of the due date with the final

month's data added at the end of the year.

In addition, we believe that it is impractical to extend this

timeframe because of the work that must be done to determine the

performance standards before the recertification process which, for

most OPOs, begins in April. Prior to the beginning of April in the

years in which the recertification process takes place, we must review

the data submitted by the OPOs, make any necessary adjustments, enter

the data into a database, and calculate the performance standards. This

work must be completed as early in the year as possible so that the

OPOs can be notified of the standards, be afforded an opportunity to

verify the accuracy of their data, and make any changes to the data

prior to the recertification process. Because, the performance

standards are based on averages, a change in a single OPO's data can

result in a change in the standard that could impact upon other OPOs.

We believe that it would be inequitable to OPOs to delay having the

performance standards available to them until immediately preceding the

recertification.

Additionally, we must also have estimates available as early as

possible of those service areas currently served by OPOs that do not

appear to meet the standards so that any OPO interested in moving into

a service area of a poorly performing OPO has an opportunity to prepare

a plan for operating in the service area.

The only alternative we have to collecting data within 15 days of

the end of the performance period is to change the base years from

which we calculate the standards. That is, we could calculate the

performance standards for the 1996 redesignation using data from 1993

and 1994 rather than 1994 and 1995. We find this alternative

unsatisfactory. We believe that it is important that the data used to

evaluate an OPO's suitability for redesignation reflect the most recent

performance of an OPO. The use of old data could result in our

terminating the agreement of an OPO that has just completed an

outstanding performance year because the OPO did not meet the criteria

2 or 3 years ago.

We note that very few OPOs appear to have difficulty with the data

collection process and due date once they have gotten used to the

process. For example, only six OPOs did not file their data

[[Page 19733]]

timely in response to our 1995 collection effort. Further, none of the

OPOs called us to complain that the timeframe was unworkable or

unreasonably difficult.

C. Provisions of the Final Rule With Comment Period

We have not made any revisions to Sec. 486.306(t) in this final

regulation with comment period. We have, however, removed the

introductory paragraph of Sec. 486.310 containing operational

instructions regarding the counting of organs. We are removing these

instructions from the OPO regulations because they will be more

appropriately placed and more easily updated in an operational manual.

VII. Performance Standards (Sec. 486.310)

A. Background

Section 485.306 (now Sec. 486.310) lists the performance standards

for OPOs. In the proposed rule, we proposed revisions to this section

to state that we would not ``redesignate'' any OPO that fails to meet

the performance standards contained in this section. We also revised

Sec. 485.306(b) (now Sec. 486.310(b)) to distinguish between an OPO

which has not previously been designated by us for a particular service

area and a redesignated OPO with respect to the exemption from meeting

the performance standards in Sec. 485.306(a) (1) and (2) (now

Sec. 486.310(a) (1) and (2)) for 2 years.

In the interim final rule with comment period, we revised the

proposal to add the performance standards that OPOs must meet beginning

January 1, 1996. An OPO must meet the primary performance standard by

achieving at least 75 percent of the national mean for four of the five

performance categories over 2 calendars years before the year of

redesignation. The performance categories are:

Actual donors per million population.

Kidneys recovered per million population.

Extrarenal organs recovered per million population.

Kidneys transplanted per million population.

Extrarenal organs transplanted per million population.

In addition to the primary performance standard, the interim final

rule provided for three additional performance standards. An OPO must:

Procure organs from an average of at least 24 donors per

calendar year in the 2 calendar years before redesignation.

Maintain an average procurement ratio of three organs per

donor.

Enter into a working relationship with any hospital or

transplant center in the OPO's service area that requests a working

relationship.

For the purpose of measuring adherence to the performance

standards, organs removed en bloc and transplanted en bloc are counted

as a single organ.

In addition, Sec. 485.306 (now Sec. 486.310) permits an OPO to

submit corrected information if it believes the data used to apply the

performance standards were inaccurate. It also allows us to grant an

exception from some of the performance standards to OPOs operating

outside the contiguous United States.

B. Public Comments and Our Responses

Comment: One commenter suggested that performance measures be

reevaluated annually to ensure that the system can incorporate a

superior model for assessing underlying donor potential that is under

development.

Response: We intend to continually reevaluate the performance

standards as new data become available. We believe it is unnecessary to

commit to an annual reevaluation because it is unlikely that new

measures will surface at a rate that would indicate that the existing

standards are antiquated that quickly. Nonetheless, readers can be

assured that we will continue to monitor research and experience to

further refine and perfect performance standards. Any proposed changes

in the standards will be published for public comment before being

effectuated.

Comment: One commenter noted that performance standards based on

potential would be more accurate and effective than the ones specified

in the regulation.

Response: We do not agree with the commenter that standards based

on potential performance are superior to standards based on actual

performance. We believe it would be inappropriate for us to certify any

except a new OPO based on its potential to perform at a certain level,

if the OPO is not achieving a certain level of that potential. For

example, an OPO could service an area with the potential to produce 100

organ donors and significantly higher than average organs per million

population. However, if that OPO does not actually achieve 24 donors

and 75 percent of the national average organs per million population,

we believe strongly that it would be inappropriate for us to ignore the

actual performance and continue to certify the OPO based on its

potential performance.

Comment: One commenter expressed concern that the performance

criteria disproportionately accentuated recovery over transplantation.

That is, the commenter noted that three of the primary performance

standards related to recovery (that is, donors per million, kidneys

recovered, and extrarenal organs recovered), while only two related to

transplantation (that is, kidneys and extrarenal organs transplanted).

The commenter believed this emphasis on recovery over transplantation

does little to accomplish the primary goal of OPOs--providing

transplantable organs for thousands of waiting recipients. The

commenter was concerned that such an emphasis may result in increased

discard rates.

Response: We believe that both organ recovery and transplantation

are critical areas of OPO performance that need to be monitored. We

acknowledge that the commenter is accurate in noting that the primary

performance criteria do slightly emphasize recovery over

transplantation. One of the primary reasons for this is that an OPO can

more directly influence the recovery rate than the transplant rate.

While we acknowledge that a small portion of the organs discarded

are within the control of the OPO through tasks such as thorough

medical history taking, we believe the majority of organ discards occur

for reasons that are beyond the OPO's control. For example, surgical

nicks, damage to the organ during removal, and diseases that were

unknown to the family or not reported in medical records account for

many discards.

While we believe it is important to hold OPOs accountable for

making every effort to avoid unnecessary discards, we believe it is

unnecessary and inappropriate to accentuate the transplantation over

recovery. After all, an organ must first be recovered before it can be

transplanted. Given that there are but five criteria in the primary

performance standard, we continue to believe that it is appropriate to

have three recovery-related criteria and two transplant-related

criteria. We note that, for the most part, the OPO industry widely

supports this division.

Comment: Another commenter expressed concern that the primary

performance criteria were antiquated in that they emphasize kidney

transplants almost to the exclusion of other tissues and organs.

Response: We do not agree with the commenter that the primary

performance standard disproportionately emphasizes kidney transplants

``almost to the exclusion of'' other tissues and organs. Three of the

five primary standards are not related to kidney transplants. However,

since the

[[Page 19734]]

number of kidney transplants significantly outweighs other organ

transplants, we believe it is appropriate to establish separate

standards that look solely at the kidney recoveries and transplants as

part of overall OPO performance. Of the 19017 transplants in 1994,

11,391 or 59 percent were for kidneys. We believe this high incidence

of kidney organ transplants justify standards that concentrate

exclusively on that organ. We welcome comments on whether this emphasis

on kidney transplants is the best course for the future, given the

science of transplantation.

Comment: One commenter stated that some OPOs may not meet the

extrarenal organ standards for reasons beyond their control, such as

geography or availability of transplant surgeons. The commenter stated

that there are no pancreas, lung, or heart/lung programs in the

commenter's State so the OPO often did not recover these organs due to

unavailability of transplant surgeons. The commenter suggested that if

an OPO is able to demonstrate that it cannot meet the standard due to

such reasons, it be given credit for unrecovered organs.

Response: Although we can sympathize with this OPO's concerns, many

OPOs are faced with this situation. Some have developed mechanisms to

facilitate procurement of extrarenal organs for transplantation in

patients listed at transplant centers outside their States. Many OPOs

are meeting these goals by utilizing local surgeons to perform

excisions. Other OPOs are developing relationships with extrarenal

programs to facilitate placements without impediment from geographic

boundaries.

It is an OPO's responsibility to recover all viable organs from all

acceptable donors and facilitate their placement in suitable

recipients. The performance standards are designed specifically to

encourage more effective organ retrieval and transplantation. We

believe it would be irresponsible, given the number of persons awaiting

organs, to modify the performance standards in any way that would

validate the failure to retrieve transplantable organs. Therefore, we

are not altering the regulations as suggested by the commenter. We note

that in areas where geographical boundaries present real obstacles to

placement, such as noncontiguous States and territories, the

regulations now located at Sec. 486.310(c)(1) already adequately

address this issue through an exception process.

If it is true that viable organs are going unrecovered because

there is no transplant program for a specific type of organ in a State,

we find a severe problem exists that should certainly be corrected. We

do not want to encourage the continuance of the problem by altering the

performance standards.

All organs can be transported at least 500 miles without

significant chance of damage. With few exceptions, this 500-mile radius

goes significantly beyond State and, generally, OPO service area

boundaries. Consequently, an organ should be recovered even when the

organ cannot be transplanted in the State or within the OPO's service

area. We strongly encourage any OPO that has adopted the practice of

not recovering organs that it cannot transplant locally to alter that

practice immediately.

Comment: One commenter suggested that HCFA include data from all

OPOs, including new OPOs, in the calculation of the national mean.

Response: We intend to include all OPOs in the calculation of the

national mean, including new OPOs and those in noncontiguous States and

territories. However, we believe it is unnecessary to amend the

regulations to specify this intention. Since the regulatory language

does not restrict the calculation, we believe it already supports our

position to include all OPOs in the calculation.

Comment: Several commenters suggested that we substitute deaths per

year as the denominator in the primary performance criteria is lieu of

population. They believe that logically this denominator is more

directly correlated to the potential donor pool and would produce

better performance standards.

Response: The objective of the performance standards is to

establish an appropriate measure that would enable us to assess how

well OPOs are maximizing organ resources and therefore warrant

certification by the Medicare/Medicaid program. As such, it is

important that the data we use to develop these standards provide an

accurate measure of OPO performance. Clearly, the use of hospital

deaths versus area population in the denominator from which these

standards are derived warrants further investigation. We agree that

since OPOs deal with cadaveric donors, deaths per year (particularly

hospital deaths per year) is a more targeted measure of an OPO's actual

potential donor pool. Therefore, we surveyed the OPOs in an attempt to

collect death data from them for 1994 so that we could study the

feasibility of using deaths per year as the denominator. In nearly

every State, OPOs reported problems obtaining timely data. In at least

one State, the data are not available at all. We were able to

determine, however, that national death statistics are available from

the National Center for Health Statistics (NCHS) and the Social

Security Administration (SSA).

Although we have decided to proceed with the use of population as

the denominator for a number of reasons discussed below, we are

soliciting public comments on which approach--population or death

statistics--would best achieve our objectives with respect to measuring

OPO performance.

Population Data:

For purposes of developing the performance standards, we use the

latest census data. In addition, adjustments are made in the population

data to account for hospitals that deal with OPOs outside the

designated OPO service area.

These data are relatively easy to obtain at minimal, if any, cost

to the OPOs. We are soliciting comment on the timeliness, cost, and

quality of these data and adjustments to these data.

NCHS Death Data:

NCHS produces a public use data tape that contains deaths by county

for all U.S. counties. This tape contains approximately 2.2 million

records per year. Although death data are available universally, there

are some data elements that may be missing for certain areas. The OPO

industry has suggested the use of in-hospital deaths rather than

general death data, and while this could be obtained from the NCHS

tape, certain areas, such as Oklahoma, do not make fine distinctions in

the hospital site. Also, we are not certain about the availability of

death data for the United States territories. The NCHS tape may allow

some finer analysis based on demographic characteristics that may

better reflect the viable organ pool.

In the United States, the collection of these vital statistics data

is a State responsibility. Data are gathered by the States, and each

State establishes its own definitions for terms and coding rules.

Although NCHS conducts a quality review of the data, it uses the

individual State guidelines to verify the data were coded

appropriately. This approach, especially in terms of the definition of

``hospital'', could affect the OPO performance standards. In addition,

there is approximately a two-year delay in the availability of death

data from NCHS.

The NCHS public use tape can be purchased for $590 per year. Since

performance standards utilize a two-year average to avoid penalizing

OPOs for short fluctuations in organ donation, it would cost an OPO

approximately $1200 per redesignation cycle to obtain

[[Page 19735]]

the tapes. At this time, the data file is only available in mainframe

medium. We expect that most OPOs do not employ the staff that would be

required to abstract data from the NCHS tapes, although we would

welcome comment on this point.

The NCHS data does not identify individual hospitals for any State,

and there may be confidentiality issues that preclude States from

collecting hospital-specific information. Lack of hospital-specific

data would create a problem in adjusting the performance data for those

hospitals that deal with OPOs outside of the designated OPO service

area. While for most OPOs the impact of hospitals dealing with

alternative OPOs is minimal, there are several OPOs where the impact of

such hospital choices is very significant.

SSA Death Data:

Although we may be able to obtain timely death data through the

Social Security Administration, we know through experience that there

are a small number of deaths that are not reported accurately. Our

experience with using these data in our intramural research indicates

it is approximately 98 percent accurate. However, we are very concerned

with use of data that the OPOs cannot verify. We are further

investigating the timeliness, cost and quality of the SSA mortality

data. We are interested in receiving public comment on this data

source.

Other Policy Implications:

We are concerned about the impact of using death as the denominator

for those OPOs servicing large urban areas. Urban areas may have a

higher death rate among apparently suitable donors, however, there is a

lower donor consent rate among the minority population and a higher

likelihood that a potential donor will be an HIV risk or present a

history of substance abuse. Therefore, in these cases, the death rate

may not accurately define the potential donor pool and may

disproportionately affect OPOs serving large urban areas. We may not

want to establish a performance standard that may systematically bias a

particular group of OPOs.

We conducted an impact analysis comparing the use of 1991 death

data (the most recent data available at the time of our analysis) and

population data as denominators in calculating performance standards.

We determined that the use of death data would not significantly alter

performance outcomes compared to using population data. However, three

OPOs servicing major urban areas would not meet the performance

standards if death data were substituted for population data, provided

that the performance standards is not also changed. We acknowledge that

if the denominator used to measure performance were changed, the

performance standard itself could in principle be changed, and solicit

comments on this issue.

While research is being conducted on determining adjustment factors

that would allow for normalization of death or population data to

account for demographic factors, we are not aware of a generally

accepted adjustment methodology at this time.

In summary, we are soliciting comments on the approaches discussed

above with respect to use of population versus death statistics (from

either NCHS, SSA or some other national source) as a denominator for

measuring performance. Specifically, we are interested in comments

concerning the timeliness, cost, and validity of the various data

sources. We would also appreciate suggestions concerning possible

adjustments to account for varying demographic factors across areas, as

well as any other potential changes in the performance measures that

could be used in conjunction with death data.

Comment: One commenter suggested that any adopted performance

standards include adjustment for demographic risk factors related to

the population of the service areas. The commenter suggested historical

consent rates and medical suitability rates of potential donors.

Response: We acknowledge that intuitively it would seem to be more

difficult to achieve performance standards in some service areas than

in others. However, the impact analysis we conducted based on 1994 AOPO

data does not support the assumption that the unadjusted population-

based performance standards would disproportionately impact on those

population bases that have higher demographic risk factors. Rather, it

appears that the selected performance standards appropriately identify

those OPOs that have not achieved designated performance standards

based on factors that are within the OPO's control. For the most part,

those OPOs with high demographic risk factors do not appear to have

difficulty meeting the standards. For example, the California

Transplant Donor Network exceeds the mean of all five of the

performance standards while servicing San Francisco, which has one of

the largest HIV populations in the country. Similarly, most OPOs

servicing populations that have historically had low consent rates also

appear to meet the standards.

Finally, the commenter did not propose an empirical value to be

used to adjust for these risk factors. Although we are aware of ongoing

research in this area, we have not found literature that unequivocally

supports a method to calculate exact demographic risk factors that

would appropriately adjust the planned performance standards. We are

interested in any empirical research in this area. We intend to

continue to monitor the research and will consider any significant

findings for future refinement of the standards.

We are very interested in the development of alternative

performance criteria that would be consistent with our goals of

increasing organ donation, setting achievable threshold levels of

acceptable performance that are realistic and fair to all the OPOs.

Unfortunately, we have not been able to ascertain empirical evidence

regarding the correlation between adjustment factors and donation. That

is, to the best of our knowledge organ donation is influenced by a

myriad of factors. An area that has a high incidence of some factor

that would seem to decrease donation may also have a high incidence of

another factor that would seem to increase donation. We are not aware

of any regression analysis or other statistical studies that would

allow us to appropriately adjust performance indicators for

idiosyncracies of a geographic area.

Nonetheless, we are very interested in further refining the

performance standards. We specifically invite the public to comment on

any alternative performance measures that are supportable by empirical

evidence.

We should point out, however, that it appears that the rigorous

performance standards we have selected are providing the appropriate

incentives to increase organ donation. Based on the unverified 1995

performance data reported, there has been an increase of 262 donors in

1995 over 1994, resulting in over 1100 additional organs being

procured. We find these statistics very gratifying and may demonstrate

that the use of rigorous performance standards significantly benefits

the public awaiting transplantation.

Comment: Two commenters noted that many OPOs deal with hospitals

outside of the designated service area. They asked if we would

calculate the appropriate, actual population served by an OPO in

applying the performance standards.

Response: As noted above, we believe that approximately 200

hospitals deal with OPOs outside their service areas. We recognize that

this arrangement can contribute to an OPO's failure to meet the

performance standards based on servicing a designated area. The

[[Page 19736]]

regulations at Sec. 486.310(c)(3) specify an OPO may provide

documentation to us to support an adjustment in its population rate if

one or more hospitals in its designated service area have agreements

with alternative OPOs.

Operationally, we have implemented this provision by soliciting

actual population data from each OPO. We asked the OPOs to advise us

when a population adjustment is appropriate. We then ascertained

appropriate population adjustments through discussions with the

alternative OPOs, the hospitals in question, and the HCFA regional

offices. We note that effective January 1, 1996, a hospital may deal

with only one OPO. We believe this requirement will make it easier to

allocate population as the entire hospital service area will be

designated to the one OPO with which it has an agreement. As noted

above, we calculated the performance standards based on the reported

data, asked OPOs to verify the accuracy of their submitted data, and

provided OPOs an opportunity to request further adjustments.

We believe that the process we developed provides an opportunity

for equitable adjustments to the population data and holds an OPO

accountable for all of the hospitals it serves--including hospitals

outside of its designated service areas.

Comment: One commenter noted that research currently underway at

the Harvard School of Public Health could potentially lead to a more

accurate methodology for measuring OPO performance. The commenter

requested that the current performance measures be reevaluated annually

to ensure that more current research does not produce a superior

mechanism for evaluating performance.

Response: We are pleased to see that there is research ongoing in

this area. We will be very interested in the results and will consider

them fully when the research is complete. While we are always open to

improving the mechanism for evaluating OPO performance from any

interested source, we believe it is unnecessary and inappropriate to

commit to an annual reevaluation in the regulations. OPOs must know in

advance to what standards they will be held, so that they can make

appropriate plans and changes in their procurement strategies. If the

research proves to be superior as the commenter believes, we will issue

a proposed notice in the Federal Register for public comment. Changes

in the performance standards will only be made after the public has had

an opportunity to review and comment on the proposal.

Comment: Two commenters suggested that we develop more appropriate

criteria for the noncontiguous States and territories. They noted that

Puerto Rico has historically had extremely poor success with organ

procurement and would fail to meet the planned standards of 50 percent

of the national mean.

Response: We acknowledge the historically small number of organ

donations in Puerto Rico. We note, however, that other noncontiguous

areas such as Hawaii have had higher donation rates. We feel challenged

to develop a standard that would provide an incentive for improvement

for Puerto Rico without being so lax as to fail to present any

challenge to Hawaii at all. We note that the performance standards for

the noncontiguous States and territories are limited exclusively to

kidneys procured and transplanted. For this single organ, the standard

is 50 percent of the national average.

During 1994, a new OPO assumed responsibility for Puerto Rico.

Under the guidance of this new OPO, we are optimistic that Puerto Rico

will eventually meet this performance standard. In the meantime, we do

not intend to allow a service area that contains a hospital to go

unserved. Thus, we have revised the regulations to specify that an OPO

that does not meet the performance standards will not be terminated as

long as another OPO does not compete for the territory

(Sec. 486.310(c)). Given this change in the regulations, we believe it

is acceptable to retain the standards for the noncontiguous States and

territories. An OPO may continue to be designated for Puerto Rico even

if it does not meet the performance standards as long as no other OPO

competes for the service area. If another OPO demonstrates that it can

achieve better performance in the area, we believe that it is

appropriate to terminate the low performing OPO and give the

alternative OPO an opportunity to achieve higher organ donation.

Comment: Several commenters were concerned that the primary

performance standard of achieving at least 75 percent of the national

mean for four out of the five performance categories is absolutely

mandatory. They believed that OPOs should have an opportunity to

provide a corrective action plan for the primary performance standards

rather than be terminated. Another OPO suggested that OPOs not meeting

the primary performance standard be placed on probation for one year.

Response: We, together with staff in the Health Resources and

Services Administration, have long believed that there are many more

potential organ donors available than are currently being identified by

the OPOs. For example, there are nearly 5,000 hospitals in this country

that have not identified a single organ donor over a 3-year period.

Based on recent research from the Johns Hopkins University, we believe

that approximately 850 of these hospitals have donor potential. While

there are a myriad of reasons for failure to identify all potential

organ donors and to convert all potential donors to actual donors, a

major influence on organ donation is unquestionably the OPO.

We believe that the establishment of primary performance standards

at 75 percent of the national average is a reasonable standard. We hold

no OPO accountable to an arbitrary number but rather look only to its

peers. We are not aware of geographical factors that by themselves make

it impossible for an OPO to meet the standards in certain service

areas. Rather with a 25-percent margin of error off the mean, we

believe that the most influential factor to performance is the OPO

itself.

We intend these performance standards to serve the people on the

transplant waiting lists in all areas of the country by fostering the

most efficient OPO service for them. We believe that all Americans,

regardless of whether they are Medicare or Medicaid beneficiaries,

deserve to be serviced by OPOs that make every effort and use every

skill available to procure transplantable organs so that lives may be

saved or improved through timely organ transplants.

Consequently, we believe it is important to hold each OPO

accountable for meeting the primary performance standard. If the OPO

that is assigned to a service area is not achieving appropriate organ

donation rates, we would be acting irresponsibly to the Americans on

the waiting list to allow that OPO to continue to serve that area

rather than replace it with another better-performing OPO.

However, we equally believe we would be acting irresponsibly to

allow an area to go unserved rather than to permit an OPO an

opportunity for improvement. Therefore, we are altering the regulations

to permit an OPO that does not meet the performance standards to retain

its certification and submit a corrective action plan, if no other OPO

that is performing acceptably is willing to assume the service area.

When an OPO does not meet the primary performance standard, we will

solicit interest in assuming the territory from other OPOs. When

another higher-

[[Page 19737]]

performing OPO wants to assume the service area, we believe that we

should make the potentially superior service available in that area. In

those cases where no other OPO expresses an interest in assuming the

service area, we will allow the poor-performing OPO to submit a

corrective action plan and retain its certification for an additional

2-year period.

Comment: Several commenters thought that the performance standard

requiring OPOs to maintain an average procurement ratio of three organs

per donor should be eliminated. Many of them thought that the standard

would discourage innovative practices by OPOs, particularly those

related to procuring organs from older donors.

Response: We had originally intended the use of a static number

standard, such as the 3 organs per donor and 24 donors per year

standards, as part the performance standards to ensure that the

standards remained rigorous over time. We wished to safeguard against

the industry as a whole becoming lax in performance and driving the

national average to artificially low numbers.

Upon further reflection, we believe that the use of static number

performance standards is unnecessary and could result in a burden on

the OPOs if we required the submission of justification or corrective

action plans when these standards are not met. In conducting an impact

analysis of these performance standards, we found that all OPOs that

did not meet the three organ per donor standard also failed to meet the

primary performance standard. Consequently, we anticipate that this

standard in and of itself would have no immediate impact.

We also recognize that industry changes that could result in these

static number standards not being met may not necessarily be

detrimental. For example, innovative practices, such as procuring

organs from older donors, can result in a net increase in organs

available even though the standard may not be met. We do not wish to

discourage aggressive organ procurement practices as long as they

promote safe organ acquisition and show respect for the families of

potential donors. Our principle goal in the development of performance

standards is to increase the total number of organs transplanted.

Standards that could potentially deter an OPO from obtaining every

viable organ available are contrary to our goal. Consequently, we

believe that our goal is best served if we eliminate the static number

standards and proceed with the primary performance standards alone.

Comment: One commenter requested that newly merged OPOs and OPOs

acquiring significant new territory be granted a grace period for

compliance with the performance standards, similar to what we permit

for newly formed OPOs. The commenter believed that failure to provide a

grace period would deter an OPO from expanding its territory.

Response: The concept of granting a grace period for merging OPOs

and OPOs acquiring significant new territory is a difficult one. We

recognize that significant changes in OPO management, administration,

or new service areas could potentially result in a temporary decline in

performance as the organization adjusts to the change.

On the other hand, we are extremely concerned that permitting a

grace period could instill a perverse incentive into the program. That

is, allowing a grace period could provide an incentive for two poorly

performing OPOs to merge merely to avoid termination or for OPOs to

enter into bidding wars over service areas to avoid application of

performance standards. Policies that promote frequent major changes in

the OPO structure could be counter to our goals by resulting in

decreased rather than increased organ donations.

After considerable thought, we have decided to retain our current

policy of not permitting a grace period for newly merged OPOs or OPOs

with significant changes in territory. We believe that this will

encourage OPOs to undertake such changes judiciously using careful

thought and extensive planning. It is far less likely that big OPOs

will overstep their capacity for expansion if they must maintain high

performance standards.

We note, however, that the above change in policy, related to the

failure to terminate an OPO's provider agreement when there is an

absence of interest by another OPO in assuming the service area, would

apply in the case of newly merged OPOs. That is, a newly merged OPO

will be allowed to continue in the program even if it does not meet the

performance standards when no OPO with acceptable performance levels is

interested in servicing the area.

We expect that, in most cases, there would be a reluctance on the

part of competing OPOs to move into the service area of a newly merged

OPO before that OPO has had an extended opportunity to demonstrate its

ability to perform. We base our expectation on the realization that

repeated changes in OPO personnel and organization practices are

disruptive to organ donation and are likely to make it more difficult

for the second OPO to meet its performance standards as well.

C. Provisions of this Final Rule With Comment Period

We have added new Sec. 486.310(c)(2) to provide that an

OPO that is performing below standards may be redesignated for a

service area if no acceptably performing OPO is willing to accept

responsibility for the service area and if the designated OPO submits a

corrective action plan.

We have reorganized Sec. 486.310(c) for clarity.

We have moved the requirement at Sec. 486.310(b)(4)

(formerly Sec. 485.306(b)(4)) that each OPO enter into a working

relationship with any hospital or transplant center in the OPO's

service area that requests a working relationship to

Sec. 486.304(b)(8).

We have deleted Sec. 486.310(b) (2) through (4) (formerly

Sec. 485.306(b) (2) through (4)) relating to the non-primary

performance standards for redesignation after January 1, 1996. We are

making conforming changes to various other sections to delete

references to these sections.

VIII. Definition of an Open Area (Sec. 486.302)

A. Background

In the proposed rule, we added the definition of ``open area'' to

Sec. 485.302 (now Sec. 486.302). We defined ``open area'' as a service

area for which we are accepting applications for designation. A service

area becomes open for competition once the normal 2-year designation

period or brief interim redesignation period has expired, when the

designated status of the existing OPO is terminated, or when no OPO

previously has been designated for the area. In the interim final rule

with comment period, we modified Sec. 485.308(a) (now Sec. 486.316(a))

to clarify that, based upon the language in Sec. 485.302 (now

Sec. 486.302), it is the OPO's provider agreement with HCFA (not the

OPO itself) that can be terminated.

B. Public Comments and Our Responses

Comment: A few commenters requested clarification of the concept of

an open area. The commenters believed that, if an OPO meets the

performance criteria, no other OPO should be allowed to compete for its

service area.

Response: It is the intent of the law to encourage the most

effective organ procurement and allocation system. During various

Congressional hearings on transplant issues, the Congress has made it

clear that it supports as

[[Page 19738]]

equitable a system as possible. We believe it is the Congress'

expectation that we establish conditions in the Medicare and Medicaid

program that provide incentives for OPOs to operate as efficiently and

effectively as possible in procuring lifesaving organs.

Consequently, we believe that the law does not in any way intend to

assure OPOs a monopoly simply because they barely meet the Medicare

performance criteria. The structure of the statute, which allows only a

single OPO to be designated in any given area, sets up an inherently

competitive system. Thus, it is appropriate and in keeping with the

principles of our national economy to permit competition regardless of

the fact that an OPO is meeting the performance criteria.

We intend to designate the best performing OPO for each service

area. We believe it is inappropriate to designate a marginally

performing OPO for a service area simply because it has operated in

that area previously if a peak-performing OPO is also competing for the

area and has the support of the hospital community. However, we

recognize that organ donation is a voluntary action. Therefore, to

perform well in an area, any OPO must have the support and cooperation

of the community. The ``tie-breaking'' criteria we will use to

adjudicate the competition are specified at Sec. 485.308(a) (1) through

(6) (now Sec. 486.316(a) (1) through (6)). These criteria emphasize the

relationship between the OPO and the hospitals in the service area, the

proximity of the OPO to the area, and past performance.

With regard to the explicit request for clarification of the open

area designations, every county in the country is open for competition

at redesignation time. Currently, most OPOs are in two-year designation

periods that end April through June 1996 and every two years

thereafter. Thus, an OPO may compete for any county, or all counties in

an MSA, that it believes it can serve better than the existing,

designated OPO at that time. To bid on an open area, the OPO must

notify the HCFA regional office of its intention. The regional office

will advise the existing, designated OPO of the competition and request

the necessary information to evaluate the proposals.

In addition to the open area competition that may occur at

redesignation time, an area will be declared open if the provider

agreement with the OPO serving the area is terminated or if no OPO has

been designated for the area. There are a number of counties that do

not contain hospitals. Consequently, no OPO had been designated for

these counties in prior designation periods. We believe that every

county should have a designated OPO to work within the community.

Therefore, we instructed our regional offices to designate these

counties based on the affiliation of the hospital from which the

majority of the residents seek care. That is, we asked the Regional

Offices to designate these counties to the OPO servicing the hospital

that is used routinely by the majority of the residents.

We had considered designating the county to the hospital furnishing

trauma care to the locality. However, we decided to designate the OPO

of the local hospital because the nearest trauma facility may be

located very far away. We believe that designating the area to an OPO

that is a great distance away is likely to be a deterrent to the OPO's

ability to serve the community.

Finally, we point out that the final regulation states explicitly a

policy HCFA has applied administratively in implementing the OPO

redesignation process. We have historically allowed competition for OPO

service areas designations at time of redesignation. Further, we would

accept a bid for a service area for undesignated counties or the

service area of a terminated OPO at any time should an entity apply.

Such competition has been minimal. We do not expect this to change with

the inclusion of this policy in the regulations. It is generally

accepted that OPO-hospital relationships may make procurement more

difficult during the transition. Since OPOs acquiring new service areas

will continue to be held to rigorous performance standards, we do not

believe OPOs will seek expansion without considerable thought and

planning.

Comment: Another commenter noted that the interim final rule did

not list the factors that would be used to adjudicate the designation

of a service area that is being contested. The commenter suggested the

following factors: procurement rate, satisfaction of transplant centers

with service provided by the OPO, organ procurement costs, response

time to donor referrals, extent and effectiveness of professional and

public education, established patterns of organ donor referrals, organ

discard rate, and donor hospital satisfaction.

Response: We did not reprint the factors that would be considered

in adjudicating contested service area designation because we did not

intend to change the regulations. As noted above, the factors are

listed at Sec. 486.316(a) (1) through (6). Many of the factors noted by

the commenter are included in these regulations. These factors follow.

(1) Prior performance, including the previous year's experience in

terms of the number of organs retrieved and wasted and the average cost

per organ;

(2) Actual number of donors compared to the number of potential

donors;

(3) The nature of relationships and degree of involvement with

hospitals in the organization's service area;

(4) Bed capacity associated with the hospitals with which the

organization has working relationships;

(5) Willingness and ability to place organs within the service

area; and

(6) Proximity of the organization to the donor hospitals.

As noted above, we have not heretofore experienced a significant

amount of competition among the OPOs. Thus, we have only limited

experience with these criteria. If competition increases among the OPOs

as a result of this final rule with comment period, we will consider

revising the factors in the future. In that regard, we will give

consideration to the factors noted by the commenter. We will also

publish a proposed notice of these changes in the Federal Register and

invite public comment on the proposal.

C. Provisions of This Final Rule With Comment Period

As we stated above, we are making no revisions in the definition of

``open area'' at this time.

IX. Termination of an OPO's Provider Agreement (Sec. 486.325(b))

A. Background

In the interim final rule, we added Sec. 485.311 (now

Sec. 486.325(b)) to specify the conditions for both voluntary and

involuntary termination of an OPO's provider agreement. For a voluntary

termination, we required that the OPO provide us with a written notice

of its intention with a proposed termination date. We will take action

to approve the request as submitted or take other action to ensure that

there is no disruption in services in the affected service area.

For an involuntary termination, we may terminate an agreement if we

find that an OPO no longer meets the conditions of coverage. Under

Sec. 485.311(b) (now Sec. 486.325(b)), we indicated we would give 15

days notice of termination. We also set forth an OPO's appeal rights,

the requirement that an OPO give prompt public notice regarding the

voluntary termination, and reinstatement provisions.

We made editorial changes to this section as part of the interim

final rule

[[Page 19739]]

with comment period but we did not make any significant changes in the

substance.

B. Public Comments and Our Responses

Comment: One commenter believed that a 15-day notice of

termination, if used, could lead to serious disruption of organ

procurement efforts. The commenter urged a minimum notice requirement

of 90 days.

Response: The added the 15-day termination notice is included in

the OPO regulations to be consistent with the treatment of providers

under the Medicare program. It is common practice in the Medicare

program to give providers a 15-day notice of termination of their

agreement to participate in the Medicare program for failure to comply

with the conditions of coverage.

However, upon further reflection, we can see some significant

differences between certification of Medicare participating providers

and certification/designation of an OPO that may warrant an alternative

policy for OPO termination. Most notably, providers are generally

terminated for serious and imminent health and safety reasons, while

OPOs are most likely to be terminated for failure to meet performance

standards. While it is possible for an OPO to be terminated for a

health and safety reason, such as procuring organs from HIV-infected

donors, such a termination has not occurred to date. Consequently, we

expect that such an occurrence would occur very rarely, if at all.

Thus, in the case of serious health and safety issues, it is important

to protect the health and safety of our beneficiaries by proceeding

with termination expeditiously. However, we believe that because no

serious harm is likely to befall anyone if we move more cautiously with

termination of an OPO's provider agreement, we can consider an extended

termination notification period.

In addition, Medicare beneficiaries generally have easier access to

alternative health care when a provider of health care services is

terminated. That is, while a Medicare beneficiary is no doubt

inconvenienced somewhat when the provider of choice is terminated from

the program, 15 days is generally enough notice for the beneficiary to

locate an alternative source of care within the area. In the case of an

OPO, however, the situation is significantly different. That is, an OPO

does not furnish health care services directly to the beneficiary, and

there are no generally available alternative OPOs within easy access.

Thus, in the case of OPOs, expeditious termination of the entity could

present a significant problem to the providers who have an agreement

with the OPO.

We note that we are changing the process for termination somewhat

from that in the interim final rule with comment period. That is, we

have concluded that we will not necessarily terminate an OPO that does

not meet the primary performance standard if no other OPO is willing to

assume the territory. Rather, we will solicit interest from other OPOs

in assuming the service area. Thus, it seems only practical to allow

for a period in which to solicit such interest from competing OPOs

before terminating the OPO that does not meet the performance standard.

To do otherwise would place an OPO in the anomalous position of being

terminated 15 days after notification of failure to meet the

performance standards only to be reinstated within a month or two when

we discover no alternative OPO is willing to assume the territory.

Consequently, we have modified Sec. 485.311 (now Sec. 486.325) to

provide that termination of OPOs will occur 90 days after the

notification by the Secretary that the OPO does not meet the standards.

C. Provisions of this Final Rule With Comment Period

We have revised Sec. 486.325(b) (formerly Sec. 485.311(b)) to

provide for a 90-day advance notification before a termination of an

OPO's provider agreement becomes effective. Similarly, we have revised

Sec. 486.304(e)(3)(ii) (formerly Sec. 485.303(e)(3)), relating to

interim designation periods, to extend the length of such designations

to 180 days to take into account the longer advance notification period

to effectuate terminations.

X. Effective Dates

A. Background

In the September 1994 interim final rule, we noted that, although

the regulations were effective 30 days after publication, we would

apply the new qualification and performance standards for the first

time with the recertification of OPOs that takes place in the spring of

1996 (for most OPOs, June 1, 1996). For purposes of the

recertification, we would use data from calendar years 1994 and 1995.

B. Public Comments and Our Responses

Comment: Several commenters suggested that we delay the effective

date of the regulations to provide for 2 full years of advance notice

before we apply the standards.

Response: Although the actual regulations were not issued until 9

months into the 24-month performance period (1994 and 1995), we believe

that OPOs have had adequate advance notice of the intent to improve

performance through both the law and the notice of proposed rulemaking

that was issued in June 1991. That is, since 1991, revisions in the

statute relating to OPOs that were discussed in the interim final rule

have expressed the intent of the Congress that OPOs be held to rigorous

performance standards. Moreover, while the 1991 notice of proposed

rulemaking did not specify detailed qualification and performance

standards, it included a discussion of the exact standards we included

in the September 1994 interim final rule.

We believe that OPOs have had adequate advance notice that

performance would be monitored and should have taken appropriate steps

to ensure that they are performing to the best of their ability. In

addition, the interim final rule was issued only 9 months into the

performance period. Thus, even if an OPO had not been planning for the

rigorous performance standards, it still has approximately 63 percent

of the performance period remaining to make up for any past performance

problems.

Finally, we note that the primary performance criteria are based on

national averages. All of the data that are used to set the actual

performance standards numbers come from actual performance of OPOs.

Since the content of the interim final rule was not released until

publication, all of the OPOs are treated equally with regard to

knowledge of the standards. Thus, it is reasonable to assume that no

OPO is unfairly treated by reliance on standards that are based on the

performance of its peers. We collected the 1994 performance data from

the OPOs. National averages were calculated and distributed to the OPOs

in 1995. Thus, each OPO had an indication of what the performance

standards would be and if it needed to significantly alter its

performance to achieve performance equivalent to its peers. In

addition, the AOPO has published peer performance data for OPOs to

review and monitor their own performances throughout the performance

period.

We are anxious to implement meaningful performance standards for

OPOs. We believe that implementation of these standards will promote

organ availability and result in additional lifesaving transplants for

not only Medicare and Medicaid beneficiaries, but for all Americans in

need of organ transplants. The 1996 recertifications are for a 2 year

period. Thus, if we delay implementation of the standards beyond

[[Page 19740]]

the 1996 recertification, the standards will not be fully effective

until June 1998.

Nonetheless, we recognize that the move to a system of performance

and qualification standards that are objectively measured and strictly

enforced is a major transition for the OPO community. Consequently, we

are providing for a transition mechanism for OPOs that do not meet the

standards for the 1996 redesignation period but are making progress

towards meeting them. Therefore, we are providing transitional

standards for both the service area size designation qualification

standard and the performance standards for the 1996 redesignation

period.

We will grant an exception to the 24-donor service area size

criterion during the 1996 redesignation process for those qualified

OPOs that meet the performance standards in Sec. 486.310. To qualify

for the exception, an OPO must submit a written request to HCFA that

includes a narrative description of its plans for meeting the standard

by the 1998 redesignation period. We emphasize that this is a one-time

exception opportunity that will not be repeated for any OPO after the

1996 redesignation process.

We are also providing a one-time exception process for OPOs that do

not meet four of the five performance standards at the time of

redesignation. This exception is limited to those qualified OPOs that

meet three out of the five performance criteria in Sec. 486.310(b) (1)

through (5). Similar to the exception process for the qualification

standard, an OPO must submit a written request to HCFA accompanied by a

detailed, narrative description of the OPO's plans for ensuring that it

will meet the performance standards by the 1998 redesignation.

C. Provisions of This Final Rule With Comment Period

We are not making any changes in the effective dates of the

provisions of the interim final rule with comment period. We are,

however, as explained above, adding two one-time exceptions for the

1996 redesignation process only.

We are adding Sec. 486.307(d)(4) stating that HCFA may

grant an exception to the 24-donor criterion in paragraph

Sec. 486.307(d)(2)(ii) to an OPO that can demonstrate that (1) it meets

the performance criteria in Sec. 486.310(b), and (2) it has a specific

plan to meet the service area size criterion in paragraph

Sec. 486.307(d)(2)(ii) by the 1998 redesignation period.

We are adding Sec. 486.310(c)(3) to provide that for the

1996 designation period only, HCFA may continue to designate for a

service area an OPO that does not meet the standards under paragraph

(b) of this section if the OPO (1) meets three of the five criteria in

Sec. 486.310(b)(1) through (b)(5); and (2) submits an acceptable

corrective action plan in accordance with Sec. 486.310(d).

XI. Waiver of Service Area Designations

A. Background

Section 1138(a)(1)(A)(iii) of the Act had required hospitals

participating in the Medicare program to notify an OPO of potential

organ donors. The use of the article ``an'' indicated that a hospital

need not have an agreement with the OPO whose designated service area

includes the county in which the hospital is located. Thus, a

significant number of hospitals, for various reasons, have chosen to

have agreements with a Medicare/Medicaid-certified OPO other than the

OPO designated for their areas. In fact, several hospitals have

agreements with multiple OPOs.

Sections 155 (a)(1)(A) and (a)(1)(B) of Public Law 103-432 amended

sections 1138 (a)(1)(A)(iii) and (a)(1)(C) of the Act to add

requirements that a hospital have an agreement for notification of

potential organ donation only with the OPO designated for the area in

which the hospital is located. Public Law 103-432 also provided for

waiver of the requirements under certain circumstances. Section

155(a)(1)(C) added new section 1138(a)(2)(A) to the Act. Specifically,

the Secretary must approve waiver requests if (1) the waiver is

expected to increase organ donations and (2) the waiver will assure

equitable treatment of both those patients within the service area

served by the hospital's designated OPO and those patients within the

service area served by the OPO with which the hospital seeks to enter

into an agreement under the waiver.

The law is quite specific in identifying the factors that HCFA may

consider in adjudicating waiver requests. That is, section

1138(a)(2)(B) provides that in making a determination on a waiver

request the Secretary may consider the factors that would include, but

not be limited to (1) cost effectiveness; (2) improvements in quality;

(3) any change in a hospital's designated organ procurement agency due

to a change made on or after December 28, 1992, in the definitions for

MSAs (as established by the Office of Management and Budget); and (4)

the length and continuity of a hospital's relationship with an organ

procurement agency.

Sections 1138 (a)(2)(C) and (a)(2)(D) of the Act are quite specific

in detailing the process for the waiver requests. Effective January 1,

1996, any hospital seeking a waiver must submit an application to the

Secretary. Within 30 days of receipt of a waiver request, the Secretary

will publish a public notice of the request offering interested parties

a 60-day period to comment on the request. Allowing HCFA only 30 days

to evaluate the comments and render a decision would result in a

minimum time period of 120 days for processing a waiver request.

Section 155(a)(2) of Public Law 103-432 contains a grandfathering

provision for hospitals which on October 31, 1994, the date of

enactment of Public Law 103-432, have existing agreements with OPOs

other than the OPO designated for their service areas. Any hospital

that has an agreement with an OPO other than the OPO designated for its

area on October 31, 1994, may continue the agreement until HCFA has

adjudicated its waiver request, provided the hospital has filed a

waiver request by January 1, 1996. This provision was included because

it would be disruptive to a hospital to force it into an agreement with

the OPO designated for its area while a waiver request is being

processed.

We believe the provisions of section 155 are self-implementing.

Thus, we proceeded with implementation prior to modification of the

regulations or prior public comment. In October 1995, we issued Program

Memorandum A-95-11 to our intermediaries outlining the process for

making a waiver request. We instructed each intermediary to notify

every hospital that it serviced of the opportunity to request a waiver

to deal with an OPO other than the OPO designated for the area. We

advised the hospitals that we intended to adjudicate the requests using

the criteria set forth in the law. We advised the hospitals that, to

retain their existing out-of-area OPO agreements that were in effect as

of October 31, 1994, their waiver requests must be received by January

1, 1996.

The law did not address the impact of changes in OPO service areas

on future waiver requests. That is, we note that changes in OPO service

areas are ongoing events. We anticipate that, with the implementation

of the provisions contained in the September 8, 1994, final rule with

comment period, such changes may become somewhat more frequent. Often

these changes occur through mergers or cooperative means. Some changes,

however, are the result of competitive actions among the OPOs with HCFA

awarding the service areas

[[Page 19741]]

based on the criteria in Sec. 485.308 (now Sec. 486.316). When these

changes in service areas occur, the hospitals in the affected counties

must enter into agreements with the newly designated OPO or request a

waiver to deal with an alternative designated OPO.

As noted above, the minimum period of time necessary to process a

waiver request is 120 days. We believe it is unproductive and contrary

to the goal of increasing national organ donation to force the

hospitals in affected areas into new working relationships with a OPO

and then to approve a waiver request and allow an alternative agreement

a few months later. Such a system would be disruptive to the hospital

and to effective organ procurement nationally.

Consequently, we are adding a new provision to the regulations at

Sec. 486.316 to permit the grandfathering of existing agreements

between an OPO and a hospital when changes in a service area occur

pending resolution of the hospital's waiver request.

To be eligible for the grandfathering, a hospital must have had an

agreement with the OPO prior to the changes in service area and the

hospital must have requested waiver from the provisions of section 1138

(a)(1)(A)(iii) and (c) of the Act within 30 days of the effective date

of the change in service area. Of course, if HCFA denies the waiver

request on its merits (the request does not demonstrate that it is

expected to increase organ donation and assure equitable treatment of

patients), the hospital must enter into an agreement with the new OPO

for the area. The regulations provide that such new agreements must be

executed within 30 days of notification of the determination on the

waiver request.

We recognize that this grandfathering provision is not explicitly

stated in the law. Nonetheless, we believe the provision is authorized

under section 1138(a)(2)(A) of the Act which vests broad authority to

HCFA to waive the new requirements of sections 1138(a)(1)(A)(iii) and

1138(a)(1)(C) of the Act. The provision is also complementary to the

grandfathering provision specified in section 155 of the Social

Security Act Amendments of 1994. We believe that allowing such a

grandfathering policy during the processing of the waiver request is

the only means to ensure a smooth transition and promote organ

donation. Nonetheless, we are providing an opportunity for public

comment in this final rule with comment period.

B. Provisions of This Final Rule With Comment Period

We have revised Sec. 486.316 (formerly Sec. 485.308) by adding new

paragraphs (c) through (f) to implement section 1138 (a)(2) of the Act

and the grandfathering provisions of section 155(a)(2) of Public Law

103-432. These revisions permit grandfathering of a hospital to the OPO

with which it has an historical working relationship while the

hospital's request for waiver is being considered when changes in the

OPO designated for the service area in which the hospital is located

occur beginning January 1, 1996. We are soliciting comments on this

provision of the final rule with comment period.

XII. Technical Revisions

We have made the following technical revisions to the regulations

for the purposes of clarifying and reorganizing the OPO regulations.

We amended Sec. 405.2163 by removing the reference to part

485, subpart D and replacing it with a reference to part 486, subpart G

to reflect the earlier published redesignation of the OPO regulations.

We revised Sec. 486.301 to add section 1138(a) and (b) of

the Act and section 371(b) of the PHS Act as the statutory bases of the

OPO regulations.

We reorganized Sec. 486.310 to include the exceptions and

exemptions to the OPO standard requirements under paragraph (c).

We deleted Sec. 486.310(e) (previously designated as

Sec. 485.306(e)) as it is unnecessary and has created confusion among

the OPO industry. This provision provides that an OPO that has not

previously been designated by HCFA for a particular service area is

exempt from meeting the performance standards for its first 2 years of

designation as the OPO for that area. However, the performance

standards are used to measure the OPO's qualifications to be

redesignated beginning 2 years after the OPO has been first designated

for any portion of a service area.

Since there is no data on the OPO's performance in the area when it

is newly designated, it would be impossible to apply the performance

standards at the time of initial designation. Thus, we believe it is

unnecessary to maintain an exemption of this nature. The remaining

portion of the provision merely states that we will apply the normal

performance standards at the time of redesignation. Therefore, this

portion of the regulation is also unnecessary since, without it, we

would have no alternative but to apply the normal performance

standards.

We revised the cross-reference in Sec. 486.314 (formerly

Sec. 485.307) to reflect the reorganization of the material.

XIII. Waiver of Proposed Rulemaking

We ordinarily publish a notice of proposed rulemaking in the

Federal Register and invite public comment before issuing a final

document. Most of the provisions of this rule were open for public

comment through both the June 21, 1991, proposed rule and the September

8, 1994, interim final rule. We are now publishing these provisions as

final rules. Because they have previously been open for comment, we are

not inviting further public comment on these provisions.

The Social Security Act Amendments of 1994 were enacted subsequent

to the September 8, 1994, interim final rule with comment period.

Section 155 of these amendments, relating to OPO hospital

relationships, are inextricably linked to this final rule. The

provisions of section 155 are self-implementing and do not require

rulemaking.

XIV. Regulatory Impact Statement

We generally prepare a regulatory impact statement that is

consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601

through 612) unless we certify that a rule will not have a significant

economic impact on a substantial number of small entities.

For purposes of the RFA, we consider all providers and suppliers of

health care as small entities. Individuals and States are not included

in the definition of a small entity. Also, section 1102(b) of the Act

requires us to prepare a regulatory impact analysis if a rule may have

a significant impact on the operations of a substantial number of small

rural hospitals. Such an analysis must conform to the provisions of

section 604 of the RFA. For purposes of section 1102(b) of the Act, we

define a small rural hospital as a hospital that is located outside of

a MSA and has fewer than 50 beds.

This final rule with comment period sets forth changes required by

Public Law 100-607, Public Law 101-616, and Public Law 103-432. In the

September 1994 interim final rule with comment period, we provided an

impact analysis on the provisions of Public Law 100-607 and Public Law

101-616. In that analysis, we stated that we expected that, while OPOs

may incur some additional costs, those costs would be minimal. We

invited public comment on the impact statement in the interim final

rule with comment period. We did not receive any public comments.

The provisions of section 155 of Public Law 103-432 included in

this final rule with comment period conform to section 1138(a)(2) of

the Act to provide for a waiver of section

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1138(a)(1)(A)(iii) and (c) of the Act under certain circumstances.

Section 1138(a)(1) requires that a hospital have an agreement for

potential organ donations only with the OPO designated for the area in

which the hospital is located. We expect any additional costs related

to this provision to be minimal. Any hospital wishing a waiver must

file a request with us. We believe, however, that any additional costs

are minimal compared to the improvement these provisions will have on

the quality of health care for organ recipients.

We have determined and we certify that this final rule with comment

period will not have a significant economic effect on a substantial

number of providers and suppliers. Also, OPOs (independent and

hospital-based) are not considered small rural hospitals since OPOs

generally service large geographical areas. Therefore, a regulatory

flexibility analysis under the RFA and a rural impact analysis under

section 1102(b) of the Act are not required.

In accordance with the provisions of Executive Order 12866, this

regulation was reviewed by the Office of Management and Budget.

XV. Information Collection Requirements

Under the Paperwork Reduction Act of 1995, agencies are required to

provide 60-day notice in the Federal Register and solicit public

comment before a collection of information requirement is submitted to

the Office of Management and Budget (OMB) for review and approval. This

final rule with comment period contains information collections that

are subject to review by OMB under the Paperwork Reduction Act of 1995.

The title, description, and respondent description of the information

collections are shown below with an estimate of the annual reporting

and recordkeeping burden. Included in the estimate is the time for

reviewing instructions, searching existing data sources, gathering and

maintaining the data needed, and collecting and reviewing the

collection of information.

We are, however, requesting an emergency review of these

regulations. In compliance with the requirement of section

3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we have submitted

to the Office of Management and Budget (OMB) the following requirement

for emergency review. We are requesting an emergency review because the

collection of this information is needed prior to the expiration of the

normal time limits under OMB's regulations at 5 CFR. Part 1320 to

permit recertification of OPO's as required by statute. Failure to

issue these rules in time for the 1996 redesignation process may result

in the termination of OPO agreements. As a consequence, persons in need

of organ transplants may not receive them. The agency cannot reasonably

comply with the normal clearance procedures because public harm is

likely to result if normal clearance procedures are followed. Without

this information, we could not ensure compliance with this

Congressional mandate.

We are requesting that OMB provide a 21-day public comment period

with a 7-day OMB review period and a 90-day approval. We will publish a

separate Federal Register notice for an emergency request for the OPO

manual requirements.

Type of Information Collection Request: New Collection.

Type of Information Collection: Conditions of Coverage for Organ

Procurement Organizations.

Form No.: HCFA-R-13.

USE: Organ Procurement Organizations are required to submit

accurate data to HCFA concerning population and information on donors

and organs on an annual basis in order to ensure maximum effectiveness

in the procurement and distribution of organs.

Frequency: Annually.

Affected public: Not-for-profit institutions.

Number of Respondents: 66.

Total Annual Responses: 66.

Total Annual Hours Requested: 4,096.

To request copies of the proposed paperwork collections referenced

above, call the Reports Clearance Office on (410) 786-1326.

The sections in these final regulations with comment period that

contain information collection requirements are:

Sections 486.304 (c)(2), (c)(4), (c)(7), and (c)(8)

require that an OPO submit documentation to HCFA as part of the

conditions for payment. These requirements include cost reporting, cost

projection, and data to show the number of organs procured and

transplanted. The OPO must maintain data in a format that can readily

be continued by a successor OPO.

Section 486.306(d) requires that an OPO document that it

meets the service area requirements at Sec. 486.307.

Section 486.306(t) requires that an OPO submit to HCFA

within 15 days following the end of the calendar year information on

the service area population, number of donors, number of organs

procured, and the number of organs transplanted.

Section 486.307(a) requires that an OPO make documentation

available to HCFA to verify that it meets the requirements for boundary

designation, service area location, and service area size.

Section 486.307(d) requires that, for the 1996

transitional redesignation period only, an OPO that does not meet the

qualification standards in Sec. 486.307(d)(2)(ii) may submit a request

to HCFA for a one-time exception to the standard if it can demonstrate

that it meets the performance criteria in Sec. 486.310(b) and has a

specific plan to meet the 24-donor standard by the 1998 redesignation

period.

Section 486.310(c)(3) requires that, for the 1996

transitional redesignation period only, HCFA may continue to designate

for a service area an OPO that does not meet the standards of

Sec. 486.310(b) if the OPO can demonstrate that it meets three of the

criteria in Sec. 486.310(b)(1) through Sec. 486.310(b)(5) and if the

OPO submits an acceptable correction plan in accordance with

Sec. 486.310(d).

Section 486.310(d) requires that an OPO that does not meet

the performance standards may continue to be designated for a service

area if no acceptably performing OPO is willing to accept

responsibility for the service area and if the OPO submits a corrective

action plan that is acceptable to HCFA.

Section 486.316 requires that an OPO submit an application

to HCFA if it wishes to be designated as the OPO for a service area.

Applications are only accepted if the area is an open area.

Section 486.318 requires that a designated OPO notify HCFA

if it is considering a change in ownership or service area. It must

submit the same information that it supplied at the time of

designation.

Section 486.325(a)(1) requires that an OPO that wishes to

terminate its agreement with HCFA send written notice of its intention

with the proposed termination date to HCFA.

The information collection requirements concern quantifiable data

for submission to us that document an OPO's performance. The

respondents for the information collection requirements are the 66 OPOs

participating in the Medicare program. The OPOs are required to keep

performance data on an ongoing basis and submit a yearly report. The

reporting burden for the collection of all of this information is

estimated to be 1,000 hours per submission.

Other reporting requirements for special circumstances such as

termination of agreements and requests for exceptions and exemptions

rely on the same information that an OPO must submit in its annual

report. Consequently, no extra collection of

[[Page 19743]]

information is required. Since these submissions depend on special

circumstances, we cannot give the exact number of submissions. However,

since there are only 66 OPOs participating in the Medicare program, we

expect the number of these submissions will be extremely small.

These information collection and recordkeeping requirements are not

effective until they have been approved by OMB. The agency has

submitted a copy of this final rule with comment period to OMB for its

review of these information collections. A notice will be published in

the Federal Register when approval is obtained. Interested persons are

invited to send comments regarding this burden or any other aspect of

these collections of information, including any of the following

subjects: (1) The necessity and utility of the information collection

for the proper performance of the agency's functions; (2) the accuracy

of the estimated burden; (3) ways to enhance the quality, utility, and

clarity of the information to be collected; and (4) the use of

automated collection techniques or other forms of information

technology to minimize the information collection burden. Comments

should be sent to HCFA, OFHR, MPAS, C2-26-17, 7500 Security Boulevard,

Baltimore, Maryland 21244-1850.

XVI. Response to Comments

Because of the large number of items of correspondence we normally

receive on a final rule with comment period, we are not able to

acknowledge or respond to them individually. However, we will consider

all comments that we receive related to the waiver process discussed in

section XI of this preamble, Sec. 486.316, and the definition of

``donor'' by the date and time specified in the DATES section of this

preamble, and, if we proceed with a final rule, we will respond to the

comments in the preamble of that rule.

List of Subjects

42 CFR Part 405

Administrative practice and procedure, Health facilities, Health

professions, Kidney diseases, Medicare, Reporting and recordkeeping

requirements, Rural areas, X-rays.

42 CFR Part 486

Health facilities, Medicare, Reporting and recordkeeping

requirements.

42 CFR Chapter IV is amended as set forth below:

A. Part 405, subpart U is amended as follows:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

Subpart U--Conditions of Coverage of Suppliers of End-Stage Renal

Disease (ESRD) Services

1. The authority citation for part 405, subpart U continues to read

as follows:

Authority: Secs. 1102, 1138, 1861, 1862(a), 1871, 1874, and 1881

of the Social Security Act (42 U.S.C. 1302, 1320b-8, 1395x,

1395y(a), 1395hh, 1395kk, and 1395rr), unless otherwise noted.

2. Section 405.2163(f) is amended by removing the reference to

``part 485, subpart D'' and replacing it with a reference to ``part

486, subpart G.''

B. Part 486 is amended as follows:

PART 486--CONDITIONS FOR COVERAGE OF SPECIALIZED SERVICES FURNISHED

BY PROVIDERS AND SUPPLIERS

Subpart G--Conditions for Coverage: Organ Procurement Organizations

1. The authority citation for part 486 continues to read as

follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42

U.S.C. 1302 and 1395hh).

2. Section 486.301 is revised to read as follows:

Sec. 486.301 Basis and scope.

(a) Statutory Basis. (1) Section 1138(b) of the Act sets forth the

requirements that an organ procurement organization must meet to have

its organ procurement services to hospitals covered under Medicare and

Medicaid. These include certification as a ``qualified'' organ

procurement organization (OPO) and designation as the OPO for a

particular service area.

(2) Section 371(b) of the PHS Act sets forth the requirements for

certification and the functions that a qualified OPO is expected to

perform.

(b) Scope. This subpart sets forth--

(1) The conditions and requirements that an OPO must meet;

(2) The procedures for certification and designation of OPOs; and

(3) The terms of the agreement with HCFA, and the basis for, and

the effect of, termination of the agreement.

3. In Sec. 486.304, the introductory text of paragraph (b) is

republished, new paragraph (b)(8) is added, and paragraph (e)(3)(ii) is

revised to read as follows:

Sec. 486.304 General requirements.

* * * * *

(b) Requirements for designated status. To be the designated OPO

for a service a

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