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Tag: Transplant

Medicare Graduate Medical Education and Organ Acquisition Payment Policy Changes

On Monday December 27, CMS published Federal Register / Vol. 86. No. 245 [CMS–1752–FC3. This Final Rule with comment period includes new teaching slots for graduate medical education, modifications to organ acquisition reimbursement, and postpones potential changes related to Section 1115 waiver days for empirical DSH payments. February 25 is the deadline to submit comments to CMS for the issues (discussed below) whereby CMS is seeking feedback. 

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Transplant/Organ Acquisition Reimbursement Industry Update

For Hospitals Performing Bone Marrow and Kidney Transplants


– New policies will impact future Medicare cost reporting and reimbursement.

– Medicare’s payment changes on Allogeneic Stem Cell Acquisition can improve revenue and requires precise documentation (effective for cost reporting periods beginning on or after October 1, 2020).

– With restructured billing processes, kidney transplant centers will be reimbursed for acquisition costs for Medicare Advantage patients through the Medicare cost report (effective January 1, 2021). 


Toyon Associates is pleased to provide this update on Transplant/Organ Acquisition Reimbursement.

1. Medicare’s payment changes on Allogeneic Stem Cell Acquisition

Medicare reimbursement of allogeneic acquisition costs will be based on a reasonable-cost methodology effective for cost reporting periods beginning on or after October 1, 2020. Precise documentation of allogeneic stem cell acquisition costs is imperative as CMS will apply the ratio of Medicare to total (all payers) allogeneic stem cell transplants as the basis of this reimbursement method. This is a similar method CMS uses for reimbursing the acquisition costs of solid organs.

This change follows Section 108 of the Further Consolidated Appropriations Act of 2020 (Pub. L. 116-94) passed on 12/20/2019. Currently, IPPS payments for acquisition services associated with allogeneic hematopoietic stem cell transplants are included in MS–DRG 14 when the transplant occurs in the inpatient setting.


CMS provides more detail on the implementation in the FFY 2021 IPPS Proposed Rule (page 32762) to include the following:

  • Definition of Allogeneic Hematopoietic Stem Cell Transplant
  • Future development of a cost report worksheet, (i.e., similar to Worksheet D-4) for solid organs, to capture costs from Worksheet A, line 77 as well as report routine and ancillary charges to compute related costs.

Medicare reimbursement methodology using allogeneic acquisition costs will be based on the ratio of Medicare to total (all payers) allogeneic stem cell transplants.

CMS also updates the definition of allogeneic stem cell acquisition costs to include:

  • National donor registry fees (e.g., NMDP)
  • Tissue typing of donor and recipient
  • Donor evaluation
  • Physician pre-admission/pre-procedure donor evaluation services
  • Costs associated with the collection procedure, such as general routine and special care services, procedure/operating room and other ancillary services, and apheresis services, post-operative/post-procedure evaluation of donor
  • Preparation and processing of stem cells derived from bone marrow, peripheral blood stem cells, or cord blood (excluding embryonic stem cells)

Toyon’s Take on Reimbursement for Allogeneic Stem Cell Acquisition Costs

This is positive news for Medicare reimbursement of allogeneic bone marrow transplants as the MS-DRG payment was in most cases insufficient to cover the acquisition costs alone. The shift to the reasonable cost methodology aligns processes to those for solid organ although Medicare utilization should be low for bone marrow transplants.

Listed below are recommendations to prepare for the change in methodology:

  • Review historical volume for MS-DRG 14 (Allogeneic Bone Marrow Transplant) to assess the financial impact (Note that the decrease of the MS-DRG relative weight will also lower reimbursement for IME, DSH, and outliers)
  • Review/update the standard acquisition charge (revenue code 815) to confirm that it is inclusive of the average acquisition costs for this type of transplant
  • Review internal processes for flagging living donor hospital services to be able to capture all payer charges for the Medicare cost report
  • Review internal process to confirm living donor services are not billed to Medicare fee-for-service as these charges will be reimbursed through the Medicare cost report
  • Review processes for capturing stem cell acquisition related expenses include staffing, space, etc. for inclusion on line 77 of Worksheet A of the Medicare cost report (Toyon recommends having a separate G/L department to capture the revenue and expenses for allogeneic stem cell acquisition)

2.  Kidney Acquisition Costs for Medicare Advantage Transplants

Effective January 1, 2021, kidney acquisition costs for MA enrollees will be covered under the original Medicare program and reimbursed under the reasonable cost methodology in the Medicare cost report (i.e., the MA kidney transplant will be counted as a Medicare usable organ on Worksheet D-4, Part III, line 63). 

This change is per CMS’s Final Rule (FR 85 33796) dated June 2, 2020, to implement sections of the 21st Century Cures Act (Pub. L. 114-255), which expanded enrollment options for individuals with end stage renal disease (ESRD). The new enrollment option will impact reimbursement for kidney acquisition costs from MA plans and original Medicare. Currently, individuals with ESRD are unable to enroll in Medicare Advantage (MA) plans except in limited circumstances.

Toyon’s Take on Medicare Advantage Kidney Transplants

This should be positive news for kidney transplant centers. Many MA plans already utilize the Medicare reimbursement methodology through inclusion of the hospital’s most recently filed cost report worksheets. For those kidney programs where MA plans had low case rates or carve outs for kidney acquisition, this will be beneficial to recoup the actual acquisition costs for kidney transplant.

Listed below are recommendations to prepare for the change in methodology (effective January 1, 2021):

  • Modify billing processes to no longer submit kidney acquisition related claims (e.g., pre-transplant services) to MA plans if including on the Medicare cost report
  • Continue to submit hospital inpatient claims to the MA plan for the transplant procedure and exclude the kidney standard acquisition charge (revenue code 081x) from the claim form. (Note: For multi-organ transplants, continue to include the extra renal standard acquisition charge)
  • Continue to submit “no pay” bills to the Medicare Administrative Contractors (MACs) to accumulate the inpatient days and simulated payments captured in PS&R report type 118.
  • Update internal processes to include MA kidney transplants in the Medicare count of the Medicare cost report effective for kidney transplants occurring on or after January 1, 2021

Toyon is committed to apprising our clients with important reimbursement updates impacting transplant and organ acquisition reimbursement. Please contact Robert Howey at 888.514.9312 ext. 3147 or if you have any questions about these updates. 

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