Medicare and Medicaid Programs; Conditions for Coverage for Organ Procurement Organizations (OPOs), 6086-6137 [05-1695]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 70, Number 23 (Friday, February 4, 2005)]
[Proposed Rules]
[Pages 6086-6137]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-1695]



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Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 413, 441, et al.



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

Federal Register / Vol. 70, No. 23 / Friday, February 4, 2005 / 
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 413, 441, 486 and 498

[CMS-3064-P]
RIN: 0938-AK81


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

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish new conditions for coverage 
for organ procurement organizations (OPOs), including multiple new 
outcome and process performance measures based on donor potential and 
other related factors in each service area of qualified OPOs. We are 
proposing new standards with the goal of improving OPO performance and 
increasing organ donation.

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on April 5, 2005.

ADDRESSES: In commenting, please refer to file code CMS-3064-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of three ways (no duplicates 
please):
    You may submit comments in one of three ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to https://www.cms.hhs.gov/regulations/
ecomments. (Attachments should be in Microsoft Word, WordPerfect, or 
Excel; however, we prefer Microsoft Word.)
    2. By mail. You may mail written comments (one original and two 
copies) to the following address ONLY: Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Attention: CMS-3064-
P, P.O. Box 8015, Baltimore, MD 21244-8015.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-9994 in advance to schedule your arrival 
with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    (Because access to the interior of the HHH Building is not readily 
available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for persons wishing to retain a proof of filing by stamping 
in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by mailing your 
comments to the addresses provided at the end of the ``Collection of 
Information Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Marcia Newton, (410) 786-5265. Diane 
Corning, (410) 786-8486.

SUPPLEMENTARY INFORMATION:
    Submitting Comments: We welcome comments from the public on all 
issues set forth in this rule to assist us in fully considering issues 
and developing policies. You can assist us by referencing the file code 
CMS-3064-P and the specific ``issue identifier'' that precedes the 
section on which you choose to comment.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. CMS posts all electronic 
comments received before the close of the comment period on its public 
Web site as soon as possible after they have been received. Hard copy 
comments received timely will be available for public inspection as 
they are received, generally beginning approximately 3 weeks after 
publication of a document, at the headquarters of the Centers for 
Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, 
Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 
p.m. To schedule an appointment to view public comments, phone 1-800-
743-3951.

I. Background

A. Key Statutory Provisions

    The Organ Procurement Organization Certification Act of 2000 
(section 701 of Pub. L. 106-505) and section 219 of the Conference 
Report accompanying the Consolidated Appropriations Act, 2001 (Pub. L. 
106-554) contain identical provisions that amended section 371(b)(1) of 
the Public Health Service (PHS) Act (42 U.S.C. 273(b)(1)). The 
legislation directs the Secretary to establish regulations that include 
four major requirements. These are to:
    1. Increase the re-certification cycle for OPOs from 2 to at least 
4 years.
    2. Establish outcome and process performance measures based on 
empirical evidence, obtained through reasonable efforts, of organ donor 
potential and other related factors in each service area of qualified 
OPOs.
    3. Establish multiple outcome measures.
    4. Establish a process for OPOs to appeal a de-certification on 
substantive and procedural grounds.
    The re-certification cycle was increased from 2 years to 4 years 
through an interim final rule with comment (December 28, 2001, 66 FR 
67109), ``Emergency Re-certification for Coverage for Organ Procurement 
Organizations (OPOs).'' The interim final rule re-certified all 59 OPOs 
until December 31, 2005 and extended their agreements with us until 
July 31, 2006. Thus, the re-certification cycle set forth in the 
interim final rule satisfies the first of the new criteria (that is, 
certification not more frequently than once every 4 years.) Our 
proposed rule addresses the remaining three requirements.
    Section 1138 of the Social Security Act (the Act) (42 U.S.C. 1320b-
8) provides the statutory qualifications and requirements that an OPO 
must meet in order for organ procurement costs to be reimbursed in 
hospitals and critical access hospitals under the Medicare or Medicaid 
programs. Section 1138(b) of the Act also specifies that an OPO must 
operate under a grant made under section 371(a) of the PHS Act or must 
be certified or re-certified by the Secretary as meeting the standards 
to be a qualified OPO. Under these authorities, we previously 
established conditions for coverage for OPOs at 42 CFR 486.301, et seq. 
(May 2, 1996, 61 FR 19722).
    Section 1102 of the Act gives the Secretary of Health and Human 
Services the authority to make and publish such rules and regulations 
as may be necessary to the efficient administration of the functions 
with which he is charged under the Act. This section of

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the Act gives the Secretary broad authority to establish requirements 
for OPOs that are necessary for the efficient administration of the 
Medicare program.

B. Why We Are Proposing New OPO Regulations

    OPOs are government contractors that play a crucial role in 
ensuring that scarce transplantable human organs are provided to 
seriously ill patients suffering from end-stage organ failure. OPOs are 
responsible for identifying potential organ donors, informing families 
about their donation options, obtaining consent to donation, screening 
potential donors for infectious disease, clinically managing potential 
organ donors to maintain viability of their organs, placing the maximum 
number of organs possible with transplant centers, arranging for 
recovery, testing, and tissue typing of organs, and packaging and 
transporting organs to transplant hospitals. Clearly, OPO performance 
is one of the most critical elements of the nation's organ 
transplantation system. An OPO that is effective in procuring organs 
and delivering them safely to transplant centers will save more lives 
than an ineffective OPO. Therefore, under the broad authority in the 
statute, the Secretary has established performance standards for OPOs 
so that they excel in their critical mission.
    The need for organ donors is acute and growing rapidly. While 
medical advances have made transplantation a viable treatment option 
for many patients suffering from end-stage organ failure, the supply of 
organs has not kept pace with the number of patients who need them. 
Since 1996 when the current OPO regulations went into effect through 
the end of 2002, the number of patients waiting for organs increased by 
nearly 60 percent to more than 80,792, while the number of deceased 
donors grew by only 14 percent. As of June 23, 2003, there were 82,049 
patients waiting for a transplant.
    Various studies, including those by the Harvard School of Public 
Health, the Partnership for Organ Donation, and the Association of 
Organ Procurement Organizations (AOPO), have estimated that 
approximately 10,500 to 22,000 deaths occurring in the United States 
every year could yield suitable donor organs. (C Christiansen, S 
Gortmaker, J William, et al: A Method for Estimating Solid Organ Donor 
Potential by Organ Procurement Region, American Journal of Public 
Health, Vol. 88, No. 22, November, 1998. E Sheey, S Conrad, L Brigham, 
et al: Estimating the Number of Potential Organ Donors in the United 
States, The New England Journal of Medicine, 349:667-74, August 14, 
2003. E Guadagnoli, C Christiansen, C Beasley, Potential Organ-Donor 
Supply and Efficiency of Organ Procurement Organizations, Health Care 
Financing Review, Vol. 24, No. 24, Summer 2003.) However, there were 
only 6,182 deceased donors in 2002 and only 18,244 transplants 
resulting from those donations. Based on these estimates, OPOs are 
recovering organs from, at most, only a little more than half the 
number of potential donors per year.
    The study published in The New England Journal of Medicine found 
that of all potential organ donors reported in the study, only 42 
percent became donors. Of those families who were asked to donate, only 
39 percent agreed, and 16 percent of families were never asked whether 
they would agree to donation. The study published in the Health Care 
Financing Review found that of all potential organ donors reported in 
the study, only 35 percent became donors.
    Over the years, many research studies have analyzed factors that 
impact donation rates, including health professionals' attitudes toward 
donation, the setting in which requests for donation are made, and 
medical examiner prohibitions on donation. Recently, researchers have 
increasingly turned their attention to the best practices of OPOs whose 
service areas have high donation rates.
    In April 2003, the Health Resources and Services Administration 
(HRSA) began an ongoing ``Organ Donation Breakthrough Collaborative'' 
to bring best practices in organ donation to OPOs and hospitals, 
particularly to hospitals identified as having the greatest number of 
potential donors. More than three-quarters of the 59 OPOs are 
participating in the Collaborative. By studying the practices of six of 
the best-performing OPOs, the Collaborative's researchers have already 
identified several best practices for OPOs, as well as strategies for 
implementing them. Many of the best practices and associated strategies 
are discussed throughout this preamble to provide guidance for OPOs in 
implementing the requirements of the proposed rule.
    Our proposals would fundamentally change the existing OPO 
regulations to emphasize quality and continuous quality improvement. 
The changes would ensure that each OPO utilizes best practices to 
improve its efficiency, effectiveness, and quality. While the 
requirements in the proposed rule apply to all OPOs, we have 
specifically targeted the requirements toward OPOs that may not 
understand the value of incorporating best practices into the structure 
of their organizations. Thus, our overall goal is to improve the 
functioning of poor performing OPOs, rather than simply to terminate 
them.
    In April 2001, the Department of Health and Human Services (the 
Department) launched ``The Secretary's Donation Initiative,'' a multi-
pronged effort to increase all types of donation--blood, marrow, 
tissue, and organ. In his speech launching the Initiative, the 
Secretary noted, ``The facts are just astounding. Someone dies every 96 
minutes because there aren't enough organs to go around.'' The five 
initial key elements of the Initiative were the Workplace Partnership 
for Life, a new model donor card, a national forum on donor registries, 
a national gift of life medal, and a drivers' education donation 
curriculum. The Department promised that it would launch additional 
elements under the Initiative in the future. The Organ Donation 
Breakthrough Collaborative is the sixth key element of the Secretary's 
Initiative. The Secretary believes promulgation of the multiple outcome 
and process performance measures in this rule will improve OPO 
performance and, as a result, increase organ donation and 
transplantation in the United States.

B. Overview of Key Proposed Provisions

1. Appeals and Competition Processes
    In the congressional findings associated with section 219 of the 
Conference Report accompanying the Consolidated Appropriations Act, 
2001 (42 U.S.C. 219(a)(2)) Congress found that the process for OPO re-
certification created a level of uncertainty among OPOs that interfered 
with their effectiveness in increasing organ donation. Therefore, 
Congress directed the Secretary to develop a process for OPOs to appeal 
a de-certification on substantive and procedural grounds. (See section 
219(c)(3) codified at 42 U.S.C. 273(b)(1)(D)(ii)(iv).) Under this 
authority, we are proposing a streamlined appeals process, in which an 
OPO facing de-certification could appeal and receive a decision on its 
appeal before its service area is opened for competition from other 
OPOs. (See proposed Sec.  486.314.)
    To further reduce the level of uncertainty identified by Congress, 
we propose making certain changes in the current re-certification 
process. Although we would open every OPO's service area for 
competition at the end of every re-certification cycle as under the 
current regulations, we would: (1) Permit OPOs to compete for open 
areas only if they met certain specific objective criteria; (2) allow 
competition only for entire service areas; and (3) use

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clear, objective criteria for determining which OPO would be designated 
for the service area (See proposed Sec.  486.316.)
    A more extensive discussion of our proposal for the appeals and 
competition processes, as well as a description of other competition 
processes on which we are requesting comments, can be found in this 
preamble under proposed ``General Requirements.''
2. Proposed Multiple Outcome Performance Measures
    When we published the current OPO regulations in 1996, population 
was the only measure readily available to assess donor potential. 
Therefore, we promulgated regulations that judge an OPO's performance 
based on the population in its service area (for example, the number of 
donors per million population). Subsequently, we began to investigate 
alternative methods for assessing donor potential in order to develop 
new outcome measures based on the organ donation potential in each 
OPO's service area. This preamble contains a discussion of our analysis 
of these alternative methods, as well as an explanation of the method 
we propose--using potential donor data reported by OPOs to the Organ 
Procurement and Transplantation Network (OPTN) based on information 
from hospital referral calls to OPOs. A discussion of the proposed 
multiple outcome measures can be found in this preamble under ``OPO 
Outcome Performance Measures.'' The proposed regulatory text can be 
found at Sec.  486.318.
    The proposed outcome measures would address two requirements of the 
Organ Procurement Organization Certification Act of 2000 and section 
219 of the Consolidated Appropriations Act, 2001. The first requirement 
calls for promulgation of ``outcome* * *performance measures that are 
based on empirical evidence obtained through reasonable efforts of 
organ donor potential and other related factors in each service area of 
qualified organ procurement organizations.'' The second requirement 
calls for the use of ``multiple outcome measures as part of the 
certification process.''
3. Proposed Multiple Process Performance Measures
    In addition to proposing multiple outcome measures, the Organ 
Procurement Organization Certification Act of 2000 and section 219 of 
the Consolidated Appropriations Act, 2001 require the Secretary to 
propose ``process performance measures that are based on empirical 
evidence obtained through reasonable efforts of organ donor potential 
and other related factors in each service area of qualified organ 
procurement organizations.'' In the congressional findings associated 
with section 219 of the Conference Report accompanying the Consolidated 
Appropriations Act, 2001 (Pub. L. 106-554, 42 U.S.C. 219(a)(6)(B)), 
Congress urged us to ``improve the overall certification process'' by 
incorporating process as well as outcome performance measures. Congress 
noted that current OPO regulations do not permit consideration of 
outcome and process performance measures that ``would more accurately 
reflect the relative capability and performance of each organ 
procurement organization.''
    Therefore, we propose to establish outcome and process performance-
related measures based on factors that affect an OPO's ability to 
provide the maximum number of healthy organs to transplant centers. The 
purpose of these measures is to improve OPO performance and increase 
organ donation by ensuring that OPOs attain the highest possible level 
of effectiveness and quality. The process performance measures we 
propose would require OPOs to develop performance protocols, monitor 
their own performance continuously, and make changes to improve the 
quality of their organizations.
    The proposed new process performance measures are based on 
empirical evidence of organ donor potential and other related factors 
in each OPO service area derived from three bodies of knowledge: (1) 
Research into best practices in organ donation, (2) information about 
methods of maximizing organ donation based on our work with OPOs, and 
(3) accepted standards of practice and quality improvement strategies 
used by the larger health care community.
    A review of the literature on best practices in organ donation 
provides empirical evidence that certain characteristics are common to 
successful OPOs. These characteristics include experienced leadership; 
efficient mechanisms for tracking activity; excellent communication 
with transplant hospitals; timely, on-site response to donor referrals; 
adequate experienced staff; data-driven decision making; in-hospital 
coordinators; and targeted hospital development programs. We have 
incorporated findings from the literature into the proposed process 
performance measures. Discussions and citations of individual studies 
can be found in this preamble in ``Organ Procurement Organization 
Process Performance Measures.''
    Our experience with top-performing OPOs supports the validity of 
the literature on best practices. In 1998, we developed four ``OPO 
Coordinator'' positions in the four CMS Regional Consortia (Midwest, 
West, South, and Northeast). The OPO Coordinator positions are unique; 
OPOs are the only Medicare providers or suppliers that have our staff 
assigned to work with them on an ongoing basis to improve their quality 
and outcomes. The Coordinators sponsor seminars, conduct conferences 
and workshops, provide education for OPO staffs, conduct site visits, 
meet with OPO directors and hospital development staffs, recommend 
interventions to increase OPO efficiency and quality, analyze OPO's 
voluntary quality improvement efforts, and act as liaisons between OPOs 
and hospitals and between OPOs and tissue banks to resolve problems and 
promote cooperation. (We would note that for ease of use, the term 
``tissue bank'' when used in this preamble and in the proposed 
regulations text refers to all types of tissue banks, including those 
that recover only corneas and eyes, and the word ``tissues'' refers to 
all types of tissues, including corneas and eyes.)
    The proposed process performance measures are based heavily on the 
Coordinators' extensive experience with all 59 OPOs. The Coordinators' 
experience with and knowledge about OPOs provide much of the empirical 
evidence that has enabled us to develop proposed process performance 
measures targeted specifically toward increasing OPO performance and 
quality.
    As stated earlier, some of the proposed requirements are based on 
other factors such as accepted standards of practice for all health 
care organizations. For example, proposed Sec.  486.344 would require 
OPOs to use accepted standards of practice for testing donors to 
prevent transmission of the human immunodeficiency virus (HIV) and 
other infectious diseases. Proposed Sec.  486.348 is based on quality 
assessment and performance improvement (QAPI) programs that have been 
embraced by the health care community and that have been shown to 
increase quality and outcomes of care.
    Therefore, the process performance measures we propose would 
satisfy the second requirement in the Organ Procurement Organization 
Certification Act of 2000 and section 219 of the Consolidated 
Appropriations Act, 2001 for the Secretary to propose process 
performance measures ``based on empirical evidence, obtained through 
reasonable efforts, of organ donor potential and other related factors 
in

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each OPO's service area.'' These include the following proposed 
requirements for OPOs:
     Have agreements with hospitals and critical access 
hospitals that address responsibilities in regard to the requirements 
for hospitals at Sec.  482.45 and for critical access hospitals at 
Sec.  485.643. (Sec.  486.322.)
     Maintain sufficient qualified staff (either from the OPO 
or under contract or arrangement) to accomplish a number of different 
objectives, including screening referral calls for donor potential, 
assessment of potential donors for medical suitability, requesting 
consent, maintaining donors, placing organs, overseeing organ recovery, 
performing death record reviews, and conducting QAPI activities. (Sec.  
486.326.)
     Ensure that organ recovery personnel are qualified and 
trained. (Sec.  486.326.)
     Provide education, training, and performance evaluations 
for OPO staff. (Sec.  486.326.)
     Obtain informed consent for organ and tissue donation. 
(Sec.  486.342.)
     Develop and follow protocols for donor evaluation and 
management and organ placement and recovery. (Sec.  486.344.)
     Have a medical director who is responsible for 
implementation of these protocols, as well as oversight management of 
potential donors. (Sec.  486.326.)
     Arrange for screening and testing of the donor for 
infectious disease and testing and tissue typing of organs by a 
laboratory certified under the Clinical Laboratory Improvement 
Amendments (CLIA) of 1998. (Sec.  486.344 and Sec.  486.346.)
     Collaborate with transplant programs and have protocols 
defining OPO and transplant hospital roles and responsibilities for 
donor evaluation, donor management, organ recovery, and organ 
placement. (Sec.  486.344.)
     Document recipient information, including blood type and 
position on the wait list, before organ recovery. (Sec.  486.344.)
     Develop and follow a protocol for packaging, labeling, 
handling, and shipping organs. (Sec.  486.346.)
     Establish a comprehensive, data-driven, QAPI program 
designed to monitor and evaluate performance of all donation services. 
(Sec.  486.348.)
     Perform death record reviews in hospitals with level I or 
level II trauma centers or 150 or more beds. (Sec.  486.348.)
    In addition, we propose a number of other requirements based on the 
Secretary's authority under section 1102 of the Act to establish 
requirements necessary for the efficient administration of the Medicare 
program. These requirements generally are related to (1) administrative 
matters (because efficient administration by Medicare contractors such 
as OPOs supports efficient administration of the Medicare program); (2) 
OPOs' relationships with Medicare donor and transplant hospitals; and 
(3) data collection, management, and reporting (because OPO data are 
needed by other Medicare entities, by other agencies within the 
Department, and by us for the certification of OPOs.) These proposed 
requirements include:
     Participation in the Organ Procurement and Transplantation 
Network. (Sec.  486.320.)
     Designated requestor training for hospital staffs. (Sec.  
486.322.)
     Legal authority of a governing body for management and 
provision of OPO services and development and implementation of 
policies and procedures for administration of the OPO, the OPO's QAPI 
program, and services furnished under contract or arrangement. (Sec.  
486.324.)
     Conflict of interest policies for the governing body, OPO 
directors, medical directors, senior management, and procurement 
coordinators. (Sec.  486.324 and Sec.  486.326.)
     Credentialing records for organ recovery personnel. (Sec.  
486.326.)
     Hospital-specific organ donation and transplantation data 
reported to Secretary and public. (Sec.  486.328.)
     Information management, including donor and transplant 
recipient information, data retention, and format of records. (Sec.  
486.330.)
     A system to allocate donated organs that is consistent 
with the rules and requirements of the OPTN. (Sec.  486.344.)
     Investigation, analysis, and reporting of adverse events 
to us. (Sec.  486.348.)
    Some of the proposed process performance measurements have a dual 
role in that they both satisfy the requirements of the Organ 
Procurement Organization Certification Act of 2000 and section 219 of 
the Consolidated Appropriations Act, 2001 and are based on the 
Secretary's authority under section 1102 of the Act. For example, the 
requirement for OPOs to provide designated requestor training for 
hospitals can be linked to the Organ Procurement Organization 
Certification Act of 2000 and section 219 of the Consolidated 
Appropriations Act, 2001 because the requirement is based on empirical 
evidence that shows improved consent rates when the OPO and hospital 
collaborate in requesting consent. (Note that factors in each OPO's 
service area, such as the OPO's relationship with its hospitals, would 
determine whether hospitals would request, and OPOs would need to 
provide, designated requestor training). This proposed requirement also 
is necessary to the effective and efficient administration of the 
Medicare and Medicaid programs because under 42 CFR Sec.  482.45, 
hospitals must ensure that individuals who discuss donation with 
families of potential organ donors are trained in a course offered or 
approved by the OPO.
    Finally, section 1138(b)(1)(A) of the Act requires an OPO to be a 
``qualified'' OPO as described in section 371(b) of the PHS Act. A 
number of the requirements we propose (for example, arrangements to 
cooperate with tissue banks and membership composition and authority of 
OPO boards) are based on requirements for qualified OPOs under the PHS 
Act. (See Sec.  486.322 and Sec.  486.324.) Proposed requirements that 
relate to the PHS Act are noted in the broader discussion in this 
preamble under ``Proposed Process Performance Measures and Other 
Requirements.''

II. Provisions of the Proposed Regulations

    For the reasons discussed above, we propose to reorganize and 
revise 42 CFR part 486, subpart G. Following is a discussion of the 
specific requirements contained in the proposed conditions.

Proposed General Requirements

Basis and Scope (Proposed Sec.  486.301)
    Section 486.301 (Basis and scope) would remain unchanged from the 
existing regulations except that we would add a reference to Sec.  1102 
of the Act, and we would add the term, ``non-renewal'' to Sec.  
486.301(b)(3) to clarify that the scope includes non-renewal of 
agreements.
Definitions (Proposed Sec.  486.302)
    To reflect organizational changes in the regulations text, to 
remove obsolete material, and to provide further clarity to the 
regulations, we propose several amendments and additions to the 
definitions.
    We propose amending the definition for ``certification'' to mean a 
Secretarial determination that an OPO meets (or has met) the 
requirements at 42 CFR 486.303 and is eligible for designation if it 
meets the additional requirements for designation.
    We propose amending the definition of ``designation'' to clarify 
that designation is the process of assigning geographic service areas 
to OPOs. Once an OPO is certified and assigned a

[[Page 6090]]

geographic service area, organ procurement costs of the OPO are 
eligible for Medicare and Medicaid payment under Sec.  1138(b)(1)(F) of 
the Act.
    We propose amending the definition of ``entire metropolitan 
statistical area'' to state that we do not recognize consolidated 
metropolitan statistical areas (CMSAs) when making service area 
determinations.
    We propose amending the definition of ``organ'' to clarify that the 
definition includes multivisceral organs only when they are 
transplanted with an intestine.
    We propose eliminating ``potential donor'' and replacing it with 
``organ donor potential.'' The definition of ``potential donor'' in the 
current regulations refers to causes and conditions of death that are 
``generally acceptable'' for donation of at least one solid organ.'' In 
our definition for ``organ donor potential,'' we would include specific 
parameters for the cause and conditions of death that indicate medical 
suitability for organ donation. These parameters are discussed in this 
preamble under ``Proposed OPO Outcome Measures,'' section C3. We are 
particularly interested in public comments on this proposed definition.
    We propose replacing ``transplant center'' with ``transplant 
hospital'' and have standardized the use of ``transplant hospital'' 
throughout this proposed regulation. A transplant hospital means a 
hospital that furnishes organ transplants and other medical and 
surgical specialty services required for the care of transplant 
patients. There may be one or more types of organ transplant centers 
operating within the same transplant hospital.
    Additionally, we propose adding definitions for ``adverse event,'' 
``agreement cycle,'' ``death record review,'' ``de-certification,'' 
``designated requestor,'' ``donor,'' ``donor document,'' ``potential 
donor denominator,'' and ``re-certification cycle.''
    We propose a definition for ``adverse event'' because we propose 
requiring an OPO to report those events to us so that we can monitor 
the OPO's response to the adverse event. An adverse event would mean an 
untoward, undesirable, and usually unanticipated event that causes 
death or serious injury or the risk thereof.
    We propose definitions for ``agreement cycle'' and ``re-
certification cycle'' to clarify the difference between the two. The 4-
year CMS/OPO agreement cycle runs from August 1 through July 31, unless 
it is extended according to Sec.  486.314. The 4-year re-certification 
cycle is based on the calendar year.
    We have included a proposed definition for ``death record review'' 
because we would require OPOs to perform death record reviews as part 
of their QAPI programs.
    We have included a definition for ``de-certification'' to explain 
that de-certification follows our determination that an OPO no longer 
meets one or more conditions for coverage (including, the outcome 
measures at Sec.  486.318 and the process performance measures and 
other requirements) or no longer meets the requirements for 
certification or designation. If an OPO's agreement with us is 
terminated or is not renewed, the OPO is de-certified.
    We propose adding a definition for ``designated requestor'' to 
explain the role of designated requestors in the donation process. We 
propose a definition for ``donor'' to ensure that OPOs'' reporting of 
donor data is standardized. (The definition of ``donor'' is not 
intended to limit acceptable donors.)
    We are proposing a definition for ``donor document'' because we 
would require OPOs to ensure that, in the absence of a donor document, 
the individual or individuals with responsibility to make the donation 
decision are informed of their option to donate organs or tissues or to 
decline to donate.
    We propose adding ``potential donor denominator'' to the 
definitions because we would use this term for the potential donor data 
OPOs would report to the OPTN. Those data would be used as the basis 
for the multiple outcome measures.
    These definitions, as we propose to add or revise them, are 
contained in the regulatory text section at the end of this document.

Requirements for Certification and Designation

[If you choose to comment on this section, please include the caption 
``Certification and Designation Requirements'' at the beginning of your 
comments.]
Requirements for Certification (Proposed Sec.  486.303)
    The current regulations do not make a clear distinction between the 
requirements necessary for certification and the requirements necessary 
for designation, nor do they specify that an OPO must be certified 
before it is designated for a service area. Therefore, we propose 
adding a new section to specify the requirements an OPO must meet to be 
certified.
    Following are the proposed requirements. After each proposed 
requirement, we have listed the location of the requirement in the 
statute or in current regulations. To be certified, an OPO must:
    (1) Have received a grant under 42 U.S.C. 273(a).
    (2) Be a non-profit entity that is exempt from Federal income 
taxation under Sec.  501 of the Internal Revenue Code of 1986. (See 
Sec.  486.306(a).)
    (3) Have accounting and other fiscal procedures necessary to assure 
the fiscal stability of the organization, including procedures to 
obtain payment for kidneys and non-renal organs provided to transplant 
hospitals. (See Sec.  486.306(b).)
    (4) Have an agreement with the Secretary to be reimbursed under 
title XVIII for the procurement of kidneys. (See section 371(b)(1)(C) 
of the PHS Act.)
    (5) Have been re-certified as an OPO under the Medicare program 
from January 1, 2002 through December 31, 2005. (See Sec.  
486.301(b)(4).)
    (6) Have procedures to obtain payment for non-renal organs provided 
to transplant centers. (See Sec.  273(b)(1)(E).)
    (7) Agree to enter into an agreement with any hospital in the OPO's 
service area, including a transplant hospital, that requests an 
agreement. (See 486.304(b)(8).)
    (8) Meet or have met the conditions for coverage, including the 
outcome measures and the process performance measures and other 
requirements. (See Sec.  486.314. This section states that an OPO's 
agreement with CMS may be terminated if the OPO does not meet the two 
conditions for coverage in the current regulations, as well as the 
requirements for qualifications for designation found in Sec.  
486.306.)
    We propose that these threshold requirements for certification must 
be met before an OPO can be designated, pursuant to our proposed Sec.  
486.304.
Requirements for Designation (Proposed Sec.  486.304)
    Provisions regarding general requirements for designation as an OPO 
currently found in Sec.  486.304 (``General requirements'') and 
requirements at Sec.  486.306 (``Qualifications for designation as an 
OPO'') would be reorganized. Some requirements found in current Sec.  
486.304 have been moved to proposed Sec.  486.303. Other requirements 
judged to be burdensome or unnecessary have been removed. For example, 
we would no longer require

[[Page 6091]]

OPOs to submit a written application for designation.
    Most requirements in the current Sec.  486.306 would be 
incorporated into other sections of the proposed rule. Specifically, 
requirements for OPO advisory boards and boards of directors have been 
moved to proposed Sec.  486.324 (``Administration and governing 
body''). Requirements for agreements with hospitals, critical access 
hospitals, and tissue banks can be found in proposed Sec.  486.322 
(Relationships with hospitals, critical access hospitals, and tissue 
banks). Requirements for testing of donors and organs can be found in 
both proposed Sec.  486.344 (Donor evaluation and management and organ 
placement and recovery) and proposed Sec.  486.346 (Organ preparation 
and transport). Requirements for data reporting have been moved to 
proposed Sec.  486.328 (Reporting of data), and requirements for 
protecting privacy of data can be found in proposed Sec.  486.330 
(Information management). Finally, requirements for professional 
education can be found in Sec.  486.326 (Human resources). Our 
rationale for these proposed changes is addressed later in this 
preamble in our discussion of the individual sections.
    In addition, we propose requiring OPOs to file a cost report within 
5 months following the end of the fiscal year, rather than the current 
3 months. This would conform the OPO regulations to Sec.  413.24(f).
OPO Service Area Size Designation and Documentation Requirements 
(Proposed Sec.  486.306)
    The requirements contained in this section would be re-designated 
from the current Sec.  486.307, and many requirements would remain 
unchanged. We would no longer require OPOs to provide population data 
to us since population would no longer be used as a basis for OPO 
certification.
    We propose retaining the requirement that an OPO must procure 
organs from an average of at least 24 donors per calendar year. We 
believe it is important to retain this requirement to assure that each 
OPO has ``a defined service area of sufficient size to assure maximum 
effectiveness in the procurement and equitable distribution of organs* 
* *'' as Congress intended. (See section 371(b)(1)(F) of the PHS Act.) 
In addition, we would change the current requirement for an average of 
24 donors per calendar year in the 2 years before the year of re-
designation to a requirement for an average of 24 donors per calendar 
year in the 4 years before the year of re-designation because the re-
certification cycle has been increased from 2 years to 4 years.
    However, we would no longer permit exceptions to the 24-donor per 
year rule, including the exception for an OPO that serves an entire 
state. (See Sec.  486.307(d)(2)(ii).) When the current regulations were 
published in 1996, the average OPO recovered 77 donors per year. 
Because of a decrease in the number of OPOs and an increase in the 
number of donors recovered nationwide, the average OPO procured 
approximately 100 donors in 2002. Therefore, we believe that an OPO 
procuring fewer than 96 donors in a 4-year period is too small to 
operate efficiently and effectively.
    We propose removing language from the current regulations that 
refers to new entities or organizations becoming OPOs. Section 371(a) 
of the PHS Act provides authority for the Secretary to make grants to 
qualified OPOs that are described in subsection (b). However, given the 
provision in (b)(1)(D) added by the OPO Certification Act of 2000 
(``notwithstanding any other provision of law, has met the requirements 
of this section and has been certified or re-certified by the Secretary 
within the previous 4-year period as meeting the performance standards 
to be a qualified organ procurement organization* * *''), it appears 
impossible for the Secretary to give a grant to an organization that 
was not one of the 59 OPOs that was certified by the Secretary as 
meeting the performance standards in the 4-year period before January 
1, 2000.
    Therefore, we propose removing the language at Sec.  
486.307(d)(2)(iv) that requires an entity to show that it can procure 
organs from at least 50 potential donors per year if it was not 
previously designated as an OPO. We also propose removing references 
related to designation of or requirements for entities or organizations 
that are not currently OPOs
    Additionally, we would remove obsolete service area size standards 
for periods during 1996 and before. We would change the current 
requirement for submission of information about acute care hospitals 
that have an operating room and the equipment and personnel to retrieve 
organs to submission of information about hospitals that have both a 
ventilator and an operating room, since we propose requiring OPOs to 
have agreements with 95 percent of those hospitals. (See discussion in 
this preamble of Sec.  486.322, Relationships with hospitals, critical 
access hospitals, and tissue banks). Finally, we would increase the 
designation period from 2 years to 4 years to conform the designation 
period to the re-certification cycle.
Designation of One OPO for Each Service Area (Proposed Sec.  486.308)
    Requirements for the designation of one OPO for each service area 
would be moved from Sec.  486.316 to proposed Sec.  486.308. Many 
requirements would remain unchanged. However, we propose replacing the 
``tie-breaker criteria'' used to designate an OPO when two or more OPOs 
apply for the same area with new criteria found in proposed Sec.  
486.316 (``Re-certification and competition processes''). (See 
discussion of proposed Sec.  486.316 in this preamble for a discussion 
of the proposed criteria.)
Changes in Ownership or Service Area (Proposed Sec.  486.310)
    The requirements for an OPO changing ownership or changing its 
service area found in Sec.  486.318 would be moved to proposed Sec.  
486.310. Many requirements would remain unchanged. However, we propose 
requiring certain additional information if there is a change in 
ownership of an OPO. The OPO would be required to provide information 
specific to the board structure of the new organization to ensure that 
all required representatives are included. In addition, the OPO would 
be required to submit operating budgets, financial information, and 
other written documentation we determine to be necessary for 
designation to ensure that the OPO continues to meet the requirements 
for designation.
De-Certification (Proposed Sec.  486.312)
[If you choose to comment on this section, please include the caption 
``De-certification'' at the beginning of your comments.]
    Many of the requirements contained in Sec.  486.325 (``Termination 
of agreement with CMS'') would be moved to proposed Sec.  486.312, but 
the title of the section would be changed to ``De-certification,'' to 
reflect the fact that if an OPO's agreement with us ends (whether 
through voluntary or involuntary termination or non-renewal of the 
OPO's agreement), we would de-certify the OPO.
    The paragraph titled ``Voluntary termination'' would remain 
substantially unchanged, but the paragraph would be renamed ``De-
certification due to voluntary termination of agreement.'' 
Additionally, we would add language to indicate that we would de-
certify the OPO as of the effective date of the voluntary termination. 
The paragraph

[[Page 6092]]

titled ``Involuntary termination'' also would remain substantially 
unchanged, but the paragraph would be renamed ``De-certification due to 
involuntary termination of agreement.'' Additionally, we propose adding 
language to indicate that we would de-certify the OPO as of the 
effective date of the involuntary termination.
    We propose adding a paragraph titled, ``De-certification due to 
non-renewal of agreement,'' which states that we will not renew an 
OPO's agreement if the OPO fails to meet the outcome measures at Sec.  
486.318 based on data from the most recent re-certification cycle or if 
the OPO is no longer designated for the service area. In that case, we 
would de-certify the OPO as of the ending date of the agreement. We 
propose removing the paragraph titled, ``Appeal right,'' because we 
propose a new appeals process in Sec.  486.314.
    In proposed Sec.  486.312(d), we have retained our general policy 
of providing an OPO with at least 90 days notice before a de-
certification would be effective. However, we propose that in cases of 
urgent need, notice of de-certification would be given at least three 
days before de-certification. We expect that cases where an OPO would 
need to be replaced based on urgent need would be extremely rare. 
Nevertheless, in unusual circumstances, this expedited time frame may 
be necessary to protect the public health. The notice to the OPO would 
specifically state the reason for de-certification and the effective 
date. We propose changing the title of the paragraph, ``Effects of 
termination'' to ``Effects of de-certification.'' We propose retaining 
the paragraph, ``Public Notice,'' but we would add language that states 
we would give public notice of involuntary termination or non-renewal 
of agreement in local newspapers in the OPO's service area.
    Finally, we propose eliminating the paragraph, ``Reinstatement'' 
because our proposed appeals process sets forth the process we would 
use for an OPO whose de-certification was reversed by a CMS hearing 
officer. If a hearing officer upheld a de-certification, we would not 
voluntarily reinstate the de-certified OPO. Thus the current language 
regarding reinstatement would no longer be needed.
Appeals (Proposed Sec.  486.314)
[If you choose to comment on this section, please include the caption 
``Appeals'' at the beginning of your comments.]
    Under existing regulations, an agreement with an OPO could be 
involuntarily terminated for failure to meet the conditions for 
coverage, and any resulting appeals were governed by regulations at 42 
CFR part 498. If an OPO failed the outcome performance standards set 
forth in 486.310, we de-certified the OPO as of August 1 of the year 
following the end of the re-certification cycle. Although the OPO was 
given the right to appeal under part 498, it was not possible to 
complete the appeals process prior to expiration of our agreement with 
the OPO on August 1. Therefore, we opened the OPO's service area to 
competition from other OPOs as soon as the OPO was notified about the 
de-certification. The existing time frame generally did not permit a 
decision to be made on an appeal prior to a successor OPO taking over 
the service area when the de-certified OPO's agreement with us expired 
on August 1. In order to resolve this problem, we propose to make 
changes to the appeals process and alter the timing of the competition. 
Specifically, we would: (1) Delay competition until an appeal is 
completed; (2) expedite appeals by using a CMS hearing officer; and (3) 
extend an OPO's agreement beyond August 1 if necessary.
    In the OPO Certification Act of 2000, Congress specified that we 
must propose a process whereby an OPO could appeal a de-certification 
on substantive or procedural grounds. (See section 273(b)(D)(ii)(IV).) 
Therefore, we are proposing a process whereby an OPO facing de-
certification due to involuntary termination or non-renewal of its 
agreement with us would be able to appeal the de-certification on 
substantive or procedural grounds and receive a decision on its appeal 
before its service area was opened for competition from other OPOs. We 
believe the proposed appeals process would be both fair and 
expeditious.
    An OPO would have 30 calendar days from the date on the notice of 
de-certification to submit an appeal to a CMS hearing officer. In the 
appeal, the OPO would be given the opportunity to submit evidence to 
show why it should not be decertified. Appeals could be based on 
substantive and/or procedural grounds. Within 2 weeks of receipt of the 
OPO's appeal, the CMS hearing officer would schedule a hearing. The 
hearing officer would issue notice of his or her decision to the OPO by 
certified mail within 2 weeks following the date of the hearing.
    In making an appeal on substantive grounds, an OPO could submit 
evidence of factors that negatively impacted organ donation in its 
service area and prevented it from meeting the outcome or process 
performance measures or other requirements. For example, an OPO might 
have evidence that its ability to obtain consent from families of 
potential donors was adversely affected by certain demographic factors 
in its service area, such as the presence of a significant number of 
citizens whose race, ethnicity, religion, or educational level may be 
associated with lower rates of consent to organ donation. As another 
example, an OPO might have evidence that its ability to recover and 
transport organs to transplant centers while they are still viable for 
transplantation was hampered by the remote location of many of its 
donor hospitals.
    Since most OPOs have some factors in their service areas that work 
against organ donation, the failing OPO would need to demonstrate not 
only the specific factors that affected its ability to meet the outcome 
measures but also what it did to attempt to ameliorate the factors. For 
example, if an OPO provided data to show that it has a high minority 
population that historically has had a lower rate of consent to 
donation, the OPO would have to demonstrate what it did to address the 
situation (such as conducting targeted public education) and whether 
these efforts were successful.
    Evidence submitted by an OPO about substantive factors could 
include, but would not be limited to, research studies, demographic 
studies, data from the OPO's QAPI program, and information on the OPO's 
public and professional education and hospital development activities.
    In making an appeal on procedural grounds, an OPO could, for 
example, provide evidence that incorrect data were used by us to 
determine whether the OPO met the outcome measures.
    We propose that if the hearing officer reversed our determination 
to de-certify an OPO in a case involving the involuntary termination of 
the OPO's agreement, we would not de-certify the OPO. An OPO that was 
successful in its appeal would have a right to compete for this service 
area for the next cycle.
    If the de-certification determination was upheld by the hearing 
officer, Medicare and Medicaid payment would not be made for organ 
procurement services the OPO furnished on or after the effective date 
of de-certification. The unsuccessful OPO would not be permitted to 
compete for the service area, or any other service area.
    As stated earlier, OPOs currently have the right to appeal a de-
certification under part 498, which sets forth procedures for providers 
and suppliers to appeal decisions that affect participation in the 
Medicare program. Since this proposed rule includes an appeals process 
for OPOs that is

[[Page 6093]]

separate from the part 498 process, we propose that if a hearings 
officer denied an OPO's appeal, the OPO would have no further 
administrative appeal rights. Thus, we propose removing OPOs from the 
definition of suppliers found at Sec.  498.2.
    However, we note that section 901 of the Medicare Prescription 
Drug, Improvement, and Modernization Act (MMA) defines the term 
``supplier'' to mean ``unless the context otherwise requires, a 
physician or other practitioner, a facility, or other entity (other 
than a provider of services) that furnishes items or services under 
this title [title XVIII].'' Nevertheless, the unique nature of OPOs and 
their special role in the Medicare program distinguishes them from 
other suppliers. Typically, suppliers furnish medical items and 
services directly to Medicare beneficiaries and obtain direct payment 
for Medicare-covered items and services from a Medicare carrier. A 
supplier may furnish one or more of the health care items included 
within the definition of ``medical and other health services'' that are 
defined in section 1861(s) of the Act and are included in the scope of 
the part B program. (See section 1832 of the Act.) Many suppliers do 
not have a formal participation agreement with the Secretary. (See 
section 1842(h) of the Act.) In contrast, an OPO is required to have an 
agreement with the Secretary. (See 42 U.S.C 273(b)(1)(C).) Moreover, 
many, if not most, organ donors are not Medicare beneficiaries, and 
many organs recovered by OPOs are not transplanted into Medicare 
beneficiaries.
    Given this framework, and to ensure that Medicare pays 
appropriately for its share of organ acquisition costs, OPOs have 
payment rules and methodologies that differ from the payment rules and 
methodologies used for other suppliers. (See, for example, 42 CFR Sec.  
413.200.) Among other differences, organ acquisition costs are not paid 
directly by a carrier to an OPO. Instead, the OPO is paid by the 
transplant hospital, subject to later adjustment (see 42 CFR 
413.200(c)(iv)), and Medicare pays the transplant hospital for the 
organ acquisition costs. If necessary, Medicare payment to the OPO is 
adjusted after it files its yearly cost report; for example, if the 
OPO's costs to recover organs exceeded the payments it received for the 
organs, Medicare covers the additional costs, based on the percentage 
of organs that were recovered and transplanted into Medicare 
beneficiaries. However, for purposes of the adjustment, all organs 
provided by the OPO to Medicare-approved transplant centers are 
considered to be organs that were transplanted into Medicare 
beneficiaries. Since approximately 64 percent to 74 percent of extra-
renal organ transplant centers and approximately 100 percent of kidney 
transplant centers are Medicare approved, the Medicare program 
reimburses OPOs for their excess costs for most of the organs they 
recover. Thus, the legal relationship between an OPO and the Medicare 
program is different from other ``suppliers'' and reflects important 
statutory differences.
    The MMA also requires the Secretary to establish in regulations a 
provider and supplier enrollment process that includes an appeals 
process. Section 936 of MMA states that suppliers ``whose application 
to enroll (or, if applicable, to renew enrollment) under this title is 
denied may have a hearing and judicial review of such denial under the 
procedures that apply under subsection [1866](h)(1)(A) to a provider of 
services that is dissatisfied with a determination by the Secretary. 
Although the appeals process we propose for OPOs differs from the MMA 
appeals process, it specifically addresses the congressional findings 
associated with the OPO Certification Act of 2000 that the uncertainty 
of the current re-certification interferes with the effectiveness of 
OPOs in raising the level of donation. This alternative appeals process 
is necessary because there is a limited time period from the date that 
the outcome performance measure data are available to the date when the 
OPO contract cycle ends. Therefore, to achieve the goals of the 2000 
legislation, including providing an equitable process for appeals, OPO 
appeals must be expedited and completed before a replacement OPO is 
named in order to avoid disruption in organ procurement.
    Under our proposed rule, if the hearing officer upheld a de-
certification determination, we would open the OPO's service area for 
competition from other OPOs. The de-certified OPO would not be 
permitted to compete for the open area, and in most cases, the de-
certification would be effective as of the ending date of the OPO's 
agreement with us.
    However, if the appeals process did not leave sufficient time for 
us to conduct a competition process for the open area and provide for a 
smooth transition of the service area to the successor OPO, we could, 
at our discretion, extend the OPO's agreement with us for a period of 
time not to exceed an additional 60 days.
    We believe the appeals process we propose fully satisfies the 
statutory requirement to provide a process for an OPO to appeal a de-
certification on substantive and procedural grounds. Although the 
process is streamlined to allow an OPO to receive a decision on its 
appeal before the effective date of the de-certification and before its 
service area being opened for competition, it allows ample time for the 
OPO to prepare and present evidence of the substantive or procedural 
basis for its appeal. Furthermore, the process allows sufficient time 
for a hearing officer to consider the evidence and make a fair decision 
that affords all of the process that is due to the OPO, while 
safeguarding our ability to remove and replace an OPO that has not 
performed well.
Re-Certification and Competition Processes (Proposed Sec.  486.316)
    [If you choose to comment on this section, please include the 
caption ``Re-certification and competition'' at the beginning of your 
comments.]
    Congress stated in the congressional findings associated with 
section 219 of the Consolidated Appropriations Act, 2001 that the OPO 
re-certification process ``created a level of uncertainty that is 
interfering with the effectiveness of organ procurement organizations 
in raising the level of donation.'' Under existing regulations at Sec.  
486.310 and Sec.  486.316, the service area of every OPO was opened for 
competition at the conclusion of every re-certification cycle, 
regardless of whether the OPO met the outcome performance standards for 
the prior re-certification cycle. Any OPO that met the performance 
standards for the prior re-certification cycle was eligible to compete 
for an open service area or a portion of an open service area.
    Under existing OPO regulations, an OPO that failed to meet the 
outcome measures would lose its service area and be de-certified. Its 
service area would be opened for competition from all OPOs that met the 
outcome performance standards. If no OPO that met the outcome 
performance standards was willing to accept responsibility for the 
service area, the OPO that failed the outcome performance measures 
would be re-designated for the service area if it submitted an 
acceptable corrective action plan to us.
    Under existing regulations, if more than one OPO that met the 
performance standards wanted to take over the service area or part of 
the service area of another OPO, we used six ``tiebreaker'' criteria to 
determine which OPO should be awarded the service area. The tiebreakers 
were: (1) Prior performance, including the previous

[[Page 6094]]

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 
organizations have a working relationship; (5) willingness and ability 
to place organs within the service area; and (6) proximity of the 
organization to the donor hospitals.
    As stated earlier in this preamble, we propose opening every OPO's 
service area for competition at the end of every re-certification cycle 
as we did under the existing regulations. However, we are proposing 
certain limitations that we believe would address the uncertainty in 
the re-certification process that was noted by Congress. The 
limitations would ensure that: (1) The process can be completed 
expeditiously; (2) disruptions to service areas will be minimized; and 
(3) an OPO may compete for an open area only if it is likely to be able 
to improve organ donation in the service area.
    The proposed competition process would differ somewhat, depending 
upon whether a service area was opened for competition because the 
incumbent OPO was de-certified or because of the wider competition 
process taking place at the end of a re-certification cycle. First, we 
would permit OPOs to compete for open areas only if they met certain 
specific objective criteria. These criteria would vary, depending upon 
whether the incumbent OPO was or was not de-certified. Second, we would 
allow competition only for entire service areas. A service area could 
be divided only if the incumbent OPO was de-certified and no OPO wanted 
to accept responsibility for the service area. In such case, we could, 
at our discretion, choose a single OPO to take over the service area or 
adjust the service area boundaries of two contiguous OPOs to 
incorporate the open area. Finally, we are proposing to use specific 
clear, objective criteria for determining which OPO would be selected 
for a service area.
    The chart below shows how the process would differ. Following the 
chart is a more detailed explanation of our proposal.

----------------------------------------------------------------------------------------------------------------
                                     Incumbent OPO                        Criteria OPOs must
   Incumbent OPO  decertified?       permitted to      Can service area     meet to compete    Criteria CMS uses
                                       compete?           be divided?        for open area       to choose OPO
----------------------------------------------------------------------------------------------------------------
Yes.............................  No................  Yes, at discretion  4 out of 5 outcome  Acceptable plan to
                                                       of CMS.             performance         increase organ
                                                                           measures at or      donation in open
                                                                           above the mean.     area.
No..............................  Yes...............  No................  4 out of 5 outcome  Acceptable plan to
                                                                           performance         increase organ
                                                                           measures at or      donation in open
                                                                           above the mean.     area.
                                                                           Conversion rate
                                                                           (actual donors as
                                                                           a percentage of
                                                                           potential donors)
                                                                           at least 15
                                                                           percentage points
                                                                           higher than
                                                                           incumbent's
                                                                           conversion rate.
----------------------------------------------------------------------------------------------------------------

Competition When OPO Has Been De-Certified
    We propose that if we notify an OPO that it will be de-certified 
because its agreement will be terminated or will not be renewed and the 
OPO does not appeal within the time frame specified in Sec.  486.314(a) 
or the OPO appeals but the de-certification is upheld (see Sec.  
486.314(c)), we would o