Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
M -A H
EDICARE PPROVED  EART 
T C
RANSPLANT  ENTERS 
Inspector General 
February 2004 
OEI-01-02-00520  Office of Inspector General

http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 
as amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs. This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations in order to reduce waste, abuse, and 
mismanagement and to promote economy and efficiency throughout the department. 
Office of Evaluation and Inspections 
The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management 
and program evaluations (called inspections) that focus on issues of concern to the 
department, the Congress, and the public. The findings and recommendations contained 
in the inspections reports generate rapid, accurate, and up-to-date information on the 
efficiency, vulnerability, and effectiveness of departmental programs. 
Office of Investigations 
The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. The OI also oversees 
state Medicaid fraud control units, which investigate and prosecute fraud and patient 
abuse in the Medicaid program. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support in OIG's internal operations. The OCIG imposes program exclusions and 
civil monetary penalties on health care providers and litigates those actions within the 
department. The OCIG also represents OIG in the global settlement of cases arising 
under the Civil False Claims Act, develops and monitors corporate integrity agreements, 
develops model compliance plans, renders advisory opinions on OIG sanctions to the 
health care community, and issues fraud alerts and other industry guidance.  ABSTRACT 
We analyzed data on Medicare-approved heart transplant centers from 1987 through 2000. 
Our report did not evaluate whether heart transplants were performed under unsafe 
conditions.  It measures only whether centers continued to meet Medicares initial volume 
and/or survival criteria. 
Our analysis of these centers performance found that many centers have performed at 
volume and survival rates below the minimum levels required for their initial Medicare 
approval, sometimes for several consecutive years.  From 1987 through 2000, 69 of 90 
Medicare-approved heart transplant centers failed, at least once, to meet the initial approval 
criteria for volume and/or survival rate.  From 1992 to 2000, 15 percent of Medicare 
beneficiaries who received a heart transplant did so in a Medicare-approved center that fell 
below the initial approval  However, the Centers for Medicare & Medicaid Services (CMS) 
rarely receives data from heart transplant centers on their volume and survival rate.  The lack 
of data and lack of criteria for ongoing performance limits CMSs ability to provide effective 
oversight of heart transplant centers. 
We recommend that CMS expedite the development of standards for continuing approved 
centers, as well as guidelines for what levels of performance trigger specific responses from 
CMS.  We also recommend, in the short term, that CMS improve its oversight of centers by 
entering into an arrangement with the Health Resources and Services Administration for the 
regular exchange of volume and survival rate data. 
i 
Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  EXECUTIVE SUMMARY 
OBJECTIVES 
To document whether Medicare-approved heart transplant centers continue to meet the initial 
1-year volume and survival rate criteria required for Medicare approval. 
To assess the Centers for Medicare & Medicaid Servicess (CMSs) oversight of approved 
centers performance on annual volume and survival rate. 
BACKGROUND 
In 1987, CMS published a coverage decision that allowed Medicare coverage for heart 
transplants performed in centers that are Medicare approved for heart transplants.  By 2002, 
99 heart transplant centers had been approved for Medicare reimbursement.  In 1992, 294 
Medicare beneficiaries received a heart transplant; by 2001, this number had increased to 
494. 
The 1987 coverage decision required centers to have performed heart transplants on at least 
12 patients in each of the 2 preceding 12-month periods, and 12 patients prior to that, for a 
minimum total of 36 transplants.  It also required centers to have achieved a 73 percent 1-
year survival rate and a 65 percent 2-year survival rate.  In 2000, CMS lowered the volume 
criteria from 36 to 12 transplants. 
The 1987 coverage decision also required approved heart transplant centers to notify CMS 
about changes that would affect the health and safety of patients...for example...a significant 
decrease in its experience level or survival rates.  The 2000 update to the criteria did not 
change or clarify this requirement. 
CMS has not established ongoing performance standards for Medicare-approved heart 
transplant centers.  However, for the purpose of this study, we measured the historical 
performance of approved centers against CMSs initial approval requirements (12 annual 
procedures with a 73 percent 1-year survival rate).  We reviewed volume and survival rate 
data for 90 heart transplant centers approved for Medicare coverage from 1987 through 1999. 
We obtained these data from the Scientific Registry of Transplant Recipients (Scientific 
Registry). 
We reviewed all available files and applications for the 90 centers, including 70 letters that 
centers had sent to CMS in 2000. We mailed a questionnaire to 97 Medicare-approved 
centers and received 65 responses.  We analyzed 1992 to 2001 Medicare payment data. We 
conducted six interviews with expert reviewers of applications for Medicare coverage and 
with transplant center representatives. 
1 
Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  Our report did not evaluate whether heart transplants were performed under unsafe 
conditions.  It measures only whether centers continued to meet Medicares initial volume 
and/or survival criteria. 
FINDINGS 
From 1987 through 2000, 69 of 90 Medicare -approved heart transplant centers failed, 
at least once, to meet the initial approval criteria for volume and/or survival rate. 
During this time period, 53 Medicare-approved heart transplant centers fell below a 73 
percent 1-year survival rate at least once.  Forty-five Medicare-approved heart transplant 
centers fell below an annual volume of 12 transplants at least once.  Twenty-four 
Medicare-approved heart transplant centers fell below both initial criteria at least once. 
From 1992 to 2000, 15 percent of Medicare beneficiaries who received a heart 
transplant did so in a Medicare-approved center that fell below the initial approval 
criteria for volume and/or survival rate in the year of their transplant. 
In this 8-year period for which complete data are available, 583 of the 3,847 Medicare 
beneficiaries who received heart transplants received them in centers that did not meet 
CMSs initial approval criteria in the year of their transplant.  Medicare paid $64 million 
for these transplants. 
Over time, an increasing percentage of Medicare-approved heart transplant centers 
performed below the initial volume and/or survival rate criteria. 
The percentage of Medicare-approved heart transplant centers that performed below the 
initial criteria rose from 15 percent in 1987 to 39 percent in 2000.  In 1999 and 2000, the 
2 most recent years for which data were available, slightly more than half of all approved 
centers fell below the initial approval criteria for volume and/or survival. 
The lack of data and lack of criteria for ongoing performance limits CMSs ability to 
provide effective oversight of heart transplant centers. 
CMS rarely receives data from heart transplant centers on their volume and survival rate. 
Nor does CMS regularly obtain such information from the Scientific Registry.  Our 
assessment is based on discussions with CMS officials in the central and regional offices, 
our survey of centers, and our review of CMS files.  For example, our survey results 
revealed that only 6 of 65 responding centers had notified CMS of any changes in their 
volume or survival rate at some point between 1997 and 2002.  Yet, in 2000 alone, one-
third of these 65 centers fell below the initial criteria for volume and/or survival rate. 
Without volume or survival rate criteria for ongoing performance, CMS has little basis 
for taking enforcement actions.  CMS has never withdrawn a centers Medicare-approval 
status, although 2 centers voluntarily terminated their programs in 2002.  In our review of 
2

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  CMSs files of approved centers, we found one example of CMS instituting a corrective 
action against a center for falling below the initial Medicare-approval criteria for volume 
and survival rate. 
RECOMMENDATIONS 
In its 1987 criteria for Medicare coverage of heart transplants, CMS identified initial 
criteria for volume and survival rate as key elements in ensuring patient quality.  By not 
developing volume and survival rate criteria for continuing performance, as it committed 
to do in its 1987 coverage decision, CMS has limited its capacity to ensure that Medicare 
beneficiaries receive heart transplants under conditions that are safe and effective. 
CMS has taken some steps toward correcting this situation.  It convened a public meeting 
with stakeholders in 1999, established a work group to evaluate the volume and survival 
rate criteria, and has made progress during the course of this inspectio n toward 
developing Conditions of Participation for Medicare-approved transplant centers. CMS 
has indicated that it will publish draft criteria early in 2004. 
We present three recommendations that would enable CMS to improve its oversight of 
the volume and survival rate performance of Medicare-approved heart transplant centers. 
	 CMS should expedite the development of continuing criteria for volume and survival rate 
performance and for periodic recertification. 
	 CMS should develop guidelines and procedures for taking action when centers do not 
meet Medicare criteria for volume and survival rate. 
	 CMS should take immediate steps to improve its ability to maintain accurate and timely 
data on center performance. 
COMMENTS ON THE DRAFT REPORT 
CMS and the Health Resources and Services Administration provided comments on our 
draft report.  These agencies agreed with our recommendations and described steps that 
they are taking to address them.  We would like to address two points that they raise. 
First, they raise concerns about our reliance on Medicares volume and non risk-adjusted 
survival criteria as a basis for assessing performance.  For this inspection, we focused on 
the Medicare coverage criteria established in 1987and not yet revisedas measures of 
center performance.  Newly approved centers must meet these criteria; it seemed 
reasonable to assess their continued adherence once they are Medicare-approved. 
Second, the agencies indicate that the Department of Health and Human Services 
oversees transplant centers through the Organ Procurement and Transplantation Network 
(OPTN).  While the OPTNs review of center operations and quality provide valuable 
3

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  information, CMS is the accountable regulatory agency so far as Medicare participation 
is concerned.  Nevertheless, we recognize the OPTNs important oversight role and 
intend to look more closely at it in the future. 
4 
Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  TABLE OF  CONTENTS 
PAGE

ABSTRACT...................................................................................................................................i

EXECUTIVE SUMMARY .........................................................................................................1

INTRODUCTION........................................................................................................................6

FINDINGS

69 of 90 centers failed to continue meeting initial approval criteria ...............................11

Centers below criteria provided 15 percent of Medicare heart transplants......................12

Increasing number of centers fail to meet initial criteria .................................................13 

Lack of data impedes CMS oversight of centers .............................................................14 

RECOMMENDATIONS 
CMS should develop continuing criteria for center performance....................................16

CMS should develop guidelines and procedures for taking action..................................17

CMS should develop an arrangement to receive accurate and timely data .....................17

COMMENTS ON THE DRAFT REPORT.............................................................................18

APPENDICES 
A: Agency Comments......................................................................................................19

B: Methodology  ..............................................................................................................23

C: CMSs 2000 letter to centers.......................................................................................28 

D: Endnotes......................................................................................................................30

ACKNOWLEDGMENTS .........................................................................................................31

5

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  INTRODUCTION 
OBJECTIVES 
To document whether Medicare-approved heart transplant centers continue to meet the initial 
1-year volume and survival rate criteria required for Medicare approval. 
To assess the Centers for Medicare & Medicaid Servicess (CMSs) oversight of approved 
centers performance on annual volume and survival rate. 
BACKGROUND 
The Importance of Heart Transplants 
Heart transplants have extended and improved the lives of thousands of people.  Demand, 
however, continues to outpace the supply of available organs.  From 1995 to 2001, over 
26,000 people registered to be placed on a list of patients waiting for a heart transplant.1  Of 
those on the list, 39 percent did not receive the needed heart transplant.  The Secretary of 
Health and Human Services has launched several initiatives to increase awareness of the 
need for organ donation and thereby increase the number of transplant recipients.2 
Medicare Coverage of Heart Transplants 
CMS covers heart transplants for beneficiaries if the procedures are medically necessary and 
performed in centers that Medicare has approved for that purpose. Medicare began coverage 
for heart transplants in approved centers in 1987.3  By 2002, 99 of 139 heart transplant 
centers in the United States had been approved for Medicare reimbursement.  From 1992 to 
2001, the annual number of Medicare bene ficiaries who received heart transplants increased 
by 68 percent, from 294 to 494.  During the same period, annual Medicare Part A heart 
transplant payments almost tripled, from $25 million in 1992 to $74 million in 2001. 
From 1992 to 2002, the number of Medicare-approved heart transplant centers grew from 62 
to 99.  From 1992 to 2001, the total number of heart transplants performed in the United 
States remained relatively flat, rising from 2,170 to 2,202. 
Volume and Survival Rate Criteria for Medicare Coverage 
When it began covering heart transplants in 1987, CMS published a coverage decision 
describing criteria that transplant centers must meet to be eligible for Medicare payment, 
including criteria for volume and survival rate.  CMS based these criteria on research that 
demonstrated that volume and survival rate were key indicators of a successful 
transplantation program.  The decision announcing Medicare coverage of heart transplants 
stated that the survival rate criteria are necessary to provide an adequately reliable measure 
6 
Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  of the success of an applicant facility.4  Later research supported the use of volume criteria 
to ensure better outcomes, finding that the risk of mortality...is substantially higher in low-
volume cardiac transplant centers.5  The volume and survival rate criteria established for 
heart transplants preceded and influenced the criteria later developed for Medicare coverage 
of liver, lung, and intestinal transplants. 
Table 1 
Changes in Initial Volume and Survival Rate Criteria for Approval 
Criteria  April 1987-October 2000  After October 2000 
Heart transplant centers applying for Medicare coverage must perform a 
minimum total of 36 transplants before a date the centers choose, 
referred to in the coverage decision and hereafter as the fiducial date: 
  At least 12 transplants 
  At least 24 transplants performed in the 24 months prior to  performed within the 12 
the fiducial date. There must be at least 12 transplants in  months prior to the fiducial 
1. Volume  each of the two 12 months in this 2-year period.  date. 
-and
  Eliminated all other volume 
  At least 12 transplants performed m ore than 24 months prior  requirements. 
to the fiducial date. These 12 can be done at any prior time, 
with no yearly minimum. 
  At least 73 percent 1-year survival rate. The cohort of    Unchanged survival rate and 
patients includes all transplants at the center, back to 1982.  cohort. However, the volume 
The volume criteria result in a minimum of 24 transplants  criteria do not result in any 
with 1 full year of survival experience.  minimum number of 
transplants with 1 full year of 
-and
survival experience. 
2. Survival 
  At least 65 percent 2-year survival rate. Calculated for all 
Rate 
transplants, back to 1982. The volume criteria result in a    Unchanged survival rate and 
minimum of 12 transplants with 2 full years of survival  cohort. However, the volume 
experience.  criteria do not result in any 
minimum number of 
transplants with 2 full years of 
survival experience. 
Source: OIG analysis of 1987 coverage decision and 2000 decision memorandum. 
Among other criteria, Medicare approval requires centers to meet certain volume and 
survival rate criteria as of a date that centers choose, referred to in the coverage decision as 
the fiducial date.  The fiducial date must be within 90 days of the date that a center submits 
its application and is the point from which all volume and survival rate data are calculated 
(see Table 1).  The 1987 criteria did not include an ongoing performance standard. 
In 2000, CMS published a memorandum that lowered the volume criteria for approval.6 
CMS reasoned that volume could possibly serve as a proxy for the 2-year minimum 
experience requirement in addressing the issue of whether a new transplant center staffed 
with an experience[d] team might be expected to produce satisfactory outcomes.  The 2000 
criteria did not include an ongoing performance standard. 
CMS has taken several steps to develop and institute performance indicators, such as volume 
and survival rate, for measuring the quality of the health care that Medicare beneficiaries 
receive in a variety of settings.  For example, in January 2003, CMS published a final rule 
that established the Quality Assessment and Performance Improvement (QAPI) Program, 
which requires hospitals to keep data on performance indicators for improving health 
7

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  outcomes and reducing medical errors.  In 2002, CMS launched the National Nursing Home 
Quality Initiative, which uses performance indicators to highlight quality of care in nursing 
homes.  The agency began reporting similar information for home health agencies in 2003. 
Reporting Criteria for Volume and Survival Rate 
In addition to establishing volume and survival rate criteria, the 1987 coverage decision 
required approved heart transplant centers to maintain data and submit information to notify 
CMS about changes to the transplant program that would affect the health and safety of 
patients...for example...a significant decrease in its experience level or survival rates.  The 
2000 update to the criteria did not change or clarify this requirement.  Because volume and 
survival rate are important indicators of quality, notifications of changes in these measures 
can serve as a vital oversight tool. 
All heart transplant centers, regardless of their Medicare-approval status, must report volume, 
survival, and other transplant-related data to a Health Resources and Services Administration 
(HRSA) contractor, the Organ Procurement and Transplantation Network.  Another HRSA 
contractor, the Scientific Registry of Transplant Recipients, analyzes and releases these data. 
Initiatives to Evaluate Heart Transplant Centers After Approval 
Although CMS has not developed procedures for a reapproval process or criteria for 
continuing performance, as it stated it would in the 1987 coverage decision, it has taken some 
steps to reassess the volume and survival rate criteria.  CMS is in the process of developing 
Conditions of Participation for Medicare-approved transplant centers, including those 
performing heart transplants.  CMS estimates it will publish the draft criteria early in 2004. 
As a part of this effort, CMS has a workgroup in place to evaluate the initial criteria for 
Medicare coverage and to determine criteria for ongoing approval. 7  In 1999, CMS convened 
a town hall meeting at which stakeholders offered their views on appropriate criteria for 
maintaining approval status, including criteria for volume and survival rate.8 
SCOPE AND METHODOLOGY 
Our study focuses on heart transplant centers approved for participation in Medicare from 
1987 to 2000.  We assess the performance of these centers against 2 of the criteria that 
Medicare adopted in 1987.  We recognized that heart transplantation is a dynamic field and 
that measures of quality also are evolving.  Because there are no continuing performance 
standards for centers, we considered Medicares 1987 initial criteria to be a reasonable 
benchmark against which to measure continuing performance. 
Our report did not evaluate whether heart transplants were performed under unsafe 
conditions.  It measures only whether centers continued to meet Medicares initial volume 
and/or survival criteria. 
For this report we reviewed several sources of data related to the volume and survival rate 
criteria and the reporting requirement.  Not every source contains data for each of the 99 
8

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  heart transplant centers that CMS approved for Medicare, or for the entire period between 
1987 and 2002.  For example, data limitations prevented an analysis of how often centers met 
the 2-year volume and survival rate requirements.  We note the time periods and number of 
approved centers for each of the data sources as they are referenced in the text. 
Below, we summarize our data sources.  Appendix B provides a more detailed methodology. 
	 Center-specific performance data.  To determine the extent to which centers met or 
did not meet the initial Medicare coverage criteria for volume and survival rate 
performance, we analyzed annual 1-year volume and survival rate data for the 90 
heart transplant centers approved for Medicare coverage between 1987 and 1999.  For 
that time period, we compared each centers annual volume and survival rate with the 
initial criteria for Medicare coverage and calculated how many times each center fell 
below or met the criteria.  Our analysis is similar to the criteria detailed in the 2000 
coverage update, but calculates 1-year survival rates with a full year of follow up. 
	 Review of files and applications of Medicare-approved centers. To document the 
number of voluntary notifications centers sent to CMS and any communications CMS 
made to centers about performance and reporting expectations, we reviewed 91 files 
and 22 applications of approved centers that CMS has maintained.  We also reviewed 
the 70 letters that centers sent to CMS in response to its 2000 letter reminding centers 
to report changes in their transplant programs. 
	 Phone interviews and on-site visit with CMS central office.  To document the 
approval process, CMSs ongoing oversight, and communications between CMS 
central office and approved centers, we conducted six phone interviews and one on-
site interview with CMS central office staff responsible for keeping track of and 
writing policy for heart transplant centers. 
	 Phone survey of CMS regional offices.  To determine the role of CMS regional 
offices in the oversight of heart transplant centers and the extent to which regional 
offices communicate with centers and with CMS central office, we surveyed each of 
the 10 CMS regional offices responsible for overseeing Medicare-certified hospitals 
and for informing beneficiaries about insurance. 
	 Survey of Medicare-approved heart transplant centers. To validate and 
supplement information we gathered from CMS files and staff interviews, we mailed 
a written questionnaire to 97 Medicare-approved centers and received 65 responses. 
	 Medicare claims data. To calculate how many Medicare beneficiaries received a 
heart transplant and how much those transplants cost, we analyzed Medicare payment 
data.  These data cover Medicare Part A payments for diagnostic-related group 
(DRG) 103 (heart transplants) from 1992 to 2000, a period for which we also 
received volume and survival rate data from the Scientific Registry. 
	 Interviews with expert reviewers and transplant center representatives.  To 
document perspectives on Medicare coverage of heart transplants and issues that 
physicians and centers face in addressing volume and survival rate, we conducted six 
interviews with expert reviewers of applications for Medicare coverage and with 
heart transplant center representatives. 
9

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  	 Literature review.  To further understand Medicare coverage of heart transplant 
centers and the volume and survival rate criteria, we reviewed relevant literature, 
including laws, regulations, policies, and guidelines, as well as journal articles. 
We conducted this inspection in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
10

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  FINDINGS 
From 1987 through 2000, 69 of 90 Medicare-approved heart transplant centers 
failed, at least once, to meet the initial approval criteria for volume and/or 
survival rate. 
The 1987 coverage decision for heart transplants stated that center approval will be for a 
three year period and extensions of approval will require submission of a continuation 
application and will not be automatic.9  CMS, however, never specified how centers were to 
submit continuation applications and never developed continuing performance standards for 
approved centers. 
In the 1987 coverage decision, CMS justified its volume and survival rate criteria, explaining 
that transplantation under such circumstances, and only under such circumstances is safe, 
effective, and widely accepted; that is, reasonable and necessary.10  Through the year 2000, 
45 of the 90 approved centers fell below the initial approval criteria for volume in at least 1 
year after their approval, and 53 of the centers fell below the initial approval criteria for 
survival rate in at least 1 year after their approval (see Table 2). 
Many Medicare-approved heart transplant centers fell below 12 procedures annually not just 
once, but in multiple years.  For example, one center performed fewer than 12 procedures 
annually for 8 consecutive years, including 2 consecutive years in which it performed only 1 
transplant.  From 1987 through 2000, 17 centers performed 6 or fewer transplants in a single 
year, yet retained their Medicare approval status. 
Table 2

Medicare-Approved Heart Transplant Centers 

Performing Below the Volume and/or Survival Rate Criteria, 1987-2000

Number of Centers Below Criteria 
Below Volume  Below Survival Rate  Below Both in 
(fewer than 12 procedures)  (less than 73 percent)  the Same Year 
At Least 1 Year Below 
45 (50%)  53 (59%)  24 (27%) 
Criteria 
3 or More Years 
27 (30%)  13 (14%)  2 (2%) 
Below Criteria 
3 or More Consecutive 
17 (19%)  7 (8%)  2 (2%) 
Years Below Criteria 
N=90. Source: OIG analysis of Scientific Registry of Transplant Recipients database as of 8/2/2002, containing volume and survival 
rate data from 1987-2000. These categories are not mutually exclusive: each cell is an independent summary of all applicable centers. 
Additionally, many Medicare-approved heart transplant centers fell below a 73 percent 1-
year survival rate multiple times (see Table 2).  For example, 2 centers fell below the survival 
rate criteria for 4 consecutive years.  Some centers had 1-year survival rates far below 73 
percent: 6 centers had a 1-year survival rate of 50 percent or less.  One center had a 1-year 
survival rate of 25 percent for a year in which 8 patients were transplanted.  Another center 
11

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  had a 1-year survival rate of 0 percent for a year in which the single patient transplanted died 
within the year. 
Twenty-four centers fell below both volume and survival rate criteria in a single year.  One 
center fell below both initial approval criteria in 4 consecutive years, but continued to be 
approved by Medicare. 
This variance in transplant center performance has implications for beneficiaries.  One effect 
is that many Medicare beneficiaries received transplants in low-performing centers that are 
located near approved centers that did meet Medicares initial volume and survival rate 
criteria for approval.  In the year 2000 alone, 35 Medicare-approved heart transplant centers 
fell below the initial approval criteria for volume and/or survival rate.  Twelve of these 
centers, 34 percent, were located within 10 miles of a center that performed above both the 
initial volume and survival rate criteria in 2000. 
From 1987 through 2002, 2 of the 99 approved centers voluntarily terminated their status by 
submitting a letter to CMS, requesting a change in their approval status to voluntarily 
terminated.  Some centers that retain their approval status, however, have performed at 
volume and survival rate levels below those of the two voluntarily terminated centers. 
From 1992 to 2000, 15 percent of Medicare beneficiaries who received a heart 
transplant did so in a Medicare-approved center that fell below the initial approval 
criteria for volume and/or survival rate in the year of their transplant. 
During the 8 years for which complete Medicare payment data were available, 583 of the 
3,847 Medicare beneficiaries who received heart transplants received them in centers that did 
not continue to meet CMSs own research-based initial criteria for quality.  These 583 
beneficiaries transplants accounted for $64 million in Medicare payments.11  Medicare paid 
$25 million for 232 beneficiaries transplants at centers that, after receiving Medicare 
approval, fell below the initial Medicare-approval criteria for volume; $32 million for 294 
beneficiaries heart transplants performed at centers that fell below the initial criteria for 
survival rate; and $7 million for 57 beneficiaries heart transplants performed at centers that 
fell below both initial criteria. 
The amount of Medicare payments going to centers that did not continue to meet the initial 
certification criteria increased fo urfold, from $3 million in 1992 to $13 million in 2000.  The 
number of Medicare beneficiaries receiving transplants at those centers similarly increased; it 
nearly tripled from 34 in 1992 to 98 in 2000. 
12

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  Over time, an increasing percentage of Medicare-approved heart transplant 
centers performed below the initial volume and/or survival rate criteria. 
The percentage of Medicare-approved heart transplant centers that performed below the 
initial Medicare-approval criteria for volume and/or survival rate rose from 15 percent (2 of 
13) in 1987 to 39 percent (35 of 90) in 2000 (see Figure 1). 
Figure 1 
Medicare-Approved Centers that Met or Did not Meet the Initial 
1-year Medicare Criteria for Volume or Survival Rate, 1987-2000 
70  64 
60 
rs  60  50  52  55  55  54  55 
e
nt 50 
Ce 40  37  37  36  35 
d  30  29 
e 27 
ov 30  22 
r 17 
pp 20  11  14  13  12  14  15 
A 8 
10  2  3  2  4 
0 
1987  1988  1989  1990  1991  1992  1993  1994  1995  1996  1997  1998  1999  2000 
Year 
Centers that did not meet the initial approval criteria 
Centers that met the initial approval criteria 
Source: OIG analysis of HRSA/Scientific Registry database as of 8/2/2002. 
Of the 90 centers approved through 1998, 48 fell below the initial approval criteria for 
volume and/or survival rate in 1999 or 2000.  In other words, in the 2 most recent years for 
which data were available, more than half of all approved centers fell below the initial 
approval criteria for volume and/or survival rate. 
Due to the lack of growth in the number of organ donations, the total number of heart 
transplants performed in the United States during the 1990s stayed relatively flat.  Even 
though the number of Medicare-approved heart transplant centers doubled in the 1990s (from 
45 to 90), the total number of transplants performed in these centers grew by only 51 percent. 
Eighteen of the 65 centers responding to our survey, and 3 of the 6 expert reviewers and 
transplant center representatives we interviewed, told us that the stagnant donation rate has 
reduced the average number of transplants performed annually at Medicare-approved centers. 
13

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  The lack of data and lack of criteria for ongoing performance limits CMSs ability 
to provide effective oversight of heart transplant centers. 
The 1987 coverage decision requires Medicare-approved heart transplant centers to report to 
CMS when they experience any events or changes which would affect [their] approved 
status...specifically...any significant decreases in volume and/or survival rates.  But CMS 
has not defined what level of decreases in volume and/or survival rate should trigger centers 
to report. 
CMS rarely receives data from heart transplant centers on their volume or survival 
rate. Although the 1987 coverage decision requires approved centers to maintain and 
routinely submit data to CMS, this has not happened.  The revised performance criteria 
issued in 2000 reiterated this requirement.  In both the 1987 and 2000 coverage decisions, 
however, CMS did not specify what type of information centers should maintain or the 
format in which to submit it.  In 1987, CMS stated that it would issue such instructions, but it 
has not done so. 
CMS lacks a system to monitor centers ongoing performance concerning volume or survival 
rates.  We base this assessment on discussions with CMS officials in its central office and 
each of its 10 regional offices, as well as data gathered from our survey of Medicare-
approved centers and through a review of relevant CMS files. 
In our survey of 97 approved centers, we asked if they had notified CMS of any change in 
their volume or survival rate in the last 5 years.  Of the 65 centers that responded, only 6 
indicated that they had notified CMS of changes in their volume or survival rate at some 
point between 1997 and 2002.  Yet, in 2000 alone, one-third of these 65 centers fell below 
the initial criteria for either volume and/or survival rate. 
In our file review, we examined the files that were available in CMSs central office for 91 
approved centers.  In those files, we found no documentation of centers submitting volume or 
survival rate information, except for the centers response to a specific request CMS made in 
2000.  In that year, for the first time in the 15 years of Medicare coverage, CMS mailed a 
letter to centers reminding them to report performance data. This letter triggered a one-time 
spike in reporting, which accounts for the majority of data on volume and survival rate that 
CMS has received from centers.  Both before and after this spike in reporting, centers have 
reported little information to CMS concerning volume or survival rate. 
CMS does not regularly obtain information from the Scientific Registry.  As we noted in 
the background to this report, another source of data on center performance is available to 
CMS: The Scientific Registry of Transplant Recipients.  The Scientific Registry is 
maintained under contract with the Health Resources and Services Administration.  All heart 
transplant centers, regardless of their Medicare-approval status, report volume, survival, and 
other transplant-related data to the Organ Procurement and Transplantation Network on an 
14

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  annual basis.  Since 2000, these data have been made publicly available on the Scientific 
Registry website (http://ustransplant.org). 
CMS does not have a system in place to receive these data directly from the Scientific 
Registry.  CMS does not have an arrangement with the Health Resources and Services 
Administration for the regular receipt of these data.  We found no indication that CMS 
routinely accesses the data on the Scientific Registrys website regarding heart transplant 
center performance. 
Without volume or survival rate criteria for continuing performance of approved 
centers, CMS has little basis for taking enforcement action against approved centers 
that fall below the initial Medicare -approval criteria for volume and/or survival rate. 
The 1987 heart transplant coverage decision states changes in the terms of approval may 
lead to prospective withdrawal of approval for Medicare coverage.  CMS, though, has not 
determined what type and level of changes in volume and survival rate would lead it to 
withdraw Medicare approval.  CMS also has not outlined steps it would take to address a 
low-performing center before withdrawing approval. 
In its 2000 letter reminding centers to report program changes, CMS stated that centers must 
report when they fall below the initial criteria under penalty of withdrawal from the Medicare 
program (see Appendix C).  However, CMS officials have since expressed a lack of certainty 
regarding CMSs authority to take such action, except in egregious cases, since clear 
guidelines for performance have not been developed.  According to CMS officials and our 
review of all CMS files on heart transplant centers, CMS has never withdrawn a centers 
Medicare-approval status (although, as noted before, two centers voluntarily terminated their 
programs). 
In our review of the files of 90 heart transplant centers that CMS possesses, we found 1 
example of CMS taking action against a center for falling below the initial Medicare-
approval criteria for volume and survival rate.  In this case, CMS conducted an on-site 
review and instituted a corrective action plan in response to a nationa l newspaper article that 
raised concerns about the centers survival rate.  CMS had approved this center for Medicare 
less than 3 months before the article was published. 
CMS has taken no actions to address approved centers that reported falling below the initial 
approval criteria.  When CMS sent centers a letter in 2000 reminding them to report program 
changes, 70 out of the 91 centers that were approved at that time responded.  However, CMS 
conducted no follow up on these responses or on the 21 centers that failed to respond to its 
letter. 
15

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  RECOMMENDATIONS 
Over the past 15 years, Medicare has covered heart transplants in many centers that, after 
approval, performed at levels below the initial approval criteria for volume and/or survival 
rate.  In a recent period for which data are available1992 to 200015 percent of the 
Medicare beneficiaries who received transplants received them in such centers.  This is a 
significant concern given that CMS, in its 1987 criteria for Medicare coverage of heart 
transplants, identified the initial criteria for volume and survival rate as key elements in 
ensuring quality.  In that statement of criteria, CMS noted the following: 
We believe that the most appropriate means of assuring that Medicare beneficiaries 
receive heart transplants under conditions that are safe and effective is to provide 
coverage only at those facilities with demonstrated experience and success.12 
Our report did not evaluate whether heart transplants were performed under unsafe 
conditions.  It measures only whether centers continued to meet Medicares initial volume 
and/or survival criteria.  However, by not developing volume and survival rate criteria for 
continuing performance, as it committed to do in its 1987 coverage decision, CMS has 
limited its capacity to ensure that Medicare beneficiaries receive heart transplants under 
conditions that are safe and effective.13 
CMS has taken some steps toward correcting this situation.  It convened a public meeting 
with stakeholders in 1999, established a work group to evaluate the volume and survival rate 
criteria, and has made progress during the course of this inspection toward developing 
Conditions of Participation for Medicare-approved transplant centers.  In its response to our 
draft report, CMS indicated that it will publish these draft criteria early in 2004.  The 
development of the Conditions of Participation offers the opportunity for CMS to strengthen 
its ability to oversee the performance of Medicare-approved heart transplant centers. 
We present three recommendations that would enable CMS to improve its oversight of the 
volume and survival rate performance of Medicare-approved heart transplant centers. 
CMS should expedite the development of continuing criteria for volume and 
survival rate performance and for periodic recertification. 
CMS stated its intention to do so in the 1987 coverage decision, in the 1999 town hall 
meeting, and in the 2000 memorandum that lowered the approval criteria.  The updated 
criteria could specify the volume and survival rate that centers must meet to be eligible for 
Medicare approval, as well as the specific requirements and time periods that the 
recertification process involves.  Upon determining the appropriate levels of performance and 
the procedures for maintaining continuing approval, CMS should clearly communicate them 
to all approved heart transplant centers. 
16 
Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  CMS should develop guidelines and procedures for taking action when centers 
do not meet Medicare criteria for volume and survival rate. 
Once CMS establishes clear criteria for performance, it could determine the performance 
threshold and corresponding steps necessary to take action if centers fail to meet the criteria. 
For example, it could define the extent to which centers can fall below the performance 
criteria without triggering CMS action.  It also could develop guidelines that define when 
poor performance constitutes immediate jeopardy to patients, triggering review of the 
centers Medicare approval status.  It could define the length of time over which low 
performance would warrant specific actions.  CMS could establish levels of approval that 
would determine the degree of its oversight, develop corrective action plans for centers that 
fall below the criteria, and outline termination processes for centers that are unable to meet 
the criteria over time. 
CMS should take immediate steps to improve its ability to maintain accurate and 
timely data on center performance. 
Because the development and implementation of a new system for the approval, periodic 
recertification, and oversight of heart transplant centers may be lengthy, there are steps CMS 
can immediately take to improve its oversight of Medicare-approved heart transplant center 
performance.  Obtaining Scientific Registry data is a first step toward the routine tracking 
and analysis of heart transplant center performance data.  This would eliminate CMSs 
reliance on center reporting as the sole source of data on program changes. 
While developing an arrangement for the regular exchange of performance data from the 
Health Resources and Services Administration, CMS could request or obtain the publicly 
available data on volume and performance since 1987 from the Scientific Registry.  Using 
these data, CMS could identify instances in which centers fail to meet the ongoing criteria for 
volume and survival rate, once they are defined.  With regular performance data coming from 
the Scientific Registry, CMS can be better informed in the future regarding its oversight 
efforts. 
Moreover, CMS could use volume and survival rate data from the Scientific Registry for 
quality improvement efforts.  It could make that data available to the public to encourage 
more informed decision-making by beneficiaries.  Many of the centers that fell below the 
initial criteria are located a short distance from another center that meets or exceeds the 
initial approval criteria.  This knowledge about the comparative quality of care of centers 
could facilitate the publics informed decision-making about their health care. 
17

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  COMMENTS ON THE 
DRAFT REPORT 
We received comments on our draft report from the Centers for Medicare & Medicaid 
Services (CMS) and the Health Resources and Services Administration (HRSA). 
These agencies agreed with our recommendations and described steps that they are taking to 
address them.  In particular, we are encouraged that CMS and HRSA plan to publish a 
proposed rule that includes survival criteria for initial approval and reapproval of transplant 
centers.  We are pleased that this proposed rule will include a process that CMS will follow if 
centers do not meet ongoing performance criteria. 
We would, however, like to address two points that these agencies comments raise. 
First, the agencies raise concerns about our reliance on Medicares volume and non risk-
adjusted survival criteria as a basis for assessing center performance.  For this inspection, we 
focused on the Medicare coverage criteria that were established in 1987and that have not 
yet been revisedas measures of center performance.  Newly approved centers are required 
to meet the volume and outcome criteria set forth in these coverage conditions.  It seemed 
reasonable to us to assess their continued adherence to these criteria once they become 
Medicare-approved. 
Second, the agencies indicate that the Department of Health and Human Services (HHS) 
oversees transplant centers through the Organ Procurement and Transplantation Network 
(OPTN).  For example, they point out that any center that did not meet Medicares volume 
and survival criteria would have been reviewed by the OPTN using risk-adjusted 
performance criteria.  We recognize the important oversight role played by the OPTN and 
intend to look more closely at it in the future.  Certainly the OPTNs review of center 
operations and quality serves a valuable purpose as one component of oversight.  However, 
since CMS is the regulatory agency with responsibility for ensuring quality care for Medicare 
beneficiaries and for protecting the Medicare Trust Fund, it is the accountable agency so far 
as Medicare participation is concerned. 
Input from a collegial, scientific organization is not the same as regulatory oversight of 
participating centers.  HHS oversees the performance of the OPTN as a private contractor; 
that oversight does not extend to using that contractor for approval of centers for 
participation in Medicare. 
18

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX  A 
AGENCY  COMMENTS

19

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX  A 
20

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520
 APPENDIX  A 
21

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520
 APPENDIX  A 
22

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520
 APPENDIX  B 
METHODOLOGY

In 1987, Medicare published criteria that heart transplant centers must meet to be approved 
for coverage.  Among other criteria, Medicare approval required centers to have transplanted 
12 or more patients in the 12 months preceding the application and to have achieved a 73 
percent 1-year survival rate.  The coverage decision identified volume and survival rate as 
key indicators of quality and required centers to report if they fall below these criteria. 
Between 1987 and 2002, Medicare approved 99 heart transplant centers. 
Number of Heart Transplant Centers Approved for Medicare, 
by Year of their Effective Approval 
Number of Approved  Number of Approved 
Centers  Centers 
Effective  Approved  Cumulative  Effective  Approved  Cumulative 
Year of  Per Year  Total  Year of  Per Year  Total 
Approval  Approval 
1986  13  13  1995  7  79 
1987  4  17  1996  5  84 
1988  7  24  1997  3  87 
1989  10  34  1998  3  90 
1990  11  45  1999  0  90 
1991  5  50  2000  4  94 
1992  12  62  2001  4  98 
1993  4  66  2002  1  99 
1994  6  72 
Source: CMS website 
For this report, we reviewed several sources of data related to the volume and survival rate 
criteria and the reporting requirement.  Some approvals made were made retroactive to 1986. 
We were unable to access data for each of the 99 approved centers or for the entire time 
period between 1986 and 2002.  In those cases, however, we noted the limitations of the data 
in the text. 
Center-Specific Performance Data 
We used Microsoft Excel and SAS, a statistical analysis program, to review and analyze 
each centers 1-year volume and survival rate.  Our data analysis covers every year from 
1986, when Medicare retroactively attributed coverage, to 2000, the most recent year of data 
available.  These data allow post-approval performance analysis of all 90 Medicare-approved 
heart transplant centers approved before the year 2000.  These data allowed us to track how 
many centers per year met or did not meet the initial Medicare coverage criteria for volume 
and survival rate performance and to what extent they did not meet the criteria over time. 
Performance data represent only adult heart transplants. 
23

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX  B 
We obtained each centers 1-year volume and survival rate data from the Health Resources 
and Services Administration (HRSA).  HRSA synthesized volume and survival rate 
information from data it received from its contractor, the Scientific Registry of Transplant 
Recipients.  The Scientific Registry collects, analyzes, and releases data on heart transplant 
centers, including volume and survival rate.  We requested annual volume and survival rate 
data from 1986 to 2002, but HRSA staff who provided us with Scientific Registry data told 
us that data were incomplete, at the time of our request, for years after 2000 given the time it 
takes to input and analyze the data. 
We also interviewed HRSA and Scientific Registry staff to find out the extent to which they 
validate data that centers report.  They told us that they validate survival rate through 
comparing center reports with Social Security records.  In turn, we attempted to validate the 
Scientific Registry data through comparing figures from the Scientific Registry and from the 
Organ Procurement and Transplantation Network (OPTN) another HRSA contractor that 
collects and manages data from heart transplant program.  However, the Scientific Registry 
and OPTN calculate and publish their data differently, making comparisons difficult. 
Although OPTN has volume and survival rate data publicly available on the Internet, the data 
do not correspond with the calendar year time period on which we based our analysis.  While 
the Scientific Registry gave us volume and survival rate for every year (January 1 to 
December 31), OPTN calculates data for a 3-year cohort, which it published on its website. 
To determine the distance between centers, we used a SAS program to calculate the distance 
between the geographic center of each zip code in which a heart transplant center is located; 
we did not use street addresses to calculate distances.  The resulting distances are therefore 
approximate, not exact, center-to-center distances. 
Incomplete volume and survival rate records and a lack of accurate data on the review and 
approval process for each center prevented several analyses, including: how often approved 
centers met the approval criteria at the time of their approval, and how often centers met the 
2-year volume and survival rate. The 1-year criteria that we used to assess center 
performance are a lower threshold than using both the 1-year and the 2-year criteria for 
volume and survival rate. 
CMS posts on its website the effective date of approval for each Medicare-approved heart 
transplant center.  We used these dates to determine the effective year of approval for each 
approved center.  Two of these dates were incorrect.  Fairview University in Minneapolis, 
Minnesota and Clarian Health in Indianapolis, Indiana are incorrectly listed as approved in 
1997.  Both centers indicated, in response to our survey, that their effective dates of approval 
were 1986. 
Review of Files and Applications of Medicare-Approved Centers 
While on-site at CMS headquarters in Baltimore, we collected and reviewed all files 
associated with heart transplant centers, including center applications and CMS-center 
correspondence.  CMS staff told us that they were unable to retrieve some files and 
documents.  CMS did not have 8 files and 77 applications of the 99 centers with effective 
24

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX  B 
approval dates between 1986 and 2002.  In the process of moving office locations, CMS staff 
responsible for transplant facilities purged or stored documents, such as waivers, 
applications, and subsequent correspondence, in the Federal Archives. 
Using an Excel spreadsheet, we documented what the available files and applications 
contained.  We recorded the number of voluntary notifications centers sent to CMS and any 
communications CMS made to centers about the reporting criteria and performance 
expectations.  If such notifications and communications existed, we documented the contents 
of those documents. 
Two centers took steps to voluntarily terminate themselves from Medicare coverage. 
Although these steps occurred recently, in 2002, CMS staff told us that documents related to 
these steps to terminate are incomplete, similar to the other files.  We extracted as much as 
was available and for greater details reviewed the two cases with CMS staff during our on-
site visit. 
We also obtained the letter CMS gave to heart transplant centers on June 6, 2000, to remind 
them of their obligation to report changes in their transplant program (see Appendix C). 
Seventy out of the 91 centers that Medicare had approved by that time responded to the 2000 
letter.  We reviewed the 2000 letter and centers responses and documented how many 
centers reported significant decreases in their volume and survival rate. 
Phone Interviews and On-Site Visit of CMS Headquarters 
To document the approval process, CMSs ongoing oversight, and communications between 
CMS headquarters and approved centers, we conducted four phone interviews and one on-
site interview with CMS headquarters staff in the Office of Coverage and Analysis Group 
(OCAG), who oversee the Medicare-approval process and post-approval performance of 
heart transplant centers.  We also conducted two interviews with CMS staff from the Office 
of Clinical Standards and Quality (OCSQ), which is responsible for writing policy for heart 
transplant centers.  In July 2001, policy decisions related to heart transplant centers were 
moved from OCAG to OCSQ=s Division of Institutional Quality Standards. OCSQ is 
currently in the process of reevaluating the existing standards and developing Conditions of 
Participation. 
Phone Survey of CMS Regional Offices 
We developed a telephone survey protocol for CMS regional office staff responsible for 
overseeing Medicare-certified hospitals, including those with Medicare-approved heart 
transplant centers.  We inquired about the role of CMS regional offices in the oversight of 
heart transplant centers and the extent to which regional offices communicate with centers 
and with CMS headquarters in Baltimore.  We interviewed the four CMS regional offices of 
OCSQ, and the nine regional offices from the Division of Survey and Certification (DSC). 
We also spoke with two regional offices in the Division of Beneficiary Health Plans and 
Providers (DBHPP), which provides information to Medicare beneficiaries about insurance. 
25

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX  B 
Surveys to Medicare-Approved Heart Transplant Centers 
We designed a written questionnaire and received 65 responses from the 97 approved centers 
that we were able to contact.  Addressed to directors of each centers transplant programs, we 
mailed the survey twice to increase the response rate.  We recorded the survey results on 
Microsoft Access template and aggregated the results using Access queries. 
We used the survey results to validate and supplement the information we gathered from 
CMS files and regional/headquarter staff interviews.  We asked centers about waivers they 
received for low volume and survival rate, any reports of program changes that they gave to 
CMS, and their experiences in meeting the performance criteria.  We then compared the 
survey response with what we found in CMSs files. 
Medicare Claims Data 
Using SAS, we analyzed claims data from the CMS Customer Information System (HCIS). 
Since 1992 to the present, CMS has used HCIS to summarize Medicare claims data. From 
HCIS, we extracted Medicare Part A payments captured under diagnostic-related group 
(DRG) 103, the DRG for heart transplants.  The data cover 1992 to 2001, the earliest and 
latest years of data available.  We recognize that other Medicare costs are associated with 
heart transplants, such as Part B payments, immunosuppressant drugs, and diagnostic 
procedures.  However, we focused solely on the Part A, DRG 103 amount to calculate the 
number of Medicare beneficiaries receiving heart transplants in approved centers and their 
corresponding costs. 
For 11 states, HCIS did not have center-specific information to calculate how many 
beneficiaries receive a heart transplant and how much those transplants cost.  Because we 
used each center as the unit of analysis in matching center performance data with claims data, 
it is likely that we have undercounted the number of beneficiaries who received transplants in 
a center that did not meet the initial criteria for Medicare approval, and therefore, 
undercounted the costs for these transplants.  For example, in 1998, we know that five 
centers in Texas, Utah, Virginia, Washington, and Wisconsin fell below the volume and/or 
survival rate criteria.  However, HCIS did not contain center-specific information for these 
States in that year.  As a result, we were unable to calculate the number of Medicare patients 
and associated costs given to those low performing centers using HCIS. 
We conducted a separate analysis of those missing centers using Medicare Provider Analysis 
and Review (MEDPAR) data, which increased the total amount Medicare has paid for 
Medicare-approved centers below the initial criteria for volume and/or survival rate by 3 
million dollars, and the total number of beneficiaries who received transplants in such centers 
by 33.  We did not combine data from MEDPAR and HCIS due to discrepancies between the 
systems.  These figures, however, would only increase the total dollars spent and 
beneficiaries affected. 
Also, we identified eight heart transplant centers that changed their Medicare Provider 
Number.  Five of these centers changed their Medicare Provider Number due to a merger 
26

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX  B 
with another hospital.  In those cases, because we used centers as our unit of analysis, such 
mergers did not affect our yearly totals.  Three of these centers received Medicare payment 
despite being denied approval. 
Interviews with Expert Reviewers and Transplant Center Representatives 
We developed interview protocols and conducted interviews with three expert reviewers of 
applications for Medicare coverage and for three heart transplant center representatives. 
These interviews gave us insight into how, if at all, expert reviewers and centers 
communicate with CMS regional and headquarters staff about heart transplants, including the 
criteria to report program changes and performance expectations related to volume and 
survival rate.  These interviews also allowed us to document the current and historical 
perspectives to Medicare coverage of heart transplants and issues that physicians and centers 
face in addressing volume and survival rate. 
Literature Review 
We performed a literature review, covering relevant laws, regulations, policies, and 
guidelines.  We paid particular attention to the 1987 and 2000 coverage criteria that outline 
the conditions under which Medicare would cover heart transplants, including the 
requirements to meet initial volume and survival rate criteria and to report program changes 
to CMS.  We also reviewed OPTN data and documents related to center performance and 
reporting requirements, given that OPTN has similar requirements it uses in overseeing heart 
transplant centers.  We reviewed journal articles that address the link between volume and 
survival rates. 
27

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  APPENDIX C 
28

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520
 APPENDIX C 
29

Medicare-Approved Heart Transplant Centers  OEI-01-02-00520
 APPENDIX D 
ENDNOTES

1  Robert Wolfe et al., Final Analysis for the Data Request from the ACOT Multicultural Issues 
Subcommittee Meeting of April 24, 2002, Scientific Registry of Transplant Recipients Meeting 
Materials, Table 2:13, 7.16. 
2  U.S. Department of Health and Human Services, HHS Secretary Unveils Organ Donation 
Documentary HHS press release, 9 April 2002.  Retrieved from 
http://www.hhs.gov/news/press/2002pres/20020409.html, 12 July 2002. 
3  Criteria for Medicare Coverage of Heart Transplants, 52 FR 10,935, April 6, 1987. 
4  Ibid. 
5  U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services, 
Medicare Coverage Policy, Transplant Centers: Re-Evaluation of Criteria for Medicare 
Approval, Decision Memorandum, 26 July 2000. 
6  The 1-year and 2-year survival rates remained at 73 percent and 65 percent, respectively.  The 
minimum number of transplants and the period of follow-up experience, however, changed with 
the volume requirements.  These changes are reflected in Chart 1. 
7  Criteria for Approval of Facilities to Perform Covered Heart, Liver, Lung, Pancreas, and 
Intestinal Transplants, Unified Agenda, 67 FR 74,524, December 9, 2002. 
8  U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services, 
Medicare Coverage Policy: Re-Evaluation of Criteria for Medicare Approval of Transplant 
Centers, Summary of Town Hall Meeting, 1 December 1999. 
9  Criteria for Medicare Coverage of Heart Transplants, 52 FR 10,935, April 6, 1987. 
10 Ibid. 
11  In our analysis of Medicare claims data from CMS Customer Information System, we found 
eight provider numbers that did not match any of the ones associated with centers approved for 
Medicare.  According to the CMS files we reviewed, one of these Provider Numbers matched a 
center that withdrew its application for Medicare approval in 1996.  This center received 
payments from Medicare of $51,633 in 1992. 
12  Criteria for Medicare Coverage of Heart Transplants, 52 FR 10,935, April 6, 1987. 
13  Ibid. 
30 
Medicare-Approved Heart Transplant Centers  OEI-01-02-00520  ACKNOWLEDGMENTS 
This report was prepared under the direction of Mark R. Yessian, Ph.D., Regional Inspector 
General for Evaluation and Inspections in Boston and Joyce M. Greenleaf, MBA, Assistant 
Regional Inspector General.  Other principal Office of Evaluation and Inspections staff who 
contributed include: 
Steve Keenan, Lead Analyst  Bambi Straw, Program Specialist

Chaletta Huertas, Program Analyst

Russell Hereford, Project Leader

Medicare-Approved Heart Transplant Centers  31  OEI-01-02-00520