---
/'. 
. . ,. 
Department of Health and Human Servces 
OFFICE OF 
INSPECTOR GENERAL 
ADDRESSING INCREASED ORGAN 
ACQUISITION COSTS 
A MANAGEMENT ADVISORY REPORT 
.. SERVICl 
Richard P. Kusserow 
t E 
INSPECfOR GENERA 
Irdla  OEI-Ol-81331  EXECUTIVE  SUMMAR 
PUROSE 
To identif 
opportunities for improving the effciency of organ acquisition systems 
without adversely affecting the quality or quantity of organ transplantations. 
BACKGROUN 
This brief report is a follow up to two prior Offce of Inspector General report urging 
that the Health Care Financing Administration (HCF A) address the increasing costs 
sae 
for organ acquisition. It presents the  basic recommendations presented in a 
November 1988 report. Those recommendations were supported by the Public Health 
Servce and members of the professional community, but were opposed by HCF 
We reintroduce the recommendations, cited below, because (1) the ineffciencies we 
descn"bed in the prior report continue to exist, (2) fiscal oversight of organ 
procurement organiztions is stil liited and uneven, and (3) kidney acquisition 
expenditures per transplant appear to be much higher than previously assumed. 
RECOMMATIONS 
Support Denstin Prjects Incrpratig Ki Trlan an Acqn
un  Dign 
Relte 
Group.  Ex  Tr 
Pr  Ki Acq  Re  Ce. 
Condt  Aud of 
of 
Eslih  Acqn Co 
Ce  UniorPm Frisecam Ov ergh of th Oran  of al Medare-
Orantins 
Oran  Sta 
Nomlle  Pretrlt 
Esblih, for  of 
Reiurem 
Tes 
Laboratory 
Pr  Prel 
Med-Ce 
Alw for On On  Laborary for  Tesg in Eah 
Se Ar 
Orantin 
Oran  .......................................................... ..,....................................... 
. ..  ....  
. . . . . . . . . . . . . . . . . . . . . . . . . . . 
. . . . ..  .. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -. .  . .. .  . .. .   ....    ....    .....     .....     .....     .....    . ... .   . ... .    ....    ....    ... .  ...    ...   ..  . .. 
TABLE OF CONTENTS 
.ECU S'UY 
INODUCfON 
Pu 
.. 1
Backgound 
... 8 
RECO:MATIONS 
.................................. 3 
Support Demonstrtion 
Projec Incorpratig Kidney
Traplantation and Acquisition under a DRG ............... 3
Conduct Prority Audits of Kidney Acquiition Exnditues

of Renal Traplant Centers  .. 3
Fis 
Establih Uniorm  Orga Acquiition

OVersight of the 
Cots of al Medcae- Organi7.ations . 3
Certed Orga Procement 
Purp,  Stadadi 
Establih, for Reimburement 
Pretrplant 
Nomenclatue of  Laboratory Tests 
Alow for Only One Medicae-Certed Laboratory for

Pretrplant Testig in Each OPO Servce Area . . . . . . . . . . . . .. 4
CONCLUSION 
APPENIX A 
Comments on November 1988 OIG Management
Adviry Report Entitled "Kdney Acquiition Cots" ......... A 
APPENIX B 
Endnotes  . . . . . . . B- INTRODUCTION

PUROSE 
To identify opportunities for improving the effciency of organ acquisition systems 
without adversely affecting the quality or quantity of organ transplantations. 
BACKGROUN 
Prr DIG Reprt

In September 1987, we issued a final inspection report entitled "Organ Acquisition 
Costs: An Overvew " (OAI-01-86-oo108). That report indicated that organ 
acquisition systems were operating without sufficient attention to costs. It called upon 
the Health Care Financing Administration (HCF A) to amend the Diagnosis Related 
Group (DR G) for kidney transplantation to include all costs associated with 
acquisition as well as transplantation. 
In November 1988 we issued a follow-up management advisory report entitled Kidney 
Acquisition Costs " (OAI-01-88-01330). Taking account of widespread comments on 
the DRG recommendation, this brief report urged RCF A to conduct demonstration 
projects incorporating kidney transplantation and acquisition und  r a DRG. It also 
directed four other recommendations to HCF 
A, each intended to improve the
effciency of organ acquisition systems without adversely affecting the quality or 
quantity of organ transplantation. 
The Public Health Servce reacted positively to our recommendations as did members 
of the professional community. The RCF A, however, disagreed with the 
recommendations (see appendix A). We then initiated the conflct resolution process
by holding a meeting with HCF A officials to discuss the recommendations. As 
stipulated in Departmental procedures concerning that process, it was incumbent upon 
RCFA to follow up that meeting by presenting a plan on how it intended to proceed. 
It did not do so. 
Ratina for Repeg Prr Recommtins 
In this report, we present the same basic recommendations to RCFA We repeat
these recommendations for three major reasons. One is that the ineffciencies 
documented in our 1987 report continue to exist, with Medicare providing 100 percent 
reimbursement of covered costs. Fiscal oversight is stil limted
, most especially with 
respect to pre transplant laboratory costs, and uneven, with 50 independent organ 
procurement organiztions (OPOs) being subjected to guidelines and procedures 
different from those of the 19 hospital OPOs. Also, there is stil widespread variation  in pretransplant testing procedures, termnology, and costs and unnecessary duplication 
of pretransplant testing in various OPO servceeas. 
A second major reason for reintroducing the prior recommendations is that Medicae 
Although recent cost inormation is 
organ acquisition costs continue to escalate. 
incomplete, we do know that total kidney acquisition expenditures of independent 
OPOs rose by about 30 percent from the end of  199from $60. 
1988 to the end of 
3 These total do not 
millon to $78.7 milon. include the substantial kidney acquisition 
expenditures of hospital OPOs, pretrnplant  Medicae-certifed renal 
laboratories, or 
transplant hospitals, of which there were 224 on July 15, 1991. It is also relevant to 
note that from December 31, 1988 to July 15, 1991, the kidney waiting list maintaied 
by the United Network for Organ Sharg (UNOS) rose from 13,947 to 18,830. 
Nearly all of these individuals are incurrg ongoing Medicare reimbursable costs for 
tests, whether or not they ever receive a transplant. 
Finally, a third reason is that kidney acquisition expenditures per transplant appear to 
be much higher than pervously assumed. On the basis of information obtained from 
biIg 
HCF A  records as well as from cost report, those expenditures appear to be 
closer to $20 00 to $30,000 than the $10 000 estimated earlier.  RECOMMENDATIONS

Trltn 
Densn  Ki  Acqn
Prjec Incrprag  an 
Suunppo rt 
a DRG. 
In response to our 1987 report, HCFA noted that it agreed in priciple with the idea 
of a prospective payment approach to kidney acquisition, but expressed concerns 
about the operational details and the adequacy of the cost data avaable. 
recogned the signifcance of those concerns and for that reason urged in our 1988 
report that HCFA support demonstration projects. We reiterate that recommendation 
here and call for HCF A both to announce its readiness to fund such demonstrations 
and to state the specifc questions it expects the demonstrations to address. 
In the interim, as the demonstrations are underway, we believe it is essential for 
HCF A to introduce a much greater sense of cost-consciousness in organ acquisition 
systems. Through the initiatives identifed below it ca make important progress in 
that direction. In the process, it can also contribute to the development of cost data 
that provide a much more appropriate basis for caculating a DRG than do existing 
data, which reflect the inefficiencies of the current 
system. 
Ki Acqn Exes  Ce. 
Condt Prri Aud of  of Ren Trlant 
The Medicare intermediaries servg these centers tend to give relatively little 
attention to organ acquisition costs. Ths is priarily. because these costs tend to 
represent a small portion of the overall Medicae costs in the hospitals of which the 
specifg 
transplant centers are a part. By  in an annual audit instruction that the 
intermediaries should give special attention to organ acquisition costs, HCF A could 
add an important measure of fisca oversight and gain valuable inormation about 
current practices. 
, In carrng out this recommendation, HCF A should give priority attention to the 19 
transplant centers that also serve as Medicare-certifed organ procurement 
organiztions (OPOs), since they account for a large share of overal Medicare 
expenditures for organ acquisition. However, because of escalating costs, we believe it 
is important to improve fiscal oversight of all transplant centers' expenditures for 
kidneyacquisition. 
Eslih  Acqn Co 
Ce  UniorPm Frisecam Ov ergh of th Oran  of al Medar-
Oranns 
Oran 
It is vital that all 69 OPOs function under the same set of fiscal guidelies and the 
same degree of oversight. This is not now the cae, as the 50 independent OPOs, 
which are servced by a single intermediary, tend to be subject to different 
guidelies
and greater scrutiny of their costs than the 19 hospital OPOs, which are servced by 
whatever intermediary servces their hospital.  We urge HCFA to introduce more consistent and rigorous oversight by using the 
ca 
-Ihould 
servces of a single intermediary for al OPOs. out this 
recommendation in the way if fids to be technically most feasible. For the 19 
hospital OPOs, this could involve the single intermediar servg in 
an overseer 
capacity, makg recommendations to the Medicare intermediary servcing the 
individual hospitals. 
Pr1a
Sta Nome 
Establi for  of 
Reiur 
Laorary Tes 
signcat 
Pretransplant laboratory tests accunt for a  proportion of organ acquisition 
7 And, they almost 
costs. certly accunt for a growig proportion, as the number of 
individuals on organ transplant waiting lits has soared-from 13, 197 at the end of 1987 
to 23,711 on July 15, 1991. Individual on these lits, whether or not they ever receive 
a transplant, generate substantial ongoing costs for various tests as long as they remain 
on the list. 
Because of widely varyng terminology concernng these tests, HCF A' s Medicare 
intermediaries essentially are unable to determe the reasonableness of the costs 
8 To address the 
reported for these tests. situation, we urge HCFA to authorize the 
Medicare intermediary servcing the 50 independent OPOs to convene a group of 
experts to develop a standardized nomenclature for pretransplant laboratory tests that 
all laboratories would then have to use in reporting their costs for. Medicare 
Pr 
reimbursement. 
Medar-Ce 
AHow for On On  Laoratory for  Tesg in Each 
Sere 
OPO 
Enactment of this recommendation would avoid much unecessar duplication of 
1o 
pretransplant laboratory work that now occurs in many metropolitan areas. This 
duplication, as we described previously, can add not only to the cost of organ 
, acquisition, but to the time elapsed from the point of organ retrieval to 
, transplantation.
This recommendation, which may call for legislation, rests on much. the same rationale 
that Congress relied upon to allow only one OPO in each servce area. It would 
eliinate competition which serves to increase rather than reduce costs and would 
provide a central point of accountabilty for intial work-ups, on-going antibody 
screens, crossmatching tests involvig sera from donated organ and potential 
recipients, and other appropriate tests.  CONCLUSION 
Organ acquisition providers have remained by and large free from the cost pressures 
facing the rest of the health care industry. They continue to be reimbursed for all 
Medicare covered "reasonable costs " with little incentie to introduce effciencies. 
The recommendations set forth in this report offer a way of improvig thi situation 
gradually and carefully, without adverse effects on organ transplantation. They have 
been refied over a number of years and have received considerable examination by 
and support from the professional community. We strongly urge that they be enacted.  APPENDIX A 
COMM 
ON NOVEER 198 
OIG MAAGEMNf ADVIORY REORT 
'KNEY ACQUlSmON COST" 
(OAI-OI-81330)  ' .
---
IU!,  Htalth C.,g 
DEPAlITMENf'OP HE.ALTH &L HtJMANSERVICIS  FlnlnOino Admlnlltrltlcn 
I/  1 0 
19t5e  Memorandum 
lite 
Terry Coleman
rom  Actfn9 Administrator 
, O G Management Advisory Report,  "Kidney Acquisition COltS 
;ub)ItCI  OAI-Ol-8B-D1330 
The Inspector General 
Office of the Secretary 
sition costs" 
We have reviewed the management report on kidney acCtu1  The
resuHs of this management adv1 sory report wl1l be useful to ' us as we 
costs. 
continue" to refine the MediC4re program in the aria 01 organ acquisition
Our comments on the &pecff1c recommendations are attached for your 
consideration, Thank you for the opportunity to comment on this report. 
Attachment  ---
-- 6 
tion
OIG Recomend 
and 
support demonstration project  incorporating kidney transp1ontat1on) 
acquisition under I diagnosis related group (bRG). 
HCFA Comments 
At the currtnt .,time, we do not have p' ans to do & demonstration project on 
incorporating transplantation and ac uisition costs into I DRG. 
OIG Recommendation 
Conduct priority audits of the kidney ac uis1tion expenditures of those

renal transp1 ant centers that HCFA has desi gnated as organ procurement

organizations (OPOs). 
HCFA Comments 
termediaries ' to c'osely review pass..through 
HCFA instructions advise 1n rehthe'y small in rel 
costs. Kidney acquisit10n costs are  t1on to other 
pass-through costs. Given the finite , funding for  udit activities, we 
more susceptible to 
believe it more prudent to focus an areas which Ir 
abuse involving s1gn1f1cant1y larger dollar- amounts at 1S U8. 
TOI'G  Recommendation
certified 
Establish more consistent and rigorous oversight of the HCFA .
OPOs. 
.t 
HCFA ,Comments
HCFA is current1y developing the recertifying standards package for OPOs. 
oversee OPOs. 
Inc1uded in the package are standards for accounting and fiscal 
pro  edures. , We have no current p1 ans for desi gnating I s1n;1e 
1ntermedi ary to 
OIG Recommendation 
Move toward the estab'1snment of on1y one Medicare certified laboratory 
area. 
for pretransp1ant testing in each OPO service  ---
Page 2

HCFA Comments

1ni-t1at1ve. There is no

It appears that this is not the time for such an'
 participation
current regu1 atb Y authority in the 
 ed1 care Conditions  ot 
des1gnate a sing1. pretransp1ant laboratory

for providers or suppliers tO 
for. each OPO. C rrentlY, h1$toeompat1bil1ty testing is tfroeart ed as I

per..sonne1,
specialty 1n an independent hborator,y with reaquritirceimpeantt1s,on in a cell 
. quality cont"'ol  mainten  nce Of , records and 
s J whethe 
exchange progr.m., Hi stocompat1bi11 ty , aboratories in hospi 
The 
hosp1ta1 based or freestanding, must meet the Sime requirements. 
histocom!)at1b111ty laboratory 
cond1.t1ons do not specify the methodo'ogy a 
must use in testing and surveyors have no means of identifying

dup1icative pretransp1ant testing.

OIG Recommendation

EstabliSh  reimbursement pur  ose$, a standardized nomeclature of 
tor 
to.,y tests. 
pretransp ant 1abor 
HCFA Comments
This recommendation could be implemented if HCFA decides it wishes to take

he resources necess ry to force the industry to

the 1ead and devote 

such a list would roqu1r. staff

accept standardization. Preparation Of 
wi!h scientific knowledge of llbor tory testing IS we11 as reimburseMent

specialists. We wi" consider seeking the assistance of the Public Health

e , of pretransplant 
Service in establishing the standardized nomenc'atu 
boratory tests.  .._ 
- - --.  .-- -.. -.-. ...-- -'-,-.. - - ,,,-:_  --, ......... . '- J._ 
e-"",
DEPARTMENT OF HEATH &. HUMA 
SER 
pUblic tte"ith Service 
Memorandum 
Date  . FES  I:JV 
From  Deputy Assi stant Secretary for Hesl th Operat ions and 
rector  nagement 
Di  Office of 
SubjeCt  Comments on the OIG Management Advisory Report "Kidney Acquisition Costs, 
I-OI-88-01330, November 1988 
Inspector General, OS 
At tached are the PHS comments on the subject report. Since the 
findings and recommendations contained in the report are directed to the 
Health care Financing Aeministration; we have confined our response to 
general and technical c mments. 
Attachment  ---
a:1f ,
OF 'GI PFUL IC HF1H SERVICE at 'T OFICE 
INSt'tI:JlM  (OIG) 1\'I(i.1 ADVISUY P.tRJHT, 
lnl NXISI  OO OOTS It 
01330  NOVH 
PH in this 
Even though there were no recomendations to  management 
advisory report, we support all of the OIG' s recomendations on the organ 
our general coments 
acquisition costs issue. The following are  on four of 
the recomendations directed to HCA. 
Support Deonstrat ion Projects Incorporat 
ing Kidney Transplantat ion 
and Acquisition under a 
PHS supports, in principle, the idea of including standard kidney 
acquisition charges in a Diagnosis Related Group (DR). We believe that 
the demonst rat ion projects, as descr ibed, would be essent ial for 
implementing this policy in a way that would limit the potential for 
inadvertently creating disincentives for organ procurement. 
Establ ish More Consistent and Rigorous CWersight of the HCA 
ganizations 
rtified  gan Procurement 
PHS supports the establ ishment of a report ing and monitoring system for 
renal transplant centers which parallels the oversight currently being 
performed on the independent organ procurement organizations (CPs). CPs

are now reviewed on an annual basis by their Medicare intermediary, and

acquisition fees are adjusted to reflect actual costs.

Establishment of Only One Medicare Certified 
Move Towards  the 
Laboratory for Pretransplant Testing in Each OPO Service Area 
PH agrees that 
there appears to be overlap and duplication of testing in 
the hi stocompat ibi 1 i ty laborator ies. However, the laborator ies might 
resist consolidation because it may require closure of some facilities. 
OIG could consider recomending that a demonstration project be conducted 
of the problem and the feasibi 
to determi ne the  extent  11 ty 
con so I i da t i on . 
Establ ish for Reimbursement Purposes, a Standardized Nomenclature of

Pretransplant Laboratory Tests

PHS agrees that the lack of standardized vocabulary presents a problem 
determining comparability and con istency of costs among histocompatibility
laboratories. 
PHS, therefore, supports establishment of a standardized
nomenclature.  . . . . --. -. 
. . 
Page 2
Techn i CA 1 Commen t 5 
Page 3 , last paragraph
that " 
OIG should clarify its statement  . it is especially important to
take into account the fact that nat 
ionally procured kidneys tend to be more 
expensive than locally procured ones. 
\Ye suggest that the sentence be changed to read: 
e., 
"Kidneys thAt are obtained through the national sharing system, i.
the National Organ Procurement and Transplantation Network, tend to 
cost more than kidneys that are ' obtained and used locally. 
Page 4, first full paragraph
"tk 
The wording and intent of the third sentence are unclear. 
OIG states 
are less certain, however, about whether living related and cadaver
acquisition costs should be included in the mG.  The thrust of the 
ommenda t ion is t ha t cadaver acqu i sit ion cos t s shou I d be i nc I uded in the 
DR, but the wording of the sentence contradicts this premise. 
Page 6, fourth paragraph
The second sentence should be changed to read  . those on transplant 
waiting tests. 
Ylaiting lists  " instead of " : .: - ,  ;,. - " -, ?' :' ";:  . ' ,  : --- (';)  ."   :" " . ,  . " , ' ' ' '' ' , , '  .?"  ; ,  :''; ), '
:1';'
;:l'  (;!IJ U,!:.111  l'JDJt!ll1:j-.i-Jr::rJ -
New Inspector General stUdy is remarkable 
They actualy litened to our criticisms & suggestions 
in 
dr 
pr 
.i; an (2) Thy  ot.  I believe we shuld al cncourge 
:Ii'f'  an moed rele  BCFA to esli IU ltes. If 
Th nc:tb gis e. s h an  trr e  kidn ICsition co is to be inlude 
po tht  reH cr A an th  in an exfpoel lD:RG 30, it mus alow 
i':f:'  plct ofieildd etor  th pto frive, p ots. At- for th  wo 
11  I beeve  . Paymt for  an evuaon

rey  trla ce 
di trsplant community is  of th repien at th 
mino tvhe  anehwd  doonm tehn cth. alenges is  rpseor  tt oo t nexlaapnest t.h I  tr edpoie nt os  mneae 
Since th fi re wa  diyto  do ths, wh he or Ithr i s 
c19u87,: m ay signcat chagee shalvie soc;  no  pr. with th 
(I) UNOS is now  plt 
Routi Inui" is in effec in .  . Unus kiys ar inlud in th 
sin 
nth eS Ientsepbeecrirt.o :1re 9G8 ee,n tehxr aOl f( cOeIG  ) PSmraujortmty  eoMnf ts eOt;tl riattnai o (S3nt) a t(iOcPa O) for . cLtoo.o, .  pprolte tmh  OwIGi  hbae  ncoow ide.
c..u. ptu,bl ied a  on organ pro (SMSAs) ar now in pla naonwi.  Th ca be prlemc 
with a na 
ailn yz  wNhiecphh r"lIoS  News tI aInsd   . Itnio DnR Gw 3i 0b.e alow for in th
in  an Debe  fU  so ma (b th
In Its Novembe 
in 
198 bses.  tr 
prnt DRG upd), which Con-
In Ocbe or 198, I  Jrs  co 
tRwo Ibo urs with Inpeosrp tG eaebroat c1ob,  isa arlw nayos  ea  to cut.
to en 
ru  tKhus row, pointpi roeutt iegr  but thy ar  nesary to de 
in  report, and trlat velop . pry worg reimbWment 
"bat I believed WIS the  sym.
county' 
s viw.  dur th CONDucr PRIORI AUDITS
diIi omnus,  eIm phaiizm thpart e  th  EOFX THEE NKIDINTEY  ACQUISITION
th:  WIS  with two tbY et. depite  stbilizg move, OF THOSE 
has ben no rese frm HCFA  RTCs THT HCFA HAS 
. The Inper Geer, afr lok- or anyone else on th issue rase by th  DESIGNATED AS OPO 
yea 
Ing at the transplant data, said  OJG two  ago.  I IamI Sno  sur wha a prorty audt is, 
, "foubv iusy we wer wr, "e con  Let me review the fi ve points Dr.  but  ceit m tei  afn aru,t  ah
prevatlie nc wreithd in den.  Yesian now prpo. an tr to se  with .  Il 
. He tok the  cto rti  pen- wht wil be involved.  OC audts. Th is th on  in th
8pIys tno sth e other  and sug SUPORT DEMONSTRATION  dreo  tchl c otiue to dend on anee 
made by the tranplant PROJECTS INCORPORATING  (you may rembe, th 
county In  Nephrlo News &  KINEY TRASPLANATION"  wa a majoprlcm in th 1987 rert). 
lulUs.  "CQUlmON UNDER  thThlcusy,  aptly may pee feel' ,
rmuTocbhi ser lw ta"sIi Se n hcoeuara rgrionmg ,t hbeu Ot nIGot,   EXTAheNreD wEpeDr  mDraRy G c 3o0m2m nts an sug  8C (rea chitghi);  acn o(2 ) amrra: ye( n1)o t-n boet
and l bad presumed It was an geons made in 1987, an wht th  fuy elble for Medca 
aCno u"pd te onR "KIi idrne eePy d.A  cKaq ucaoiityuio onr 1OII,  bnuotw i t nee to bies  tneo ,o niynp  orr . amIpet .i ys f u alege th th may
over  - wha ar th mets of th  tre in re U8Jat cente 
1W,R bute edgte lbyn M aG Yee s, 11 OIG ma th foOowig cot (RTC) thc aar  thdir cown  OPO. How-
Pthb N,  ort Regn. ror p. oAts:lt two ye have pa, an Cor\ D, Oo, nb  e th "may ipf ethl eis"  ar 
coti th rert 
mI ew oud lie to us  as a  no plan ha ben forcomig  not identied, and no infonation is 
or  on whe I be  HCFAe.x  pe  given. ap, 
lieve the kidney transplant field . The pro diearensc ,be een 10- kIit  woud  thgh, th
sRtdEsK InA mLi-IE9 8R.EPORT  re- , kciaddyn yse meust  bea n naonyin s  ha  unti ao fs gtqyue etisi oc.no alre gto,i nga nto  quaty
The OIG'  upd rert is  to  if th aleged imved da arr e 
able for two rens: (1) Th obviouly suival reults in shag ar wor  Th  doe ma a goo pot, in 
lined to al the crtici an sugges- the cost.  that hoita cot repo we moifed 
16 Nephrlogy News & Issueslay 1989  ------ 
-- - 
- -
..  ---. -
c: 
in 1985, an HCFA's excu in 1987  unforly, so 
, was tht thy opnya h,a d one yea s data.  may depe on  Uti  oJ5 D rOe onhy .  in (cid:1) TNephlo goy Netws   tluhu   wien  m198a7.,
Tyiema  hoaf  ncoowst  report asnhd oautl dl enato w be  e(xMyis ts, tbaumte natls,o  ntoo  th OIG'  emsetsyd a ifeCtcihgg  k aidbn yt hs hOIG 'asns ta 
available for review.  Th one cot quoH sbyu Dri., Y es  ha  HL  per-
Since ths inonntion is apntly sian tht I believe must be  believe ar vad.  tyvinga, I  do
now avaiable, th DIG edtor, Dr. Yes  th Amrica Soty of  If ti ty WlDt to  tyg
sian, suggests a priority study to see  bilty an Immunenetics (ASHI com  to th disblieve, thy mus prnt
crh 
pwhear  th figure show. Ths would ap  . ment that th reiving cete mus re  S. da. Aot tph ttyi,  thy have an
to be a sensible suggestion and  pe th  an th HLA  unpuled  with th Ih 
shld be done. In addition, when all  ing. I do no  th 
believe ths is  ty of ing of "zero mismatched" kidneys. 
RbTeCe aer  sttuhdi ed, cots ca be com duplicationc teh yDI G was refdenigs tco,   However, tb ar tw prle in my 
an the 19 RTwCi twhitt ht htihre mo.w n OPO,  an it was  not wh I  COlltinu  ' 011 ptlg 
ESTABLISH MORE
CONSISTENT" RIGOROUS 
OVERSIGHT OF THE
HCF A.CERTIFIED OPOs 
The ai her is to have all OPOs, 
ba, 
independent an hospita- operate 
under the same fisca guidelines and
orvaeri ght. Ths is a 
point tht has ben
before by the trplant commu 
nity, an Dr. Yesia quotes Dr. Chrs 
Free your patients 
Blagg on this point.
frm 
This would prably, as the DIG sug  medication 
gests, reuir the hospita-ba OPO 
keep a separte set of boks, 
but it 
would seem the information obtained  worries.  For their 
would be well wor this extr effort, 
The DIG's suggestion that HCFA
conduct a pilot study with a number of 
RTCs, and individual intermediares, is 
a very goo way to tr and work out 
.these difficulties. We would agr with 
dthae  DIG, that more rigorous and sta 
oversight is neeed, and the pro 
posa sems reonable.
aIrn  points 4 and 5, the DIG moves to
where thre will be much more 
contrversy and even reistace. In re-
viewing thse two items, I wil add some  Ap nratsio wide prram il no 8Vilfare  that
commnts beyond those made by Dr.  all meication servics- fillng 
prnriptions to delivry and dire biling
Yessian.  inlurance copanies-abslutely fre. 
MOVE TOWARD THE 
ESTABLISHMNT OF ONLY  Your eligible patients wil ner He a 
meication bil again. 
ONE MEDICARE-CERTIFIED 
LAB FOR PRETRANSPLANT 
Th Uftime Medication Hrvice from 
TESTING IN EACH OPO  Stadtlander. Pharmacy is remar1bly limple 
SERVICE AREA to apply fo an us to use Jus give us a call; 
Quotg the DIG's report, "th time  ll be happy to answr an of yor quesions.
is right for movement in this dirion.  And yo" be able to ofer yor patients 
In its original 1987 report, the DIG  exra lpefiarl  helping hand. With the lifetime 
servic 
claimed: (1) Wide varation in  Stadtlander. Pharmacy, 
testing
cprrou res and cost; (2) A shar in 
in lab cost for those on trplant
Call toll-free: 
waiting lists; and (3) Some unnecssa 
800.238.7828 
duplication of pre-trsplant teting. 
ouNattcu raly, thes accustions raise an  In Pennsylvania,  3600 Laketon Road 
from a number of tissue tying  800-231-7828  Pittsburgh. Pennlylvania 15235 
grups, One can understad this, since 
CIRCLE READER SERVICE CAR 
NO. 49 
May 1989/Nephrlogy News & Issues  ... 
--- , ' ""  ",..
. ,  : " (,  ::: :. ,  . ,  ---.,+,"- . -''''' "'--"' ""';''..  ' ''_''', '  ----. ," , . ,.,  .-- .  ".  .":.  ".  .' .,.  -
fbiiYfCl)hli 
mCoindt.i nued from page /9
 cmauys  rbee cpoosidnersei abs lwee. tr to be tis- abler o vight Th fi th de with
. Tdhaer e is confusion abor Twbe rth,e To solve th OIG' s lasr two pr prucweh ceroe rH dCaFrAa  caondd  inmopwr vme oovvee tro  
show ro dare. Paul  aJs, j.  , one tissue typinsgr laab f or eah  sjght pr 
Pb, says ir is goo, 8D UNOS says SMSA, an couctg a  grup 1b th 
oirf  ims yn ofr geono'.  hI soasy .a  T"phox  l" r0a1 nr  .o fT tehts ,A I mwouclad  sSugogieesty t oh f fTolrlaowliag:r  FHAC'FsA  ctoo m,o vaen as  we wroarau dD lOWe in  HC-
csohmm uniry is made up of 8dults; Physici (AST) an th 
 imlemt tb VrCai dly as possible
da an  Susg,  su
sAnyo deuIs C tiehn y is going lteot  cuop s derfido,er.  S(AocSiTeSr)y e aocfh  Taprpaonisnptl rawnor  rSeurtgeaons  ghaevoe en. n fr  1 mighr ad,0 1lb0t,
anyway.  ir ba  tives who undrsta wha isn reeui r but have be moJeno  jus  inreon 
pmdA80onl   btDeeeO xir  ,iie lnleve  te t shnko g  f11e irrcya htwh  s1 ep8m hr hm oloaewuvorme   itmbnh  aiteWsh yr  obb H pzaYwnee.   odbiinlieryt   it btoiihsmnsi  umpateru  ihtnvyionai  lnftora ggsev,ipos ebrtrs eruo tbf.ta y  eta tiirrtv hn0erms0  a gmcu.e sItrnm  naaodt,  aswwgiuietrT h hhtr   h1cyta h htpg wa teg rlaeel r atih.n tvr oaw lrvco eoddo v toal tmbuiyyc  o t.io no  fen tsohn  tr-i
NOT?  in a  Th 
resible maer.  woud
. dTha  ssehnc  prblem is tht eVeD if the shw th govcmntrh th art wie a r wig
gues  m gmoaintcgi ntog  cilsa bi etrh,r  thlo suyr rtoc drorl o iun  apna a crin  ethar  nee mofog.
kidnys do just as well. Wht  I am almost 
ha to bpe daon  is ro also collec data  crticism wil be chentghre ds.o Hmeo wofe ve, 
olno yt,h  prumabtllciyd n yins  at mhtu chm  us  dloen em ea  crlouss -brya  sajyoi gi nt hlti tsh tO ItGo  hoaus  
mli. um), tohve r lcdny(sfi vdeo y aes  mi crtricisems  an suggestions, an 
well as  rating thm in its late report. Le us ac 
zther om miasmgar ched swhioppre  thki dneys in  to th OIaG'Js c henge. 
is nor  effort 
or th cot Whe we must be pant, EiID" Ntlr:Dr. HII iI  /r  ES 
aitt  wleoaul dt pnem apwsi tbhe t hea eiear yif  iwneo  n 6N7wX_M:e Md  odot  Ipu,   Ed NA iu; pm., .nt  t'.I, .fI
tion as it emerges. 1M  or ptri  uplM  Mr 1f  1t1)'
Befor I suggest a posible solution,  . UNOS would appinr four resen d1tIr,   fI tJ  -u. ,. or' T do  rwNraenu  otlu. 
let"s look at the OIG' s Jast prposa.  tatives, peps two horn HCFA ir
self, an two scientist or ecnomsts  Continued from page 23 
ESTABLISH, FOR 
NAR OESTIMMAENUNDRCAELRAMDTIEZUNERDT O  PFU RPOSES,  . wwASohHuol ldc  opwuroledus hleednll p rs oien tl htehecis ta  rade vvgiisreoowruy. p c othmar   aNwfahtmeio nitna cJ  oOthnrceai vnOe TdP rrta'h p lOtanaPr I A iinncr  ,tt hha n 1 9re84  
PRETRNSPLANT  minc, as suggesred in I and 2 above,  Amendments to the National Or1g9a8n8 
LAORATORY TESTS  a prposa that would ental the fol Tralant Act. 
lowing: 
walibdTeehi etv  bOarrIeaGft o danag taianin  t,ch pharate esnustg sfg ocer ostmtispu etehDie nr gi,s  . lAa sp ilan nm faojor rc ocmitibesin iinn mg uricshsu teh r yspaimng   T1h9C8e9sh,  laiennnlug fdeoesn  wsdtigal lotebn vtmioaiugs ln yd oc olien  tauheea idn.  
way OPOs were combine; i.e., ei region de
tmihneugI n ss tt aeabdteds i .ctt eiBeotensnf,,o  tir h.etee h. o,Or n aewIpG pael epc saoc rirnp oct tsao p topmhluselps,. n wge . AtUh NebraO wttSeor rywk  oiilfl   sOtoiUslsvIu yee o itlyu fproilnrf g,y  oloeurs .rH s rCbFaAl  or  asivnnecrdloo pc  OmoonfeP tnciTtuo r imaonc gmpt irtvnooicvt fi ieidunsel,f  rlblc r taooond detn hriim nrbgpi n ortpvhue,er
th Medca inteares ar rey treruliarend tr o produce a sarisfactory sece regarg OPr  re
a por poition ro derennne whar is re spibilties. 0 
sonale.  . Relative cots for such rets. 
cin eHtahyv ia ga rbg enb  ya ousr  lotoc h eclpa aedr,j uI cdai candoI  bw eolfuirelmvde   btthhe i sa davpapnrtoaagceho iuss r,e sninacbel eir  mEI doCiIor l .f , HN.o t:- -ViBr.t.  d.SI  MIE da EJ-Jr#   Vn-ci r
/. r pCII..  U. .tf. r- EMMd.Ui.... 


. cwhey  thhroew i sp enrottthn rar   icsroo immse m dtniec tbus alarnr rt,oy a  bonef  swe. ay to swoel vdeo t Dhsoter r imslsouaveres   i(ntc iasos ruueen nttysiyinb gli)et,  GInItw   MIU NSEO,.S: ' MWf/. --G.. 
 t 4/..  8/, . "It,

rteht sp.r Ablpesmp,n ttalny d,  Ais Strmg h aro  genc  mthy enr.w ill  be solved for us by the gover ..1.M,  odpw  tI.  oro r p'DT  do  Nrq e ot 1IwtI8 il,C tu PItI,y  
nomnc1a. 
li with  CONCLUSION 
If thes re comp 20% of kidny  In sum, the OpIG'r s oup dat on kid mOltS! Advam' 1OfiI 
acquisition costs, as is state by the ney acuisition cost  tive ways  es. CaI 
OIG' s report, then these issues rely  ro reuce costs and give more responsi (215)489-2357. 
26 
Nephrlogy News & 
Issues/May 1989  ..'
.. ' ' '. - " ,- ,', 
ansplant Cont oY!r 
sEi' 
Inspector General' 
reprt encouraging 
Contrm' ers;es  column (NN&I, May  sesbiblae  way to develop one. It would 
n D. 
Hai 1989 issue).  be  on sond data creeov er over 
EuUlI\lC,  CDPioTrC    stafIf  afoprp lthaued c Ronictehnatr do fK thuisss edroocwu manedn th. iIst   aa pperihod  owf otuilmde b.e 1 m1u1c h mor ptahaatta tbhlies 
SOh-- Oron 

Dolla-"TX  is refreshing to know that there is a  to organt hpr ourement organizations
system in place where members of the  (OPO)  would be th immeate 
pri vate sector can spek and be head by  establishment of a DRO for kidney 
the federal government.  lCuisition. 
The focus of the Sept. 1987 report . Cocurrntly, I would remend 
and the new management advisory  initiation of a systematic study to
detein th effca 
report (Nov. (988), is on prmotig of a DRO for 
cost consciousness in kidnedy iacfqfueisrit ion  wkideny  lCuisition. While a DRG may
Ofce oef  tSheep Itn.s p1e9c8t7o r rGepeonne raflr o(Om ItGh)e,   tshyes ttwemo sd.o Tcuhme esnigtsn iisfi cthaantt  t'he new report  dMeedioc uat  icnoetffsc,i eitn tm OaPy Oa lsaon  craeuusc ae 
Organ Acquisition Costs: An Over- recognizes that some of the measures  in organ availabilty in some
1r. 
view " generated considerable attention  previously outlined might cause a 
In otr wor, th meical impact 
and commentary, much of which  reuction in kidney availabilty.  must also be coidere along with the 
appeared in  Nephrology News  Issues  After taking that into consideration,  cot savings. 
(Nov. & Dec. 1987).  the OIG developed five reommend . Conduct priority audits of kidney 
In response to the significant 
ations:  acquisition expenditures of renal

feedback on the final inspection repon. . Suppon demonstration projects transplant centers (RTCs) that are 
the OIG has produced a new  which incorporate kidney trans- designted IS OPO. Th trsplant 
management advisory repon. "Kidney plantation and acquisition into one DRG.  center-baed OPO have tyicaly ben
Acquisition Costs:' which was  If. in fact. a DRG for acquisition is  subjet to only minimal overight, and 
addressed in Dr. Alan Hull'  Transplant  imminent, this seems like the most
 (conl;nu  46) 
d on pagt 
CIRCLE READER SERVICE CARD NO.

Octoberl989/Nephrology News & Issues 43  '" 
'__. ,.  ...............".. ......'.....'..' .... '.....'... ........ .........   ............................... ......" .............................................. ....... .................. ................ .,........ ..,....................,. .................. ......... .............. ............. .. .
Renal Nutrition 
Teaching about nutrition in anemia 
E(cxonetrincuis d Pfrromg praamg  20) PChiolmadeolnphliya ,U 1s9e85..  14th Ed" J.B. Lipplll Co..  OveIrIto. aM Pinr nDliailoysni sa Pnl lieMnatnsg."e smyemnpt.  of Metal 
wayMsu toc him repsroevaeh t hise  bdeilienmgm cao nodfu acnteemd ioan.   C In3t.o xPinc.a tCi.o:n E aalnodn.  HJ.y; pKrjoexJa/sletrma,i aC .in,  -CVlirloaiinc  WUninivc.hD oefe Mro, iMa mDi;  SAcllhe.n o Af Mlfreedy.,.  MMDia: mJai,c FskLp Cs Jo.ab mrbnys, 
Drs. Andrew Goldberg and Jierschel  H19e8m5.o dialysis Patients," Nephro. 39: 112.116, MD;  Shenard. MD; " Isidro Sausky.
riHneag SnuIrl.a,  Lrblooyu tshics f,h oMendnOuel,er sldyh  oeoxwf eBerdac imisnee  s1p 9Hr7oo8s gpthirtaastl  DSiael.,4a 1. :lT2),h  9o4Om-x9pa9l.so Aos.pis rC .o 1.f 9 R8:8e W.n ael iFnamilaurne., E" J$.e.m. in  O(MSvuDep1; prJ2olu..a n IW e)i, n 3p .apD 1.ni 9a28tl2y8e.s. .is  JP.a tFi"e nMlMs."a Sgee.m ine lN oefp hIr.,o 4n
26, 1986. 
maFy oimr ppartoivene tasn wemhoia t.e nd to be a "couch  2.P r1v36e5.n.  t1iH9oa7n9n ,eorf, R He.n:a lK Olashlre,o yS.S:l ro51hayt,o"p aAlSskAyI,O E J..,.  Win. , te1ht3 ea. i ,RS leamopasUlk syoe. fo E fA .M;l uWimceirnnasup.m sC ui.n;l  aFDitneicadhly.  CsJi.s;  aLPnea ,
cpootualtdo ,r"e pevreesne wnta lak innogt i2c0e ambilneu itmesp rao dvaey   Mine6r,a lS Dlaisttauprlbsakny.c eEs. i:n  CRobernna,l  IJn.s. uMff8c0ienn cayn,"d  tielS," ASN Abstrats, 771., 1985, 
cmiaenns lt.o  Pmaatkieen stusr es hthoeuyl da rae sak c tahnediird pathey fsoir  PHuabnlidshbino okC oo.f.  RMe. nMaal nTinheezr-aMpaeludotincasd. oP. leedn.u. mp.   nMu.m.1 4"-.Hn edHam kIrirofmu..s  IRino.d nu ci;ne dS t hBceu oTlnmree aDtm,i sGnela. so:e fL. A"a AlruuSmsNi..  r
an exercise program.  397. 1983, Ab5lrat5, 6SA. 1985. 
7. Slivellln. J.: Hakim. R. : Schulman. G., et  15. U.S. DHHS. PHS. FDA. Center for De-
al. "Iron and Aluminum Chelalion Kinetics During  vices at Raiological Heallh, Rockvile, MD. FDA 
/mEnTda intnaosgri \ s'  rN OfCoI ar r:  nMu, ts/rn.i CHti'a oSrnuham l  sihs  anths'i  cp ushM lai' sTnha H lidoo mn2a0 l  HHEeXomluoesdn8tioda,ne l."dy, I sTniDXnsdo e. vPrOaaollcxiita.eo mn2nli9ssn . ,ei1" n9AT 8SShN5oe .r rArbabeesppnlyrlri na itlTnesed .c F hfe1rno9 o8mLl5oo .Ng dyee,wd    aSHlayefmseisot )dP' ieaArlyslseniensl.  W.C aFhleelbor, rS a1um9p.ipn li1ee9 sC8. 8Lo. enntaemr 1i0n aHleiomno odif.  
a,.ic/ s on ,'arious asp C'TS ofrrnal nUTriTion, Dimensions in Dialysis. Vol. 3. No. I. published by  of E1x6e.r cGisoeld ibne Hrge.m  odi;a Hlyaslibse Prgal. ienMt.s,. "Benefits
and sh is a mtmhtr oftht Editorial Ad\'isory  Erika. Lifechem &. Nalional Medical Care. July Reseh,  " Clinical
1986, .  27, 4ISA. 1979. 
Board of  Nephrology News and Issues. 
REFERENCES  9, Chan . T.  : Barre. P.. "EffecI of 
DesfelTioxamine on Removal of Aluminum 
I. MassI). S.: Kopple. J .P., "Dielal) Therapy in and 
Renal Failure. " in Quick Reference 10 Clinical  IHraoenm boyd iaClo)'aslise,'d'L Cnhcaelr.c olaI:l 1 0H5a1e.m 1o9p8e3r,f usion and  Index of
NUlrilion. 223.231. L.H. Seymour (Ed. 
Phila2d.e Blpohwiae.  ),& B,.  CLhipupricnhc.o Fllo Coo .V. a1l9u7e9s, o f Ponions  : 1e0l , aPla.r i"soIsl1 Do. eMsf. em: Soxchaemriinni,e E T.:h Nraaprdya cScahfieo?n,e .  Advertisers 
Aspecis of Renal Care. I.pp. 12-/6. 1986,
HCFA: consider DIG proposal Amgen._..,.......,.............."....center sprd
Brodley.Jams Corp. (RSC  I1S) 
...... ..page 39
I(c obneTliineutvde fr otmhe pa gpt ro4p3)osed  prelaboratory tests. The currnt system  Bunoughs- Welcome............. ..pgs. 16-17
audits are extraordinarily costly and complex. with  Chugai-Upjohn (RSC  14)........................ 
reasonable. in order to fully assess kidney  many different laboratories using varied inside front cover 
acquisition expenditures.  tests and  Dialysis Assoc. of Palm Beaches 
combinations of tests.
. Establish more consistent and Undoubledly. Medicare and its  (RSCII).......................................page 41
rigorous oversight of HCFA-cenified  Dialysis Management, Inc (RSC '36) 
intennediaries must find this process
OPOs. The OIG recommends a pilot test.  ..... .................. page 3 
using a single intermediary for pimerpplleemxienng.ti nIg b tehliisev ree,c tohmermefeonred,a ttihoant  Enviromental Water Tech (RSC'29) 
independent and trnsplant center-based  would be a reasonable and significant  Euromed Pructs (RSC '84)......page 39
page 43
OPOs, I believe this is a goo first step step to take in promoting cost  Heallhcare Suppliers, Inc. (RSC , 18) 
toward fiscal consistency, and I agree that  consciousness.  ................. .......... ................ page 45
it should be implemented.  Ihopethenew OIG recommendations Home Intensive Car. Inc. (RSC '3) 
. The least contrversial (but probably  wil be seriously considered by the Health  inside back cover 
the hardest to implement) recom  Care Financing Administration (HCFA).  Hospal Medical Corp. (RSC'I) 
mendation is to move toward the  I would also encourage HCFA to carefully  back cover 
Interconlinential Medical Services 
establishment of only one Medicare  evaluate the impact on organ procurement 
(RSC '7 ).....................................page 42 
cenified laboratory for pre-transplant of a DRG for kidney acquisition.  Millpore Corp. (RSC 1f8)...........page 40
testing in each OPO service area. 
Nephrology Managemenl, lnc.
The problem of uMecessar dupli  Edi  s NOT  , ST phtll D'l!a.id ha.s stn' (RSC 'S9)................  page ) 8

hcataiovn eof  sbereviecens a nldo anssogci ated costs  tharro/orugsa nTtpcrhomccu'ar l manrndT aadnmdilmnlsmuu'anToll' ot gp)O'fSiTtSl dIsn  N(RMSCC-'M19e)d.i.c..a..l. .P...r.u...c..t..s.. .D..i.v..i.s..i.o..n.  
recognized by  page II
pMroeledl"s silcoanrales.  1y0e tth en ofi eslud.b sast awnel l as by  sinct  1/91714' , OJH IrS SrOai/l"'It,d  T,a  .B.A,U IiSn.  ahin%  a\s'fr otn r  N(RMSCC- M'2e0d)i.c..a..l. .P..r..u...c..t.s.. ..D..i.v..i.s.i.o..n.  page 
ebxpeenedintur et.  ken to reduce this unnecelsvsea rsyt eps have  ainnculundrhin gr opfprnos ofSfTiInr profAtnsrsCi"or.n aTrlaalslssopld,a CToioonrds.,   RPeenntaelc Shy Isnlefumssio. nInsc (.R (RSCSC Il 9'3)8..)......... .p.apgaeg e1 56
A.!o(', (NATCO) in  /986-87.  and Tht hoard of  Sandoz Phannaceuticals Corp.

. Establish, for reimbursement  th.-Amel: COllncilOil Transpl, (ACT)in /986- (RSC 146)..............................pgs. 47.
purpses. a standardized 
nomenclature of 88  Stadt landers (RSC 1t83)...............
page 14
T__L__  ---
- . -...
,.... ...-.  . '
Employee Benefis Division 
Chidghan J. Dave
151 Farngton Avenue  Mage 
Merv Admtrali
 IMedicarel
Harord. CT 06156

(20)  56' 
March 1, 1989

qE:IVED 
- OIGIQ4

Richard P. Kusserow
 Af 
Inspector General

Department of Health & Human Servi

HHS North Building .
330 Independence Avenue, S. 
...-., h "
Washington, D. 
C. 20201 
Dear Mr. Kusserow:

receipt 
of a management advisory report 
We are  in 
enti tled, "Kidney  Acquisition Costs.  Attached, please
find our comments  response to the recommendations made 
in 
this report.

If you have any questions relative to our comments or 
if we can be of any assistance, please contact us. 
Sincerely, 
ve' 
. Manager.
Medicare Administration, M323 
Aetna Life Insurance Company 
/jc 
Attachment 
B. Schumaker, Director, HCFA

Weingartner, Director
R. F. 
M. Yessian, Regional Inspector, OIG

J
tna Life Insurance Company 
One of the ..NA LIFE & CASUALTY companies  . .
REPLY TO OIG REPORT
Rccommenda ti on: 
Support demonstration projects incorporating kidney 
transplantation and acquisition under a 
DRG. 
Commentary 
A demonstration project to determine the feasibility 
and impact both on procurement activity and on cost 
savings thorough implementation of a DRG for 
and  acquisition, is a very supportable 
itrasnspslantuatione. 
In this manner, both acquisi 
tion cost and procurement 
ties can be studied separately, 
acti  vi  yet combined
th the transplant center activities 
to determine
an overall DRG. 
This project could avoid the confusion and sometime 
disastrous effects when large numers of facilities
are impacted before adequate information is available. 
As the control numers within the 
universe sample can
be maintained at a reasonable 
level, and as the area,
size, and complexity of the facilities would be known 
up front, this project would appear to offer the 
greatest possibility of success. 
It would appear from first blush that the independent 
OPO' s would be the most complex towards determination
of a fixed cap for costs. 
All the variables previously
encountered in establishing DRG' 
s in hospitals, plus
several new ones, would have to be thoroughly 
researched and studied before effectuating a 
DRG. It
may even be found that the establishment of a DRG in 
the RTC setting is appropriate, but not 
so, for an
independent OPO. 
2. Recommendation: 
Conduct priority audits of kidney acquisition expendi 
tures of those renal transplant centers that HCFA has 
designated as organ procurement organizations.  ---
. .
Commentary
We are in basic agreement wi 
h this recommendation and
have been working with the Division of Transplantation,
various aspects for
pHCFoA  ten(Batltiimoare), l review.t o  establish 
We intend to continue this endeavor
during the year, providing whatever information we
can. It should be pointed out that this point could also
be a beginning or climax to the 
numer  recommendation, noted as
one (1) above, serving to eliminate unnecessary
items, of cost and weed out or at 
least, identify
inefficient operations.
3. Recommendation: 
Establish more consistent and rigorous oversight of
the HCFA certified organ procurement organizations.
Commentary
As brought out  in  the elaboration of the comment
wi thin your repor 
, the complexities of the
Administration, necessary cooperation and ultimate
rUling authority for making determinations and adjust 
ments, needs to be explored more fUlly before this
recommendation can be evaluated further.
4. Recommenda tion:
Move towards the establishment .of only one 
certified laboratory for pre-transplant test(i1n)g  Miendicare
each OPO service area ' 
Commentary
The recommendation certainly would provide for cost
efficiencies  in  pre-tranplant testing and eliminate
much of the duplicate testing and reimbursement that
ties. 
accompanies such acti  However, issues such as
speed of test availabivi lity, ease of access to testing
facilities upon donor identification, and 
physician,
as well as, facility reliance on 
another, entities
hodologies and test results complicate the 
situation.
not known whether or not legislating a single lab
It  is 
in  each area would solve the issues or would  serve
o extend the time frames involved in donor 
only 
procurement,
impacting the acquisition levels 
adversely.  ---
5. Recommendation:
Establish for reimbursement purposes, a standardized 
nomenclature of pre-transplant laboratory tests. 
Commentary 
We have supported the establishment of common
nomenclature for laboratory tests in the 
continue ,  past, and will
to do so. However, the complexity of the
testing and the methodologies used in developing the 
various tests and results  beyond the technical 
expertise of the intermediaisr  y 
our understanding
that ASHI is moving towards this It endis  now, and that UNOS 
may have an impact also. 
Any effcrts on the part of
HCFA to assist this process could help to achieve the
ul timate goal quicker. 
There is little doubt that 
standard nomemclature would be of a benefit to the 
Program, the intermediary, and probably to beneficiaries 
who are covered under the renal 
program. 
/jc  APPENQJ 
ENNOT
It focused on kidney transplantation because at the time the study was 
conducted Medicare reimbursement was not yet available for other 
kids of 
transplantation. 
See OIG, "Organ Acquisition Costs: An Overvew " OAI-01-8600108, pp. 
Information obtained from Aetna, the Medicae intermediary responsible for 
oversight of independent OPOs. 
Offce of Research, Health Care Financing Administration. 
It would probably be advisable to limit the demonstrations to kidney 
acquisition, since there is a larger historical base of data and a larger number 
transplants to rely upon. However, HCF A might consider the feasibilty of a 
separate demonstration involving acquisition costs for hearts used for 
transplantation. Heart transplants have been covered under Medicae for the 
past 3 years, with acquisition ' costs payable on a reasonable cost basis as they 
are for kidneys.

Here, agai, we focus on kidney expenditures because they represent the great 
majority of Medicare reimbursed organ acquisition expenditures. The HCF A . 
might consider whether or not it would be feasible to include expenditures for 
the acquisitions of hearts in some or even all of the priority audits. 
In our 1987 report at a time when kidney waiting lists were much shorter, we 
estimated that these laboratory costs accounted for about 20 percent of kidney 
acquisition costs. 
For example, they are unable to compare how much diferent laboratories are 
reporting for the same test. 
In response to our 1987 report, the American Society for Histocompatibilty 
and Imunogenetics (ASHI) indicated that it was workig on the development
of a standardized nomenclature and would be wiling to work with HCF A and 
the intermediary in this regard. 
10.(cid:1) We cited the example of one metropolitan area where each of five renal 
transplant centers conducts the same basic tests involving a donor organ each 
time such an organ becomes available. The process, we were told, could add 
up to eight extra hours to the organ procurement process.  While other reviewers expressed suppQUr this recommendation, Aetna 
manager of Medicare Administration (who is responsible for fiscal oversight for
the independent OPOs) expressed some 
reservtion, especially with respect 
the possible impact on time frames. On the basis of the areas we have visited 
with single pretransplant laboratories, the process seems to work rather 
effciently, certinl more so than in the cae cited above with five such 
laboratories.