Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

Inspector General 

February 2004 

OEI-01-02-00520 

MEDICARE-APPROVED HEART 

TRANSPLANT CENTERS 
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) con ducts 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 Medicare’s 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 CMS’s 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 leve ls 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 Services’s (CMS’s) 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 CMS’s 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 Medicare’s 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 

CMS’s 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 CMS’s 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, onethird 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 center’s 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 
CMS’s 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 Medicare’s 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 1987—and not yet revised—as 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 OPTN’s 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 OPTN’s 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: CMS’s 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 Services’s (CMS’s) 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 lowvolume 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 

1. Volume 

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 24 transplants performed in the 24 months prior to 

the fiducial date. There must be at least 12 transplants in 

each of the two 12 months in this 2-year period. 

-and­

• At least 12 transplants performed m ore than 24 months prior 

to the fiducial date. These 12 can be done at any prior time, 

with no yearly minimum. 

• At least 12 transplants 

performed within the 12 

months prior to the fiducial 

date. 

• Eliminated all other volume 

requirements. 

2. Survival 

Rate 

• At least 73 percent 1-year survival rate. The cohort of 

patients includes all transplants at the center, back to 1982. 

The volume criteria result in a minimum of 24 transplants 

with 1 full year of survival experience. 

-and­

• At least 65 percent 2-year survival rate. Calculated for all 

transplants, back to 1982. The volume criteria result in a 

minimum of 12 transplants with 2 full years of survival 

experience. 

• Unchanged survival rate and 

cohort. However, the volume 

criteria do not result in any 

minimum number of 

transplants with 1 full year of 

survival experience. 

• Unchanged survival rate and 

cohort. However, the volume 

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. Anothe r 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 Medicare’s 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 Medicare’s 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 center’s 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, CMS’s ongoing oversight, and communications between CMS 

central office and approved centers, we conducted six phone interviews and one onsite 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 President’s 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 

(fewer than 12 procedures) 

Below Survival Rate 

(less than 73 percent) 

Below Both in 

the Same Year 

At Least 1 Year Below 

Criteria 45 (50%) 53 (59%) 24 (27%) 

3 or More Years 

Below Criteria 27 (30%) 13 (14%) 2 (2%) 

3 or More Consecutive 

Years Below Criteria 17 (19%) 7 (8%) 2 (2%) 

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 Medicare’s 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 CMS’s 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 

2 3 2 4 

8 

13 12 14 17 15 

29 27 

36 35 

11 14 

22 

30 

37 37 

50 52 55 

64 

55 

60 

54 55 

0 

10 

20 

30 

40 

50 

60 

70 

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 

Year 

Approved Centers 

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 CMS’s 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 Medicareapproved 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 CMS’s 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 Registry’s 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 CMS’s 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 center’s 

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 Medicareapproval 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 center’s 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 available—1992 to 2000—15 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 Medicare’s 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 

center’s 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 CMS’s 

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 public’s 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 Medicare’s volume and non riskadjusted survival criteria as a basis for assessing center performance. For this inspection, we 

focused on the Medicare coverage criteria that were established in 1987—and that have not 

yet been revised—as 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 Medicare’s 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 OPTN’s 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 

Centers 

Effective 

Year of 

Approval 

Approved 

Per Year 

Cumulative 

Total 

1986 13 13 

1987 4 17 

1988 7 24 

1989 10 34 

1990 11 45 

1991 5 50 

1992 12 62 

1993 4 66 

1994 6 72 

Number of Approved 

Centers 

Effective 

Year of 

Approval 

Approved 

Per Year 

Cumulative 

Total 

1995 7 79 

1996 5 84 

1997 3 87 

1998 3 90 

1999 0 90 

2000 4 94 

2001 4 98 

2002 1 99 

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 center’s 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 center’s 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 onsite 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, CMS’s ongoing oversight, and communications between 

CMS headquarters and approved centers, we conducted four phone interviews and one onsite 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 center’s 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 CMS’s 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