Medicare Could Have Saved Millions if Organ Procurement Organizations Had Correctly Reported Procurement of Double Lungs as Two Organs

Organ procurement organizations (OPOs) are not-for-profit organizations that facilitate organ donation and transplantation. Because lungs are in pairs, they are procured as one or two organs and should be reported as such. When OPOs report the number of transplanted lungs incorrectly, Medicare costs may be misstated.

Of the 54 OPOs that we reviewed, 44 reported lung statistics incorrectly in their fiscal year 2011 Medicare cost reports. Of the 51 independent OPOs reviewed, 43 incorrectly reported double lungs as 1 organ. Specifically, the OPOs understated the number of lungs procured by reporting 1,691 lungs instead of 3,382 lungs. We estimated that Medicare's share of organ procurement costs was overstated by $9 million. Of the three hospital-based OPOs reviewed, one incorrectly reported double lungs as one organ. Specifically, the OPO understated the number of lungs procured by reporting 30 lungs instead of 60 lungs. We estimated that Medicare's share of organ procurement costs was understated by $188,000.

Both independent and hospital-based OPOs incorrectly reported lung statistics because they relied on CMS's Provider Reimbursement Manual, which does not provide specific instructions on reporting double lungs. If the 44 OPOs (43 independent OPOs and 1 hospital-based OPO) had reported procurement of 1,721 double lungs correctly, the Medicare program could have saved an estimated net amount of $8.9 million during the year.

To help realize future savings for the Medicare program, we recommended that CMS (1) clarify instructions on how independent and hospital-based OPOs should report lung statistics in Medicare cost reports and (2) work with the Medicare contractors to educate OPOs on the correct reporting of double lungs in Medicare cost reports. CMS concurred with our recommendations and provided information on actions that it planned to take to address them.