CMS Finalizes the IOTA Model

The Centers for Medicare & Medicaid Services (CMS) released the Final Rule implementing the Increasing Organ Transplant Access Model (IOTA Model) on Nov. 26, 2024. This mandatory payment model introduces financial incentives and penalties for kidney transplant hospitals based on transplant volume, matching efficiency, post-transplant success rates and specific quality measures. The rule becomes effective on Jan. 3, 2025, 30 days after publication in the Federal Register.

The IOTA Model could proceed as planned without modifications or delays, or the Trump Administration might decide to halt it altogether. During the first Trump Administration, the Center for Medicare and Medicaid Innovation (CMMI) tested several mandatory payment models, though the Trump Administration fully developed these. Notably, the first Trump Administration canceled mandatory value-based payment programs for hip fractures and cardiac care that were set to begin in January 2018. Similarly, the incoming administration may be reluctant to implement mandatory models developed by the outgoing Biden Administration, opting to prioritize more voluntary value-based payment models instead.

For additional information, CMS has made the following resources available:

• IOTA Model Participant List (XLSX)
• IOTA Model Fact Sheet (PDF)
• IOTA Model FAQs
• IOTA Model Press Release – Final Rule
• Final Rule – Increasing Organ Transplant Access Model
• CMS IOTA Model Welcome Webinar (Dec. 18, 2024, 2-3 p.m. ET)

Overview

Proposed in May 2024, the finalized IOTA Model remains a mandatory Medicare payment initiative to test whether performance-based payments can increase patient access to kidney transplants. The model will run from July 1, 2025, through July 30, 2031, encompassing a six-year performance period.

Model Participation

CMS has selected 103 kidney transplant hospitals using stratified random sampling, with approximately 50 percent of the nation's donation service areas (DSAs) participating. The remaining DSAs and their hospitals will serve as the comparison group for evaluation. Hospitals were eligible for selection if they performed at least 11 adult kidney transplants annually, regardless of payer type, during the three-year period from July 1, 2021, to June 30, 2024, and if at least half of their total kidney transplants were performed on adults.

Performance Measurement

Scores are based on three domains: Achievement, Efficiency and Quality. Medicare claims and administrative data about beneficiaries, providers, suppliers and data from the Organ Procurement Transplant Network (OPTN) will be used to measure participant performance in these domains. The total scores in these domains will determine whether a hospital receives a payment from CMS, owes a payment to CMS or is a neutral zone where payment is not received or owed.

Achievement Domain (60 points)

The achievement domain assesses the number of kidney transplants performed during a performance year (PY) relative to a participant-specific target set by CMS. Originally, CMS had proposed to set the transplant target as the highest number of deceased or living donor kidney transplants performed during the baseline years trended forward by the national growth rate. Instead, CMS will assign hospitals a transplant target equal to the average number of transplants performed during the baseline years trended forward by the national growth rate.

CMS finalized a lower maximum performance threshold of 125 percent, reduced from 150 percent as proposed. The scoring system has also been modified to increase the number of performance bands from five to eight, narrowing the range of results within each band (see Final Rule Table 3). These changes are intended to better differentiate participants and improve comparisons.

CMS had also proposed a health equity performance adjustment, which was not finalized. The points allocated for this domain were updated to make the thresholds for achieving top performance more attainable.

Thresholds. Participants performing below 75 percent of their target receive 0 points; those at or above 125 percent receive the full 60 points.

Efficiency Domain (20 points)

The efficiency domain will assess the kidney organ-offer acceptance rate ratios of each participating kidney transplant hospital relative to a national ranking or the participating kidney transplant hospital's past organ-offer acceptance rate ratio performance metric.

This metric divides the number of kidney transplant organs accepted by each participant by a risk- adjusted measure of expected organ acceptances. The expected organ acceptances will account for factors such as whether the kidney was biopsied, how long the candidate has been on dialysis, and the distance between the donor hospital and the transplant center. The percentage chance of acceptance will be calculated for each transplant offer the participant received during a PY, and these summed percentages will determine the final expected organ-offer acceptances that participants would be measured against. For a list of organ offers that would be excluded from this calculation, see Final Rule Table 6.

Under this measure, participants will receive two scores: an achievement score measuring their current level of performance, and an improvement score measuring how that performance has improved over time. Participants will receive the higher of the two scores as their final score for the efficiency domain. The achievement score is based on the participant's performance on organ-offer acceptance rate ratio relative to the national ranking, which includes all eligible transplant hospitals. (See Final Rule Table 3.)

The improvement score is determined by comparing the participant's organ-offer acceptance rate ratio during the PY to their improvement benchmark rate. If the participant's acceptance rate ratio meets or exceeds the improvement benchmark rate, they will receive 15 points for the efficiency domain. However, they will receive zero points if the acceptance rate ratio is equal to or lower than their rate in the third baseline year for the respective PY. In cases where the acceptance rate ratio is higher than the third baseline year's rate but still below the improvement benchmark rate, CMS will apply the equation found on page 553 of the final rule.

Quality Domain (20 points)

The quality domain will assess the quality of care provided by the participating kidney transplant hospitals via a composite graft survival rate. CMS had proposed that 10 points would be based off of a quality measure set but did not finalize this proposal. In future rulemaking, CMS may propose additional quality measures, potentially focusing on health-related quality of life (HRQoL) for kidney transplant recipients or pretransplant care processes.

To reward participants for positive post-transplant outcomes, CMS will allocate points based on a participant's unadjusted rolling composite graft survival rate (see Final Rule Table 4). For PY 1, this metric will be the number of functioning grafts divided by the number of completed adult transplants. For subsequent PYs, this figure will be updated to account for any failed transplants from past PYs. In response to comments, CMS will consider a risk adjustment methodology for this measure in future years but is not implementing one at this time.

The following will be excluded from the number of observed functioning grafts: graft failure, retransplant, death, pediatric patients and offers to multi-organ candidates (except for kidney/pancreas candidates that are also listed for kidney alone).

Participants will receive points based on their performance against all hospitals eligible for the IOTA Model, regardless of whether they were selected for the model. The bands have been revised in the final rule, and the point values have increased to reflect the removal of the quality measure set. The point distribution can be seen in Final Rule Table 4.

Payment Risk Structure

The IOTA Model includes upside and downside financial risk based on Medicare-covered kidney transplants. IOTA payments and recoupment will be determined solely by the volume of transplants where Medicare was the primary or secondary payer. Although scoring metrics will consider all eligible patients regardless of payer, financial recoupments or payments are tied to Medicare transplant volumes. Eligible patients are individuals aged 18 or older, either on a waitlist or having received a kidney transplant from an IOTA participant during the performance period.

CMS acknowledged the complexity of the transplant ecosystem, which "necessitates coordination among transplant hospitals, healthcare providers, organ procurement organizations (OPOs), patients, potential donors, and their families." Accordingly, the IOTA Model does not mandate specific processes or policy approaches that participating entities must adopt for the model test.

Participants will be able to score up to 100 points across the three domains.

• Upside Risk Payments. Participants that score above 60 points would qualify for an upside risk payment, which could be up to $15,000¹ (as opposed to $8,000 as proposed), per Medicare fee-for-service (FFS) kidney transplant, depending on hospital performance.
  • Formula: (final performance score – 60)/40) x $15,000 x total number of kidney transplants performed by the participant to attributed patients with Medicare as a primary or secondary payer
• Neutral Zone. Final performance scores below 60 in PY 1 and scores between 41 and 59 in PYs 2 through 6 will place participants in the neutral zone, meaning they will not receive a payment or owe a recoupment.
• Downside Risk Payment. Participants that score below 40 points in PYs 2 – through 6 would be required to pay CMS a downside risk payment, capped at $2,000 per Medicare FFS kidney transplant. The payment would be adjusted depending on performance.
  • Formula: (final performance score – 40)/40) * - $2,000 * total number of kidney transplants performed by the participant to attributed patients with Medicare as a primary or secondary payer

To account for sufficient Medicare kidney transplant claims runout, CMS will perform preliminary scoring and payment calculations for each PY three to six months after its conclusion. Participants will be informed of their scores and payments within five to nine months after the end of the PY, with a 30-day review period to assess their scores before final performance results are issued. Following this review, CMS will distribute upside payments and issue demand letters for any downside payments.

Immunosuppressive Drug Coverage

CMS has finalized a proposal allowing IOTA participants to subsidize, either partially or fully, the cost-sharing obligations for immunosuppressive drugs covered under Medicare Part B, the Part B-ID benefit, and Part D (see Final Rule Page 450).

Transparency

To increase transparency for beneficiaries, CMS finalized its proposal to require IOTA participants to publish on a public website the criteria they use when determining whether or not to add a patient to the kidney transplant waitlist. This ensures that patients have clear and accessible information when determining eligibility.

Health Equity

Initially, CMS proposed mandating the submission of a health equity plan (HEP) by IOTA participants starting in PY 2. However, the final rule makes this submission optional. The HEP will identify health disparities within the participant's patient population and outline actions to address these disparities, promoting equitable healthcare access and outcomes for all patients.

Data Sharing

CMS has finalized a proposal to share beneficiary-identifiable data with IOTA participants. This includes Medicare claims data for Parts A, B and D, which participants can use to assess performance, improve care coordination and enhance transplant readiness and outcomes. Participants are required to comply with Health Insurance Portability and Accountability Act (HIPAA) regulations and sign a data-sharing agreement to safeguard patient privacy.

Beneficiaries will be informed of the data-sharing arrangement and have the option to opt out of sharing identifiable data. However, they cannot opt out of sharing deidentified data or attribution-related information. CMS will ensure that shared data is limited to what is necessary for the model's healthcare operations.

Overlap with Other Payment Models and Regulatory Efforts

The IOTA Model is expected to overlap with other CMS programs and models, potentially leading to hospitals simultaneously participating in multiple Advanced Payment Models (APMs) with overlapping financial incentives. CMS anticipates intersections with programs such as the Kidney Care Choices (KCC) Model, the End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model, the Medicare Shared Savings Program (MSSP), the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model, and the Hospital Value-Based Purchasing (VBP) Program.

CMS has finalized a proposal to allow IOTA participants to engage concurrently in IOTA and other CMS Innovation Center models or CMS programs. The agency will monitor the transplant ecosystem to identify and address any unintended consequences in future rulemaking.

Of significant note, the finalized rule removes previous Medicare reapproval requirements for transplant hospitals, including data submission and outcomes metrics. CMS notes these changes address concerns about duplicative regulations between CMS and OPTN and their impact on transplant program behavior. CMS stated that emphasizing organ and patient survival rates had inadvertently incentivized programs to prioritize low-risk transplants, potentially disadvantaging patients on the waitlist.

Waiver Request to Collaborate with a Different OPO

CMS received a comment suggesting that CMS prioritize waiver requests from hospitals seeking to collaborate with a different OPO before proceeding with the development of a new transplant model. CMS noted that the suggestion falls outside the scope of this rule.

Fraud and Abuse

To promote transparency and protect beneficiaries, CMS will require IOTA participants to notify patients of their involvement in the model. A mandatory notification template will be provided for this purpose. Participants must also display a notice of beneficiary rights and protections at office or facility locations.

Although beneficiaries cannot opt out of being attributed to an IOTA participant, they retain the freedom to choose a different kidney transplant hospital or provider for their care.

Compliance – Site Visits

CMS will monitor compliance through documentation requests, data audits, patient interviews and site visits. This oversight ensures adherence to model terms and safeguards patient care, including preventing manipulations of organ allocation practices. CMS retains the authority to intervene, adjust payments or require refunds if discrepancies are identified.

Site visits will typically be conducted with at least 15 days' notice, but unannounced visits may occur in cases of urgent concerns regarding patient safety or program integrity. The purpose of these visits is to evaluate compliance and verify that medically necessary services are delivered without discrimination.

Notes

¹ CMS' Office of the Actuary believes CMS will see projected savings of $22 million if the maximum adjustment were raised to $15,000.

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