Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model

In the 2025 Proposed Rule (90 FR 57622), we sought input on several requests for information (RFIs). 1. Pre-Transplantation Access Process Measure

In the proposed rule (90 FR 57623), we sought comment on the potential use of pre-transplantation access process measures in the IOTA Model. Specifically, we sought feedback on the following questions:

For kidney transplant hospitals: What existing measures are being used to measure access to the waitlist or transplantation evaluation processes?

++ What are the domains, strengths, and weaknesses of these measures?

++ Are there factors that could make these measures more meaningful and practical?

++ Are there existing measures being used to measure time from referral to waitlist or waitlist to transplantation?

++ Would this type of measurement be useful for improving access to kidney transplantation?

++ How do these measures provide information that can be used to improve patient care and healthcare systems?

++ What unintended consequences could arise by measuring waitlist to referral and pre-transplant processes?

++ What data would be necessary to create measures of time from referral to waitlist and time from waitlist to transplant?

++ How could that data be transmitted to CMS in a way that minimizes burden to transplant hospitals?

++ What data would be necessary to create a measure on those specified components?

For kidney transplant recipients and dialysis and ESRD patients: Why is a quality measure that looks at access to waitlist and pre-transplantation processes important to include?

++ What criteria would make this type of measure most useful for driving access to kidney transplantation?

For all stakeholders: When measuring pre-transplantation processes, what specific components should be analyzed (for example, time from referral to waitlist, time from waitlist to transplant)?

While we will not be responding to specific comments submitted in response to this RFI in this final rule, we intend to use this input to inform any future quality measure efforts, as appropriate. 2. Allocation Out-of-Sequence (AOOS)

In the 2025 Proposed Rule (90 FR 57623), we sought comment on how CMS should account for, monitor, and provide transparency around the use of AOOS in transplant performance measurement and patient notification in the IOTA Model. Specifically, we sought feedback on the following questions:

How should CMS account for organs AOOS in the achievement domain? Should CMS adjust the counting of any deceased donor transplants performed on organs AOOS?

How should CMS account for organs AOOS in the efficiency domain? Should CMS adjust scoring in the numerator or denominator of the metric to account for this?

What de-identified data would be helpful for CMS and HRSA to share with the public about the use of AOOS in the IOTA Model and in the overall transplant system?

Should kidney transplant waitlist patients be notified about a transplant hospital bypassing them on the match run for a patient who is lower on the match run? What is the right way to inform kidney transplant waitlist patients about this occurrence and how does that align with the organ offer transparency provisions described elsewhere in this final rule or the IOTA Model? How should CMS monitor that this has occurred?

Through our monitoring efforts laid out in Sec. 512.462(b)(2)(x), we plan to monitor AOOS. What considerations or stratifications should CMS take into account when monitoring AOOS?

While we will not be responding to specific comments submitted in response to this RFI in this final rule,

we intend to use this input to inform any future quality measure or CMS policy efforts, as appropriate.

We have examined the impacts of this final rule as required by Executive Order 12866, “Regulatory Planning and Review”; Executive Order 13132, “Federalism“; Executive Order 13563, “Improving Regulation and Regulatory Review”; Executive Order 14192, “Unleashing Prosperity Through Deregulation”; the Regulatory Flexibility Act (RFA) (Pub. L. 96-354); section 1102(b) of the Social Security Act; and section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104- 4).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select those regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts.). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as any regulatory action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, or the President's priorities.

A regulatory impact analysis (RIA) must be prepared for a regulatory action that is significant under section 3(f)(1) of E.O. 12866. Based on our estimates, the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) has determined this rulemaking is not significant per section 3(f)(1) of E.O. 12866. Although we do not come close to the threshold to be considered significant under section 3(f)(1), we have prepared an RIA that to the best of our ability presents the costs and benefits of the rulemaking. In accordance with the provisions of Executive Order 12866, this final rule was reviewed by the Office of Management and Budget.

Table 12 summarizes the policy changes modeled for each version of the rule. Starting with the 2025 Proposed Rule, the baseline projection from the 2024 Final Rule was revised to include updated projections regarding the declining share of beneficiaries in Medicare FFS versus MA currently expected over the course of the model. The projected impact of the inclusion of MA beneficiaries in the definition of Medicare kidney transplants was first modeled in the 2025 Proposed Rule as an alternative considered and is being finalized in this 2026 Final Rule. The inclusion of MA beneficiaries in the definition of Medicare kidney transplants allows for upside and downside risk payments to be calculated using the number of kidney transplants furnished to both beneficiaries of Medicare FFS and MA as primary or secondary payer. The inclusion of MA beneficiaries accounts for growth in MA, mitigates variation in geographic MA penetration, and increases savings to the Medicare trust fund. The 2025 Proposed Rule also projected the impact of decreasing the maximum upside risk payment from $15,000 to $10,000, as an alternative considered along with the inclusion of MA beneficiaries in the definition of Medicare kidney transplants, but this 2026 Final Rule is not finalizing a reduction in the maximum upside risk payment. [GRAPHIC] [TIFF OMITTED] TR01JN26.200

The original points allocation for the composite graft survival rate in the 2024 Final Rule had the potential to penalize kidney transplant hospitals that accept higher-risk kidney transplant patients. The proposed scoring in the 2025 Proposed Rule aimed to remove the possibility of getting free points for poor performance and provide a more even scoring distribution for participants. The 2026 Final Rule builds upon the scoring methodology in the 2025 Proposed Rule by increasing the number of possible scores from five to eight to remove the potential for large disparities among point distributions and align scoring with the achievement domain. Table D 13 illustrates the allocation of points awarded to IOTA participants for the composite graft survival rate in this final rule. [GRAPHIC] [TIFF OMITTED] TR01JN26.201

As described in detail in the 2024 Final Rule, a stochastic model was constructed to estimate the financial impact of the IOTA Model. When possible, assumptions were informed by historical data. Transplant hospital adult transplant counts by donor type and recipients' primary source of payment were obtained from the Scientific Registry of Transplant Recipients (SRTR) dashboard.\117\ Organ offer acceptance ratios \118\ and the composite graft survival rate \119\ were analyzed from SRTR's program-specific statistics and transplant hospital-level data on kidney transplants. The SRTR data source includes data on all transplant donors, candidates, and recipients in the U.S.

\117\ Scientific Registry of Transplant Recipients. Adult Recipient Transplants By Donor Type, Center: U.S. Transplants Performed: January 1, 1988-September 30, 2024; For Organ = Kidney; Include: Transplant Year & Recipient Primary Source of Payment. https://optn.transplant.hrsa.gov/data/view-data-reports/national-data/. Accessed October 22, 2024.

\118\ Scientific Registry of Transplant Recipients. National Center Level Data by Organ: Kidney CSRS Final Tables, Table B11 & Figures B10-B14. https://www.srtr.org/reports/program-specific-reports/. Accessed May 25, 2023.

\119\ Scientific Registry of Transplant Recipients. National Center Level Data by Organ: Kidney CSRS Final Tables, Tables C5-C12 Figures C1-C20. https://www.srtr.org/reports/program-specificreports/. Accessed May 25, 2023.

IOTA participants receive upside or downside risk payments based on their performance across three domains: achievement, efficiency, and quality. The upside risk payment is a lump sum payment paid by CMS to the IOTA participants that achieve high final performance scores. Conversely, the downside risk payment is a lump sum payment paid to CMS by the IOTA participants with low final performance scores. The performance-based payments are based on the following thresholds. Total scores of 60 and above result in a maximum upside risk payment of $15,000, CMS will calculate the IOTA participant's upside risk payment by subtracting 60 from the IOTA participant's final performance score, dividing the resulting amount by 40, multiplying the calculated amount by $15,000 and multiplying that amount by the total number of Medicare kidney transplants performed by the IOTA participant during the relevant PY. Scores below 60 fall into the neutral zone with no upside or downside risk payment in PY 1. After the first PY, scores from 41 to 59 fall in the neutral zone, and scores of 40 and below would receive a downside risk payment. The maximum downside risk payment in the model is $2,000. For downside risk payments, beginning in PY 2, CMS will calculate the downside risk payment by subtracting the IOTA participant's final performance score from 40, divide that number by 40, multiplying the resulting amount by $2,000 and multiplying that amount by the total number of Medicare kidney transplants performed by the IOTA participant during the relevant PY.

We applied assumptions for transplant growth and performance on other domains affecting the incentive formula for included transplant hospitals for purposes of estimating impacts in this portion of the rule. Random variables accounted for variation in transplant growth and transplant hospital-level performance on other measures. A pivotal uncertainty relates to the potential growth in transplants as a result of upside and downside risk payments presented by the model. The current share of deceased donated kidneys that are discarded is roughly 20 percent.120 121 Such growth was assumed to phase in over a 2- to 5-year period using a skewed distribution, with a gradual phase-in of 5 years being the most likely outcome.

\120\ Li MT, King KL, Husain SA, et al. 2021. “Deceased Donor Kidneys Utilization and Discard Rates During COVID-19 Pandemic in the United States.” Kidney Int Rep; 6(9): 2463-2467. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8419126/.

\121\ Robinson A, Booker S, Gauntt K, UNOS Research Department. 2022. “Eliminate Use of DSA and Region from Kidney Allocation One Year Post-Implementation Monitoring Report.” OPTN Kidney Transplantation Descriptive Data Report. https://optn.transplant.hrsa.gov/media/p2oc3ada/datareport_kidney_full_20220624_1.pdf.

Table 14 shows the projected impacts for upside and downside risk payments, transplants, and Federal spending in the 2026 Final Rule. In the final rule, we are maintaining the revised baseline, including MA beneficiaries in the definition of Medicare kidney transplants, keeping the maximum upside risk payment at $15,000, and applying the finalized scoring on the composite graft survival rate (Table 13). Transplant recipients with any type of insurance may benefit from a kidney transplant hospital's participation in the model. Model payments in this final rule are based on the number of transplant recipients who are beneficiaries with Medicare FFS or MA coverage including beneficiaries with Medicare as a secondary payer. Roughly 30 percent of IOTA participants are

projected to receive upside risk payments in the first year (PY 1), rising to about 38 percent over the succeeding 5 PYs, with fewer than 24 percent of IOTA participants projected to owe downside risk payments in any of PYs 2 through 6. The magnitude of the average downside risk payment is relatively small, and the cumulative projected upside risk payments to IOTA participants, amounting to $135 million, are nearly 45 times the magnitude of a cumulative $3 million in projected receipts from downside risk payments from IOTA participants to CMS. The amount of projected savings from new kidney transplants was greater than the net cost of payments in about 77 percent of simulation trials. Therefore, in approximately 23% (100%-77%) of the 10,000 simulation trials for the IOTA Model, the projected net cost of payments will exceed the projected savings from new kidney transplants. The projected costs for those simulation trials range from $1 M to $310 M with a mean of $58 M and a median of $45 M over the 6-year model period. In Table 14, the mean 4,766 added transplants over the 6-year model period represents the number of new deceased or living donor transplants performed by IOTA participants for transplant recipients with any type of insurance. Overall, mean net savings totaled $88 million over 6 years, ranging from a savings of $246 million to a cost of $52 million at the 10th and 90th percentiles, respectively. [GRAPHIC] [TIFF OMITTED] TR01JN26.202

In Table D 14, negative spending reflects a reduction in Medicare spending, while positive spending reflects an increase in Medicare spending. The mean net savings results were generated from the average of 10,000 individual simulation trials and the results for the percentiles are from the top 10th and 90th percentiles of the 10,000 individual simulations. The outcomes in each row do not necessarily flow from the same trial in the model at the 10th and 90th percentiles. For example, the 90th percentile for added transplants more likely corresponds to the trial that produced the 10th percentile in impact on Federal spending from those kidney transplants (because spending is reduced when kidney transplants grow). 3. Net Impact of Final Changes

In Table 15, we show the impact of the finalized changes on projected model outcomes, given by taking the finalized impacts in Table 14 less the proposed impacts from the 2025 Proposed Rule. The 2025 Proposed Rule illustrated the impact of a revised baseline, exclusion of MA beneficiaries in the definition of Medicare kidney transplants, a maximum upside risk payment of $15,000, and a proposed update to the scoring on the composite graft survival rate. The inclusion of MA beneficiaries is projected, on average, to result in marginally greater overall savings through additional growth in transplantation, because downstream savings (mainly through obviating the need for maintenance dialysis) are on average projected to ultimately exceed the elevated up-front expense for transplantation. This is offset by the finalized scoring methodology for the composite graft survival rate, which results in higher total upside risk payments due to the increase in the number of IOTA participants scoring in the upper percentile thresholds after the number of categories increased from five to eight. The range of uncertainty grew because the stakes are higher (greater potential savings from new transplants contrasted with greater incentive payouts). The model's net impact is projected to save nearly $38 million more in total over 6 years relative to the revised baseline.

[GRAPHIC] [TIFF OMITTED] TR01JN26.203

In Table 16, we show the impact of the finalized changes on projected model outcomes, given by taking the finalized impacts in Table 14 less the proposed impacts from the 2025 Proposed Rule Alternative. The 2025 Proposed Rule Alternative showed the impact of a revised baseline, inclusion of MA beneficiaries in the definition of Medicare kidney transplants, a maximum upside risk payment of $10,000, and the original scoring methodology for the composite graft survival rate. The increase in the maximum upside risk payment from $10,000 to $15,000 and finalized scoring methodology for the composite graft survival rate are projected, on average, to result in a minor increase in costs. This is due to a 78 percent increase in net incentive payments largely offset by a 28 percent increase in gross savings. The model's net impact is projected to save approximately $10 million less in total over 6 years relative to the Proposed Rule Alternative. [GRAPHIC] [TIFF OMITTED] TR01JN26.204

Finally, in Table 17, the difference is shown for the model as finalized in this final rule (from Table 14) relative to the baseline model specifications originally published in the 2024 Final Rule and re-estimated in the 2025 Proposed Rule. \122\ This represents the estimated impact of this final rule in terms of the incremental changes for the various outcomes relative to what the model would have been expected to produce under the original finalized policies that would otherwise remain effective absent this new final rule. In Table 17, the mean 1,370 added transplants over the 6-year model period are due to the following reasons: (1) the inclusion of MA beneficiaries in the definition of Medicare kidney transplants; and (2) more IOTA participants were estimated to receive a positive incentive any given year because of the finalized scoring methodology for the composite graft survival rate, which results in higher total upside risk payments due to the increase in the number of IOTA participants scoring in the upper percentile thresholds after the number of categories increased from five to eight.

\122\ The baseline impact estimates from which the relative impacts are calculated can be found in 90 FR 57625, Table 4 of the 2025 Proposed Rule published on December 11, 2025.

[GRAPHIC] [TIFF OMITTED] TR01JN26.205

While the model is focused on transplant outcome measures that would be calculated by CMS, there would likely be some additional burden for compliance for the IOTA participants (that is, kidney transplant hospitals). To estimate the compliance cost we focused on Sec. 512.442(c) that requires IOTA participants to review organ offer acceptance criteria with IOTA waitlist patients who are Medicare beneficiaries at least every 6 months that the Medicare beneficiary is on their waitlist. For this estimate, we assume that the IOTA participant will take a total of 15 minutes per patient per year to review the criteria at least twice a year with each patient. This assumption likely yields an upper estimate since the method (for example, patient visit, phone, email, or mail) of how the IOTA participant communicates the review with the IOTA waitlist patient who is a Medicare beneficiary is up to the IOTA participant and will likely vary by IOTA participant, potentially reducing the time to conduct the review. In addition, the IOTA waitlist patient who is a Medicare beneficiary may decline the review, resulting in the IOTA participant having fewer Medicare waitlist patients than what is used in our estimate.

We estimate that the average IOTA participant would have 200 waitlist patients who are Medicare primary payer or Medicare secondary payer beneficiaries per year and that it would take a clinician 15 minutes to review organ offer acceptance criteria with each patient at least twice each year. Using base wage information from the Bureau Labor of Statistics (BLS) for a nurse practitioner (series 29-1171), we estimate the cost of completing these reviews to be $63.46 per hour.123 124 The base wage is then doubled [$63.46 x 2] to account for fringe benefits and overhead to equal an estimated cost of $126.92 per hour.\125\ The cost of completing these reviews would then be $6,346.00 per kidney transplant hospital per year [200 Medicare IOTA waitlist patients x 0.25 hour per review each year x $126.92 hourly wage]. We also estimate that 25 percent of beneficiaries would need to be notified of a change in waitlist status. Using the same wage assumption noted previously, this would add $1,587 in cost per hospital [50 Medicare IOTA waitlist patients requiring a notification of a change in waitlist status x 0.25 hour per notification x $126.92 hourly wage]. Total estimated hospital cost per year is $7,933 per year [$6,346 + $1,587]. Therefore, the total cost would come out to $753,635 to complete the review of organ offer acceptance criteria for the 95 kidney transplant hospitals selected as IOTA participants [$7,933 x 95 IOTA participants = $753,635]. The average total revenue for IOTA participants was calculated from inpatient claims with DRGs 008, 019, 650, 651, or 652 submitted for adult Medicare FFS or MA beneficiaries with Medicare as their primary or secondary payer was estimated to be $2 million in calendar year (CY) 2024. Therefore, the $7,933 cost per IOTA participant to review the organ offer acceptance criteria would represent 0.4 percent [$7,933/$2,000,000 = 0.4 percent] of their estimated total annual revenue from kidney transplants for Medicare beneficiaries.

\123\ Bureau of Labor Statistics (BLS). May 2024. “Occupational Employment and Wage Statistics.” Accessed on March 30, 2026. https://www.bls.gov/oes/current/oes_nat.htm

\124\ The most recent publicly available BLS Occupational Employment and Wage Statistics data are for May 2024 as of March 2026.

\125\ Guidelines for the adjustment in base wages is based on the following report: Office of the Assistant Secretary for Planning and Evaluation (ASPE). 2017. “Valuing Time in U.S. Department of Health and Human Services Regulatory Impact Analyses: Conceptual Framework and Best Practices.” https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.

Due to the uncertainty involved with accurately quantifying the number of entities that will review the rule, we assume that the 160 total unique commenters on last year's proposed rule will be the number of reviewers of this final rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this rule. It is possible that not all commenters reviewed last year's rule in detail, and it is also possible that some reviewers chose not to comment on the proposed rule. For these reasons we thought that the number of past commenters would be a fair estimate of the number of reviewers of this rule. We welcome any comments on the approach in estimating the number of entities which will review this final rule.

We also recognize that different types of entities are in many cases affected by mutually exclusive sections of this final rule; and therefore, for the purposes of our estimate we assume that each reviewer reads approximately 50 percent of the rule. We sought comments on this assumption.

We estimate the time it will take for a medical and health services manager to review the proposed rule to be 1 hour [30,000 words x 50 percent read through / 250 words per minute / 60 minutes = 1 hour]. Using the wage information from BLS for medical and health service managers (Code 11-9111), we estimate that the cost of reviewing this rule is $132.44 per hour, including overhead and fringe benefits [$66.22 mean hourly wage x 2 = $132.44].\126\ The cost of reviewing the rule for each commenter would be $132.44 [1 hour to review the rule x $132.44 per hour = $132.44] or a

total cost of $21,190.40 [$132.44 x 160 unique commenters = $21,190.40].

\126\ Bureau of Labor Statistics (BLS). May 2024. “Occupational Employment and Wage Statistics.” Accessed on March 20, 2026. https://www.bls.gov/oes/current/oes_nat.htm

Assuming that not all commenters will be IOTA participants and to put the cost of the regulatory review for kidney transplant hospitals in context, we calculate the cost of reviewing the rule separately for the IOTA participants. The cost of reviewing the rule for each IOTA participant would be $132.44 [1 hour to review the rule x $132.44 per hour = $132.44] or a total cost of $12,581.80 [$132.44 x 95 IOTA participants = $12,581.80]. Therefore, the $132.44 cost per IOTA participant to complete the regulatory review would represent approximately 0.007 percent [$132.44/$2,000,000 = 0.007%] of their estimated total annual revenue from kidney transplants for Medicare beneficiaries.

Overall, kidney transplants only represent a small fraction of the revenue IOTA participants make and even the largest per transplant downside risk payment of $2,000 would not represent a significant economic impact on small entities. Effects on IOTA participants in the model include the potential for additional upside risk payments from CMS to the IOTA participant of up to $15,000 per eligible kidney transplant or downside risk payments from the IOTA participant to CMS of up to $2,000 per eligible kidney transplant (refer to section IV.C. (Detailed Economic Analysis) of the 2024 Final Rule for a description of how upside and downside risk payments are calculated in the model). We project that payouts will far exceed the relatively small sum of downside risk payments expected over the 6-year model performance period. Only about $3 million in total downside risk payments are expected over the 6 years, with fewer than 22 percent of IOTA participants projected to owe downside risk payments in any of years 3 through 6. By contrast, we project that $135 million in total upside risk payments would be made over 6 years to roughly 30 percent of IOTA participants in the first year, rising to about 37 percent over the succeeding 5 model years.

Under the RFA, agencies are to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small

entities. The great majority of hospitals and most other health care providers and suppliers are small entities, either by being nonprofit organizations or by meeting the SBA definition of a small business (having revenues of less than $9.0 million to $47.0 million in any 1 year). Although many IOTA participants (that is, kidney transplant hospitals with NAICS 622110 General Medical and Surgical Hospitals) may be small entities as that term is used in the RFA, kidney transplants only represent a small fraction of the revenue such hospitals generate, and even the largest per transplant downside risk payment of $2,000 (which is not expected to apply to any hospitals at the median projection and only about 1 percent of hospitals at the 90th percentile projection) would not represent a significant economic impact. Additional sources of financial burden on IOTA participants to consider include the estimated cost of $6,346.00 per IOTA participant per year to review the organ offer acceptance criteria with IOTA waitlist patients who are Medicare beneficiaries, $1,587 to notify patients about changes in their waitlist status, and the one-time cost of $132.44 per IOTA participant to have their medical and health services manager review this rule. Refer to the sections titled, “Estimated Burden on Participant Hospitals” and “Regulatory Review Cost Estimation” in this final rule for an explanation of how these burden estimates were determined.

As its measure of significant economic impact on a substantial number of small entities, HHS uses a change in revenue of more than 3 to 5 percent. The $6,346.00 cost per IOTA participant to review the organ offer acceptance criteria, $1,587 for notifying patients about a change in status, and the $132.44 cost per IOTA participant to complete the regulatory review would represent 0.3 percent, 0.1 percent, and 0.007 percent, respectively, of the estimated total annual revenue per IOTA participant from inpatient claims with DRGs 008, 019, 650, 651, or 652 submitted for adult Medicare FFS or MA beneficiaries with Medicare as their primary or secondary payer. The total estimated average total burden per hospital of $8,065 would only represent 3 percent or more of total annual hospital revenue if total annual hospital revenue were less or equal to about $269,000. However, it would not be possible for a transplant hospital meeting the minimum 15 kidney transplants per year to have revenue low enough to approach such minimum threshold. Based on these estimates, we do not believe that this threshold will be reached by the requirements in this final rule. Therefore, the Secretary has certified that this final rule will not have a significant economic impact on a substantial number of small entities.

In addition, under section 1102(b) of the Act, a regulatory impact analysis should be prepared if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. We believe this final rule would not have a significant impact on small rural hospitals. Currently, no small rural hospitals are IOTA participants and no additional IOTA participants are being proposed. Therefore, the Secretary has certified that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.

Administrative practice and procedure, Health facilities, Medicare, Recordkeeping requirements.

Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services, approved this document on May 28, 2026.

For the reasons set forth in the preamble the Centers for Medicare & Medicaid Services amends 42 CFR part 512 as set forth below:

PART 512--STANDARD PROVISIONS FOR MANDATORY INNOVATION CENTER MODELS AND SPECIFIC PROVISIONS FOR CERTAIN MODELS

0 1. The authority citation for part 512 continues to read as follows:

Authority: 42 U.S.C. 1302, 1315a, and 1395hh.

0 2. Section 512.402 is amended by: 0 a. Removing the definitions for “Health equity goals,” “Health equity plan intervention,” “Health equity plan performance measure(s),” and “Health equity project plan”; 0 b. Adding the definition for “MA”; 0 c. Revising the definition for “Medicare kidney transplant”; 0 d. Adding the definitions for “Military medical treatment facility,” “MPSC”, and PRA; 0 e. Removing the definition for “Resource gap analysis”; 0 f. Adding the definition for “Single-organ kidney transplant”; 0 g. Removing the definition for “Target health disparities”; 0 h. Adding the definition for “Transplant organ offer acceptance criteria”; 0 i. Removing the definition for “Underserved communities”; and 0 j. Adding definition for “VA medical facility”.

The additions and revisions read as follows:

Sec. 512.402 Definitions.

* * * * *

MA stands for Medicare Advantage. * * * * *

Medicare kidney transplant means a kidney transplant furnished to an

attributed patient in the IOTA Model whose primary or secondary insurance is Medicare fee for service (FFS) or MA, as identified in Medicare FFS claims with MS-DRGs 008, 019, 650, 651, and 652, or through OPTN data. * * * * *

Military medical treatment facility (MTF) means both of the following:

(1) Any fixed facility of the Department of Defense that is outside of a deployed environment and used primarily for health care.

(2) Any other location used for purposes of providing health care. services as designated by the Secretary of Defense as defined in 10 U.S.C. 1073c(j)(3). * * * * *

MPSC stands for Membership and Professional Standards Committee. * * * * *

PRA stands for panel-reactive antibody. * * * * *

Single-organ kidney transplant means the procedure in which a kidney alone is surgically transplanted from a living or deceased donor to a transplant recipient alone. * * * * *

Transplant organ offer acceptance criteria means individualized patient acceptance parameters that kidney waitlist patients, as defined at Sec. 512.402, may elect regarding the categories of organ offers they are prepared to accept for transplantation. * * * * *

VA medical facility means a VA hospital, a VA community-based outpatient clinic, or a VA health care center, any of which must have at least one full-time primary care physician as defined in 38 CFR 17.1505. A Vet Center, or Readjustment Counseling Service Center, is not a VA medical facility. * * * * *

0 3. Section 512.412 is amended by-- 0 a. In paragraph (a) introductory text, removing the phrase “meets both of the following” and adding in its place the phrase “meets all of the following”. 0 b. In paragraph (a)(1), removing the figure “11” and adding in its place the figure “15”. 0 c. Adding paragraph (a)(3).

The addition reads as follows:

Sec. 512.412 Participant eligibility and selection.

(a) * * *

(3) The kidney transplant hospital is not an MTF or VA medical facility as defined at Sec. 512.402. * * * * *

Sec. 512.414 [Amended]

0 4. Section 512.414 is amended by redesignating paragraphs (b)(3)(A) through (D) as paragraphs (b)(3)(i) through (iv).

0 5. Section 512.428 is amended by-- 0 a. Revising paragraphs (b)(1)(ii), (b)(1)(iii)(E), and (b)(1)(iv)(A); 0 b. Adding paragraphs (b)(2) and (3); 0 c. Revising Table 1 to paragraph (d).

The revisions and additions read as follows:

Sec. 512.428 Quality domain.

* * * * *

(b) * * *

(1) * * *

(ii) For all subsequent PYs, CMS calculates the IOTA participant's cumulative composite graft survival rate using the same calculation methodology described in paragraph (b)(1) of this section and in accordance with paragraph (b)(2) of this section.

(iii) * * *

(E) Multi-organ transplants (except for kidney/pancreas transplants).

(iv)(A) When calculating the composite graft survival rate, CMS only includes single-organ kidney transplants, as defined at Sec. 512.402, and kidney/pancreas transplants for patients who are 18 years of age and older at the time of the kidney transplant in the number of kidney transplants performed by the IOTA participant during each PY in the denominator. * * * * *

(2) Risk-adjustment transplant recipient and donor characteristics. In accordance with paragraphs (b)(1) through (3) of this section, CMS risk-adjusts the composite graft survival rate using SRTR's adult kidney graft survival first-year outcomes variables in accordance with paragraphs (3)(i) through (iii) of this section.

(3) Risk-adjustment methodology--(i) Calculation of Observed Composite Graft Survival Rate. In accordance with paragraph (b)(1) of this section, CMS calculates the observed composite graft survival rate by dividing the number of functioning grafts plus two by the total number of completed kidney transplants plus two, as described in equation 2 to paragraph (b)(3)(i) of this section.

Equation 2 to Paragraph (b)(3)(i): Observed Composite Graft Survival Rate Calculation. [GRAPHIC] [TIFF OMITTED] TR01JN26.207

(ii) Risk score calculation methodology. CMS calculates a risk score for each IOTA participant as follows:

(A) Expected graft failure rate Calculation.

(1) CMS calculates the expected graft failure rate using SRTR's methodology as described in equation 3 to paragraph (b)(3)(ii)(A)(1).

Equation 3 to Paragraph (b)(3)(ii)(A)(1): Expected Graft Failure Rate Calculation. [GRAPHIC] [TIFF OMITTED] TR01JN26.208

(2) CMS uses both of the following:

(i) SRTR adult kidney graft survival first-year post-transplant risk-adjustment models for both deceased donor and living donor kidney transplants.

(ii) SRTR's most available set of coefficients.

(B) National graft failure rate calculation. (1) CMS calculates the national graft failure rate by dividing the number of graft failures in a given PY by the number of completed kidney transplants in a given PY, as described in equation 4 to paragraph (b)(3)(ii)(B)(1) of this section.

Equation 4 to Paragraph (b)(3)(ii)(B)(1): National Graft Failure Rate Calculation.

[GRAPHIC] [TIFF OMITTED] TR01JN26.209

(2) When calculating the national graft failure rate, CMS excludes all of the following:

(i) Patients who are under the age of 18 years of age at the time of the kidney transplant.

(ii) Pediatric kidney transplant hospitals as defined at Sec. 512.402.

(iii) Multi-organ transplants (except for kidney/pancreas transplants).

(3) In accordance with the provisions in paragraph (b)(3)(ii)(B)(2) of this section, CMS includes kidney transplant patients who have experienced any of the following in the numerator when calculating the national graft failure rate:

(i) Graft failure, based on OPTN adult kidney transplant recipient follow-up forms for all completed kidney transplants to determine failed grafts as defined by SRTR.

(ii) Re-transplant.

(iii) Death.

(4) When calculating the national graft failure rate, CMS only includes single-organ kidney transplants, as defined at Sec. 512.402, and kidney/pancreas transplants for patients who are 18 years of age and older at the time of the kidney transplant in the number of kidney transplants performed during the given PY in the denominator.

(C) Risk Score Calculation. CMS calculates the risk score for each IOTA participant by dividing the amount resulting from the calculation in paragraph (b)(3)(ii)(A) by the amount resulting from the calculation in paragraph (b)(3)(ii)(B) as described in equation 5 to paragraph (b)(3)(ii)(C) of this section.

Equation 5 to Paragraph (b)(3)(ii)(C): Risk Score Calculation. [GRAPHIC] [TIFF OMITTED] TR01JN26.210

(iii) Risk-Adjusted Composite Graft Survival Rate Calculation. CMS calculates the risk-adjusted composite graft survival rate for each IOTA participant by multiplying the amount resulting from the calculation in paragraph (b)(3)(i) of this section by the amount resulting from the calculation in paragraph (b)(3)(ii) of this section, as described in equation 6 to paragraph (b)(3)(iii) of this section.

Equation 6 to Paragraph (b)(3)(iii): Risk-Adjusted Composite Graft Survival Rate Calculation [GRAPHIC] [TIFF OMITTED] TR01JN26.211

* * * * *

(3) [Reserved.]

(d) * * *

Table 1 to Paragraph (d)--IOTA Model Composite Graft Survival Rate

Scoring

Performance relative to Lower bound Upper bound Points

national ranking condition condition earned

87.5th percentile............ Equals 87.5th Greater than 20

percentile. 87.5th

percentile. 75th percentile.............. Equals 75th Less than 18

percentile. 87.5th

percentile. 62.5th percentile............ Equals 62.5th Less than 75th 15

percentile. percentile. 50th percentile.............. Equals 50th Less than 13

percentile. 62.5th

percentile. 37.5th percentile............ Equals 37.5th Less than 50th 10

percentile. percentile. 25th percentile.............. Equals 25th Less than 8

percentile. 37.5th

percentile. 12.5th percentile............ Equals 12.5th Less than 25th 5

percentile. percentile. 12.5th percentile............ N/A............ Less than 0

12.5th

percentile.

0 6. Section 512.430 is amended by-- 0 a. In paragraph (b)(1) introductory text, removing the phrase “is 60 points or above,” and adding in its place the phrase “is above 60 points,”; 0 b. In paragraph (b)(2)(ii), removing the phrase “between 41 to 59 points (inclusive),” and adding in its place the phrase “between 40 to 60 points (inclusive)”; 0 c. In paragraph (b)(3) introductory text, removing the phrase “is at or below 40 points” and adding in its place the phrase “is below 40 points”; and 0 d. Revising paragraph (d)(6)(ii)

The revision read as follows:

Sec. 512.430 Upside risk payment, downside risk payment, and neutral zone.

* * * * *

(d) * * *

(6) * * *

(ii) The IOTA participant must pay the downside risk payment to CMS in a single payment within 60 days after the date on which the demand letter is issued. If full payment is not received by CMS within 60 days after demand is made, CMS will invoke all legal means to collect the debt, including referral of the remaining debt to the United States Department of the Treasury, in accordance with 31 U.S.C. 3711(g).

0 7. Section 512.436 is amended by revising paragraph (b) introductory text to read as follows:

Sec. 512.436 Extreme and uncontrollable circumstances.

* * * * *

(b) Impact on payments. In the event of an extreme and uncontrollable circumstance, as described in paragraph (a) of this section, CMS may adjust the magnitude and direction of the IOTA participant's upside or downside risk payment, if applicable, prior to recoupment or payment, if the IOTA participant is participating in the IOTA Model when CMS has declared such an emergency period. CMS may determine any adjustment made based in part on the following: * * * * *

0 8. Section 512.442 is amended by-- 0 a. Revising paragraph (a); 0 b. In paragraph (c) introductory text, removing the phrase “acceptance criteria with” and adding in its place the phrase “acceptance criteria (as defined at Sec. 512.402) with”; 0 c. Revising paragraphs (c)(1) and (2); 0 d. Adding paragraph (d).

The revisions and addition read as follows:

Sec. 512.442 Transparency requirements.

(a) Publication of selection criteria. (1) The IOTA participant must publicly post on its website the criteria used by the IOTA participant for evaluating and selecting patients for addition to their kidney transplant waitlist by the end of PY 1.

(2) For all subsequent PYs, the IOTA participant must review its publicly posted criteria used for evaluating and selecting patients for addition to its kidney transplant waitlist and ensure that the information is up to date on its website by the end of each relevant PY.

(3) IOTA participants performing living donor kidney transplants must--

(i) Publicly post on its website its living donor selection criteria for evaluating potential living donors for kidney transplant waitlist patients by the end of PY 2; and

(ii) For all subsequent PYs, review its living donor selection criteria for evaluating potential living donors for kidney transplant waitlist patients and ensure that the information on its website is correct by the end of each relevant PY. * * * * *

(c) * * *

(1) The IOTA participant must conduct this review via patient visit, phone, email or mail on an individual basis, unless the Medicare beneficiary declines this review.

(i) Prior to reviewing transplant organ offer acceptance criteria, as defined at Sec. 512.402, with IOTA waitlist patients who are Medicare beneficiaries, IOTA participants must give these beneficiaries an opportunity to decline this review.

(ii) If an IOTA waitlist patient who is a Medicare beneficiary declines this review, the IOTA participant must do both of the following:

(A) Record in the IOTA waitlist patient who is a Medicare beneficiary's medical record all of the following:

(1) The date on which this review was declined.

(2) The method by which this review was declined.

(B) Offer the IOTA waitlist patient who is a Medicare beneficiary the opportunity to review transplant organ offer acceptance criteria once every 6 months at which time the IOTA waitlist patient who is a Medicare beneficiary will have the opportunity to decline this review again.

(2) The IOTA participant must record in the IOTA waitlist patient who is a Medicare beneficiary's medical record all of the following:

(i) The information specified in paragraph (c) of this section was reviewed with the IOTA waitlist patient who is a Medicare beneficiary.

(ii) The date in which this review took place.

(iii) The method by which this review was delivered.

(d) Change in waitlist status notification. (1) The IOTA participant must do the following for all IOTA waitlist patients who are Medicare beneficiaries during the model performance period:

(i) Inform IOTA waitlist patients who are Medicare beneficiaries any time their status on the waitlist is changed that would impact their ability to receive an organ offer (that is, from active to inactive).

(ii) When there is a change in waitlist status, provide notifications to each IOTA waitlist patient who is a Medicare beneficiary that includes all of the following:

(A) The most recent date the IOTA waitlist patient who is a Medicare beneficiary became inactive.

(B) The reason for the change in waitlist status.

(C) That the IOTA waitlist patient who is a Medicare beneficiary cannot receive organ offers while inactive.

(D) Information on how the IOTA waitlist patient who is a Medicare beneficiary may become active on its waitlist again.

(E) How the IOTA waitlist patient who is a Medicare beneficiary may contact the IOTA participant for more information or with any questions.

(iii) The IOTA participant must provide this notification (as described in paragraph (d)(1)(i) of this section), and the information specified in paragraph (d)(1)(ii) of this section as follows:

(A) Electronically or by mail on an individual basis.

(B) Within 10 days of the IOTA waitlist patient who is a Medicare beneficiary's change in waitlist status.

(C) Annually, thereafter, for as long as the IOTA waitlist patient who is a Medicare beneficiary remains inactive (that is, 365 consecutive days).

(2) Record in the IOTA waitlist patient who is a Medicare beneficiary's medical record a copy of the notification that includes all of the following:

(i) The method by which the notification was delivered.

(ii) The date of when the notification was delivered.

(3) For IOTA waitlist patients who are Medicare beneficiaries and--

(i) ESRD patients, the IOTA participant must also notify the dialysis facility (as defined at 42 CFR 494.10) and managing clinician (as defined at Sec. 512.310) or nephrologist.

(ii) Non-ESRD patients, the IOTA participant must also notify the referring provider or practitioner providing care to the IOTA waitlist patient who is a Medicare beneficiary.

Sec. 512.446 [Removed]

0 9. Removing Sec. 512.446.

0 10. Section 512.450 is amended by-- 0 a. In paragraph (a)(1), removing the phrase “attributed patients that” and adding in its place the phrase “attributed patients who are Medicare beneficiaries that”; and 0 b. Revising paragraph (a)(3)(iii).

The revision reads as follows:

Sec. 512.450 Required beneficiary notifications.

(a) * * *

(3) * * *

(iii)(A) Provide the notification described in paragraph (a) of this section to each applicable attributed patient in a paper format at their first office visit or other outpatient visit after the start of the IOTA Model; or

(B) If the applicable attributed patient has affirmatively opted out of receiving paper communication or has chosen to receive communication through electronic methods, the notification described in paragraph (a) of this section may be distributed through that agreed upon electronic method. * * * * *

0 11. Section 512.462 is amended by adding paragraph (b)(2)(xi) through (xiii) to read as follows:

Sec. 512.462 Compliance and monitoring.

* * * * *

(b) * * *

(2) * * *

(xi) Monitoring the publication of selection criteria provision in accordance with Sec. 512.442(a).

(xii) Monitoring the review of acceptance criteria provision in accordance with Sec. 512.442(c).

(xiii) Monitoring the change in waitlist status provision in accordance with Sec. 512.442(d). * * * * *

0 12. Section 512.466 is amended by revising and republishing paragraph (a)(3)(ix) to read as follows:

Sec. 512.466 Termination.

(a) * * *

(3) * * *

(ix) Poses significant program integrity risks, including but not limited to any of the following:

(A) Is subject to sanctions or other actions of an accrediting organization or a Federal, State, or local government agency.

(B) Is subject to investigation or action by HHS (including OIG and CMS) or the Department of Justice due to an allegation of fraud or significant misconduct, including any of the following:

(1) Being subject to the filing of a complaint or filing of a criminal charge.

(2) Being subject to an indictment.

(3) Being named as a defendant in a False Claims Act qui tam matter in which the government has intervened, or similar action.

(C) If HHS or the OPTN has determined that an IOTA participant has violated the OPTN's policies, OPTN's Management and Membership policies, or HHS regulations (42 CFR part 121) upon a review conducted under 42 CFR 121.10. * * * * *

Sec. 512.470 [Amended]

0 13. Section 512.470 is amended by removing the phrase “and 1833(b) of the Act” and adding in its place the phrase “1833(b), and 1851(i)(2) of the Act, and 42 CFR 422.322(c)”.

Robert F. Kennedy, Jr., Secretary, Department of Health and Human Services. [FR Doc. 2026-10890 Filed 5-28-26; 4:15 pm] BILLING CODE P