Oversight Subcommittee Expands Investigation into Fraud, Waste, and Abuse in Organ Transplant Industry
Washington, D.C. (May 27, 2021)—Today, Rep. Raja Krishnamoorthi, the Chairman of the Subcommittee on Economic and Consumer Policy, and Subcommittee Member Rep. Katie Porter sent letters to Nevada Donor Network and the Association of Organ Procurement Organizations (AOPO) requesting documents concerning certain costs submitted to Medicare for reimbursement and indirectly paid for by Medicare following compromising testimony before the Subcommittee.
“The nation’s 57 Organ Procurement Organizations (OPOs) bear a responsibility to the public to make all feasible efforts to obtain organs for transplant from deceased donors in each OPO’s designated service area. For performing this important public service, OPOs receive substantial reimbursement from Medicare for the ‘reasonable cost of allowable services,’” wrote the Members.
Medicare reimburses a high percentage of OPO costs, so financial mismanagement and waste diverts public resources away from OPOs’ core mission of securing organs for transplant. While OPOs reportedly are understaffed and under-resourced in key organ acquisition functions, OPOs sometimes spend money on unnecessary and excessive expenses having nothing to do with organ procurement. Past audits of some OPOs have uncovered lavish spending on frivolous items such as executive parties and costs for building parade floats, which were then reimbursed by the taxpayers through Medicare.
During the Subcommittee’s hearing held on May 4, 2021, Joseph Ferreira, President and CEO of the OPO Nevada Donor Network, confirmed under oath that Nevada Donor Network holds season tickets for the National Football League’s Las Vegas Raiders and the National Hockey League’s Las Vegas Golden Knights and spent money on multiple board retreats to California wine country.
“The Subcommittee has reviewed Nevada Donor Network’s cost reports submitted to
CMS from 2014 to 2019,” added the Members. “The OPO’s season tickets to professional sports games and board retreats to California wine country do not directly appear anywhere on the cost reports. We seek to determine whether they may be hidden in one of the cost reports’ broad categories for overhead or general and administrative expenses.”
The Subcommittee’s review of OPO cost reports revealed that many OPOs are charging to Medicare their AOPO dues by adding that expense to their administrative and general expenses, which are then allocated to organ acquisition costs and passed onto Medicare. Because AOPO, the dominant OPO trade group, receives the vast majority of its funding from its member OPOs, there is a clear connection between taxpayer dollars and AOPO’s operations.
Despite being largely funded indirectly by taxpayers, AOPO has devoted copious resources to resisting measures to increase government oversight and accountability for OPOs. At the Subcommittee hearing, AOPO’s CEO Steve Miller admitted that he lacks a “deep understanding” of inadequate performance metrics he has lobbied to keep in place.
The Subcommittee requested production of documents in the expanded investigation by June 10, 2021. Subcommittee Chair Krishnamoorthi and Rep. Katie Porter originally launched this investigation on December 23, 2020.
Click here to read the letter to Nevada Donor Network.
Click here to read the letter to the Association of Organ Procurement Organizations.