Transplant Billing in 2026

Organ Acquisition Cost Reporting and the New Non-Renal SAC Rule

By Team Rcmaxis  ·  October 22, 2026  ·  12 min read

A September 2026 OIG report found that conflicting CMS guidance and federal statutory requirements cost Medicare an estimated $380 million over six years for organs that were never actually transplanted into a Medicare enrollee. In OIG's sample of 180 organs reported as Medicare usable, 43 went to non-Medicare patients and 12 were never transplanted at all. Medicare paid acquisition costs on every one of those 55 organs anyway, because the guidance transplant centers were following assumed an organ passed to another center or an OPO would end up in a Medicare transplant, which isn't always true.

That finding lands on top of a payment system that was already in the middle of a structural fix. Certified transplant centers were reimbursed over $3 billion for roughly 39,000 organs on a cost basis in 2023 alone, and for most of that volume, non-renal organs specifically, there was no mechanism reconciling what centers were paid against what they actually spent. CMS just closed that gap.

Here's how organ acquisition cost reporting works, what changed for non-renal organs in the FY2027 rule, what the $380 million OIG finding means for your documentation, and the decades-long pattern of audit findings that keeps repeating at individual transplant hospitals.

How Medicare Pays for Organ Acquisition Costs

Transplant billing runs on a different mechanism than almost anything else in Medicare Part A. Instead of a fixed DRG payment, organ acquisition costs are reimbursed on a reasonable-cost basis, with Medicare's share calculated by the ratio of Medicare-usable organs to total usable organs, by organ type, reported on the transplant hospital's or organ procurement organization's cost report.

For kidneys, this has worked with a reconciliation step for years: Medicare Administrative Contractors establish a Standard Acquisition Charge (SAC) for OPOs, pay against that interim rate throughout the year, and then true it up against actual reported costs at cost report settlement. That structure keeps interim payments reasonably close to reality, organ type by organ type.

The New Non-Renal SAC Rule: What Changed in the FY2027 Rulemaking

Until recently, non-renal organs, hearts, livers, lungs, pancreases, had no comparable reconciliation process to kidneys. They were governed mostly by sub-regulatory guidance rather than a structured SAC-and-reconciliation system, and CMS and OIG both flagged that gap as a source of payment inaccuracy. CMS's own analysis of 2024 OPO data found non-renal organ acquisition revenues had exceeded reported costs by roughly $100 million, real money sitting outside the reconciliation structure that's applied to kidneys.

CMS finalized a fix as part of its FY2027 IPPS rulemaking: Medicare Administrative Contractors now establish, adjust and publish Standard Acquisition Charges for non-renal organs handled by independent organ procurement organizations, plus testing rates for histocompatibility labs, with interim payments reconciled to actual reasonable costs reported on the cost report, the same structure kidneys have used for years.

If your organization handles non-renal organs through an independent OPO, this is the moment to review your cost reporting process against the new reconciliation structure, not after your first post-implementation settlement surprises you.

The $380 Million OIG Finding: What It Means for Your Documentation

The September 2026 OIG report's root cause wasn't fraud; it was a guidance-vs-statute mismatch. Federal statute limits Medicare's reimbursement to the cost of acquiring organs actually used in Medicare-covered transplants. CMS's guidance, in practice, assumed that an organ a transplant center removed and passed along to an OPO or another center would end up in a Medicare transplant, an assumption that turned out wrong often enough to produce a $380 million estimated overpayment across a six-year sample period.

The practical lesson for your organization doesn't depend on whose guidance was wrong. It's that your own records need to track an organ's actual disposition, not an assumed one, all the way through to whether the recipient transplant was Medicare-covered. If your center passes organs to other centers or an OPO regularly, build a feedback loop that confirms final disposition, rather than counting an organ as Medicare-usable the moment it leaves your facility.

The Decades-Long Pattern: Time-and-Effort and Cost-Separation Failures

Set the new systemic findings aside, and individual transplant hospitals have been generating a remarkably consistent set of OIG audit findings for over 20 years. Baylor University Medical Centers' audit found $5,010,761 in unallowable costs, an estimated $4,195,303 Medicare overpayment, with another $13.6 million in unsupported costs that could have pushed the total toward $9.2 million if the hospital couldn't document them. Yale-New Haven Hospital's audit found roughly $1.57 million in salary costs claimed as acquisition costs without documentation separating pre-transplant from post-transplant work, for an estimated $793,000 overpayment. University of Alabama at Birmingham's audit found about $913,000 in overpayments tied to unallowable costs and unreported offsetting revenue. Massachusetts General Hospital's audit found roughly $1.5 million in unallowable and unsupported costs, linked to missing systems for separating acquisition costs and related-party charges not properly reduced to cost.

Every one of those findings traces back to the same two root causes: staff who split time between transplant and non-transplant duties without adequate time-and-effort documentation, and acquisition costs that weren't cleanly separated from the broader cost of patient care before or after the transplant itself. Those are solvable problems with the right internal controls, and they're exactly what a MAC cost report audit still checks for today.

Build the Transplant Billing and Cost Reporting Workflow

Treat organ disposition tracking, time-and-effort documentation, and cost separation as three distinct controls, each owned by someone specific, rather than as a single end-of-year cost-report task. Review all three on a rolling basis throughout the year, not just when the cost report is due.

If your center works with an independent OPO on non-renal organs, confirm now how the new SAC and reconciliation structure will flow through your own reporting, and raise any gaps with your MAC before your next settlement rather than after.

• Track final organ disposition to completion. Confirm Medicare-covered status before claiming the acquisition cost.
• Keep time-and-effort logs current for split-duty staff. Review them quarterly, not just at cost-report time.
• Separate pre- and post-transplant costs by policy, not by habit. Document the allocation method in writing.
• Confirm your non-renal SAC reconciliation process with your MAC. Don't wait for your first post-rule settlement to find a gap.

Our guide to hospital outpatient billing covers related facility cost-reporting fundamentals, and our ESRD and dialysis billing guide covers the care pathway many kidney transplant recipients come from before transplant.

Frequently Asked Questions About Transplant Billing

How does Medicare pay for organ acquisition costs?

Medicare reimburses organ acquisition costs on a reasonable-cost basis, with Medicare's share set by the ratio of Medicare-usable organs to total usable organs, by organ type, reported on the transplant hospital's or OPO's Medicare cost report. For kidneys, Medicare Administrative Contractors have long set a Standard Acquisition Charge (SAC) that's reconciled against actual costs at cost report settlement.

What changed for non-renal organ acquisition cost reporting in 2026?

CMS finalized a rule, part of the FY 2027 IPPS rulemaking, requiring Medicare Administrative Contractors to establish, adjust and publish Standard Acquisition Charges for non-renal organs handled by independent organ procurement organizations, with interim payments reconciled to actual reasonable costs on the cost report, the same structure kidneys have used for years. CMS found non-renal organ acquisition revenues had exceeded reported costs by roughly $100 million in 2024 OPO data, which is part of why the reconciliation gap was closed.

What did the 2026 OIG report on transplant centers find?

A September 2026 OIG report found that conflicting CMS guidance and federal statutory requirements cost Medicare an estimated $380 million over a 6-year period (2017 to 2022) for organs that were never actually transplanted into Medicare enrollees. In OIG's sample of 180 organs reported as Medicare usable, 43 went to non-Medicare transplants and 12 were never transplanted at all, a combined 55 organs Medicare should not have paid acquisition costs for.

What documentation failures have OIG audits found most often in transplant billing?

Across more than a decade of hospital-specific OIG audits, the recurring findings are weak time-and-effort documentation for staff who split work between transplant and non-transplant duties, failure to separate pre-transplant and post-transplant costs, and acquisition cost claims that included unallowable or unsupported items. These findings have produced overpayment estimates ranging from roughly $800,000 to more than $9 million at individual hospitals.