The Finance of Kidney Transplantation

Abstract

Hospitals provide many expensive and complicated services to patients all across the country, with organ transplantation ranking among the top of the list. The daily operations of transplant programs involve varied disciplines and numerous payment methodologies, contract types, and reimbursement methods. Medicare and private commercial insurers provide the major sources of payment for kidney transplantation, with differing payment structures per each insurer. Medicare’s payment system consists of three parts: the inpatient prospective payment system for the transplant admission, the Medicare cost report for allowable organ acquisition costs, and the outpatient prospective payment system. While Medicare’s payment system is a threefold process, commercial payers work through managed care organizations (MCOs) to contract with specialty transplant networks. Although commercial payers, Medicaid, and self-pay are other payment sources, Medicare remains the largest single primary payer for kidney transplantation because of the 1972 end-stage renal disease entitlement.