In this episode, Foley Of Counsel Maureen Kwiecinski sits with Alexandra Glazier of New England Donor Services (NEDS) about how Organ Procurement Organizations (OPOs) are regulated and some of the recent changes in performance and outcome standards, similar to other health care organizations.
Maureen Kwiecinski is of counsel with Foley & Lardner LLP, based in the firm's Milwaukee office, where she is a member of the Health Care Industry Team. Maureen counsels health systems, hospitals, medical clinics, blood centers, organ procurement organizations (OPOs) and other health care providers on corporate governance, strategic transactions, and significant investigations and corrective actions; as well as general operational, compliance and regulatory matters. Following a successful career as a registered nurse and health care attorney, Maureen served as the Executive Vice President & General Counsel for Versiti, Inc., a large, complex health care organization that includes a federally-funded research organization, extensive hospital and health system relationships, physician's clinics, multiple blood centers, and organ and tissue procurement organization, a pharmacy, an esoteric laboratory, and a philanthropic foundation.
Alexandra Glazier is President & CEO of NEDS, formed in 2017 as an affiliation between two OPOs together serving over 200 hospitals, 14 transplant centers and a population of 14 million people in a six state service area. Under NEDS, the number of organ transplants doubled in the lower performing OPO service area. As of January 1, 2021, NEDS merged the two OPOs, resulting in the first successful OPO consolidation in decades. NEDS has 270 employees and a $95M annual operating budget. NEDS was named Modern Healthcare Best Places to Work 2018 and a Top 100 Female Led Business by the Boston Globe and The Commonwealth Institute in 2018, 2019 and 2020.
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Maureen Kwiecinski
Thank you so much for the introduction, Judy. This is Maureen Kwiecinski, I'm Of Counsel with Foley and Lardner's health care practice, and we're very grateful to have Alexandra Glazier with us this morning. Alex serves as the president and CEO of New England Donor Services. Alex, tell us just a little bit about your background.
Alexandra Glazier
Thank you first of all, for having me on, I'm delighted to be here. I, myself am a health care attorney, I practiced for a number of years at a firm in Boston, and then my career morphed into working within organ donation and transplantation in the organization I'm at now New England Donor Services (NEDS). We're responsible for coordinating deceased organ donation and transplant for the six New England states. And it's an incredible mission and it's been an incredible journey as a health care attorney to work both from the outside, and now from within the organization, leading this group with a mission of saving lives through donation and transplant.
Maureen Kwiecinski
I really admire your work, and as part of my background, I served with an organ recovery organization and the work is amazing. The mission is very, very important, not only serving patients who are in desperate need of life-saving organ transplantation, but also caring for donor families at the bedside who have lost a loved one. Our listeners might not be aware that only three out of about a thousand people who die can become organ donors, that are healthy enough to be organ donors. And oftentimes they lose their lives through really tragic episodes-accidents, overdoses, homicide, suicide-so you're dealing with families at the bedside that are really in a difficult circumstance. So the work is very, very important. I would imagine that our listeners don't fully appreciate how organ recovery works in the United States. Could you give some background on what OPOs are and what their purpose is?
Alexandra Glazier
OPOs are organ procurement organizations, they're charitable nonprofits and there are 57 total within the U.S. that are responsible for coordinating deceased organ donation within a specific geographic area. I already mentioned my own organization serves the six New England states. There are some OPOs that serve parts of a state and other OPOs that serve multiple state, so they are of varying size. These are community-based organizations because, as you already identified, this is a unique area of health care requiring public participation. It's obvious that organ transplantation requires organ donation, but when you stop to think about how organ donation is accomplished, this is really through community engagement. We are asking people to give to others they don't know, but that they know are in need, and it is truly a privilege to work in this field and see the best of humanity in what is often the most difficult and trying of circumstances, as you already identified.
So OPOs that serve a specific area are responsible for all components of coordinating the donation. This includes the initial identification that there is a potential organ donation opportunity, and as you identified, that is actually really rare. I think people are surprised to hear that the majority of deaths that occur in a hospital do not have any medical opportunity for organ donation because organ donation occurs when an individual has died, is on ventilator support and does not have significant medical complexities or diseases that would be transmittable and detrimental to a transplant recipient. For example, active cancer or COVID, which would be transmissible and potentially deadly for a recipient, so this really narrows the opportunity. And what it means is that OPOs work in really small numbers. Every opportunity is incredibly precious because we know that there are people waiting.
To finish just the process, the OPO needs to identify the potential donor, do the medical screening, send the staff on site to talk to the family and obtain authorization for the case to move forward or to check the donor registry, confirm that the individual was a registered donor, and then working with the family to discuss how that will proceed. The clinical logistical components are part of what the OPO coordinates, which includes the surgical teams, it includes the recovery of the organs, the packaging of the organs, the transportation of the organs to the recipient, the allocation of the organs to the right patient, to make sure that the gift is maximized. It is a 24/7/365 operation for every OPO to make sure that when those unique opportunities arise to make organ donation happen, that they are realized and maximized for the benefit of the patients who are waiting.
Maureen Kwiecinski
Yes, that's a terrific description. We're going to talk mostly today about how OPOs are regulated and some recent changes in performance and outcome standards, similar to other health care organizations. CMS [Centers for Medicare & Medicaid Services] is looking to ensure that OPOs are providing services as expected and providing the best possible care. Can you talk a little bit about how OPOs are currently regulated?
Alexandra Glazier
I think before I do that, it's important to note that the performance of OPOs over time has grown significantly. We know that in the past 10 years there's been year-over-year growth within the U.S. since 2013 and a 50% increase in deceased organ donors, so we're at the point where the U.S. actually outperforms every country in the world in deceased donation. We had been performing second to Spain, but in fact, the U.S. recently surpassed the rates in Spain.Yet there's 108,000 patients waiting and there are patients that die waiting. So as good as the system is in the U.S., we know we need to continue to do better, and there's certainly wide agreement in the field within the OPO industry that continual performance improvement has to be a priority because the goal of all of this work and our mission is to save lives through donation and transplantation.
With that in mind, you think about the regulatory framework and the goals of the regulation, which is to accurately assess performance, and to drive that continuous performance improvement process within the OPO community. There's been wide agreement that the past regulatory structures were inadequate in a number of ways, so the reform that did happen this past year has been not only anticipated, but encouraged by the OPO community over the years in recognition that, again, the system's performing well and it needs to continue to do better.
The new regulations set up a system where OPOs are evaluated on their outcomes based on two primary components of their operational work. One is the donation rate and the other is the transplant rate. The donation rate is what you would expect-how many actual organ donors is the OPO able to coordinate from the pool of potential organ donors-and then the transplant rate looks at how many organs are actually transplanted from that same pool of potential donors, and this is the new regulation. There has been lots of debate and discussion about the data source for how to define the pool of potential donors, because as mentioned previously, organ donation, for it to be a medical possibility is relatively limited. It's not every death. It's actually a small subset of deaths of individuals that die in a hospital, on a ventilator, and without certain medical comorbidities that would preclude the safe organ donation for transplant. So lots of debate about that, but fundamentally, these two rates are the primary drivers of overall performance for OPOs, and that is how well the OPOs do identifying and making donation happen in a manner that results in transplant, which of course is the ultimate goal, to serve the patients, waiting for transplant by delivering an increasing pool of available organs.
I think those basic components of the outcome measure are well agreed upon even as there is significant debate over the data source and how the calculation is made. What kinds of adjustments, for example, should be made statistically in looking at the rate such as risk adjustments, which we're very familiar with in the health care field. I think that the other component of the new regulation-which really has not garnered nearly as much attention yet, but it's very interesting from a health law perspective-is that the regulations for the first time set up a system of significant competition and with performance thresholds that are designed to de-certify OPOs that are performing below a set level.
Maureen Kwiecinski
That's the part of the new regulations that I'm really interested in exploring with you. I agree that there's been a lot of discussion and debate about the actual performance metrics that are being used, and I have some concerns about the metrics in the sense that I don't think they're perhaps specific enough, given the complexity as you described of how an organ goes from being donated to being transplanted. There are so many components that these gross metrics might not be the best, but that's solvable, I think, in the future. What I'm really perplexed about is this decertification process that's in the final rule, and if I compare it to how CMS tries to manage underperforming hospitals, do you want to go ahead and just explain this kind of unique decertification process?
Alexandra Glazier
Yeah, it is unique. What CMS has set up in the new regulations for OPOs is a three-tier system, and OPOs are assigned to a tier based on how they do under both that donation rate and the transplant rate. Tier one will be composed of OPOs that are at or above the top 25th percentile for both the donation rate and the transplant rate during the assessment period. OPOs are on a four-year certification cycle and CMS has chosen-in the final regulations-to use a 12-month assessment period to assign a tier, so tier one are the OPOs at or above the top 25th percentile. Just to pause there for a moment, even in and of itself, that's pretty remarkable because we're talking about a top 25th percentile of overall performance. And those OPOs are then recertified without any further action at the end of the certification cycle.
Tier two OPOs are OPOs that are at or above the mean, but below the top 25th percentile for either the donation rate or the transplantation rate. That may mean that an OPO, for example, is above the top 25th percentile for the donation rate, but below the top 25th percentile, even if they are above average for the transplant rate, and that would place that OPO in tier two. Tier two OPOs can be recertified; however, their service area is going to be open to competition, and I'll talk about that in a moment because I think that does raise a whole host of questions and changes the environment under which OPOs are operating.
And then tier three OPOs are those that perform below the mean for either the donation rate or the transplantation rate, and those OPOs are going to be subject to a decertification process. So going back to the overall structure and framework, for decades, OPOs have worked under the environment that they are community-based organizations that need to collaborate with a national system of allocation and transplantation to ensure that every donation opportunity, no matter where it occurs in the country, has an assigned designated OPO responsible for evaluating that potential and realizing and maximizing the organs that can be transplanted if a donation opportunity can actually occur.
Setting up a system of competition for organizations, especially those performing above average is an interesting policy choice for CMS to have made. The concern of course, is that what you don't want is competition that could end up being costly or disruptive without any potential benefit. So the challenge for CMS will be in figuring out how to coordinate competition among high-performing organizations, because again, tier two OPOs are all performing above average, and at the end of that competitive process, ensuring that performance is increased and not decreased, or that there aren't costs or resources expended unnecessarily with the same result.
Maureen Kwiecinski
I'm fascinated by how this would work practically in the sense that each OPO is its own nonprofit corporation located in the various states and they have their designated service area. If you are in that lower tier and your designated service area is up for competition, another organization can come in and compete for your certification, but you're not obligated to sell the assets or resources from the organization that's being decertified. I'm not explaining that well, but could you help me understand how would this practically work?
Alexandra Glazier
I think it's a great question and we aren't sure how it's going to practically work. I will say this, that in the final regulations, CMS estimates that there could be 34 out of the 57 OPOs open to competition and that's a compilation of both OPOs that would be tier three, and therefore decertified, and tier two that are performing above the mean, but below the top 25th percentile on one or both of the donation or transplant rate. 34 out of 57 OPOs is, well, you can do the math, it's more than half, so figuring out how that will be managed, I think, is a big question mark.
And to your point, there are three aspects of OPOs to consider in terms of what this might look like. There's the corporate entity, the corporation itself, which as we know as attorneys is a matter of state law, that includes the board as the fiduciaries, the charitable assets, which may be significantly restricted depending on the state law or the Attorney General's position on that, or the Secretary of State, depending on which state we're talking about.
There's also the nuts and bolts of the organization itself-the staff, the operations-which may include functions outside of the OPO designation. Many OPOs, for example, are also tissue recovery agencies, which is separate from their OPO designation by CMS, and there are some OPOs that are a department within a hospital, some which are divisions within a larger corporation. So there may be multiple OPOs within a larger corporation or some that are separate corporations within a common parent. There are different organizational structures that currently exist and it is unclear exactly how this could be orchestrated. We know CMS makes the designation of an entity as an OPO and that the CMS regulations require OPOs to have certain structures. Federal law requires OPOs to be 501(c)(3) charitable nonprofits. CMS regulation requires certain governance board and advisory board structures. However, CMS doesn't have the legal authority to move charitable assets, to change the governing board membership, or even make executive leadership changes.
Maureen Kwiecinski
That's part of what I see as a real practical challenge to implementing the new regulation. The other piece that I'm fascinated with, and I'm not quite sure I understand how it will move forward is, when there's competition for a designated service area and let's say you have five competitors that step up and they may be of various performance standards themselves. By what criteria is CMS going to decide who "wins"? And then, how does CMS contemplate that it won't get mired down in litigation or legal actions when there are organizations who thought they were the best competitor? What do you think happens with that going forward?
Alexandra Glazier
CMS estimated in the final regulation that at least five OPOs will compete for decertified tier three OPOs and that at least two OPOs would compete for tier two OPOs that are open to competition under the regulation. So that's a huge number of applications-70 something applications that they're anticipating in one cycle-and they really have not provided in the final regulation any guidance on how the selection process will occur. I think that is a real question. For example, if you have a tier two OPO that's actually in the top 25th percentile for the donation rate, but below the top 25th percentile for the transplant rate, what would competition for that DSA look like? Would it require an OPO that was above the top 25th percentile in both rates in order to compete for the DSA? It's unclear.
The one thing I would say is that CMS has signaled in their unified agenda, that they will be looking at those in the 2021-2022 cycle, as we are anticipating that they'll be proposed changes and clarifications to specifically the competition and de-certification process because. Many questions have come up and they really haven't yet solicited public comment on that aspect. So at least it seems that CMS is signaling that they know they need more input on this process and we anticipate that will be some proposal with a public comment period forthcoming.
Maureen Kwiecinski
I think that'll be fascinating to have public comment, and collect the thoughts and comments from individuals who have the practical understanding of how to provide the service on a continuous basis. I do think that the way the new regulations are structured, they seem to trigger some disruption that might not best serve the community. It might draw a lot of resources that could be devoted to bedside care to these pretty complicated, voluntary or involuntary consolidation decertification matters.
Alexandra Glazier
I think that for those of us in health care who have done corporate transactions for many different components within the health care industry, we are aware of how complex this can be. And that's both from a legal perspective when you're combining organizations and you're doing a merger, there's all those components that we're familiar with as attorneys that need to happen, which are significant. It takes a lot of time from the board as fiduciaries to work through those pieces to come to agreements. But then there's the entire component of integrating operations, which is the only way that mergers will result in successful performance improvement. We know that it's not really just about assigning a service area, it's about making the work happen in a productive and positive way.
Maureen Kwiecinski
The legal work is something that can get done fairly easily, but the integration work and actually developing a new organization that operates comprehensively and cohesively, that's the real challenge. Your organization, New England Donor Services (NEDS) is one of the few OPOs that has any past experience doing this type of merger work. Do you want to talk to us a little bit about your experience, your past experience with NEDS?
Alexandra Glazier
When I started in my role as the CEO for New England Organ Bank, which was the OPO based in the Boston area that served most, but not all of the six states, and there was a contiguous OPO Life Choice Donor Services based in Hartford, Connecticut, significantly smaller and lower performing. One of the things that I looked at when I started in my role was ways that we were improving our performance rapidly within New England Organ Bank and whether that could be scaled within Life Choice Donor Services. The goal of our work is the same and aligned amongst all the OPOs, which is to save lives through organ donation and transplantation.
So, in approaching Life Choice Donor Services, it was clear that if there was an opportunity for an affiliation, and then ultimately a merger, that we needed to identify that top priority as the goal. The goal would be to increase organ donation and transplant for our region, and in fact, we were successful in doing that. After three years of an affiliation, we more than doubled the number of organs transplanted in the lower performing OPO. We started this process with an affiliation structure that had a parent corporation and maintained the two OPOs and their CMS regulatory designation. We eventually merged the two OPOs and we just accomplished that in January, which was the first OPO merger in decades.
I think that one of the things that made our process successful was number one, identifying that primary goal and then selecting corporate and operational structures that were going to facilitate that goal. Everything was measured against "will it increase organ transplantation" and that's how the decisions were made.
Maureen Kwiecinski
And that actually brings up another really good point in this regulation and these potential future mergers. I don't quite understand how CMS will evaluate a merged organization post-merger. Will it continue to do the performance outcome measures on the separate organizations or measure them as a single enterprise? Because obviously the challenge would be if I, as a successful OPO takeover and an OPO that was underperforming, how quickly do I need to get them back to a higher performance level before my whole enterprise is in tier two?
Alexandra Glazier
Exactly, I think that's a really good point. I think the value proposition for a high-performing OPO to consider competing for a low-performing OPO, especially one that's being decertified in tier three is a real concern because for this entire policy to work, it relies on the idea that higher performing OPOs will want to take over lower performing OPOs. And yet there's very little said in terms of making sure the incentives are aligned to do so. And in fact, what the regulation says is that the OPO that takes over the lower performing OPO service area will be held accountable within 12 months for that performance. For anyone who has done this work of merging two enterprises, 12 months is a very, very short period of time, and the full integration work really takes a number of years to be successful. So I do think that that's a concern that there's not a significant alignment in the incentives within the regulation for that.
Maureen Kwiecinski
And then the other aspect of that would be in the second cycle, let's say, if you acquired a T3 decertified, and within the 12 months you were unable to demonstrably improve the outcome measures, does that portion of your organization now go up for competition again. It's really unclear. But the other thing I find fascinating about this-and I would think other health law practitioners would be very interested in watching this unfold is that it's an interesting experiment-I wonder how translatable it is to other CMS regulated organizations. So, is CMS signaling any intent to do a similar competitive structure with skilled nursing facilities or any other type of health care?
Alexandra Glazier
Or even within transplantation itself with transplant programs. It is a really interesting question. I think one of the unique things about OPOs is that they do have a designated service area, which in the past has meant there really isn't competition amongst OPOs because each OPO serves a specified area and then is a collaborator nationally to create that patchwork that covers the entire country. We don't have other examples that are exactly like that within the health care milieu because we have hospitals and skilled nursing facilities and other programs that are competitors with multiple programs within one service area. So it is unique in that way, but I think it is a question of whether or not this experiment of sort of injecting competition in what is defined by statute to be a charitable non-profit field is an interesting and unusual policy choice that is, I think, of concern for all of us.
Maureen Kwiecinski
Alex, as we talked about earlier, the OPO's role within organ donation and transplantation is just a small segment of the whole process. What's your view on these new regulations and how they address really the whole system?
Alexandra Glazier
This is part of the Kidney Health Initiative, which has several focuses. One of them is increasing organ donation and transplantation. The OPO metrics fit within that, but there is recognition that overall increases in transplant have to be driven through system-wide reform, that it's not singularly the OPO's responsibility. In fact, OPOs don't perform transplants, transplant programs do. And that we need to work collectively with the donor hospitals, the OPOs and the transplant programs to ensure that regulations are aligned to facilitate the goals we want, and there's definitely some more work to do there.
For example, transplant programs are not incentivized to use organs from older or more complex donors, and this is a real problem for the U.S. We have about a 20% discard rate on kidneys, which is significantly higher than our European counterparts. We don't do as well as we could transplanting organs specifically from donors who are over 60 years old, and yet we know that those organs, those kidneys could really benefit patients. The evaluation for patients, and this is where the regulatory alignment needs to be done, isn't the risk of one particular organ versus another particular organ. It's actually one particular organ being offered versus no transplant at all. We know what the result of that is, which is in many cases, unfortunately, death. So we need to have some regulatory reconciliation that this is in fact the context that we're working within and try and align the transplant program performance metrics with what's happening on the OPO side. You can incentivize OPOs to increase significantly the recovery of organs, but if they're not actually getting transplanted by transplant programs, we're not getting the end result we all want, which is to benefit patients.
Maureen Kwiecinski
One of the things we didn't talk about was, do you think this is going to spark any voluntary consolidation? Do you get the sense that the underperforming OPOs are out there looking for partners right now?
Alexandra Glazier
Yeah, most certainly, and they should, and actually everyone should be. Our own process at New England Donor Services was, "how can we do better for the field?" I don't think that consolidation by itself is a magic bullet, as we know, and I said before, most mergers within health care fail and we know this from the data, so you have to be really careful and do a lot of planning and be clear what the goal is, which is to increase organ donation. And I think that kind of work actually fits better in a voluntary process than in an involuntary process, number one, and number two, takes a lot of time. So back to your question of how quickly is an OPO going to be accountable for its new territories, new service area, if it's too short of a timeframe, I think it's unrealistic that we'll actually see the improvement. Involuntary consolidation, I think is much more difficult to be productive. Voluntary consolidation, certainly being discussed within the field.
Maureen Kwiecinski
Yeah. Fascinating because from my experience of doing mergers and acquisitions, it takes you 12 months to figure out who's who and what should your priorities be before you've even implemented anything.
Alexandra Glazier
Right. One of the things we worked a lot on was how do we communicate a culture of oneness, and again, this isn't unique to OPOs, but any merging entities need to develop a culture of oneness to be successful. We know that culture drives performance and when you're taking two separate entities and two separate cultures, potentially in two separate areas of the country, not even necessarily contiguous and you're trying to create a positive culture that can drive real performance improvement, that takes a lot of work and dedication through leadership levels. It's not as simple as just moving a designation from one place to another. So if you're going to invest that kind of time and energy in communicating and developing a culture, you really want it to be successful. Certainly CMS should want it to be successful because again, the goal is to improve. But they've got to set up a system that can foster that.
Maureen Kwiecinski
Right. Right. It's going to be fun to watch.
Maureen Kwiecinski
Well, thank you so much, Alex. I am so grateful to talk with you, and I think it's going to be really interesting to how this whole process evolves. So hopefully we can catch up again and let everyone know how this proposed experiment works.
Alexandra Glazier
Thank you for having me, and I do think as health care attorneys and executives within the health care field, watching the consolidation, both voluntary and involuntary in the OPO field will be fascinating over the next couple of years, so stay tuned.
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