Federal authorities have launched a wide-ranging investigation of the nonprofit organizations that collect organs for transplant in the United States, according to six people familiar with the inquiry, which seeks to determine whether any of the groups have been defrauding the government. The probe involves U.S. attorneys in various parts of the country who are investigating organ procurement organizations in at least five states. Their team includes investigators from the Department of Health and Human Services and the office of Michael Missal, the inspector general of the Department of Veterans Affairs. They are seeking to determine, among other things, whether any of these groups have been over billing the government for their costs.
The investigation has been underway for at least several months, the people said. But in a sign the probe is intensifying, investigators from the VA inspector general were “dispatched” to the offices and homes of 10 chief executives of organ procurement organizations at the beginning o February “as part of an inquiry,” according to a notice that Steve Miller, chief executive of the Association of Organ Procurement Organizations, sent to his membership.
Serious deficiencies in the nationwide organ transplant system have been the subject of increasing government scrutiny in recent years, but an investigation led by federal prosecutors — which carries the possibility of criminal charges — could be the gravest threat yet to the status quo in the troubled, multibillion-dollar organ transplant industry.
The Association of Organ Procurement Organizations “is aware the Department of Veterans Affairs Office of the Inspector General has made inquiries of some OPOs,” Jenny Daigle, a spokeswoman for the trade association, said in an email. She added that the association hasn’t been contacted by the agency.
None of the organ procurement organizations contacted by The Washington Post about VA’s actions and the federal investigation returned emails and
phone calls. Spokesmen for the Justice Department and the VA inspector general’s office declined to comment.
The nation’s 56 organ procurement organizations collect organs — mainly kidneys — from deceased donors at hospitals and arrange for them to be transported to surgeons at the 250 U.S. medical centers that perform transplants. Each procurement group holds a government-guaranteed monopoly over a swath of U.S. territory where it operates.
Some have failed for years to collect enough organs t0 meet demand, according to government records. But the Centers for Medicare and Medicaid Services, the part of HHS that licenses the nonprofits to operate, has
never decertified one. In response to critiques,
the CMS issued new benchmarks that will allow the agency to weed out poor performers beginning in 2026.
Transplant centers pay for some of the groups’ costs, and the Medicare system reimburses the organizations for additional expenses they say they have in curred in the acquisition and transportation of kidneys, as well as other costs such as overhead. The groups collect reimbursements from transplant centers for other organs. Transplant centers are then reimbursed by both public and private payers, depending on the patient.
One thrust of the investigation appears to be whether any of the nonprofitshave violated the federal False Claims Act by knowingly billing the federal government for unallowable costs, according to the people aware of the investigation. All of them spoke on the condition of anonymity because they are not authorized to comment on an ongoing government inquiry.
Another line of investigation is whether there have been kickbacks between organizations in this tightly knit, lightly regulated corner of U.S. medicine, according to one of these people.
In addition, investigators are looking into whether six organ procurement organizations have fraudulently billed VA and Medicare, according to one of the people familiar with the investigation.
“Organ procurement executives have acted with complete impunity for decades,” said Greg Segal, co-founder of Organize, an activist group that seeks widespread reform of the transplant industry. “They should not be above the law.”
The trouble with tissue
Despite decades of improvement efforts and increasing numbers of transplants, more than 103,000 people remain on the U.S. waiting list for organs, the majority of them seeking kidneys. Some die every day.
The federal investigation is the latest attempt to address long-standing allegations by some lawmakers, activists and people in the transplant industry that the system is mismanaged and that some officials use it to enrich themselves and their organizations.
In 2022,
an investigation by the Senate Finance Committee found that mistakes in screening organs had led to 70 deaths from 200 to 2015. The committee inquiry also blamed the federal contractor that runs the transplant system for lax oversight of careless treatment of donated organs and organs lost in transit. And it revealed that the entire system for transporting organs relied on
out-of-date technology that the government had never audited
for security weaknesses and other flaws.
Last March, the head of the government’s Health Resources and Services Administration, part of HHS, promised to overhaul the transplant system by ending the 38-year monopolyheld by the United Network for Organ Sharing. UNOS, a nonprofit based in Richmond, is the only organization ever to run the transplant system, under a contract it has repeatedly been awarded by the government.
In July, Congress passed a law authorizing the change.
Most False Claims Act investigations originate as complaints by whistleblowers who are not part of the government. The Justice Department then can decide to throw its considerable resources into determining whether the allegations have merit. The law allows prosecutors to bring criminal charges or file civil lawsuits, depending on the results of their investigation.
VA, the largest health-caresystem in the United States, has not figured prominently in previous critiques of the transplant system, and a 2021 report in the American Journal of Transplantation may offer one clue why. The paper showed that procurement organizations collected organs from just 33 deceased donors at VA hospitals between 2010 and 2019, though 5,281 donors met the criteria to provide them. (Some of the authors of the peer-reviewed research have been critical of the current organ transplant system.)
Some procurement groups collect skin, bone, ligaments, heart valves and other body parts from the same donors who provide organs, and from others who do not. They are permitted to sell those tissues into the lucrative market for material used in surgical procedures and other medical treatment. Unlike organ transactions, information on commerce in tissue is not made public.
Investigators want to know whether some procurement groups may be using VA donors as a source of revenue-generating body tissue and leaving badly needed organs behind, according to the person most familiar with that part of the investigation.Taking out organs requires more expertise and expense than collecting tissue, which, in some cases, yields substantial amounts of money for organ procurement groups
A complex web
While the latest probe represents a major new level of scrutiny, federal authorities have taken action against organ procurement groups before.
In 2012, two officials of the Alabama group were convicted of health-care fraud and other charges for taking kickbacks from a funeral home.
Last year, the Senate Finance Committee explored possible conflicts of interest among the groups. It sent letters to executives of eight of them seeking information on alleged “instances in which they potentially abused their positions for monetary gain.”
The letters alleged that organ procurement organizations and their executives “have engaged in a complex web of financial relationships with tissue processors, researchers, testing laboratories, and logistics providers, which have the potential for creating conflicts of
interest.”
They also said the committee had “received credible allegations” that senior members of the patient
protection and policy making committees at UNOS “may harbor undisclosed for-profit interests and may be leveraging their UNOS leadership positions to self-enrich at the expense of patient care.”
“These alleged conflicting financial and business relationships,” the letters stated, “pose serious risks to those in need of a lifesaving organ transplant.”
Many of the questions in the letters pertain to “all personal financial interests or business relationships” the executives and their board members have had with organizations that do business with their organ procurement organization or any other such group.
The letters were sent to organ procurement groups in Cincinnati, Milwaukee, Denver, Oklahoma City, Philadelphia, Nashville, Albuquerque and Westwood, Kan.The Association of Organ Procurement Organizations and Midwest Transplant Network in Westwood, Versiti Wisconsin in Milwaukee and Gift of Life Donor Program in Philadelphia emailed statements to The Post saying they
have cooperated with the Senate Finance Committee.
A spokeswoman for the committee, Nicole L’Esperance, said it is still waiting for some responses and could not yet comment on results of the inquiry.
Lawmakers and investigators aren’t the only people questioning the business practices of organ collection groups.
In a December lawsuit, one procurement group accused a neighboring one of trying to lure away a large nonprofit health-care network in Reno by offering $6 million to help start up a new organ transplant program.
Lawyers for Donor Network West said that organization has been the federally designated group for northern Nevada, including Reno, for almost 40 years. They alleged that Nevada Donor Network, the group for the rest of the state, offered the health-care network the money to become its procurement organization.
They also alleged that the money came from federal pandemic stimulus funding meant to aid the nation’s recovery from the covid-19 crisis.
About three weeks after the suit was filed, Donor Network West posted a statement that the
health-care network would retain Donor Network West as its procurement group unless the CMS provided the hospital a waiver. The lawsuit is continuing.Nevada Donor Network said it does not comment on pending litigation, “but we do look forward to the facts of this case coming out
