Health Law Daily Wrap Up, ORGAN PROCUREMENT AND TRANSPLANTATION—M.D. Fla.: CMS organ procurement ranking rule survives APA challenge, (Oct 2, 2026)

By WK Editorial Staff

A federal court upheld CMS’s competitive certification framework for organ procurement organizations, finding the rule consistent with federal law and supported by reasoned agency decisionmaking.

A federal district court granted summary judgment to the HHS Secretary and rejected organ procurement organizations’ challenge to a CMS final rule that ranks organizations using donation and organ transplantation rates. The court held that it could review the claims because the regulatory scheme provides no administrative path for certain organizations to obtain judicial review. On the merits, however, the court found that the rule complies with the organ procurement statute, is not arbitrary or capricious, and adequately addresses significant public comments. The court separately dismissed without prejudice the claims of an organization expecting the highest-tier designation because it did not establish an injury sufficient for standing (LifeLink Foundation, Inc. v. Kennedy, No. 8:25-cv-2042-KKM-SPF (M.D. Fla. Sept. 29, 2026)).

Facts and regulatory framework. LifeLink Foundation, OneLegacy, Iowa Donor Network, LifeCenter Northwest, and LifeGift Organ Donation Center challenged a 2020 CMS rule governing certification and recertification of organ procurement organizations. These organizations coordinate donor identification, consent, organ recovery, and transportation within designated service areas. CMS generally assigns each organization an exclusive geographic service area, and that designation is a condition of payment for organ procurement services.

The rule uses two outcome measures: a donation rate and an organ transplantation rate. Both use donor potential, generally defined by inpatient deaths among patients age 75 or younger with a primary cause of death consistent with organ donation. CMS places organizations into three tiers based on their performance relative to nationwide thresholds and applies one-sided 95 percent confidence intervals. Tier 1 organizations are recertified without competition; Tier 2 organizations must compete to retain their service areas; and Tier 3 organizations receive an initial decertification determination. Failure to satisfy separate process performance measures also can lead to Tier 3 status.

The organizations argued that the rule exceeded CMS’s statutory authority, relied on unreliable or insufficiently tailored measures, used an unjustified tier structure, and inadequately addressed concerns about disruption to patients and the national donation system. Both sides sought summary judgment.

Jurisdiction and standing. The court first held that organizations expecting Tier 2 or Tier 3 rankings had standing. Tier 2 organizations must spend resources competing for service areas, and an unsuccessful Tier 2 organization would lose the area necessary to operate. Tier 3 organizations face decertification and loss of eligibility for Medicare reimbursement. By contrast, the organization expecting Tier 1 status offered no evidence that the favorable designation would cause a concrete injury, and the possibility of a lower ranking in a future certification cycle was too speculative.

Although the claims arose under the Medicare Act because the challenged rule controls eligibility for reimbursement, the court applied the exception to Medicare’s administrative-channeling requirement for circumstances in which channeling would produce no review at all. The rule permits an administrative appeal from decertification, but it provides no appeal from a Tier 2 designation or from the nonrenewal of a Tier 2 organization that loses its service area. The court found that unsuccessful Tier 2 organizations also would be practically unable to wait through another four-year cycle for possible review because they could not continue operating without a service area.

The court declined to treat Tier 3 organizations as adequate proxies for Tier 2 organizations. It reasoned that later relief obtained by a Tier 3 challenger would not restore a service area already reassigned through competition. The court also concluded that the organ procurement certification statute did not independently require exhaustion because its review process addresses decertification, not the pre-enforcement APA claims presented in the case.

The rule complied with the statute. Turning to the merits, the court rejected the argument that CMS failed to rely on process measures and multiple outcome measures as required by statute. The broader certification scheme has included process measures since 2006, and organizations must satisfy them to receive Tier 1 or Tier 2 status. The statute did not require CMS to evaluate every measure in the same manner or allow strength on one measure to offset weakness on another.

The donation and transplantation rates also qualified as multiple outcome measures even though they share the same denominator. The statute does not require independent or uncorrelated measures. The court further found that transplantation rates may reflect organizational performance even though transplant surgeons make final acceptance decisions, because procurement organizations can influence hospital practices and place organs outside their assigned areas.

The court also upheld CMS’s use of comparative performance. Congress authorized the Secretary to set performance standards, and the statute does not prohibit measuring organizations against one another. Confidence intervals and thresholds based on the preceding year’s data leave open the possibility that every organization could satisfy the Tier 1 standards. The agency also addressed differences among service areas through process measures, age adjustment, a donor-potential definition tied to qualifying causes of death, and a possible one-year extension for circumstances beyond an organization’s control.

CMS reasonably explained its methodology. The court found that CMS reasonably selected national mortality data to estimate donor potential despite acknowledged imperfections. CMS explained that the data were standardized, objective, publicly available, and more reliable for comparison than self-reported and unaudited information. The agency considered alternative sources, explained why they could not be obtained through reasonable efforts, and relied on the only available study addressing whether additional adjustments would change relative performance.

CMS also reasonably used a 12-month assessment period. The statute limits how frequently CMS may recertify organizations but does not require the agency to use four full years of data. CMS explained that older data could mask current performance, penalize recent improvement, and disadvantage an organization that had taken over a service area. Confidence intervals and the extension process addressed variability and extraordinary circumstances.

The court rejected the challenge to excluding zero-organ donors from the donor measure. CMS explained that the choice encourages organizations to pursue less-than-ideal or marginal donors and avoids extraordinary verification burdens associated with self-reported zero-organ donor data. The court likewise found a rational basis for declining additional risk adjustments for geographic and demographic differences. CMS stated that leading organizations operate in diverse areas, found no evidence that identified data errors systematically disadvantaged particular service areas, and explained concerns that racial adjustments could mask poor practices or perpetuate stereotypes.

The 25 percent threshold for Tier 1 also survived review. CMS considered alternative thresholds, tied the selected standard to its goal of increasing available organs, and found that top-quartile organizations were geographically and demographically diverse. CMS explained that their rates substantially exceeded those of many lower-performing organizations and that the use of confidence intervals and prior-year thresholds made the standard potentially achievable by all organizations. The addition of Tier 2 gave improving organizations an opportunity to compete rather than face immediate decertification.

Finally, the court held that CMS adequately responded to comments about competition, system disruption, and patient care. CMS noted that many commenters supported greater competition, explained that collaboration had not eliminated disparities in outcomes, and described how annual assessments and Tier 2 status would give lower-performing organizations opportunities to improve. CMS also addressed transitions by anticipating mergers, retention of existing staff, and negotiated continuity of services. Because the organizations did not show that CMS ignored significant issues or lacked a rational basis for its choices, the court upheld the rule and entered judgment for the Secretary.

The case is No. 8:25-cv-2042-KKM-SPF.

Judge: Mizelle, K.

Attorneys: Mark D. Polston (King & Spalding) for LifeLink Foundation, Inc. Christopher John Emden, U.S. Attorney's Office, for Robert Francis Kennedy, Jr.

Companies: LifeLink Foundation, Inc.

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