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Keep the Profiteers Out of Organ Procurement: Former AG Sues TransMedics Alleging Fraud

The for-profit proverbial wolf has been knocking at the non-profit organ donation system door for years and has been relying on failed science and misinformation to finally kick it in.

But now the ambitions and business practices of TransMedics, a prominent corporate advocate for allowing for-profit companies to own and manage organ procurement organizations, are drawing fresh attention. In previous years TransMedics had drafted legislation to circumvent the taboo of profiting from organ donation, an option that would have dismayed the founders of organ transplantation in America who won passage of the National Organ Transplant Act (NOTA) in 1984. NOTA and its bipartisan supporters in the scientific, medical and health policy communities agreed that live-saving organs must be treated as gifts, not commodities.

NOTA was written as gift law and not interstate commerce to protect its necessary altruistic standing.

As publicly reported:

• A federal judge in Massachusetts has allowed a securities-fraud claim against the company to proceed;

• The private law firm Kahn Swick & Foti, whose partners include former Louisiana Attorney General Charles C. Foti Jr., has announced an investigation into whether TransMedics’ officers and directors breached their duties to shareholders;

• TransMedics’ CEO outlined expansion plans at an investors’ conference and reaffirmed his interest in operating an OPO.

Together, these developments sharpen questions about placing OPO responsibilities in the hands of a publicly traded company, whose fiduciary responsibility is to shareholders and investors, not patients and donor families.

TransMedics and other defenders of for-profit involvement—including Dr. Raymond Lynch, Chief of the Organ Transplant Branch at the Health Resources and Services Administration—who previously testified to Congress that patients “do not need to be afraid of that”, meaning for profit brush off legitimate concern.

The very existence of life-saving transplants is based on altruistic donors, and equally willing donor families being approached by trained non-profit employees to offer the gift of life to others at the time of family grief.

As leading medical professionals stress, virtually no moment in their experience can match the intimacy involved in the sensitive interaction of specially trained non-profit representatives speaking with grieving donor families to confirm the donor’s gift of life to an awaiting patient. All involved have a profound right to know there are altruistic motives underpinning that conversation.

Unlike a nonprofit OPO, a for-profit business in a competitive field must always be looking over its shoulder at its competitors and has a fiduciary obligation to put its investors and shareholders first, not patients and donor families, The securities lawsuit and the related law-firm investigation reflect the darker side of profit-driven healthcare, with allegations of false statements intended to hide from investors an allegedly coercive "forced-bundling" policy.

Both legal developments focus on accountability to shareholders. The experiences of surgeons and transplant centers enter the story primarily as evidence of how the company’s alleged conduct may have harmed investors—not as injuries to the organ procurement and transplantation system for which these proceedings seek a remedy.

These episodes raise a fundamental question about the cultural fit between the altruistic and trust-based world of nonprofit organ procurement, and the harsh, unsentimental realities and intense pressures of for-profit healthcare: What happens when an OPO’s lifesaving mission comes into conflict with the financial interests of its owners?

Here is the background for each development:

On July 21, a federal judge in Massachusetts allowed a securities-fraud claim involving alleged forced bundling to proceed against TransMedics and CEO Waleed Hassanein. Investors allege that the company required transplant centers to purchase its organ-recovery and logistics services to access its Organ Care System, TransMedics’ branded technology, a portable, perfusion-based device that keeps donated organs viable outside the human body until they reach their recipients.

Meanwhile, in August, shareholder law firm Kahn Swick & Foti announced an investigation into whether TransMedics’ officers and directors breached their duties to shareholders or violated state or federal law. The firm cited a January report by short seller Scorpion Capital alleging “fraudulent billing, coercive business practices, and unsafe organ transplantation,” as well as other serious misconduct. TransMedics has denied the report’s allegations.

At the August 11 investor conference, Hassanein said TransMedics continues to seek permission to operate as a for-profit OPO—an ambition the company outlined in its March 2026 letter urging CMS to remove the nonprofit requirement for bidding on donation service areas after the Final Rule decertifies incumbent OPOs. They argued that TransMedics’ integrated network could improve organ utilization. However, they told investors that the company’s successful expansion does not depend on receiving authorization from CMS.

But that doesn’t mean TransMedics is about to give up. In 2023, Hassanein touted the potential for his company to create the “Amazon Prime model for organ transplant.” But the allegations underlying the litigation illustrate the risks that can arise when Wall Street expectations influence organ-donation logistics.

The question is not whether for-profit companies can contribute useful technology and services to transplantation.. The question is whether a company obligated to protect its “competitive moat,” increase revenue, and serve its shareholders should also be entrusted with the public-interest responsibilities of an OPO.