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Court Decision: Years of Legal Challenges Now Likely Over CMS Organ Rule

U.S. District Judge Kathryn Kimball Mizelle recently upheld the 2020 CMS Final Rule governing the certification of organ procurement organizations, rejecting a summary judgement challenge brought by LifeLink Foundation and several other OPOs. The suit continues. The ruling was a victory for federal regulators for now, although the court was deciding whether CMS acted lawfully—not whether the Final Rule represents scientifically sound or optimal policy. More than 20 peer-reviewed studies have identified serious methodological and statistical problems with the rule’s performance measures.

But one key part of Judge Mizelle’s decision demonstrates why the federal government should pause before using the rule to reorganize the nation’s organ-donation system. She held that OPOs whose scores under the Final Rule’s metrics placed them in Tier 2 have standing to challenge the Final Rule and may obtain federal-court review because CMS provided them no administrative avenue for challenging their Tier 2 designation or the loss of their Donation Service Area.

That is not a minor procedural detail. It means federal litigation is the only meaningful avenue through which Tier 2 OPOs can protect themselves and secure their legal rights against potentially fatal government decisions.

Judge Mizelle’s reasoning exposes a serious structural defect in CMS’s regulatory design: Under the Final Rule, Tier 2 OPOs must compete to retain their service areas and cannot appeal if CMS awards the territory to another organization. The court recognized that a losing Tier 2 OPO would effectively be forced to shut down while remaining unable to challenge the decision administratively and ruled that federal court review must therefore be available to them.

The practical effect could be to place a substantial portion of CMS’s planned competition process—and some resulting service-area transfers—in legal uncertainty, potentially extending well beyond the Final Rule’s planned 2027 implementation.

The irony is that CMS previously acknowledged this precise danger. The agency eliminated administrative appeals for OPOs losing service-area competitions because it said appeals would create uncertainty for the winning organization and could disrupt its work in the new territory. Judge Mizelle’s ruling indicates that CMS cannot sidestep that uncertainty simply by denying Tier 2 OPOs any avenue of administrative review. The disputes may instead move into federal court, where proceedings can last much longer.

Approximately 18 of the nation’s 55 OPOs are projected to be ranked in Tier 2. Each could be forced to spend substantial resources competing for the territory they already serve. Those that lose would remain nominally certified but, without a service area, could be forced to cease operations, lay off employees and surrender hospital and community relationships built over decades.

It is unrealistic to assume that organizations facing extinction will quietly accept those results. They may challenge CMS’s calculations, the data underlying their rankings, the procedures used to select competing OPOs and the fairness of individual DSA awards. They may seek court orders preventing transfers while their cases are heard.

No one can predict how many lawsuits will be filed or how courts will decide them. But the ruling establishes that protracted litigation is a foreseeable part of Final Rule implementation, not a remote possibility. Different cases may proceed on different schedules, produce conflicting rulings or leave contested service areas unresolved while appeals continue.

That uncertainty has consequences beyond the litigants. Hospitals need to know which OPO will serve them. OPO employees need to know whether they will have jobs. Donor families and transplant programs need continuity. A transition that looks orderly on a CMS spreadsheet may become chaotic when the incumbent organization, the proposed successor and the federal government are fighting in court over who has the right to operate.

The Final Rule was promoted as a means of creating greater accountability in organ procurement. Instead, CMS designed a process under which consequential decisions may migrate from the agency to federal courtrooms because the agency itself supplied no meaningful review.

Judge Mizelle’s recognition of Tier 2 OPOs’ standing and access to federal court creates a strong new argument for pausing implementation of the Final Rule. CMS should correct this denial of administrative review—and the rule’s other defects—before competitions, displacements and closures begin.

Reorganizing a national system responsible for recovering organs and supporting grieving families should not depend on years of emergency motions, injunctions and judicial decisions. A rule that can be implemented only through prolonged litigation clearly needs more work.