Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model

DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 512 [CMS-5544-F] RIN 0938-AV65 Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). ACTION: Final rule. SUMMARY: This final rule will update and revise the Increasing Organ Transplant Access (IOTA) Model for Performance Year (PY) 2. This final rule also includes a technical correction to the regulatory text. DATES: These regulations are effective on July 1, 2026. FOR FURTHER INFORMATION CONTACT: CMMItransplant@cms.hhs.gov, for questions related to the Increasing Organ Transplant Access Model. Thomas Duvall, (410) 786-8887, for questions related to the Increasing Organ Transplant Access Model. Christina McCormick, (410) 786-4012, for questions related to the Increasing Organ Transplant Access Model. SUPPLEMENTARY INFORMATION: I. Background and Executive Summary A. Model Overview and Background The Increasing Organ Transplant Access (IOTA) Model is a 6-year mandatory alternative payment model tested by the CMS Innovation Center under section 1115A of the Social Security Act (the Act) that began on July 1, 2025, and will end on June 30, 2031. The model appeared in the December 4, 2024 Federal Register (89 FR 96280) titled “Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model” (hereinafter referred to as the 2024 Final Rule), and this final rule will update IOTA Model provisions in response to improvement opportunities that arose during implementation of the 2024 Final Rule and to better align the model with new administration priorities. The IOTA Model is aimed at kidney transplant hospitals with the goal of increasing the number of kidney transplants, improving quality, and improving patient experience during the transplant process. B. Executive Summary 1. Purpose In the December 11, 2025 Federal Register (90 FR 57598), we published the proposed rule titled “Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA)” (hereafter referred to as the 2025 Proposed Rule). In response to the 2025 Proposed Rule, we received 114 timely pieces of correspondence from a variety of commenters, including providers, health plans, health care companies, professional associations, technology companies, dialysis facilities, and individuals. This final rule will make changes to the Increasing Organ Transplant Access (IOTA) Model for Performance Year (PY) 2, which will begin on July 1, 2026, and future PYs. We are finalizing some, but not all, of the provisions discussed in the proposed rule (hereinafter referred to as the 2025 Proposed Rule), and we intend to address certain other provisions discussed in the 2025 Proposed Rule in future rulemaking. This final rule also makes a technical correction to the regulation text for methodology and criteria for identifying and de-attributing attributed patients from an IOTA participant by redesignating § 512.414(b)(3)(A) through (D) as § 512.414(b)(3)(i) through (iv). We also note that some of the public comments were outside of the scope of the 2025 Proposed Rule. These out-of-scope public comments are not addressed in this final rule. We have summarized the public comments that are within the scope of the 2025 Proposed Rule and have included our responses to those public comments. However, we note that in this final rule we are not addressing most comments received with respect to the provisions of the 2025 Proposed Rule that we are not finalizing at this time. Rather, we will address them at a later time, in a subsequent rulemaking document, as appropriate. We are clarifying and emphasizing our intent that if any provision of this final rule is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, or stayed pending further action, it shall be severable from other parts of this final rule, and from rules and regulations currently in effect, and not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other, dissimilar circumstances. Through this final rule, we adopt provisions that are intended to and will operate independently of each other, even if each serves the same general purpose or policy goal. Where a provision is necessarily dependent on another, the context generally makes that clear. 2. Summary of the Major Provisions The following is a summary of the major provisions in this final rule. A general summary of the changes in this final rule is presented in section II.B of the preamble of this final rule. a. IOTA Participants In the 2024 Final Rule, CMS finalized that a kidney transplant hospital is eligible to be selected as an IOTA participant if it meets both of the following criteria: (1) The kidney transplant hospital annually performed 11 or more kidney transplants for patients aged 18 years or older, regardless of payer, each of the baseline years; and (2) the kidney transplant hospital annually performed more than 50 percent of its kidney transplants on patients 18 years of age or older each of the baseline years. However, per sections 1835(d) and 1862(a)(3) of the Act as codified in 42 CFR 411.6, Medicare does not pay for services furnished by a Federal provider of services or other Federal agency, nor does Medicare pay for services that are paid for directly or indirectly by a federal government entity, with only limited exceptions. Therefore, we are finalizing our proposed modification to the eligible kidney transplant hospital criteria to exclude Department of Veteran's Affairs (VA) medical facilities and Military medical treatment facilities (MTFs) from the IOTA Model for PYs 2 through 6, as described in section II.B.1.b. of this final rule. In the 2024 Final Rule, CMS established a low volume threshold requiring kidney transplant hospitals to have performed 11 or more kidney transplants for patients aged 18 years or older annually in each of the 3 baseline years in order to be eligible for selection into the IOTA Model, designed to protect beneficiary confidentiality and align with minimum CMS data display standards while ensuring statistical significance. However, in response to some IOTA participants expressing concern about their ability to participate in the model and our experience in operating the model, we believe it is necessary to reevaluate the low volume threshold requiring a kidney transplant hospital to have performed at least 11 kidney transplants annually in each of the 3 baseline years in order to be eligible for selection into the IOTA Model. As such, as described in section II.B.1.b. of this final rule, we are finalizing our proposal to raise the low volume threshold from a minimum of 11 kidney transplants performed annually during each of the baseline years to a minimum of 15 kidney transplants performed annually during each of the baseline years. b. Performance Assessment In the 2024 Final Rule, we finalized a policy to assess IOTA participant performance each PY in the quality domain on post-transplant outcomes using the composite graft survival rate. While the model performance period has begun, we indicated that for certain policies, such as the inclusion of a risk-adjustment methodology when calculating the composite graft survival rate to account for the complexities of donors and recipients, and their associated risks, we would go through rulemaking in the future to promulgate new or updated policies that will be finalized after the model start date. In the 2025 Proposed Rule, CMS proposed to include a risk-adjustment methodology in the composite graft survival rate calculation. Specifically, we proposed that CMS would risk-adjust the composite graft survival rate to account for a minimum set of transplant recipient and donor characteristics. As described in section II.B.2.b.(2).(a). of this final rule, we are finalizing updates to the composite graft survival rate metric that will include the following modifications: • Adding a modified risk-adjustment framework based on the Scientific Registry of Transplant Recipients' (SRTR's) risk adjustment methodology for the 1-year graft survival metric. • Excluding multi-organ transplants from the composite graft survival rate exclusion and inclusion criteria, in recognition of their more complicated results for kidney transplant recipients. • Updating the allocation of points awarded for performance on the composite graft survival rate. A detailed description of each finalized policy change and the corresponding scoring criteria can be found in section II.B.2.b. of this final rule. c. Payment As finalized in the 2024 Final Rule, each IOTA participant's final performance score will determine whether: (1) CMS will pay an upside risk payment to the IOTA participant; (2) the IOTA participant will fall into a neutral zone where no performance-based incentive payment will be paid to or owed by the IOTA participant; or (3) the IOTA participant will owe a downside risk payment to CMS. For a final performance score greater than 60, CMS will apply the formula for the upside risk payment, which will be equal to the IOTA participant's final performance score minus 60, then divided by 40, then multiplied by $15,000, then multiplied by the number of kidney transplants furnished by the IOTA participant to attributed patients with Medicare fee-for-service (FFS) as their primary or secondary payer during the PY. In the 2024 Final Rule (89 FR 96383), CMS proposed and finalized two-sided performance-based payments for “Medicare kidney transplants,” defined at § 512.402 as kidney transplants furnished to attributed patients whose primary or secondary insurance is Medicare FFS, as identified in Medicare FFS claims with MS-DRGs 008, 019, 650, 651 and 652. 1 In the 2025 Proposed Rule, we considered including beneficiaries with Medicare Advantage (MA) as well in the definition of Medicare kidney transplants in order to include MA beneficiaries in the calculations for the upside risk payment and downside risk payment. Based on the comments received, and as described in section II.B.3.b. of this final rule, we are finalizing the inclusion of MA beneficiaries in the calculation of the upside risk payment and downside risk payment. We had considered lowering the maximum upside payment for a kidney transplant performed from $15,000 to $10,000 alongside this provision but are not finalizing this provision due to comments from stakeholders. 1  See Table 12 in the 2024 Final Rule (89 FR 96381) for a full description of MS-DRGs 008, 019, 650, 651 and 652. Currently, IOTA Model regulations stipulate that IOTA participants must remit the downside risk payment to CMS in a single payment at least 60 days after the date on which the demand letter is issued. As described in section II.B.3.c.(2). of this final rule, CMS is finalizing a modification to the policy previously finalized in the 2024 Final Rule such that IOTA participants must remit the downside risk payment to CMS in a single payment within 60 days after the date on which the demand letter is issued. As finalized in section II.B.3.c.(2). of this final rule, if full payment is not received by CMS within 60 days after demand is made, the remaining amount owed will be considered a delinquent debt. Finally, in the 2024 Final Rule, CMS established an Extreme and Uncontrollable Circumstance (EUC) payment policy recognizing that events may occur outside the purview and control of the IOTA participant that may affect their performance in the model. Under the current provision in the IOTA Model, CMS applies determinations made by the Quality Payment Program (QPP) with respect to whether an EUC has occurred, and the areas impacted during the PY. The current regulations provide that, in the event of an extreme and uncontrollable circumstance, as determined by the QPP, CMS may reduce the downside risk payment, if applicable, prior to recoupment. CMS determines the amount of the reduction by multiplying the downside risk payment by both the percentage of total months during the PY affected by the EUC and the percentage of attributed patients who reside in an area affected by the EUC. CMS also acknowledges the limited nature of the current EUC provision to account for broader impacts that an EUC might have on an IOTA participant's ability to perform in the model if allocation systems were disrupted due to an emergency or if there were disaster conditions that could disproportionately affect post-transplant outcomes, which only potentially reduces downside payments without accounting for changes in model inputs or reporting periods that may affect an IOTA participant's performance score. In the 2025 Proposed Rule (90 FR 57612) CMS proposed to update the EUC policy so that at its sole discretion, CMS may apply flexibilities if the IOTA participant is located in an emergency area during an emergency period, as those terms are defined in section 1135(g) of the Act, for which the Secretary has issued a waiver under section 1135 of the Act and if the IOTA participant is located in a county, parish, or tribal government designated in a major disaster declaration under the Stafford Act. Additionally, we proposed that CMS has the sole discretion to determine the time period during which payment and reporting flexibilities are provided to the IOTA participant. Finally, we proposed that CMS may, at its sole discretion, adjust the direction and the magnitude of the upside or downside risk payments, if applicable, prior to recoupment or payment for the IOTA participant if the IOTA participant is participating in the IOTA Model when CMS has declared such an emergency period. Due to commenter feedback, we are finalizing this proposal with modification. We are not finalizing our proposal to apply EUC flexibilities during an emergency period as defined in section 1135(g) of the Act, but to instead continue to use EUC as defined by the Quality Payment Program. We are finalizing our proposals to extend payment and reporting flexibilities to IOTA participants impacted by EUC and to adjust the upside risk payment or downside risk payment amount for the IOTA participant if the IOTA participant is participating in the IOTA Model when such an emergency period has been declared. d. Other Requirements In the 2024 Final Rule, CMS finalized several other model requirements for IOTA participants, including transparency requirements, public reporting requirements, and a health equity plan requirement which is optional for the IOTA Model performance period. In the 2024 Final Rule, CMS signaled that there were several policies that would be updated through future rulemaking. In addition, there were several policy considerations raised subsequent to the publication of the 2024 Proposed Rule, including from IOTA participants, which CMS would have liked to incorporate into the IOTA Model, but was unable to add to the 2024 Final Rule. Therefore, the 2025 Proposed rule proposed updates to other requirements in the IOTA Model. (1) Transparency In the 2024 Final Rule CMS finalized our policy that IOTA participants must publicly post their patient selection waitlist criteria on a website by the end of PY 1. CMS also stated its intent to use future rulemaking to determine the cadence of updating this website and patient selection criteria. In the 2025 Proposed Rule (90 FR 57613), CMS proposed updates to these requirements. As such, this final rule updates requirement that include the following modifications: • For all subsequent PYs after PY1, the IOTA participant must review its publicly posted patient selection waitlist criteria and ensure that the information on its website is up to date by the end of each relevant PY. • IOTA participants performing living donor transplants must publicly post their living donor selection criteria for evaluating potential living donors for kidney transplant waitlist patients by the end of PY 2. IOTA participants must ensure this information is up to date by the end of each subsequent PY. Each of the finalized provisions is discussed in detail in section II.B.4.a.(1). of this final rule. CMS also finalized its policy in the 2024 Final Rule to identify each IOTA participant for each PY and to post performance across the achievement domain, efficiency domain, and quality domain for each IOTA participant on the IOTA Model website annually, as they become available. As discussed in section II.B.4.a.(2). of this final rule, we finalized a requirement to publish IOTA participant waitlist selection criteria and the living donor selection criteria, as described in section II.B.4.a.(1). of this final rule, on the IOTA Model website by the end of the second quarter of each subsequent PY. In the 2024 Final Rule, CMS finalized a requirement that IOTA participants must review organ offer acceptance criteria with their IOTA waitlist patients who are Medicare beneficiaries at least once every 6 months that the Medicare beneficiary is on their waitlist. Since the publication of the 2024 Final Rule, IOTA participants have requested that CMS provide clarification on what acceptance criteria information should be reviewed. Therefore, as described in section II.B.4.(a).(4). of this final rule, we aim to clarify that review of acceptance criteria pertains to individual patient transplant organ offer acceptance criteria and not organ offer filters or kidney transplant hospital level acceptance criteria. For purposes of the model, we are defining “transplant organ offer acceptance criteria” as individualized patient acceptance parameters that kidney waitlist patients, as defined at § 512.402, may elect regarding the categories of organ offers they are prepared to accept for transplantation. Lastly, in the 2025 Proposed Rule (90 FR 57618 through 57621), CMS proposed the adoption of the following provisions for IOTA participants to notify its IOTA waitlist patients who are Medicare beneficiaries when their waitlist status has changed (that is, from active to inactive) only if it is not redundant with other HHS guidance: The IOTA participant would be required to: (1) inform IOTA waitlist patients who are Medicare beneficiaries any time their status on its waitlist is changed that will impact their ability to receive an organ offer; (2) include the reason, and information about how IOTA waitlist patients who are Medicare beneficiaries could become active again; and, (3) notify the dialysis facility (as defined at 42 CFR 494.10) and managing clinician (as defined at 42 CFR 512.310) or nephrologist if applicable. IOTA participants would be required to notify these IOTA waitlist patients who are Medicare beneficiaries of status changes within 10 days when they become ineligible for organ offers (if not redundant with existing HHS guidance). CMS is finalizing this provision without modification, as discussed in detail in section II.B.4.a.(5). of this final rule. (2) Health Equity Plans In the 2024 Final Rule, CMS finalized that an IOTA participant may voluntarily submit a health equity plan (HEP) to CMS. CMS finalized voluntary health equity plan submissions aiming to address reducing health disparities for attributed patients. However, CMS is removing the voluntary HEP provisions in compliance with Executive Order 14151 Ending Radical and Wasteful Government DEI Programs and Preferencing (90 FR 8339) issued January 20, 2025 and because, although voluntary, they still require participant time and resources and CMS believes those resources are better directed to the model's core objectives and mandatory requirements. e. Beneficiary Protections CMS finalized in the 2024 Final Rule that IOTA participants must provide notice to each attributed patient of its participation in the IOTA Model. In the 2025 Proposed Rule (90 FR 57621 through 57622), CMS proposed the following updates: • Limit these notification requirements to Medicare beneficiaries only. • Allow IOTA participants to distribute this notification in a paper notification at the first in-office or outpatient visit, or to distribute the notification in an electronic format in cases where the attributed patient has affirmatively opted out of receiving paper communications and has chosen to receive communication through electronic methods. As described in section II.B.5. of this final rule, we have finalized these proposals with the modification that IOTA participants may distribute the notification in an electronic format in cases where the attributed patient has affirmatively opted out of receiving paper communications or has chosen to receive communication through electronic methods. f. Monitoring In the 2024 Final Rule, we finalized a comprehensive list of monitoring activities to ensure compliance and promote the safety of attributed patients and the integrity of the IOTA Model. However, we inadvertently omitted monitoring of the review of acceptance criteria provision as described in § 512.442. Therefore, in this final rule we are finalizing with modification that CMS may monitor the following transparency provisions as described in section II.B.6 of this final rule: • Informing eligible IOTA waitlist patients who are Medicare beneficiaries, as defined in section II.B.4.a.(3). of this final rule, of the number of times an organ is declined on the Medicare beneficiary's behalf in accordance with finalized § 512.442(b); • Reviewing selection criteria with IOTA waitlist patients who are Medicare beneficiaries at least once every 6 months that the Medicare beneficiary is on their waitlist as specified in § 512.442(c); and • Notifying IOTA waitlist patients who are Medicare beneficiaries when their waitlist status has changed from active to inactive in accordance with finalized § 512.442(d). g. Termination In the 2024 Final Rule, we finalized a comprehensive list of reasons for which CMS may immediately or with advance notice terminate an IOTA participant from the IOTA Model. As mentioned in section II.B.7. of this final rule, the 2024 Final Rule inadvertently omitted the Department of Health and Human Services (HHS) and the Organ Procurement and Transplantation Network (OPTN) as sources of vital information regarding potential events by IOTA participants identified as presenting a risk to patient safety, public health, and related concerns that may lead CMS to terminate IOTA participants. Therefore, in this final rule we are finalizing our policy, with minor technical corrections as described in section II.B.7 of this final rule, that CMS may terminate an IOTA participant from the IOTA Model if HHS or the OPTN has determined that an IOTA participant has violated the OPTN's policies, OPTN's Management and Membership policies, or HHS regulations (42 CFR part 121) upon a review conducted in accordance with 42 CFR 121.10. 3. Summary of Costs and Benefits The IOTA Model aims to incentivize transplant hospitals to overcome system-level barriers to kidney transplantation. The chronic shortfall in kidney transplants results in poorer outcomes for patients and increases the burden on Medicare in terms of payments for dialysis and dialysis-based enrollment in the program. In section V. of this final rule, we set forth a detailed analysis of the impacts that the proposed changes will have on the IOTA participants and beneficiaries. We estimate that as a result of the finalized changes to the IOTA Model, net Federal savings will increase by $60 million. II. Changes to the Increasing Organ Transplant Access (IOTA) Model A. Background 1. Purpose The Increasing Organ Transplant Access (IOTA) Model is a 6-year mandatory alternative payment model tested by the CMS Innovation Center that began on July 1, 2025, and will end on June 30, 2031. The IOTA Model is testing whether performance-based incentives paid to or owed by participating kidney transplant hospitals can increase access to kidney transplants for kidney transplant waitlist patients, while preserving or enhancing quality of care and reducing Medicare expenditures. CMS selected 103 kidney transplant hospitals to participate in the IOTA Model for the first performance year and will be measuring and assessing the participating kidney transplant hospitals' performance during each performance year (PY) across three performance domains: achievement, efficiency, and quality. The IOTA Model was established through notice and comment rulemaking, finalized in the Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model Final Rule (2024 Final Rule), CMS-5535-F, published December 4, 2024. In the 2024 Final Rule, CMS signaled that there were several policies that could be addressed through future rulemaking, including: the addition of a risk-adjustment methodology in the calculation of the composite graft survival rate, the addition of transplants furnished to Medicare Advantage beneficiaries to the definition of Medicare kidney transplants, and the addition of a monthly transparency requirement for IOTA participants to inform IOTA waitlist patients who are Medicare beneficiaries about declined organ offers and the reasons for declination. In addition, there were a number of policy considerations raised subsequent to the publication of the Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model Proposed Rule (2024 Proposed Rule), including from IOTA participants, which CMS would like to incorporate into the IOTA Model, but were unable to add to the 2024 Final Rule. Therefore, the Medicare Program; Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model (hereinafter referred to as the 2025 Proposed Rule), published December 11, 2025, proposed updates to the IOTA Model. The policies finalized in this final rule reflect our commitment to ensuring that the IOTA Model's incentive structure enhances the care delivery capabilities and efficiency of kidney transplant hospitals selected for participation, with the goal of improving quality of care while reducing program spending. 2. Statutory Authority and Background Section 1115A of the Act authorizes the Center for Medicare and Medicaid Innovation (the “Innovation Center”) to test innovative payment and service delivery models expected to reduce Medicare, Medicaid, and CHIP expenditures, while preserving or enhancing the quality of care furnished to such programs' beneficiaries. We have designed and tested both voluntary Innovation Center models—governed by participation agreements, cooperative agreements, and model-specific addenda to existing contracts with CMS—and mandatory Innovation Center models that are governed by regulations. Each voluntary and mandatory model features its own specific payment methodology, quality metrics, and certain other applicable policies, but each model also features numerous provisions of a similar or identical nature, including provisions regarding cooperation in model evaluation; monitoring and compliance; and beneficiary protections. Under the authority of section 1115A of the Act, through notice-and-comment rulemaking, the Innovation Center established the IOTA Model in the 2024 Final Rule that appeared in December 4, 2024, Federal Register (89 FR 96280). The intent of the IOTA Model is to reduce Medicare expenditures and improve performance in kidney transplantation by creating performance-based incentive payments for participating kidney transplant hospitals tied to access and quality of care for ESRD patients on the hospitals' waitlists. Participation in the IOTA Model is mandatory for approximately 50 percent of all eligible kidney transplant hospitals in the United States, which were selected by a stratified random sampling of donation service areas (“DSAs”). Mandatory participation in the IOTA Model was determined to be necessary to minimize the potential for selection bias and to ensure a representative sample size nationally, thereby guaranteeing that there would be adequate data to evaluate the model test. Eligible kidney transplant hospitals for PY 1 included those that: (1) performed at least 11 kidney transplants for patients 18 years of age or older annually regardless of payer type during the 3-year period ending 12 months before the model's start date; and (2) furnished more than 50 percent of the hospital's annual kidney transplants to patients 18 years of age or older during that same period. As this is a mandatory model, the selected kidney transplant hospitals are required to participate. CMS measures and assesses IOTA participant performance during each PY across three performance domains: achievement, efficiency, and quality. The achievement domain assesses each IOTA participant on the number of kidney transplants performed during a PY, relative to a participant-specific transplant target. The efficiency domain assesses the performance of IOTA participants on the organ offer acceptance rate ratio relative to national ranking. The quality domain is focused on improving the quality of care and measures IOTA participants performance on the composite graft survival rate relative to national ranking to assess post-transplant outcomes. Each IOTA participant's performance score across these three domains determines its final performance score and corresponding amount for the performance-based incentive payment that CMS will pay to or the payment that will be owed by the IOTA participant. The upside risk payment will be a lump sum payment paid by CMS after the end of a PY to an IOTA participant with a final performance score of 60 or greater. Conversely, beginning in PY 2, the downside risk payment will be a lump sum payment paid to CMS by any IOTA participant with a final performance score of 40 or lower. There is no downside risk payment for PY 1 of the IOTA Model. B. Provisions of the Proposed Regulation 1. IOTA Participants a. Background In the 2024 Final Rule (89 FR 96304), we defined “IOTA participant” as a kidney transplant hospital, as defined at § 512.402, that is required to participate in the IOTA Model pursuant to § 512.412. In addition, we noted that the definition of “model participant” contained in 42 CFR 512.110, would include an IOTA participant. We also proposed and finalized at § 512.402 the definition of “transplant hospital,” “kidney transplant hospital,” and “kidney transplant.” We stated that kidney transplant hospitals are the focus of the IOTA Model because they are the entities that furnish kidney transplants to ESRD patients on the waiting list and ultimately decide to accept donor recipients as transplant candidates (89 FR 96303). Kidney transplant hospitals play a key role in managing transplant waitlists and patient, family, and caregiver readiness. They are also responsible for the coordination and planning of kidney transplantation with the organ procurement organizations (OPO) and donor facilities, staffing and preparation for kidney transplantation, and oversight of post-transplant patient care, and they are largely responsible for managing the living donation process. The IOTA Model is intended to promote improvement activities across selected kidney transplant hospitals that reduce access barriers, thereby increasing the number of transplants, quality of care, and cost-effective treatment. The IOTA Model aims to improve quality of care for ESRD patients on the waiting list pre-transplant, during transplant, and during post-transplant care. b. Mandatory Participation In the 2024 Final Rule (89 FR 96308), we finalized that participation in the IOTA Model would be mandatory. We proposed and finalized that all kidney transplant hospitals that meet the eligibility requirements at § 512.412(a), and that are selected through the participation selection process at § 512.412(b) and (c) would be required to participate in the IOTA Model. Lastly, we also finalized our provisions for participant eligibility criteria for kidney transplant hospitals at § 512.412(a) for all eligible kidney transplant hospitals selected for participation in the model. As stated in the 2024 Final Rule (89 FR 96308), we proposed kidney transplant hospital participant eligibility criteria that would increase the likelihood that: (1) individual kidney transplant hospitals selected as IOTA participants represent a diverse array of capabilities across the performance domains; and (2) the results of the model test would be statistically valid, reliable, and generalizable to kidney transplant hospitals nationwide should the model test be successful and considered for expansion under section 1115A(c) of the Act. We proposed and finalized our participant eligibility criteria for kidney transplant hospitals at § 512.412(a) in the 2024 Final Rule (89 FR 96311). Specifically, that eligible kidney transplant hospitals are those that: (1) performed 11 or more transplants for patients aged 18 years or older annually, regardless of payer type, each of the baseline years; and (2) furnished more than 50 percent of its kidney transplants annually to patients over the age of 18 during each of the baseline years. We also finalized the definition of “non-pediatric facility” and “baseline years” at § 512.402. In the 2024 Final Rule, we finalized at § 512.412(a)(1) a low volume threshold requiring a kidney transplant hospital to have performed 11 or more kidney transplants for patients aged 18 years or older annually in each of the 3 baseline years in order to be eligible for selection into the IOTA Model. In our initial proposal in the 2024 Proposed Rule, we stated that we alternatively considered using a higher threshold, such as 30 adult kidney transplants or 50 adult kidney transplants during each of the 3 baseline years (89 FR 43541). However, we found that many kidney transplant hospitals consistently perform between 11 and 50 transplants per year. We received several comments expressing concern with the proposed low-volume kidney transplant threshold for IOTA participants. As described in the 2024 Final Rule at 89 FR 96309, a commenter noted that there may be some unforeseen or unintended consequences of advantaging programs classified as “low volume,” where the volume is close to the dividing line, and vice versa. Additional commenters shared concerns that the low volume threshold of 11 kidney transplants performed will disadvantage kidney transplant hospitals that furnish a smaller number of kidney transplants, as these transplant programs do not meet the requirements for Center of Excellence (COE) programs and have limited contracts with payers, and the low volume threshold does not ensure statistical significance. Several commenters recommended that CMS should increase the low volume threshold, setting the number of kidney transplants at a value such as 25, 50, or 100, to ensure statistical significance and avoid burden on kidney transplant hospitals that furnish a smaller number of kidney transplants. Finally, a commenter suggested CMS should only use the number of Medicare kidney transplants to determine eligibility, rather than 11 kidney transplants across all payers. Additionally, as described at 89 FR 96308 a commenter expressed concerns about the impact of the IOTA Model on small kidney transplant hospitals if participation was made mandatory. The commenter suggested that a low volume threshold of 100 kidney transplants, regardless of payer type, would be more appropriate. This, the commenter believed, would ensure small kidney transplant hospitals were excluded and protect access to kidney transplants in less populated areas. In the 2024 Final Rule, we stated that the low volume threshold was designed to protect the confidentiality of Medicare and Medicaid beneficiaries and that this low volume threshold aligns with the minimum standards for CMS data display, preventing the release of information that could identify individual beneficiaries while ensuring statistical significance (89 FR 96309). Additionally, we stated that we excluded these low-volume kidney transplant hospitals that may lack the capacity to comply with the model's policies. Since publication of the 2024 Final Rule, some IOTA participants close to the current low volume threshold have expressed concern about their ability to participate in the model and we stated we believed it is necessary to reevaluate the low volume threshold requiring a kidney transplant hospital to have performed 11 or more kidney transplants for patients aged 18 years or older, regardless of payer, annually in each of the 3 baseline years in order to be eligible for selection into the IOTA Model (90 FR 57603). We also received multiple comments from the 2024 Proposed Rule urging us to increase the low volume threshold. As such, in the 2025 Proposed Rule, we proposed at § 512.412(a)(1) to raise this low volume threshold from a minimum of 11 kidney transplants performed annually during each of the baseline years to a minimum of 15 kidney transplants performed annually during each of the baseline years. We also proposed this provision in response to our experience in operating the model. IOTA participants who are above the current minimum low volume threshold of 11 kidney transplants performed annually, but below the updated proposed low volume threshold of a minimum of 15 kidney transplants performed annually are still quite small and have indicated structural difficulties in achieving the goals of the model and complying with the requirements of the model. This updated low volume threshold is designed to balance accommodating the needs of smaller kidney transplant hospitals to ensure that their transplant programs can remain viable and continue to serve their communities, while also trying to ensure a sufficient volume of kidney transplant hospitals to be able to test the model. We alternatively considered higher low volume thresholds, such as 20 kidney transplants or 25 kidney transplants performed for patients aged 18 years or older annually, regardless of payer, during each of the baseline years, but think that a low volume threshold of 15 kidney transplants or more performed to patients aged 18 years or older annually best balances excluding the smallest kidney transplant hospitals, while still being able to ensure that the model has sufficient power to be able to test the model (90 FR 57603). We stated in the 2025 Proposed Rule that the updated low volume threshold would only result in the removal of one IOTA participant as of the model start date, while higher low volume thresholds would result in additional IOTA participants being removed, which could diminish the ability to evaluate the model. We sought comment on our proposal to adjust the low volume threshold at § 512.412(a)(1) to require that to be eligible for model participation, a kidney transplant hospital must have performed a minimum of 15 kidney transplants to patients aged 18 years or older annually, regardless of payer, each of the baseline years, rather than a minimum of 11 kidney transplants. We also sought public comment on the alternatives considered. Additionally, we stated in the 2025 Proposed Rule that since the publication of the 2024 Final Rule, CMS completed IOTA participant selection and notified IOTA participants of their selection to participate in the IOTA Model (90 FR 57603). Upon completion of selecting IOTA participants for inclusion in the model, we realized that an unintended consequence of the current participant eligibility criteria at § 512.412(a) is that Department of Veterans Affairs (VA) medical facilities or military medical hospitals, also known as military medical treatment facilities (MTFs) could be selected to participate even though Medicare does not provide reimbursement for VA medical facilities or MTFs. A total of 103 kidney transplant hospitals were selected to participate in the model, including four VA medical facilities and one MTF. As discussed in the 2025 Proposed Rule, per 42 CFR 411.6(a), Medicare does not pay for services rendered by Federal providers of services or other Federal agencies (90 FR 57603). Additionally, Medicare does not provide payment for services that receive direct or indirect funding from a governmental entity (see 42 CFR 411.8). As such, we proposed to update the participant eligibility criteria at § 512.412(a). Specifically, we proposed at § 512.412(a)(3) to exclude kidney transplant hospitals that are a MTF or VA medical facility from being eligible to participate in the IOTA Model. We proposed at § 512.402 to define a “VA medical facility” as defined at 38 CFR 17.1505 to mean a VA hospital, a VA community-based outpatient clinic, or a VA health care center, any of which must have at least one full-time primary care physician, but not a Vet Center or Readjustment Counseling Service Center (90 FR 57603). Additionally, we proposed at § 512.402 to define a “military medical treatment facility (MTF)” as it is currently defined at 10 U.S.C. 1073c(j)(3) to mean: (1) any fixed facility of the Department of Defense that is outside of a deployed environment and used primarily for health care; and (2) any other location used for purposes of providing healthcare services as designated by the Secretary of Defense. Given that Medicare does not provide coverage for services furnished by a federal provider, federal agency, or any other government entity, whether the services are paid for directly or indirectly by a government source, we stated that we believed that VA medical facilities and MTFs should not be eligible to participate in the IOTA Model (90 FR 57603). Additionally, we stated that we did not believe that our proposal to exclude kidney transplant hospitals that are also a VA medical hospital or MTF from being eligible to participate in the IOTA Model would negatively affect the remaining IOTA participants, impact the IOTA Model, or affect CMS's ability to evaluate the model. Moreover, we stated that the model's evaluation would benefit from an analysis that only focuses on Medicare-participating kidney transplant hospitals. Since the fundamental purpose of the IOTA Model is to test interventions specifically within the Medicare system to improve quality of care and reduce Medicare expenditures, we stated that including non-Medicare participating facilities like VA medical facilities and MTFs would introduce confounding variables that could obscure the model's true effectiveness. Additionally, we stated that VA medical facilities and MTFs operate under entirely different payment structures, regulatory frameworks, and patient populations compared to Medicare-participating hospitals, making direct performance comparisons inappropriate and potentially misleading. By excluding these facilities, we stated that the model evaluation can focus on kidney transplant hospitals that all operate under similar Medicare reimbursement conditions, face comparable regulatory requirements, and serve similar patient populations, thereby providing more accurate data on whether the model's performance-based payment incentives actually drive improvements in transplant outcomes and cost efficiency within the Medicare system (90 FR 57604). We stated that this approach would also eliminate the analytical complexity of trying to account for the vastly different operational contexts between Medicare-participating kidney transplant hospitals and federal facilities, ultimately yielding more actionable insights for potential broader implementation of the IOTA Model across the Medicare program. We sought comment on our proposal at proposed § 512.412(a)(3) to exclude kidney transplant hospitals that are a MTF or VA medical facility as eligible to participate in the model. We also sought comments on our proposed definitions of MTF and VA medical facility at proposed § 512.402. Lastly, to account for our proposed kidney transplant hospital participant eligibility criteria modifications at proposed § 512.412(a)(1) and (3), we proposed updating the language at § 512.412(a) (90 FR 57604). Specifically, we proposed replacing “meets both” with “meets all” to specify that a kidney transplant hospital is eligible to be selected as an IOTA participant, in accordance with the methodology described in proposed § 512.412(b)(3), if the kidney transplant hospital meets all of the eligibility criteria at § 512.412(a). We sought comment on our proposal at proposed § 512.412(a) to update existing language to account for our proposals at proposed § 512.412(a)(1) and (3). The following is a summary of the comments we received on the provisions proposed and the alternatives considered set out in this section and our responses. Comment: Several commenters expressed support for the proposal to raise the low volume threshold to a minimum of 15 kidney transplants performed annually during each of the baseline years for patients aged 18 years or older, regardless of payer, instead of the current low volume threshold of 11. Additionally, several commenters agreed with CMS that the proposed update would balance the need to have statistical validity with consideration for the IOTA participants. Another commenter stated that the proposed change would strengthen model integrity and that it is supported across professional societies. Response: We thank the commenters for their support. We agree that raising the low volume threshold from a minimum of 11 kidney transplants performed annually during each of the baseline years to a minimum of 15 kidney transplants performed annually during each of the baseline years will strengthen model integrity. We stated in the 2025 Proposed Rule that the proposed change would better take into consideration the needs of smaller kidney transplant hospitals and would ensure that their transplant programs can remain viable and continue to serve their communities (90 FR 57603). For these reasons, we are finalizing our proposal without modification. Comment: Several commenters expressed support for the proposal at § 512.412(a)(1) to raise the low-volume threshold to a minimum of 15 kidney transplants performed annually during each of the baseline years for patients aged 18 years or older, regardless of payer, instead of the current threshold of 11. However, commenters requested additional information regarding the proposed change. In particular, a commenter recommended that CMS provide a clearer explanation of the rationale for increasing the threshold and disclose the number and characteristics of kidney transplant hospitals that would be affected. The commenter also suggested that CMS monitor the impact of implementing the revised threshold. Response: We thank the commenters for their support, feedback, and suggestions. We stated in the 2025 Proposed Rule that our rationale for raising the low volume threshold was a result of IOTA participant feedback concerning the structural difficulties in meeting model goals, commenters responding to the 2024 Proposed Rule urging CMS to increase the low volume threshold, and our experience in operating the model (90 FR 57603). Additionally, we note that we intend to publicly post an updated list of IOTA participants on the IOTA Model website. Comment: A couple of commenters asked CMS to provide additional information or analysis proving that the proposal to adjust the low volume threshold from 11 to 15 kidney transplants would improve statistical validity or model performance. Another commenter asked CMS to provide additional data concerning how the change would impact health care access in less populous regions. Response: We thank the commenters for their comments. As described in the 2024 Final Rule, the model's design ensures sufficient participation of kidney transplant hospitals, which is necessary to obtain a diverse, representative sample for a statistically robust test of the model (89 FR 96307). We do so in accordance with section 1115A(b)(4) of the Act. As stated in the 2024 Proposed Rule, we continue to believe the proposed, updated low volume threshold aligns with the minimum standards for CMS data display, preventing the release of information that could identify individual beneficiaries while ensuring statistical significance (89 FR 96309). Additionally, as described in the 2025 Proposed Rule and this final rule, the proposed updated low volume threshold would only result in the removal of one IOTA participant as of the model start date (90 FR 57603). We intend to monitor the model for any unintended consequences. Comment: A couple of commenters expressed concern that increasing the low-volume threshold to 15 kidney transplants performed annually during each of the baseline years for patients aged 18 years or older, regardless of payer, could discourage innovation or create access barriers for low-volume kidney transplant hospitals, particularly those serving rural and underserved populations. These commenters recommended alternative approaches, including adopting a tiered eligibility framework based on transplant volume, as well as incorporating risk-adjustment, performance benchmarks, phased participation, or enhanced technical assistance to support broader participation and benefit for lower-volume transplant hospitals. Response: We thank the commenters who expressed concerns around the impact of raising the low volume threshold to 15 kidney transplants. However, we disagree with the commenters. We recognize that our proposal to raise the low volume threshold to 15 kidney transplants performed annually