Federal Court Upholds CMS’s OPO Performance Rule but Allows Earlier Judicial Challenges

On September 29, 2026, in LifeLink Foundation, Inc. v. Kennedy, the U.S. District Court for the Middle District of Florida (the “Court”) upheld the Centers for Medicare & Medicaid Services (“CMS”) 2020 rule governing Organ Procurement Organization (“OPO”) performance measures and tier classifications (the “Final Rule”). The decision rejects one significant legal challenge to the Final Rule and, for now, leaves the current framework in place for the 2026–2030 recertification cycle, although other lawsuits challenging the framework remain pending and an appeal or future regulatory developments could alter the legal landscape.

The Court did not rule entirely in CMS’s favor. Although it upheld the Final Rule on the merits, it also held that Tier 2 and Tier 3 OPOs may challenge the rule in federal court before completing CMS’s administrative appeal process. The Court further included an extensive discussion questioning whether a court may broadly vacate agency rules under the Administrative Procedure Act (“APA”), although those observations were not necessary to the Court’s ultimate decision upholding the Final Rule.

Background

The National Organ Transplant Act requires CMS to establish standards for certifying OPOs using evidence-based outcome and process measures. OPOs are generally recertified on four-year cycles and must have an opportunity to appeal a decertification.

The Final Rule replaced the prior self-reported eligible-death measure with two outcome measures based on federal death data: the donation rate and the age-adjusted organ transplantation rate. CMS uses those measures, together with applicable process requirements, to place OPOs into three tiers:

• Tier 1: OPOs that meet or exceed the top-quartile threshold on both outcome measures and satisfy applicable process requirements are eligible for recertification.
• Tier 2: OPOs that meet or exceed the median threshold on both measures but do not qualify for Tier 1 must compete to retain their designated service area (“DSA”) during recertification.
• Tier 3: OPOs that fall below the median on either measure, or fail to satisfy the applicable process requirements, receive an initial decertification determination.

Tier 2 and Tier 3 OPOs have materially different appeal rights. A Tier 3 OPO may seek reconsideration and a hearing before a CMS hearing officer. By contrast, a Tier 2 OPO that loses its DSA does not have a comparable administrative appeal because CMS treats the loss as a non-renewal rather than a decertification.

Seven OPOs challenged the Final Rule under the APA, arguing that CMS exceeded its statutory authority, adopted an arbitrary and capricious framework and failed to adequately address significant public comments. The Court rejected those challenges but separately considered whether Tier 2 and Tier 3 OPOs have a meaningful path to judicial review.

What the Court Held

• The Court upheld the Final Rule’s performance framework. The Court rejected challenges to CMS’s use of death-certificate data, the 12-month measurement period, the exclusion of zero-organ donors, the Tier 1 threshold and the confidence-interval methodology. It also concluded that CMS acted within its statutory authority and adequately addressed significant comments during the rulemaking process.
• Tier 2 and Tier 3 OPOs may challenge the rule, but Tier 1 OPOs may not. The Court found that Tier 2 and Tier 3 OPOs face sufficiently concrete consequences, including the costs of competing to retain a DSA and the risk of losing the DSA or being decertified. The Tier 1 plaintiff did not establish a comparable injury.
• Tier 2 OPOs may seek federal court review without completing CMS’s administrative process. The Court found that CMS’s appeal framework does not provide Tier 2 OPOs with a meaningful avenue for review because neither a Tier 2 designation nor the loss of a DSA is treated as a decertification. CMS acknowledged that a Tier 2 OPO whose agreement is not renewed has no administrative appeal.
• Tier 2 OPOs do not have to rely on Tier 3 OPOs to bring a challenge. CMS argued that Tier 3 OPOs could pursue administrative and judicial review that would indirectly protect Tier 2 OPOs. The Court rejected that position, emphasizing that relief obtained by another OPO may not protect a Tier 2 OPO whose DSA has already been reassigned.
• The Court questioned whether it has authority to broadly vacate an agency rule. In the Court’s view, the APA permits a court to decline to apply an unlawful rule in the case before it, but not necessarily to eliminate the rule’s effect for all parties. The Court also observed that setting aside the rule for all parties, vacatur, would not restore a DSA that had already been reassigned. The Court’s skepticism of universal vacatur is in line with questions left open by the U.S. Supreme Court in Trump v. CASA (2025).

Practical Takeaways

• Continue planning under the current framework. The decision leaves CMS’s existing performance measures, tier methodology and process requirements in place for the 2026–2030 recertification cycle unless modified through appeal, future rulemaking or another court decision. While this is the first merits decision addressing the Final Rule, other lawsuits challenging the framework remain pending.
• Use interim rankings to identify risk early. OPOs should review CMS data, monitor interim rankings and assess likely tier status before final rankings are issued. Hospitals should know how their designated OPO has performed in CMS’s interim and final assessments, as this may affect future agreement cycle planning.
• Prepare separately for Tier 2 and Tier 3 outcomes. Different designation levels carry different consequences and review mechanisms, requiring distinct legal and operational planning.
• Review process requirements independently of outcome performance. Compliance efforts should address both the outcome measures and applicable CMS process requirements.
• Develop organization-specific support for potential challenges. OPOs should preserve evidence regarding how alleged data or methodological issues affect their own performance results, tier designation or service area.
• The decision does not immediately alter day-to-day organ procurement operations. Although the ruling is significant for OPO certification and DSA allocation, it does not itself change donor referral obligations, organ recovery practices, transplant center responsibilities or the underlying regulatory requirements governing organ donation and transplantation.

If you have questions regarding the potential impact of this development on your organization or would like assistance evaluating operational, regulatory or compliance considerations, please contact:

• Megan Culp at (317) 429-3644 or mculp@hallrender.com;
• Lori Wink at (414) 721-0456 or lwink@hallrender.com;
• Brian Betner at (303) 802-1298 or bbetner@hallrender.com;
• David Yanda at (414) 721-0928 or dyanda@hallrender.com;
• Hall Render’s Transplant & Organ Procurement service line; or
• Your primary Hall Render contact.

Special thanks to Summer Associate Nick Baker for his assistance in the preparation of this article.

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.