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Audit (A-05-12-00010)

07-27-2012
The Medicare Contractor's Payments in Jurisdictions 6 for Full Vials of Herceptin Were Often Incorrect

Executive Summary

Our audit found that most Medicare payments that Noridian Administrative Services made to providers for full vials of Herceptin were incorrect. Herceptin (trastuzumab) is a Medicare-covered biological drug used to treat breast cancer that has spread to other parts of the body.

Of the 464 selected line items, 368 (79 percent) were incorrect and included overpayments totaling $557,000, or more than two-fifths of total dollars reviewed. These providers had not identified or refunded these overpayments by the beginning of our audit. Providers refunded overpayments on 20 line items totaling $84,000 before our fieldwork. The 76 remaining line items were correct.

On each of the 368 incorrect line items, the providers reported the units of service for the entire content of 1 or more vial(s), each containing 440 milligrams of Herceptin, rather than reporting the units of service for the amount actually administered. The providers attributed the incorrect payments to clerical errors and to billing systems that could not prevent or detect the incorrect billing of units of service. Noridian Administrative Services made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place during our audit period to prevent or detect the overpayments.

We recommended that Noridian Administrative Services (1) recover the $557,000 in identified overpayments, (2) implement or update system edits that identify for review multiuse-vials drugs that are billed with units of service equivalent to the dosage on an entire vial(s), and (3) use the results of this audit in its provider education activities. Noridian Administrative Services concurred with our recommendations.

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