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The Medicare Contractor's Payments to Providers in Jurisdiction 9 for Full Vials of Herceptin Were Often Incorrect

Most Medicare payments that First Coast Service Options, Inc. (First Coast), made to providers in Jurisdiction 9 for full vials of Herceptin were incorrect. Herceptin (trastuzumab) is a Medicare-covered drug used to treat breast cancer that has spread to other parts of the body.

Of the 1,330 selected line items, 1,043 (78 percent) were incorrect and included overpayments totaling $1.3 million, or more than one-third of total dollars reviewed. These providers had not identified or refunded these overpayments by the beginning of our audit. Providers had refunded overpayments on 109 line items totaling $212,000 before our fieldwork. The remaining 178 line items were correct.

For the 1,043 incorrect line items that had not been refunded, providers reported incorrect units of service on 1,036 line items and did not provide supporting documentation for 7 line items. On each of the incorrect line items, the providers reported the units of service for the entire contents of one 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 automated billing systems that could not prevent or detect the incorrect billing of units of service. First Coast 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 First Coast (1) recover the $1.3 million in identified overpayments, (2) implement or update system edits that identify for review multiuse-vial drugs that are billed with units of service equivalent to the dosage of an entire vial(s), and (3) use the results of this audit in its provider education activities. First Coast concurred with our findings and recommendations and described corrective actions that it had taken or planned to take.

Filed under: Center for Medicare and Medicaid Services