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Audit (A-05-10-00091)

The Medicare Contractor's Payments in Jurisdictions 6, 8, and 15 to Providers for Full Vials of Herceptin Were Often Incorrect

Executive Summary

Our audit found that most Medicare payments that National Government Services made to providers for full vials of Herceptin were incorrect. Specifically, of the 3,966 selected line items, 3,093 (78 percent) were incorrect and included overpayments totaling approximately $3.3 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 refunded overpayments on 257 line items totaling $241,000 before our fieldwork. The 616 remaining line items were correct.

On each of the 3,093 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 billing systems that could not prevent or detect the incorrect billing of units of service. National Government 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 National Government Services (1) recover the approximately $3.3 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. National Government Services generally concurred with our recommendations.

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