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Audit (A-05-11-00114)

The Medicare Contractor's Payments in 26 States from the WPS Legacy Workload for Full Vials of Herceptin Were Often Incorrect

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Our audit found that most Medicare payments that Wisconsin Physician Services Insurance Corporation (WPS) made to providers from the WPS Legacy Workload for full vials of Herceptin were incorrect. Herceptin, also known as trastuzumab, is a Medicare-covered drug used to treat breast cancer that has spread to other parts of the body. Prior to Medicare contracting reform, WPS processed claims for hospitals and other institutional providers from all 15 jurisdictions. This workload, referred to as the "WPS Legacy Workload," will eventually transition to the appropriate Medicare contractors.

Of the 2,947 selected line items, 2,609 (89 percent) were incorrect and included overpayments totaling $3 million, or about 40 percent of total dollars reviewed. These providers had not identified or refunded these overpayments by the beginning of our audit. Providers refunded overpayments on 175 line items totaling $223,000 before our fieldwork. The remaining 163 line items were correct.

On each of the 2,609 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. WPS 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 WPS (1) recover the $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. WPS agreed with our findings and recommendations.

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Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201