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Medicare Contractors' Payments in Jurisdictions 15 to Providers for Full Vials of Herceptin Were Often Incorrect

Our audit found that most Medicare payments that the Medicare contractors made to providers in Jurisdiction 15 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 1,073 selected line items, 916 (85 percent) were incorrect and included overpayments totaling $1.15 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 54 line items totaling $125,000 before our fieldwork. The remaining 103 line items were correct.

On each of the 916 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. The Medicare contractors 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 CGS Administrators, the Medicare administrative contractor for Jurisdiction 15, (1) recover the $1.15 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 on an entire vial(s), and (3) use the results of this audit in its provider education activities. CGS Administrators agreed with our findings and recommendations.

Filed under: Centers for Medicare and Medicaid Services