Medicare Contractors' Payments Made to Providers Currently Assigned to Jurisdiction 4 for Full Vials of Herceptin Were Often Incorrect

Our audit found that most Medicare payments that that the Medicare contractors made to providers currently assigned to Jurisdiction 4 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 1,701 selected line items, 1,349 (79 percent) were incorrect and included overpayments totaling $1.8 million, or more than one-third of total dollars reviewed. The providers had not identified or refunded these overpayments by the beginning of our audit. The providers associated with six of the line items refunded overpayments totaling $7,000 before our fieldwork. The remaining 346 line items were correct.

For the 1,349 incorrect line items that had not been refunded, providers reported incorrect units of service on 1,328 line items and did not provide supporting documentation for 21 line items. Providers attributed the incorrect payments to clerical errors, chargemaster errors, or inadvertently billing for drug waste because they did not identify the drug as a multiuse-vial drug. (A provider's chargemaster contains data on every chargeable item or procedure that the provider offers.) The 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 TrailBlazer Health Enterprises, LLC (TrailBlazer), the Medicare administrative contractor for Jurisdiction 4, (1) recover the $1.8 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. TrailBlazer stated that it had processed all 1,349 claim lines requiring adjustment and recovered the $1.8 million.