The Medicare Contractors' Payments in Jurisdiction 10 for Full Vials of Herceptin Were Often Incorrect

Most Medicare payments that Medicare contractors made to providers in Jurisdiction 10 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 1,165 selected line items, 936 (80 percent) were incorrect and included overpayments totaling $1.2 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 57 line items totaling $90,000 before our fieldwork. For another 25 line items, we could not review the line items or make a determination of overpayment because the provider was no longer in business. The remaining 147 line items were correct. In addition, during the course of our fieldwork, 7 providers identified 278 other line items totaling $322,000 in overpayments for the billing of full vials of Herceptin.

For the 936 incorrect line items that had not been refunded, providers reported incorrect units of service on 934 line items and did not provide supporting documentation for 2 line items. On each of the 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 billing systems that did not detect incorrect units of service or a lack of education regarding multiuse-vial drugs. The Medicare contractors made these incorrect payments because neither the Fiscal Intermediary Standard System nor CMS's Common Working File had sufficient edits in place during our audit period to prevent or detect the overpayments.

We recommend that Cahaba Government Benefit Administrators, LLC (Cahaba), the Medicare administrative contractor for Jurisdiction 10, (1) recover the $1.5 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. Cahaba said that it had already taken steps to recover the identified overpayments.