The Medicare Contractor's Payments to Providers in Jurisdiction 13 for Full Vials of Herceptin Were Often Incorrect

Most payments that the Medicare contractors made to providers in Jurisdiction 13 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 1,156 selected line items, 788 (68 percent) were incorrect and included overpayments totaling $1 million, or nearly 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 89 line items totaling $72,000 before our fieldwork. The remaining 279 line items were correct.

For the 788 incorrect line items that had not been refunded, providers reported incorrect units of service on 784 line items with unit counts that represented full multiuse vials and did not provide supporting documentation for 4 line items. 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. National Government Services (NGS), the Medicare administrative contractor for Jurisdiction 13, 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 recommended that NGS (1) recover the $1 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. NGS described corrective actions it has taken or planned to take to address our recommendations.