When it comes to the findings of audits conducted on Medicare claims submitted for drugs, the biggest error, by far, relates to the incorrect reporting of units. Recently, though, another billing problem has come to light, and this one relates to improper billing of multiuse vials of the monoclonal antibody Herceptin® (trastuzumab)—a drug used to treat cancer.

The Department of Health & Human Services Office of Inspector General (OIG) recently issued several final reports of audits it conducted between January 2008 and December 2010. Auditors found that providers frequently billed for an entire multiuse vial instead of the dose administered to the specific beneficiary—and Medicare contractors issued millions of dollars of overpayments for those erroneous claims.

OIG Findings

As stated above, the OIG has been auditing these claims for several years and plans to expand the evaluations, according to its Work Plan for 2013. This, of course, means that providers can expect more scrutiny of claims for Herceptin from the federal agency as well as from recovery auditors. In fact, at least two—Region C RAC Connolly and Region D RAC HealthDataInsights—have their microscopes focused on improper billing of Herceptin.

The OIG’s audit objective was to determine whether payments that Medicare contractors made to providers for full vials of Herceptin were correct. As summarized below, a high percentage (one estimate puts it at 75 percent) of Medicare payments were incorrect and for similar reasons.

Basis of Review

Herceptin comes in a multiuse vial of 440 milligrams, which contains more than one dose of medication (i.e., a multiuse vial of 440 milligrams of Herceptin and one 20-milliliter vial of bacteriostatic water for injection [BWFI] containing a solution of 1.1 percent benzyl alcohol as a preservative).

The HCPCS code for Herceptin is J9355—injection, trastuzumab, 10 mg. According to the OIG in a December 2012 report (A-05-12-00017), an entire multiuse vial of 440 milligrams of reconstituted Herceptin when administered would be reported as 44 units for Medicare billing.

For multiuse vials, Medicare pays only for the amount administered to a beneficiary and does not pay for any discarded drug. Therefore, states the OIG, a payment for an entire multiuse vial is likely to be incorrect.

Different Reviews, Same Results

Although the OIG reviewed the claims of providers in several jurisdictions during the three-year audit period, the findings were similar to those discovered for the following Medicare payers:

  • National Government Services (NGS)—the Medicare contractor for providers in Ohio and Kentucky*; and
  • Noridian Administrative Services, LLC—the Medicare contractor for providers in Arizona, Montana, North Dakota, South Dakota, Utah, and Wyoming.

During the OIG’s audit period, NGS processed 11,249 line items for Herceptin totaling approximately $20.6 million. Of the 1,073 line items selected for review, payment for 916 (85 percent) was incorrect and included overpayments totaling $1,151,915 (more than one-third of total dollars reviewed). On each of the 916 incorrect line items, the providers reported the units of service for the entire content of one or more vial(s), each containing 440 milligrams of Herceptin, rather than reporting the units of service for the amount actually administered.

The number of line items for Herceptin that Noridian processed for the three-year audit period was lower—4,142 line items totaling approximately $7 million. Of the 634 line items selected for review, Medicare payments for 399 (63 percent) were incorrect, resulting in overpayments totaling $404,746. In addition to reporting incorrect units of service, providers did not provide supporting documentation for two line items.

Reasons for Errors

For both of the above audits, 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.

Both Medicare contractors stated that they made incorrect payments because neither the Fiscal Intermediary Standard System (FISS) nor the Common Working File (CWF) had sufficient edits in place during the audit period to prevent or detect the overpayments.

In effect, stated the OIG, Medicare contractors relied on beneficiaries to review their Medicare Summary Noticeand disclose any overpayments.

OIG Recommends, Payers Comply

The OIG made identical recommendations to both NGS and Noridian. Specifically:

  • Recover the overpayments identified.
  • 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).
  • Use the results of this audit to educate providers.

Medicare Billing Tips

From the Medicare Claims Processing Manual, chapter 17:

  • Section 70: When a provider is billing for a drug “[w]here HCPCS is required, units are entered in multiples of the units shown in the HCPCS narrative description. For example, if the description for the code is 50 mg, and 200 mg are provided, units are shown as 4 ….”
  • Section 40: “[m]ulti-use vials are not subject to payment for discarded amounts of drug ….”

About the Author

Janis Oppelt is the editor at MedLearn Publishing®, Panacea Healthcare Solutions Inc., St. Paul, MN

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