From – watchdog.org – by Sarah Chavey
Medicare continues to eat up a growing share of the federal budget, but millions of dollars in spending on the program are due to waste and mismanagement. Case in point: in an audit period from July 1, 2009 to June 30, 2012, the federal government paid $35.8 million more than necessary for outpatient drugs.
In the two years that followed, the Health and Human Services Inspector General estimates the government overpaid $11.5 million more. According to a recently released Inspector General report, the money was misspent primarily due to errors in entering code numbers and amounts for outpatient drugs.
On the bright side, 63 percent (about $22.6 million) of the $35.8 million has been recovered.
However, 66 percent ($23.7 million) of the total amount was easily preventable, and most of the $11.5 million since could have been eliminated as well.
Of the 15,912 line items totaling $131.2 million the Office of the Inspector General (OIG) reviewed during the audit period, 51 percent of the line items were incorrect.
The investigation was conducted because previous reviews had revealed contractors overpaid providers by more than $122.4 million for outpatient drugs.
“Because of the significant overpayments identified in those reviews, we performed 13 individual reviews of payments for selected outpatient drugs at the Medicare contractors,” the office of the health and human services inspector general said in an email. The 13 individual reviews were collected and summed up in this report.
The payments come from Medicaid Part B, which covers outpatient drugs for beneficiaries. The drugs are organized through a system of standardized codes, known as Healthcare Common Procedure Coding System, or HCPCS. Each line item for each drug is given an HCPCS, and the HCPCS helps determine the payment amount.
The payments are sent from providers to one of 13 contractors. Each contractor is responsible for a specific area of the country. They pay the provider using the established rate per each unit subject to the Part B Deductible and coinsurance.
However, providers erred in many of the numbers they sent to the contractors, primarily (88 percent) in the number of units billed or in a combination of improper units billed and improper HCPCS codes.
For example, one provider administered 6 units of rituximab—an injection which treats cancer—to a patient, but billed it as 60 units of service, causing the contractor to send an overpayment. Twenty-one similar errors totaled $743,699 in overpayments.
In addition to rituximab, the drugs adenosine, infliximab, leuprolide acetate, and bortezomib are frequently billed incorrectly.
In another instance, 24 providers billed Medicare for two to 12 units of service for cancer-treating leuprolide acetate injections, when they should have billed for only one to six units of service—the doses actually administered. The result of these errors totaled $913,004.12 in overpayments.
CMS attempts to avoid errors by using programs such as the Medicare Learning Network and the Medicare Quarterly Provider Compliance Newsletter as well as an automatic edit program using Medically-Unlikely Edits, known as MUEs.
The MUEs compare the amount of a drug billed to the maximum amount of units the HCPCS code provides. If the billed amount is greater than the HCPCS number, the payment is denied.
While this system has prevented many overpayments, MUEs do not exist for all HCPCS codes. CMS enhances and expands the program every quarter, but the deficiencies of the MUE system may have resulted in $11.5 million more in overpayments from July 2012 to June 2014, the period after the audit period.
Had the MUE system been updated during the audited period to include as many HCPCS codes as it does now, 54 percent (19.3 million) of the overpayments could have been prevented.
The Inspector General suggested several reforms and fixes for the Centers for Medicare and Medicaid Services to implement:
- Refund the remaining overpayments of the $38.5 million
- Continue to educate providers in order to prevent mistakes
- Review the period after the audit period and refund as seems necessary
- Continue to implement and improve MUEs.
CMS concurred with the four recommendations, but insisted the Inspector General “provide the claim data necessary to determine whether overpayments exist” and how they should they proceed.
“Once the OIG furnishes the necessary claims data, CMS will instruct the Supplemental Medical Review Contractor (SMRC) to review a sample of claims and/or claims data to determine if overpayments exist. Once complete, CMS will determine if it is appropriate to continue to review the remaining claims and collect any overpayments identified to the maximum extent possible within the purview of CMS policies and regulations,” CMS responded to the Inspector General.
Of the 13 contractors, the contractor most error prone was CGS, which serves Kentucky and Ohio, with 65 percent of line items incorrect. Only 36 percent of line items from Provider First Coast—serving Florida, Puerto Rico, and the Virgin Islands—were incorrect.