The Medicare Contractor's Payments in Jurisdiction 5 for Full Vials of Herceptin Were Often Incorrect

Our audit found that most Medicare payments that Wisconsin Physicians Service Insurance Corporation (WPS) made to providers for full vials of Herceptin were incorrect. Herceptin (trastuzumab) is a Medicare-covered biological drug used to treat breast cancer that has spread to other parts of the body.

Of the 665 selected line items, 540 (81 percent) were incorrect and included overpayments totaling $635,000, or more than one-third of total dollars reviewed. These providers had not identified or refunded these overpayments by the beginning of our audit. The 125 remaining line items were correct.

On each of the 540 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 clerical errors and to billing systems that could not prevent or detect the incorrect billing of units of service. WPS 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 WPS (1) recover the $635,000 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. WPS generally concurred with our recommendations.