Payments Made by Novitas Solutions, Inc., to Hospitals for Certain Advanced Radiation Therapy Services Did Not Fully Comply With Medicare Requirements

Intensity-modulated radiation therapy (IMRT) is an advanced type of radiation procedure used to treat difficult-to-reach tumors. Novitas Solutions, Inc. (the Medicare Administrative Contractor responsible for processing Medicare payments for outpatient services in Jurisdictions H and L), incorrectly paid hospitals for IMRT services provided to nearly all of the beneficiaries associated with our review.

Although most of the IMRT services billed by hospitals were allowable, we determined that Novitas made overpayments for at least 1 service for 98 of the 100 beneficiaries in our random sample. Based on our sample results, we estimated that hospitals in Jurisdictions H and L received Medicare overpayments of at least $7.2 million for unallowable IMRT services during our audit period. The overpayments occurred because (1) Novitas' claim processing system did not adequately prevent payments to hospitals for all incorrectly billed IMRT services and (2) hospitals were unfamiliar with or misinterpreted Medicare guidance when billing for certain IMRT services, or cited clerical errors.

We made three recommendations to Novitas to recover the overpayments identified in our report. We also made two procedural recommendations to implement payment edits and to educate hospitals on properly billing for IMRT services.