OIG finds widespread Herceptin overcharges

The government's ongoing probe of hospitals and physicians overbilling Medicare for the breast-cancer drug Herceptin found errors in more than three-quarters of all claims that it audited.

Three audits released recently by HHS' inspector general's office concluded many providers have been billing Medicare for full multiuse vials of the drugs when patients actually needed only some smaller portion. Medicare doesn't pay healthcare providers for any part of the drug that is discarded because Herceptin from opened multiuse vials can be preserved for up 28 days and used in other patients.

For example, 85% of the 1,073 Herceptin vials used between 2008 and 2010 (PDF) in Ohio and Kentucky were billed incorrectly, a recent audit found. Auditors recommended recouping the $1.2 million spent on the drugs for those cases.

CGS Administrators, the Medicare contractor that processes claims in those states, acknowledged the errors and said it would reconcile and recoup all overpayments. The company, a subsidiary of Blue Cross and Blue Shield of South Carolina, said in written comments that it has already administered a program to correct future overpayments and has posted a note about it on its website.

In Florida, HHS auditors found overcharges in 78% of bills for 1,330 vials of Herceptin (PDF) submitted to the local contractor, totaling $1.3 million in overpayments to providers. First Coast Service Options—a subsidiary of Blue Cross Blue and Shield of Florida—said in written comments in the audit that it is now auditing healthcare providers' Herceptin claims for certain doses before it will pay the bills as Medicare intermediary.

And in the Medicare jurisdictions covering Illinois, Indiana, Michigan and Wisconsin, the government auditors found that 78% of 713 claims investigated were incorrect (PDF), totaling $682,000 in overpayments. Administrative contractor National Government Services, a subsidiary of WellPoint, said providers in those regions have since been warned that they must verify claims for certain dosages of Herceptin before bills will be paid.

Three reports last year (PDF) on use of the drug in other jurisdictions found similarly high rates of errors by healthcare providers that were not corrected before Medicare bills were processed by the local administrative contractors.