WellPoint, HHS target double-billing for cancer drug Herceptin

The costly breast-cancer drug Herceptin is credited with making chemotherapy far more effective for many patients. But certain dosages of the drug may be allowing healthcare providers to double-bill for it.

WellPoint, one of the nation's largest commercial insurers, has opened 86 investigations in the past three years into suspicious use of Herceptin, including four cases in Georgia in the past week alone. “They spiked in our analytics,” said Alanna Lavelle, director of enterprise investigations at WellPoint. “That doesn't mean it's fraud. But it means it's worth a closer look.”

Such stories mesh with the findings in a sweeping analysis published last month by HHS' watchdog office, documenting a sky-high error rate of 77% in Medicare claims for Herceptin multi-use vials. That translated to $24 million in extra payments nationwide between 2008 and 2011, most of which has since been recovered.

HHS' Office of the Inspector General report (PDF) concluded that many doctors and hospitals have been billing the government for a full vial of Herceptin, even though reviews of about 26,000 individual patient records show the treatment called for lower doses.

Critics say it's unlikely that the hospitals, doctors and cancer centers threw away the Herceptin left in the bottom of a multi-use vial. The implication, then, is that at least some of them used the excess drug on other people, even though those patients' drugs would have been paid for separately under their own claims—creating a double-payment for the same drug.

“It is unlikely that they are discarding the remainder of the multi-use vials, because it is so valuable and it is good for 28 days. My suspicion, based on the report, is that they are reusing it on other patients,” said Jim Sheehan, former New York Medicaid inspector general who now works as executive deputy commissioner overseeing Medicaid and other programs for the Human Resources Administration in New York City.

Herceptin is the commercial name for the monoclonal antibody drug trastuzumab, which is used in combination with traditional chemotherapy for the 20% of breast cancer patients who have high levels of a specific protein that causes aggressive growth of cancer cells. The Herceptin antibody attacks the protein and has been shown to stop recurrence of breast cancer in many patients, studies have found (PDF).

But the results are not cheap. The drug had global sales of $5.9 billion in 2011, and the cost for a course of treatment can run as high as $32,000, according to a June 2012 story published by Reuters.

The drug is sometimes sold in vials of 440 milligrams—quantities that are intended to allow for multiple doses, because most patients don't have the body mass to require 440 mgs. The nationwide analysis by the OIG turned up 19,954 cases where 440 milligram units were used when the patient record didn't reflect a need for exactly that amount.

“A multi-use vial never gives you exactly the amount you need. There's always a little bit extra,” said Dr. Joel Shalowitz, an internal medicine doctor and a professor of medicine and health industry management at Northwestern University in Chicago. “Frequently you had a little bit left extra in these little vials. When it's really expensive and you don't have to give very much, that small extra amount adds up to a lot of money.”

The Medicare investigators said that healthcare providers, when contacted for comment, blamed the billing problems on “clerical errors and billing systems that could not prevent or detect” the problems.

Since then, CMS officials say about $18 million has been repaid to the government, but the office that conducted the audit has urged for a wider review of the issue: “Herceptin is one of many multi-use drugs. Therefore, the problem of provider billing for full vials may exist for other such drugs.”

CMS Administrator Marilyn Tavenner, however, wrote in response to the audit that her agency disagrees. “CMS believes that Herceptin is an unusual situation. … However, if OIG believes there are other multidose vials that are subject to incorrect billing as single-dose vials, CMS encourages OIG to bring them to our attention.”

Sheehan said the OIG may not be the only source that will bring information to the CMS' attention. “This is clearly a program vulnerability,” he said. “I think you will also see whistle-blower attention in this area as well.”

Follow Joe Carlson on Twitter: @MHJCarlson