Knowledge Base Category -

A farmer is selling baskets of apples that were picked several days ago. He knows that some may be bad so he will give a discount based on the percentage of bad apples. The first customer chooses five apples at random and only one of the five is bad, so the farmer gives him a 20% discount. The next customer carefully selects five apples with visible dark spots and all five apples are bad. The farmer gives him a 90% discount. Sometimes it is all in the selection.

In a recent OIG review of payments for selected outpatient drugs, the OIG found that payments for 1,132 of the 1,905 line items for outpatient drugs selected for review were not correct. This appears to be an astonishing error percentage, but beware, this is not a random selection. The OIG uses computer matching, data mining, and other analytical techniques to identify the line items potentially at risk for noncompliance with Medicare billing requirements. Some specific targets mentioned in the report are selected outpatient drugs, payments for drugs that exceeded charges by at least $1,000, and high-dollar payments.

The report found errors involving incorrect units of service, incorrect HCPCS codes, both incorrect units and HCPCS, billing for packaged or non-covered use of a drug, and lack of supporting documentation. Some of the specific drugs and issues include:

• Incorrect units were the cause of most of the billing errors.
• The billable units of a drug can be calculated by dividing the dosage of the drug given by the amount in the HCPCS code description for the drug. For example if 140 mg of a drug is given that has a HCPCS code description of Injection, drug, 1 milligram, then the correct units are 140÷1 = 140 units; if 800 mg of a drug is given that has a HCPCS code description of Injection, drug, 200 mg, then the correct units are 800÷200 = 4 units.
• Leuprolide acetate injections are used for different purposes, each with a different HCPCS code and description.
• HCPCS code J1950, leuprolide acetate injection, 3.75 milligrams per unit, is indicated for the treatment of endometriosis, uterine leiomyoma, and malignant neoplasms of the breast
• HCPCS code J9217, leuprolide acetate injection, 7.5 milligrams per unit is indicated for the treatment of prostate cancer
• Due to difference in Medicare payment rates for these drugs (J1950 - $760.03 and J9217 - $206.78) and the difference in milligram descriptions, billing the wrong HCPCS code for the wrong treatment will result in a significant over or under payment.
• Doxorubicin hydrochloride is available in both a lipid (or liposomal) and a non-lipid (or non-liposomal) formula. The non-lipid form of doxorubicin hydrochloride (HCPCS code J9000) is packaged, whereas the liposomal forms (previously J9001) receive separate Medicare payment. Medicare payment rates for the current HCPCS codes for liposomal doxorubicin (Q2049 and Q2050) are close to $500 per 10 mg.
• Are you using the correct HCPCS code? For example, are your codes correct for:
• Epoetin alfa, 1000 units, for non-ESRD use – J0885
• Darbepoeitn alfa, 1 mcg, non-ESRD use – J0881
• Epoetin alfa, 100 units, for ESRD use – Q4081
• Herceptin – not specifically mentioned in this report because Herceptin audits get their own separate reports. Herceptin is available in a 44mg multi-use vial and Medicare does not pay for drug wastage for multi-use vials. The units of Herceptin billed should be based on the patient’s dosage, not the vials used.

These types of errors may be repeated errors if the reason is a wrong multiplier in the chargemaster. Look for payments that appear too large or too small in relation to the charge amounts.

Hospitals need to make sure the correct drug code is being submitted for the correct treatment purpose.

Your hospital can use the same data mining approach that the OIG uses to check for internal issues with the billing for drugs. MMP’s HIQUP (Hospital Improvement in Quality and Performance) report, which data mines a facility’s Medicare outpatient 835 files, includes several queries designed to identify drugs at high risk of billing errors. So if you are struggling with drug units, please contact us if we can help.

Were you anxiously awaiting its release? Did you lie awake at night thinking about what old and new features might be included? When it was released, did you drop everything and rush to check it out? No, we are not talking about the latest version of some Smart Phone, a movie sequel, or a new video game. We are talking about the 2014 OIG Work Plan which was finally released at the end of January.

I want to point out a few of the issues, especially billing and payment issues that are most relevant to the types of issues with which we at MMP normally deal. For other issues addressed in the OIG Work Plan that might be of interest to hospitals, see the list at the end of this article.

First, let’s look at some of the issues that are not new to this year’s work plan.

• Compliance reviews of acute care hospitals to determine compliance with selected inpatient and outpatient billing requirements. These types of reviews have been ongoing for several years and address a number of different billing issues, including but not limited to medical necessity of inpatient admissions, inpatient DRG coding, outpatient CPT/HCPCS codes, discharge status, device credits, and units of service.
• One of the most notable aspects of these reviews is that in four of the 87 compliance reviews to date, the OIG has extrapolated the overpayment amount causing an overpayment of hundreds of thousands of dollars to become millions of dollars.
• Inpatient claims for mechanical ventilation to determine if the hospitals’ DRG assignments and payments are appropriate. For certain DRGs to qualify for Medicare coverage, a patient must receive 96 or more hours of mechanical ventilation. Past OIG reviews have revealed overpayments when one of these DRGs was assigned, but the patient did not receive 96 or more hours of mechanical ventilation.
• Outpatient dental claims have also been previously identified at risk for overpayments. Generally dental services are excluded from Medicare coverage with only a few exceptions. Examples of covered dental services would be if teeth have to be removed in order to perform another covered procedure, such as excision of a tumor or to prepare for radiation treatments.

New OIG activities for 2014 include:

• Determining the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary payments. The new admission criteria of a two-midnight expectation are substantially different than the previous admission criteria. Previous OIG reviews found overpayments, inconsistencies, and inappropriate billing under the old rules. It will be interesting to see if the new rules result in improved consistency or not.
• Review of Medicare outpatient payments to hospitals for clinic visits billed at the new patient rate. Prior to this year clinic visits were billed with Evaluation and Management (E&M) codes including both new and established patient codes. The higher paying “new patient” codes were only to be used if the patient had been registered as an inpatient or outpatient at the hospital within the past three years. With the changes to clinic visit reporting for 2014, hospitals no longer have to differentiate new vs. established patients or different levels of service intensity for clinic visits.
• Review of cardiac catheterizations and heart biopsies. Right heart catheterizations performed during the same operative session are included in the heart biopsy procedure and should not be billed separately unless a separate medical necessity for the right heart catheterization can be established eg: evaluate for rejection; failed previous heart procedure; compromised pulmonary status, etc.
• The OIG will review Medicare payments made to hospitals for claims that include a diagnosis of Kwashiorkor to determine whether the diagnosis is adequately supported by documentation in the medical record. Kwashiorkor is a severe form of protein malnutrition that is usually not found in the United States. Coding malnutrition as Kwashiorkor results in a larger payment from Medicare that is not appropriate if the patient really does not have this type of malnutrition.
• Although this is listed as a new issue, the OIG has already released three audit reports addressing this topic from January and February 2014. The reports note that Medicare paid hospitals $711 million for claims that include a diagnosis of Kwashiorkor. The audits have found no claims where the diagnosis of Kwashiorkor was appropriate. Removing the Kwashiorkor diagnosis has changed the DRG in about 18% of the claims reviewed, resulting in total overpayments for the three reviews exceeding $310,000.

Other Topics in the Work Plan include:

Hospitals; Policies and Practices:

Reconciliation of outlier payments
Medicare costs associated with defective medical devices (new)
Analysis of salaries included in hospital cost reports (new)
Impact of provider-based status on Medicare billing
Comparison of provider-based and free-standing clinics (new)
Critical Access Hospitals - Payment policy for swing-bed services
Critical Access Hospitals - Beneficiary costs for outpatient services
Long Term Care Hospitals - Billing patterns associated with interrupted stays

Hospitals: Billing and Payments:

Duplicate graduate medical education payments
Bone marrow or stem cell transplants (new)
Indirect medical education payments (new)

Hospitals: Quality of Care and Safety:

Participation in projects with quality improvement organizations
Emergency preparedness and response - Hurricane Sandy (new)
Oversight of pharmaceutical compounding (new)
Oversight of hospital privileging (new)
Adverse events in inpatient rehabilitation facilities

Nursing Homes:

Questionable billing patterns for Part B services during nursing home stays

Other Providers: Billing and Payments

Diagnostic radiology – medical necessity of high-cost tests
Electrodiagnostic testing – questionable billing
Laboratory tests – billing characteristics and questionable billing
Partial hospitalization programs
High utilization of sleep-testing procedures

The Office of Inspector General (OIG) began reporting Hospital Medicare Compliance Reviews in March of 2011. Almost three years into these reviews the OIG has posted results from seventy-nine (79) hospitals. To date, hospitals in thirty states have been subject to a Compliance Review, three hospitals have had the amount to be returned to the Contractor extrapolated and only one hospital “generally complied with Medicare requirements for billing.”

In keeping with the holiday spirit instead of “remembering our favorite things,” here are the Twelve (12) top Inpatient (IP) and Outpatient (OP) “at risk issues for noncompliance” that the OIG has been looking at during their reviews:

• IP Short Stays,
• OP & IP claims paid in excess of charges,
• OP & IP manufacturer credits for replaced medical devices,
• IP claims billed with high severity level DRG codes,
• OP claims billed with Modifier 59,
• IP same-day discharges and readmissions,
• IP transfers,
• IP claims with payments greater than $150,000,
• OP claims paid in excess of $25,000,
• OP claims billed with E&M services,
• IP hospital-acquired conditions and POA reporting, and
• IP Psychiatric Facility (IPF) ED adjustments.

In the past several weeks we have written several articles about the 2014 IPPS Final Rule, including the Probe and Educate Program that is effective from October 1, 2013 through March 30, 2014. During this time Medicare Administrative Contractors (MACs) will be conducting pre-payment probes for medical necessity of IP stays with a 0 – 1 midnight length of stay. During this time the Recovery Auditors (RA) are not allowed to review claims within this time period. A word of caution, this has been the top issue for OIG Medicare Compliance Reviews and the OIG can and probably will continue to review this risk area as they are not impacted by the Probe and Educate Program.

Last month we wrote about Saint Thomas Hospital in Nashville, TN being the first hospital that the Office of Inspector General (OIG) extrapolated their Medicare Compliance Review findings. Since then they have done it again. This time Baptist Medical Center South in Montgomery, Alabama was subjected to extrapolation. This resulted in an increase in their amount to be refunded from an initial $242,514 to $1,784,982.  

OIG Medicare Compliance Reviews by the Numbers:

In addition to extrapolating findings what else is occurring in these Medicare Compliance Reviews?

After completing an extensive review of all reviews to date, here is a list of interesting facts by the numbers:

• One: The number of hospitals with no identified overpayments during a review
• Regional Medical Center at Memphis, Tennessee
• One: The number of hospitals where the OIG identified overpayments as well as potential underpayments to the hospital during the review.
• University of Alabama Hospital at Birmingham, Alabama
• Two: The number of hospitals who have now had their Medicare Compliance Review Findings extrapolated.
• Saint Thomas Hospital in Nashville, Tennessee, and;
• Baptist Medical Center South in Montgomery, Alabama
• Three: The number of hospitals that have been revisited for additional reviews by the OIG.
• Fletcher Allen Health Care, Inc. in Burlington, Vermont,
• Boston Medical Center in Boston, Massachusetts; and
• Tufts Medical Center in Boston, Massachusetts.
• Eleven: The highest number of hospitals within a single state to undergo an OIG Medicare Compliance Review (Massachusetts).
• Twenty-Six: Number of states that have had at least one hospital subject to an OIG Medicare Compliance Review.

• Sixty-Three: The total number of Medicare Compliance Reviews completed and reported on the OIG website as of July 17, 2013.
• Eight in 2011, Thirty-Nine in 2012 and Sixteen thru July 17 of 2013
• $12,222: The lowest overpayment amount identified to date was at Sanford University of South Dakota Medical Center.
• $2,244,649: The highest overpayment amount identified to date was at Cedars Sinai Medical Center. Note, this amount was not an extrapolated amount.
• $26,979,529: The amount identified as overpayments for all hospitals to date requiring payback to the Contractor without extrapolation being applied.
• $29,420,885: The amount identified as overpayments for all hospitals to date requiring payback to the Contractor with extrapolation being applied to Saint Thomas and Baptist Medical Center South.

Has Your Hospital Been Subject to an OIG Medicare Compliance Review?

Clicking the link below will show a table of all Medicare Compliance Reviews displayed on the OIG website to date. This table includes a link to the OIG reports, the “risk areas” looked at in the audit and the amount the OIG recommended the hospital refund.

OIG Medicare Compliance Reviews as of July 17, 2013

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

Saint Thomas Hospital in Nashville, TN has the unique or unfortunate distinction of being the first hospital that the Office of Inspector General (OIG) has extrapolated their Medicare Compliance Review findings. Through extrapolation the payback amount to the Medicare Administrative Contractor increased from $293,359 for the actual records reviewed to an extrapolated amount of $1,092,248.

Background of OIG Medicare Compliance Reviews:

The mission of the OIG is mandated by Public Law and “is to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the health and welfare of beneficiaries served by the programs. This statutory mission is carried out through a nationwide network of audits, investigations, and inspections conducted by” the Office of Audit Services, Office of Evaluation and Inspections, Office of Investigations and Office of Counsel to the Inspector General.

Hospital specific Medicare Compliance Reviews are performed to review Medicare payments to hospitals for selected claims for inpatient and outpatient services.

The OIG has indicated that they identify claims at risk for noncompliance through computer matching, data mining, and analysis techniques. Examples of risk areas include:

• Inpatient short stays,
• Inpatient claims billed with high severity level DRG codes,
• Inpatient claims pain in excess of charges,
• Inpatient same-day discharges and readmissions,
• Inpatient and outpatient manufacturer credits for replaced medical devices, and
• Outpatient claims with payments greater than $25,000.

Saint Thomas Compliance Review Findings and Recommendations:

In this review, the OIG found that the Hospital complied with Medicare billing requirements for 206 of 250 claims reviewed and that the remaining 44 claims resulted in $293,359 in overpayments to the Hospital. Reasons identified resulting in overpayments included the following:

• Billing claims as Medicare Part A that should have been billed as outpatient or outpatient with observation services,
• Incorrect DRG code assignment,
• Incorrect reporting of medical device credits,
• Billing separately for related discharges and readmissions on the same day; and
• Incorrect HCPCS code assignment.

Complete details can be found in the Medicare Compliance Review of Saint Thomas Hospital for Calendar Years 2009 and 2010.

The OIG made two recommendations:

• First, that the Hospital refund $1,092,248 in estimated overpayments; and
• Second that the Hospital strengthen controls to ensure complete compliance with Medicare billing requirements.

Saint Thomas Says:

Saint Thomas indicated that they were not made aware until “towards the end of the audit process that the sample was statistical and the findings would be estimated.”

Saint Thomas disagreed with the recommendation to refund the $1,092,248 in estimated overpayments and indicated in their comments that “in reviewing the Medicare Compliance Reviews audit reports the OIG has issued in the past two years, all of them were based on a “judgmental” sampling methodology. In some cases, it was noted that some hospitals had no extrapolation even though their overpayment audit results appeared to exceed those of STH.”

Further complicating the OIG findings Saint Thomas found that their “sample frame included several claims that the Recovery Audit Contractors (RAC) had also reviewed. The Hospital believed that including RAC claims in our sample frame, especially claims that the Hospital had already repaid, would result in the Hospital repaying Medicare twice.”

Ultimately, Saint Thomas indicated that they did not agree with the sampling methodology but would make any final payment necessary as a result of the statistical sampling.

The OIG Says:

The OIG indicated “at our entrance conference on June 26, 2012, we informed the Hospital that we would use statistical sampling techniques to select claims for review. In addition, during the course of the audit, we discussed with a Hospital official our plans to “project” the sample results across the population.” Additionally, they indicated that “as this hospital compliance review initiative has matured, we have refined our audit methodologies. Some reviews are statistical sampling and estimation techniques to draw conclusions about a larger portion of a hospital’s claims while other reviews are judgmental sampling. Each hospital review is unique, and the sampling method used in each of these reviews will vary.”

The OIG indicated that they did identify claims in the sample under RAC or Department of Justice (DOJ) review and as such these claims were considered “non-errors.”

Ultimately, the OIG maintained that Saint Thomas should pay bay the $1,092,248 in estimated overpayments.

Key Takeaways for our Clients:

• Be involved with the OIG staff from the beginning of an audit to understand the sampling techniques that will be used,
• Be aware of the potential “risk areas” identified by the OIG and internally assess for potential break-downs in processes; and
• Be aware that the days of paying back overpayments for only the claims reviewed appears to no longer hold true.

I remember from my first year as a compliance officer, a hospital representative lecturing at a national compliance conference explained how her facility made unintentional errors in the assignment of Medicare patients’ discharge statuses that were interpreted by the government as fraudulent activity. Now she could have presented a skewed interpretation and I am, in no way, questioning the government’s conclusion of any of the cases below. I am just acknowledging that sometimes, different parties have differing interpretations of how certain activities are classified.

The Health Care Fraud and Abuse Control Program 2012 Annual Report, a collaboration between the Department of Health and Human Services and the Department of Justice, highlights the successes of the government’s program to identify, prosecute, and prevent healthcare fraud and abuse. Below is a summary of the issues that resulted in settlements by hospitals to resolve claims and allegations under the False Claim Act (FCA).

1. Two settlements (almost $25M) relating to inflated fees for services that resulted in inappropriate Medicare “outlier” payments. The report states that both hospitals manipulated their charge structures to make it appear as though their treatment of certain patients was unusually costly, when in fact it was not.
2. Four settlements (over $31M) resulting from medically unnecessary inpatient admissions for patients that could have been treated as hospital outpatients. These cases include patients receiving Gamma Knife stereotactic radiotherapy and patients having kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures, or other surgical procedures that could have been performed on an outpatient basis.
3. Four settlements (approximately $6.7M) for a variety of other issues including:
4. Medically unnecessary and dangerous endovascular procedures
5. Surgical services performed in an Ambulatory Surgery Center (ASC), but billed as hospital outpatient surgeries
6. The drug Lupron® billed with the wrong HCPCS code (note also that even after becoming aware of the issue, these hospitals never self-disclosed or attempted to pay back monies received in error)
7. Improper physician recruitment arrangements.

You can read the full report on the OIG website at HCFAC Report.

The OIG “is an independent and objective oversight organization that promotes economy, and effectiveness in the programs and operations of the U.S. Department of Health and Human Services (HHS or the Department).” In 1997 the Health Care Fraud and Abuse Control (HCFAC) was created. Since HCFAC’s creation “approximately 80 percent of OIG’s annual funding and workload have been dedicated exclusively to oversight and enforcement activities with respect to health care fraud and abuse in the Medicare and Medicaid Programs” (Source: Fiscal Year 2013 Office of Inspector General Justification for Estimates for Appropriations Committees)

Did you know?

• The OIG has been on the forefront of the Nation’s fight against waste, fraud and abuse in Medicare, Medicare and over 300 other HHS programs since 1976?
• In 2011 the OIG launched a “Most Wanted Fugitives” list seeking over 170 fugitives on charges for healthcare fraud and abuse.
• In 2011 the OIG announced that during the first half of 2007 Medicare spent $95 million on claims for power wheelchairs that were either medically unnecessary or there was insufficient documentation to determine medical necessity.
• The OIG has a Compliance 101 web page offering “free educational resources to help health care providers,practitioners, and suppliers understand the health care fraud and abuse laws and the consequences of violating them.”
• When settling Federal health care program investigations the OIG will negotiate Corporate Integrity Agreements (CIA) with providers and in exchange the OIG agrees to not seek provider exclusion from participation in Medicare, Medicaid, or other Federal health care programs.
• In 2012 the OIG introduced a “Most Wanted” list of Deadbeat Parents
• In the Semiannual Report to Congress for October 1, 2011 – March 31, 2012 the Inspector General, Daniel R. Levinson indicated that:
• “Over the past 6 months, OIG has stepped up our focus on data analytics as a critical tool for enhanced fraud, waste, and abuse activities.”
• “OIG’s data warehouse is a key component of our strategic use of information technologies. Among other things, the warehouse integrates data from Medicare Parts A, B, and D so we can develop a more comprehensive picture of beneficiaries’ histories of medical care and providers’ billing patterns.”
• In the first half of Fiscal Year 2012 the OIG reported expected recoveries of about $483.1 million in audit receivables.

Is your Hospital prepared for an On-Site OIG Compliance Audit?

Medicare compliance reviews are listed in the 2012 OIG Work Plan as a new aspect of the plan under “Medicare Inpatient and Outpatient Payments to Acute Care Hospitals.” The first of these audits began in 2011 and have continued in earnest in 2012. The OIG is required to make all hospital audit results publically available at http://oig.hhs.gov. The OIG has indicated that the objective of these audits is “to determine whether the Hospital complied with Medicare requirements for billing inpatient and outpatient services on selected claims.” The good news is that it is possible that the OIG will complete a review and make no recommendations as was the case with the review of Regional Medical Center at Memphis for calendar years 2009 and 2010. The bad news is that they can also find just over $1 million in overpayments as was the case in the review of Boston Medical Center for calendar years 2009 and 2010. Common items in all of these audit reports include:

OIG Examples of Risk Areas:

• Inpatient short stays,
• Inpatient same-day discharges and readmissions,
• Inpatient claims billed with high severity level DRG codes,
• Inpatient and outpatient claims paid in excess of charges,
• Inpatient hospital-acquired conditions and present on admission indicator reporting,
• Inpatient and outpatient manufacturer credits for replaced medical devices,
• Outpatient claims billed for Lupron injections,
• Outpatient claims billed with evaluation and management (E&M) services,
• Outpatient claims billed with modifiers, and
• Outpatient claims billed on the date of an inpatient admission.

OIG Audit Methodology:

• Review applicable Federal laws, regulations and guidance,
• Extract Hospital inpatient and outpatient paid claim data from CMS’s National Claims History File for the time period of the review,
• Use computer matching, data mining, and analysis techniques to identify claims potentially at risk for noncompliance with selected Medicare billing requirements,
• Select a judgmental sample for detailed review,
• Review available data from CMS’s Common Working File for sampled claims to determine whether or not the claims had been cancelled or adjusted,
• Review itemized bills and medical record documentation provided by the Hospital to support the paid claims,
• Request the Hospital conduct its own review of the sampled claims to determine whether or not the services were billed correctly,
• Utilize Medicare contractor medical review staff to determine whether a limited selection for sampled claims met medical necessity requirements,
• Review Hospital procedure for assigning HCPCS codes and submitting Medicare claims,
• Discuss incorrectly billed claims with Hospital personnel to determine the underlying causes of noncompliance with Medicare requirements,
• Calculate the correct payments for those claims requiring adjustment; and
• Discuss the results of the review with Hospital officials.

Billing Errors Associated with Inpatient Claims:

• Billing Medicare Part A for stays that should have been billed as outpatient or outpatient with observation services.
• Billing Medicare separately for related discharges and readmissions within the same day.
• Billing Medicare for incorrect DRG codes.
• Hospitals reporting medical device credit for a replaced device from a manufacturer without adjusting its inpatient claims with the proper value and condition codes to reduce payment as required.

Billing Errors Associated with Outpatient Claims:

• Drug injections
• Billing incorrect number of units of service
• Billing incorrect HCPCS codes

• Billing Medicare for E&M services that arepart of the usual preoperative and postoperative care associated with aprocedure.
• Incorrect use of the -59 and -91 Modifiers
• Billing for services without sufficient documentation in the medical record to support the service.

OIG Recommendations:

• Refund to the Medicare contractor identified overpayments, and
• Strengthen controls to ensure full compliance with Medicare requirements.

At the end of each audit is an Appendix that include the Hospital’s comments regarding the report.

Next steps for Hospitals:

• Review your PEPPER Reports for any outlier areasspecific to Inpatient Short Stays and Medical and Surgical DRGs with CC andMCC.
• Consider Emergency Department Case Management to assist Physicians 7 days a week.
• Provide Coding staff with continuing education opportunities and the resources (i.e. Coding Clinic and the most current ICD Official Guidelines for Coding and Reporting) needed to remain current in
  coding updates and revisions. This will be especially important with the transition to ICD-10-CM/PCS on October 1, 2014.
• Verify that outpatient drugs are billed with the correct HCPCS codes and units.
• Educate staff on the correct application of modifiers.
• Work with physicians and ancillary departments to obtain complete documentation to support the services provided and billed.

I remember from my days in Hospital Compliance that one of the most difficult issues was billing the correct drug units. This evidently continues to be a challenge for facilities based on the ongoing reminders from CMS and the numerous OIG audits that find errors in the billing of drug units.

Some of the issues that make this such a challenging area are:

• Drug HCPCS codes must be billed based on the amount, such as milligrams (mgs) in the HCPCS code description, not on standard usage or packaging amounts.
• Most hospitals accomplish this by using a “multiplier” in their charge description master (CDM), which presents the challenges of making sure all drugs that need a multiplier have one, there are no errors or typos in the multiplier amounts, and the multipliers are kept updated with code description changes.
• CMS often changes drug HCPCS codes and/or the HCPCS description. This is especiallychallenging when the amount in the description changes.
• Medical record documentation should include the dosage amount in the physician’s order and in the administration record.
• If the dose administered does not match the dosage amount the physician ordered, a corrected order should be obtained from the ordering physician.
• If the drug dose is based on the patient’s weight, there should be documentation in the medical record of the patient’s weight.
• Medicare does not allow providers to bill for wastage of multi-dose vials.
• When billing for wastage associated with single-dose vials, there should be documentation in the medical record of the dose given and the amount wasted.
• Medicare is applying Medically Unlikely Edits (MUEs) to a number of drug quantities. Although there are no published MUEs for drugs (HCPCS “J” codes), it is the understanding of MMP, Inc. that the quantity limitations are based on manufacturer package inserts. Providers should carefully review Medicare remittances to determine which drugs are being denied for MUEs and the likely MUE quantity.

Recent OIG audits have identified some drugs that have had repeated billing errors by multiple facilities. The first has to do with the billing of the drug Herceptin (J9355- Injection, trastuzumab, 10 mg). It is the understanding of MMP, Inc. that Herceptin is only available in a multi-dose vial of 440 mg (44 units). There have been problems with a number of facilities billing for entire vials of Herceptin instead of the dosage administered to the patient. Since Herceptin is a multi-dose vial, it is not appropriate to bill for drug wastage. MMP, Inc. recommends that providers review any claims with Herceptin units in multiples of 44 (such as 44, 88, etc.) and verify that the units billed match the dosage administered to the patient. Note that in addition to the OIG audits, this issue is also targeted by Recovery Auditors (RAs) and Medicare Administrative Contractor (MAC) pre-payment audits.

Another interesting drug issue has to do with the drug Lupron. There are two HCPCS codes for Lupron Depot –

• HCPCS code J1950 injection, leuporlide acetate (for depot suspension), per 3.75 mg)
• FDA approved specifically for uterine disorders
• Medicare ASP payment rate July 2012 of $653.299
• HCPCS code J9217 (Leuporlide acetate (for depot suspension), 7.5mg).
• FDA approved solely for advanced prostatic cancer
• Medicare ASP paymentrate July 2012 of $216.750

Since the payment amount for the smaller dosage amount is over 3 times the amount of the payment for the larger dosage, using the incorrect HCPCS code can result in significant over or under-payment. Reference OIG report A-04-11-03069 for further discussion.

Other drugs that have been noted in recent OIG reports for incorrect units include:

• adenosine
• alpha 1–proteinase inhibitor
• baclofen
• bortezomib
• cetuximab
• doxorubicin HCl liposome
• epoetin alfa
• immune globulin
• paclitaxel
• pemetrexed
• rituximab

MMP, Inc. encourages providers to be diligent in your reporting of the correct drug units by staying up to date on HCPCS code descriptions and changes, verifying correct multipliers in your CDM and by reviewing OIG, RA, and MAC audits to be aware of problem-prone drugs. For MMP, Inc. clients, note that we data-mine your 835 files for possible errors with high-risk, high-dollar drug units. Please contact MMP, Inc. if you have further questions concerning the billing of drug units.