OIG Concludes in Nationwide Review of Drug That Herceptin Has Often Been Overbilled

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The HHS OIG has conducted a nationwide audit of the use and reimbursement of Herceptin (also known as trastuzumab), a Medicare-covered drug used to treat metastatic breast cancer, and has concluded in three audits released in December 2012 and January 2013 that more than 75% of all audited claims contained errors.  In particular, the OIG concluded that most Medicare payments for full vials of Herceptin were incorrect where a patient needed an amount less than the full vial. 

Herceptin comes in a multiuse vial that contains more than one dose of medication.  For multiuse vials, as a general rule, Medicare only reimburses for the amount administered to a beneficiary and does not pay for any part of the drug that is discarded, because Herceptin from opened multiuse vials can be preserved for up 28 days and used for other patients.  (Drugs that have very short shelf lives after being opened can be billed even when the entire contents of a vial are not used.)  With respect to Herceptin, the OIG’s position is that any payment for a full multiuse vial that is associated with a single patient is likely to be incorrect.

The OIG found that between 2008 and 2010, 78% of claims were incorrect for providers in Jurisdictions 6 and 8 resulting in overpayments totaling $682,748, 78% of claims were incorrect for providers in Jurisdiction 9 resulting in overpayments totaling $1,315,409, and 85% of claims were incorrect for providers in Jurisdiction 15 resulting in overpayments totaling $1,151,915.  Additional reports issued last year on the use of Herceptin in other jurisdictions found similar results.  Certain Medicare contractors are implementing changes.  For example, First Coast Service Options will audit Herceptin claims for certain doses before it will reimburse the bills.

The OIG’s December 2012 and January 2013 reports relating to Jurisdictions 6, 8, 9, and 15 are available by clicking here, here, and here.

Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.