OIG faults noncompliant drug billing for Medicare overpayments

Office of Inspector General reports released this week focus on noncompliant Medicare outpatient billing for selected drugs, in part, due to clerical mistakes, leading to a combined $143,000 in overpayments at two hospitals.

Johnston Memorial Hospital in Abingdon, Va., did not follow federal rules in billing Medicare for 31 reviewed items involving drug injections (doxorubicin hydrochloride liposome, pemetrexed, rituximab, immune globulin and adenosine), resulting in overpayments totaling $118,000, according to a July 10 OIG report, released Tuesday.

In the audit of outpatient billing during 2008 to 2011, OIG found five line items (detail regarding each provided service), in which the acute-care hospital billed the incorrect number of units of service. For 26 line items, the hospital used the wrong HCPCS (healthcare procedure coding system) code.

Johnston Memorial agreed with the OIG findings, attributing them to billing system and clerical errors.

"All claims have been reprocessed and the overpayments refunded," Johnston Memorial CEO and Vice President Sean McMurray said in a letter to the OIG. "To ensure compliance with the Medicare billing requirements, our pharmacy chargemaster coordinator verified the correct HCPCS codes and billing multiplier assignments are accurate. In addition, we will monitor our pharmacy billings as part of our compliance program."

Similarly, Augusta Health Care in Fishersville, Va., did not appropriately bill Medicare for selected drugs for 14 of the 63 reviewed line items, resulting in overpayments totaling nearly $25,000, according to a July 10 OIG report, also released Tuesday. The injections were for bevacizumab, alpha 1-proteinase inhibitor, bortezomib, immune globulin, trastuzumab and adenosine.

The acute care hospital incorrectly billed the number of units of service for 10 line items, billed for drugs that weren't administered for two line items and used the wrong HCPCS code for two line items.

Augusta concurred with the report and took actions to fix the errors, it said.

"The incorrect claims were due to clerical data entry errors and a missing signature," John Heider, chief financial officer and vice president of finance said in a letter. "Involved staff were counseled, and routine auditing and monitoring has been instituted to reduce the potential for future errors. In addition, a review of electronic systems was conducted to [ensure] that missing signatures are flagged for follow-up," he said.

For more information:
- here's the OIG report (.pdf) on Johnston Memorial Hospital
- read the OIG report (.pdf) on Augusta Health Care

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