OIG: Medicare overpaid hospitals by as much as $21.5M due to bundled payments

Medicare overpaid hospitals nationwide as much as $25.8 million for an advanced mode radiation therapy used to treat difficult-to-reach tumors, according to a new report (PDF) from the HHS Office of the Inspector General (OIG).

At issue specifically: dollars that went toward intensity-modulated radiation therapy, or IMRT, planning services that did not comply with Medicare billing requirements. 

IMRT planning is a computer-based method of developing a plan for delivering the radiation as part of the therapy. Medicare makes a bundled payment to hospitals to cover a range of IMRT planning services that may be performed to develop an IMRT treatment plan.

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Of 100 line items sampled by the OIG's office, 1,127 hospitals separately billed Medicare Part B for complex simulations when they were performed as part of IMRT planning, resulting in as much as $21.5 million in overpayments during a two-year audit period between 2013 and 2015.

In addition, there were $4.2 million in potential overpayments for IMRT planning services identified, which were not included in the sample. OIG said the overpayments occurred because hospitals appeared either unfamiliar with or misinterpreted the Centers for Medicare and Medicaid Services guidance. 

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The OIG recommended CMS implement an edit to prevent improper payments for IMRT planning services billed before the procedure code for the bundled payment for IMRT planning is billed. It should also work with Medicare contractors to educate hospitals on properly billing for IMRT planning services. 

In a written statement, CMS concurred with the OIG's recommendation.