Medicare Part B covers the cost of outpatient drugs for beneficiaries. To administer benefits, Centers for Medicare and Medicaid Services (CMS) contracts with Medicare contractors, who determine reimbursement amounts and pay claims. In an effort to reduce contractor payment errors and overpayments, CMS implements various initiatives, which are meant to identify and address billing and coding errors made by providers, before Medicare contractors reimburse their claims. As part of its enforcement efforts, CMS instituted Medically Unlikely Edits (MEUs) that automatically compare the service units billed by a provider to the maximum units of service that reasonably should be billed by a provider for a given Healthcare Common Procedure Coding System (HCPCS) code.
In its July 2015 report, the Office of Inspector General (OIG) conducted individual audits and reviewed billing practices relating to outpatient drugs that either had units of service that exceeded MUE values, or units of service that exceeded a reasonable amount of units (where MUEs were not available). The OIG focused its audit on 13 Medicare contractors, and identified overpayments of over $35.8 million amongst those contractors. The majority of the overpayments were attributed to incorrect units of service being billed by providers, or incorrect HCPCS codes being entered. The OIG also noted that providers made other types of errors, including not providing sufficient supporting documentation, billing for outpatient drugs for which payment was included in a primary procedure and billing Medicare for non-covered use of outpatient drugs.
The OIG recommended, and CMS already began implementing, ongoing initiatives to correct and diminish overpayments in the future. CMS began this process by revising MUE line items to date-of-service MUEs. Date-of-service MUEs all units of service on all line items for the same HCPCS code and date of service are added up and compared to an MUE value. The MUE denies all line items associated with the date of service, if the total units of service billed for the HCPCS code exceed the MUE value.
Additional OIG recommendations included Medicare contractors (i) collecting the overpayments identified in the audit reviews, (ii) educating providers on the correct billing of outpatient drugs, and (iii) reviewing payments to providers between July 2012 and June 2014 for overpayments.
Providers should take note of this report and ensure that that their billing practices are fully compliant with all Medicare regulations. For assistance in making sure your billing practices are compliant, contact Frier Levitt.
