Medicare uses an outpatient prospective payment system (OPPS) to pay certain outpatient claims. With this method of reimbursement, the Medicare payment is not based on the amount the provider charges; therefore, the billed charges generally do not affect the current Medicare prospective payment amounts. Billed charges usually exceed the Medicare payment amount; therefore, a Medicare payment that significantly exceeds the billed charges is likely to be an overpayment.

First Coast Service Options Inc. (First Coast) would like to remind providers that they are responsible for ensuring that the appropriate Healthcare Common Procedure Coding System (HCPCS) codes and units of service are billed correctly for services rendered to Medicare beneficiaries, and claims are in accordance with coding guidelines. Providers should use the appropriate HCPCS codes, and report units of service as the number of times that a service or procedure was performed or, if the HCPCS is associated with a drug, the number of units administered.

This article provides examples of payment errors that were identified during an audit for certain outpatient claims. Providers should carefully review this article to ensure their claims are submitted properly to Medicare.

Payment errors that may result in overpayments
Incorrect number of units of service

• the audit review, a provider administered 720 micrograms of filgrastim to a patient and billed for eight units of service (2,400 micrograms). Using the HCPCS description (injection, filgrastim 300 micrograms) the correct number of units to bill for 720 micrograms was three. On 19 separate occasions this type of error occurred, resulting in overpayments.

• to billing the claim, ensure the service is correctly represented by the true number of units. If you are unsure what constitutes one unit, per Medicare guidelines, review the Medicare Part B drug average sales price (ASP) files. These files list the dosage per unit for most payable drugs.
Billed separately for packaged services

For selected outpatient drugs that have multiple HCPCS codes, one provider billed Medicare on two line items using a HCPCS code that Medicare pays separately, instead of a HCPCS code that Medicare does not pay separately. These line items involved two different packaged outpatient drugs. In total, the provider was paid $25,637 for packaged drugs when the provider should have been paid $0.

• provider billed Medicare for the chemotherapy drug melphalan hydrochloride (J9245) rather than the chemotherapy drug carboplatin (J9045) that was actually administered. During the dates of service that the provider administered this drug, Medicare packaged carboplatin in the payment for other services and did not provide for separate reimbursement under the OPPS. As a result, the provider was paid $16,617 when they should have been paid $0.

• the services being billed prior to the claim being submitted to determine if there are any packaged services being included. It is the provider’s responsibility to ensure the correct codes are being billed to represent the services being rendered and that the billing follows Medicare guidelines.
Lack of supporting documentation

• providers billed Medicare for nine line items for which the providers did not provide any documentation to support that a patient had received the drug service billed.

• Centers for Medicare & Medicaid Services’ IOMs can provide specifics on billing for services and documentation that may be required for the services. Specifically, CMS provides an IOM on Drugs and Biologicals .

• HCPCS codes

• provider used an incorrect HCPCS code on one line item, which resulted in an overpayment. The provider billed Medicare for two units of service for leuprolide acetate injections (J1950, 3.75 milligrams per unit), which is indicated for the treatment of endometriosis, uterine leiomyomas, and malignant neoplasms of the breast; however, the provider should have billed Medicare for two units of service for leuprolide acetate injection (J9217, 7.5 milligrams per unit), which is indicated for the treatment of prostate cancer and was the drug actually administered.

• it is the provider’s responsibility to review the claim prior to submitting it to Medicare to ensure it is being billing properly. First Coast recommends that providers establish a compliance and audit program that will allow them to set up necessary checks and balances to safeguard themselves against submitting incorrect claims, resulting in future overpayments.