According to two reports issued by OIG on July 25, the Medicare Administrative Contractors (MACs) for Jurisdictions 13 and 14 made overpayments of approximately $2.7 million and approximately $1.3 million, respectively, for selected outpatient drugs over the three-year period from July 1, 2009 through June 30, 2012. OIG reported that the overpayments occurred because providers reported incorrect units of service, did not provide supporting documentation, used incorrect HCPCS codes, reported a combination of incorrect units of service and incorrect HCPCS codes, billed separately for an outpatient drug for which payment was packaged with the primary service, and/or billed for a noncovered use of a drug. OIG stated that providers attributed the incorrect billings to clerical errors and to provider billing systems that could not prevent or detect the incorrect billing of outpatient drug services.
OIG also explained that the two MACs overpaid providers because there were insufficient edits in place to prevent or detect overpayments. OIG recommends that the two MACs recover the identified overpayments and use the results of the audits in their ongoing provider education activities. During the time period covered by the audits, National Government Services, Inc. was MAC for Jurisdiction 13 and NHIC, Corp. was the MAC for Jurisdiction 14.