The OIG Targets Herceptin Billing Errors

The OIG has added specialty drug coverage and reimbursement by Medicaid to its Work Plan. 

In October, the OIG added specialty drug coverage and reimbursement by Medicaid to the list of active Work Plan items. This was in addition to the continuing Medicaid-related prescription drug reviews for the 2017 fiscal year, which included copayments and rebates related to physician-administered drugs, state action for inappropriate dispensing and potential abuse of prescription drugs, and provider compliance with Medicaid billing requirements for use of Herceptin.  

Trastuzumab (Herceptin) has been the focus of several audits over the past five years and appears to be front and center in audit efforts that will continue into 2018. 

Herceptin is covered by both Medicaid and Medicare for use in the treatment of breast cancer. Historically, the drug has been distributed in a multiuse vial of 440 milligrams that when reconstituted and stored properly, can be used for up to 28 days.

Referencing the JW guidelines for multiuse vials, remember, Medicare pays only for the amount administered to a beneficiary and does not pay for any discarded amount of the drug. Therefore, a payment for an entire multiuse vial is likely to be incorrect.

Providers report the patient’s total dose divided by 10 milligrams as the number of units on the claim. For example, if a patient receives 200 mg via IV infusion, the provider would report 20 units. Even if the rest of the Herceptin vial were discarded, the provider would only report the 20 units the patient received. No units would be reported as waste.

In 2017, Medicare approved several new pharmacy issues for automated review by the Recovery Audit Contractor (RAC) program; this included drugs and biologicals with billed units exceeding maximum dose guidance of the U.S. Food and Drug Administration (FDA), frequency limits associated with Boniva, and billed waste and use of JW modifier for Trastuzumab (Herceptin). We also saw the approval of complex review for Herceptin, which is to be reviewed for billing of waste. 

In the U.S., the maximum dosage per administration of Herceptin is calculated using an upper dose limit based on clinical evidence and the 95th percentile for adult body weight and body surface area. The maximum dose is calculated to be 8mg/kg, which equates to 950mg – or 95 HCPCS billable units.

Prior audits of Herceptin show that claims are frequently submitted with incorrect billed units representing the entire vial. Since the HCPCS code, J9355, is defined as billable per 10mg, the math is easy – as in the 440mg vial would consistently be reported in multiples of 44 billed units. The automated review can simply look for claims that represent billings equivalent to entire multiuse vials (such as 44, 88, or 132) rather than reporting the units of service for the amount administered.

There was big news in July, when it was announced that Herceptin is now approved in a single-dose 150mg vial, and that distribution of the 440mg Herceptin vials would be discontinued. Use of the JW modifier will be appropriate when billing waste from this 150mg vial labeled for single use. 

Unfortunately, this announcement will not put an end to the active audits, which, based on information on the Cotiviti website, will continue to scrutinize prior billings and reimbursements going back three years.  

Currently, there is a medically unlikely edit (MUE) limitation of 100 units set by Medicare for HCPCS code J9355. Based on the maximum dosage, a billed unit value of 95 would not be captured by the MUE limit of 100, but a billing error for three full vials (132 units) would be identified. But what happens when an error occurs at a smaller dose, such as an 800mg dose, wherein two full vials are over-reported with a billed HCPCS unit equal to 880mg? In this instance, the MUE value would not flag this claim for review, but the automated review of the RAC will identify billed units frequently associated with error. Additionally, the complex audit will include a review of medical record documentation for comparison of dose ordered medication, dose-administered medication, and the billed amount.

Private insurers usually require a prior authorization for this drug, thereby reducing the issue with coverage and post-payment audit for billed units. Policies of the private payers appear to be based on the maximum dosage allowance rather than Medicare’s MUE value of 100 units. 

Note that on Dec. 1, the FDA approved Ogivri (trastuzumab-dkst) as a biosimilar to Herceptin. This drug is packaged as a 420mg multi-dose vial. Ogivri should not be confused with ado-trastuzumab emtansine (Kadcyla), which is an anti-HER2 monoclonal antibody combined with a microtubular inhibitor and is also used in the treatment of breast cancer. Kadcyla is packaged in either 100mg or 160mg vials, both of which are labeled as single-use vials.

To avoid compliance concerns and protect revenues against recoupment, it is time to take a focused, in-depth look at the billing of all high-cost drugs, in particular to ensure that the drugs Herceptin (trastuzumab), Kadcyla (ado-trastuzumab emtansine) and Ogivri (trastuzumab-dkst) are accurately coded, billable units accurately calculated, and modifier JW accurately applied.