OIG finds Medicare overpaid $125M for radiation services

Dive Brief:

The Office of Inspector General has found Medicare overpaid for radiation therapy planning services for a decade.
From 2008 to 2017, Medicare paid $577 million for three-dimensional conformal radiation therapy (3D-CRT) treatment plans. In many cases, the government payer unnecessarily made additional payments, resulting in an overspend of $125 million.
With the overspend continuing into 2018, OIG wants CMS to implement billing requirements and other changes intended to prevent further unnecessary payments.

Dive Insight:

Medicare makes single payments to cover the cost of 3D-CRT, a procedure enabling physicians to tailor beams of radiation to the contours of a tumor. If a hospital tries to bill separately for multiple radiation planning services on the same day, automated prepayment edits should stop Medicare from making additional payments.

OIG said that system “generally” prevents additional payments for multiple services billed on the same day. But OIG discovered a weakness in the system: neither Medicare billing requirements nor system edits stop extra payments for services billed on different days.

A review of Medicare payments from 2008 to 2017 suggests that weakness was expensive. Medicare paid hospitals for 3D-CRT treatment plans and radiation planning services performed on the same patient on multiple days, increasing its spending on the procedure by 22%. Medicare made additional payments to 95% of the hospitals that billed for 3D-CRT services over the analyzed period.

OIG found Medicare continued to overpay in 2018. As of January of this year, Medicare had overpaid almost $14 million in the 2018 calendar year.

To prevent further overpayments, OIG recommended CMS implement billing requirements such as a bundled payment and adopt system edits to prevent additional payments for services billed in the days preceding a 3D-CRT procedure. OIG said CMS “concurred” with the recommendation and “will consider whether implementing billing requirements ... would be appropriate.”

The recommendations echo those made by OIG last year following its review of the billing of another radiation procedure, intensity-modulated radiation therapy (IMRT). OIG found CMS had overpaid for IMRT by $80 million because almost all hospitals billed separately for services that should have been covered by a bundled payment.

OIG referenced the prior review in its 3D-CRT findings, noting that system edits CMS implemented in response to its IMRT probe could have stopped Medicare from overpaying for radiation therapy treatment plans.