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OIG Review Finds $25.8M in Hospital Overpayments for IMRT Planning

August 22, 2018

A new Office of Inspector General (OIG) audit report indicates that Medicare made as much as $25.8 million in overpayments to hospitals for intensity-modulated radiation therapy (IMRT) planning services during 2013 through 2015.

IMRT is an advanced radiation procedure used to treat difficult-to-reach tumors.  Payment for the computer-based planning required to prepare the therapy is made as part of a bundled payment. However, according to the OIG review, some hospitals incorrectly received separate payment for IMRT planning services as well as payment through the bundle. We advise providers to review the report and alert the appropriate staff to the audit findings.

Of the $109.2 million in bundled payments made to 1,193 hospitals in 2013-2015, Medicare made $21.5 million in overpayments for complex simulations (billed with CPT Code 77290) and an additional $4.2 million in overpayments for other planning services related to  therapy, according to the OIG report. “These services were billed up to 14 days before the procedure code for the bundled payment was billed by the same hospital for the same beneficiary,” OIG states.

In response to the findings and recommendations by OIG, the Centers for Medicare and Medicaid Services (CMS) reports that, in April 2018, it implemented an edit to prevent improper payments for IMRT planning services that are billed before (e.g., up to 14 days before) IMRT planning CPT Code 77301 (IMRT plan, including dose-volume histograms for target and critical structure partial tolerance specifications) is billed. 

OIG notes that this measure could have saved more than $25 million during the audit period, as well as an estimated $5.4 million in the two subsequent years. Per recommendations from OIG, CMS said that it also plans to work with Medicare contractors to educate hospitals on proper billing for IMRT planning services.    

According to OIG, the overpayments for the complex simulations occurred in large measure because many hospitals did not adhere to the existing guidance, and the system edits in place at the time were insufficient to prevent improper payments.  The audit revealed that hospitals were unfamiliar with, or did not understand, the guidance regarding billing for IMRT planning. 

Procedure-to-procedure edits that had been put in place as part of CMS’s National Correct Coding Initiative did not prevent the overpayments because the edits applied only to planning services billed on the same day of service as the billing of CPT Code 77301.  Services in the sample used in the OIG audit were billed on a different date of service.

Following the time period of the audit, CMS had updated the guidance to state that complex simulations are included in the payment for IMRT planning services “when provided prior to or as part of the development of the IMRT plan.” However, the review revealed that the only edits that applied to IMRT planning services were the NCCI procedure-to-procedure edits.

The complete OIG report is available here.

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