OIG says Medicare overpaid hospitals upwards of $25.8 million for IMRT planning services

August 27, 2018

The Office of Inspector General (OIG) estimated that Medicare overpaid hospitals upwards of $25.8 million for Intensity-Modulated Radiation Therapy (IMRT) planning services after an OIG review found all 100 line items in its audit sample were billed improperly.  

To assess whether payments for outpatient IMRT planning services complied with Medicare billing requirements, the OIG selected a random sample of 100 line items for complex simulations billed by hospitals between June 2016 and February 2017. The sample represented payments of $21,390 to 91 hospitals. 

The OIG found that all 100 sampled line items resulted in improper payments for services performed as part of IMRT planning because the hospitals separately billed for complex simulations when they were performed as part of IMRT planning.

Based on the sample data, the OIG estimated that hospitals nationwide received overpayments of $21.5 million for complex simulations that were improperly billed during the audit period. Before conducting its review, the OIG analyzed payment data for IMRT planning services and determined that 84% of the potential overpayments were billed using CPT code 77290 (therapeutic radiology simulation-aided field setting; complex). However, code 77290 is one of the services that is supposed to be bundled into payment for CPT code 77301 (IMRT plan, including dose-volume histograms for target and critical structure partial tolerance specifications) to bill for IMRT planning.

The OIG reviewed only planning services billed using CPT code 77290 to evaluate compliance with billing requirements and found that none of the line items in the sample met those requirements. The OIG also identified $4.2 million in potential overpayments for other IMRT planning services that were not included in the sample.

According to the review, the hospitals appeared to be unfamiliar with or misinterpreted CMS guidance for billing IMRT planning services. In addition, existing NCCI code-pair edits didn’t prevent overpayments for code 77290 because these edits applied only to services billed on the same day as code 77301, and the services in this sample were billed on different dates of service.

The OIG recommended that CMS take two actions in light of its findings:

  1. Implement an edit to prevent improper payments for IMRT planning services that are billed before the procedure code for the bundled payment for IMRT planning is billed
  2. Work with the Medicare contractors to educate hospitals on proper billing for IMRT planning services

CMS agreed with the OIG’s recommendations. For more information on the actions CMS has taken or plans to take to address these recommendations, see Appendix E of the OIG review.