Medicare Overpaid $15 Million for Roche Cancer Drug, OIG Says

Medicare, the U.S. health insurance program for the elderly and disabled, overpaid for Roche Holding AG (ROG)’s Herceptin breast-cancer treatment by about $15 million, according to a government investigation.

Health-care providers across the country charged Medicare for amounts of the drug they didn’t administer to patients, running afoul of billing guidelines, according to a series of reports issued by the U.S. Department of Health and Human Services’ Office of the Inspector General. The OIG examined billing records from 2008 through 2010.

Roche sells Herceptin, which garnered 5.89 billion Swiss francs ($6.5 billion) in sales last year, in 440-milligram vials. Medicare pays by the 10-milligram dose, which means each vial holds 44 billable injections. The vials can keep for as long as 28 days, according to the OIG. Medicare pays only for the amount of drug used, which is often less than the contents of the vial, the OIG said.

In 13 reports published since July, the OIG has found a total of more than $15 million in overpayments to hospitals that billed Medicare for Herceptin doses that weren’t used. The overpayments in Medicare jurisdictions comprising Florida, Iowa, Kansas, Missouri and Nebraska often exceeded one-third of the total amount reviewed by the OIG.

The reports urge the companies hired by Medicare to process payment claims by providers to take measures to reduce future overpayment.

“I don’t think we expect a significant change in usage patterns out there in Herceptin because of this, ” Daniel O’Day, Roche’s pharmaceutical division chief, said on a Jan. 30 conference call.

A Roche spokesman had no immediate comment today.

To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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