Inflated Pharmacy Billing Units

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The submission of false or fraudulent pharmacy billing units on claims for outpatient services is an area of growing concern for health care fraud.

CMS’s Medicare Claims Processing Manual, Pub. No. 100-04 (the Manual), chapter 4, section 20.4, states: “The definition of service units … is the number of times the service or procedure being reported was performed.” The Manual, chapter 17, section 90.2.A, states: “It is … of great importance that hospitals billing for [drugs] make certain that the reported units of service of the reported HCPCS code are consistent with the quantity of a drug … that was used in the care of the patient.” If the provider is billing for a drug, according to chapter 17, section 70, of the Manual, “[w]here HCPCS is required, units are entered in multiples of the units shown in the HCPCS narrative description.”

For the line items for drugs, dishonest hospitals have regularly billed Medicare and Medicaid for the incorrect number of units of service. For instance, rather than billing from 60 service units, a hospital falsely bills 120 service units. While hospitals often blame incorrect descriptions in charge masters and electronic health record systems, it is a violation of the False Claims Act to maintain such systems with reckless disregard.