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MIR-2006-10AB, October 2006
MLN Matters. . .Information for Medicare Providers
(Issued by the Centers for Medicare & Medicaid Services)
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Competitive Acquisition Program (CAP) - Creation of Automated Tables for Provider Information, Expansion of CAP Fee Schedule File Layout, and Additional Instructions for Claims Received from Railroad Retirement Board Beneficiaries
Note: This article was revised on September 12, 2006, to reflect changes made to CR5079. The CR release date, transmittal number (see below), and the Web address for accessing CR5079 were changed. All other information remains the same. |
Provider Types Affected
Physicians submitting claims to carriers for services to Medicare beneficiaries under the CAP
Impact on Providers
This article is based on Change Request (CR) 5079, which provides additional information and instructions for the implementation of the CAP pertaining to CAP drug categories and fee schedule as outlined in CR4064 (Transmittal 777, dated December 9, 2006).
Background
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA, Section 303 (d); http://www.cms.hhs.gov/MMAUpdate/  ) requires the implementation of a competitive acquisition program (CAP) for Medicare Part B drugs and biologicals not paid on a cost or prospective payment system basis. The Social Security Act (Section 1847B(a)(1)(B); http://www.ssa.gov/OP_Home/ssact/title18/1847B.htm ) states that for purposes of implementing the CAP:
‘‘The Secretary (of the Department of Health and Human Services) shall establish categories of competitively biddable drugs and biologicals. The Secretary shall phase in the program with respect to those categories beginning in 2006 in such manner as the Secretary determines to be appropriate.”
In addition, the Social Security Act also permits the creation of appropriate geographic regions established by the secretary for contract award purposes.
The Centers for Medicare & Medicaid Services (CMS) will implement the CAP with one category of drugs and one geographic area. However, as the program evolves, additional geographic areas and additional drug categories may be created. Also, approved CAP vendors will be able to request approval for changes to the lists of drugs that they supply under the CAP.
CR4064 (Transmittal 777, dated December 9, 2006) described requirements for carriers to develop provider files that list physicians who have enrolled with an approved CAP vendor and the category (or categories) of drugs that the CAP vendor will furnish under the CAP.
CMS is issuing CR5079 to automate the process of updating the list of drugs paid under the CAP. CR5079 provides additional information and instructions for the implementation of the CAP pertaining to the CAP drug categories and fee schedule as outlined in:
For the table defined in CR4064.1.1.2.1, when Medicare carriers receive election forms from providers, the carriers will indicate for each provider:
- Which categories of drugs the provider has chosen to receive; and
- From which approved CAP vendor the provider will receive CAP drugs.
CAP Drugs and Drug Categories
Approved CAP vendors will be permitted to request certain changes to the list of drugs that they supply under the CAP. Beginning in July 2006 with changes to be effective October 1, 2006, approved CAP vendors may request that CMS (or its designee) approve the following types of changes:
- NDC Substitution(s) : Approved CAP vendor may request approval to replace one or more National Drug Codes (NDC) in a Healthcare Common Procedure Coding System (HCPCS) code supplied by the approved CAP vendor with one or more other NDCs.
- NDC Addition(s) : Approved CAP vendor may request that CMS allow it to supply additional NDCs under a HCPCS code that the approved CAP vendor already supplies under the CAP.
- HCPCS Addition(s) : Approved CAP vendor may request that CMS allow it to supply newly issued HCPCS codes under the CAP.
- Orphan Drugs : Approved CAP vendor may request that CMS allow it to supply single indication orphan drugs under the CAP.
As CMS continues to develop the CAP, additional geographical areas and additional drug categories may be created. If additional drug categories are created, certain drugs may appear in more than one drug category.
Changes to the Drug List
Written requests for changes to the approved CAP vendor’s drug list must be submitted to CMS and the CAP designated carrier. The requests must include a rationale for the proposed change, and a discussion of the impact on the CAP, including safety, waste, and potential for cost savings. If approved, changes will become effective at the beginning of the following quarter. CMS will post the changes on the CMS Web site (http://www.cms.hhs.gov/competitiveacquisforbios/ ) and notify the carriers and participating CAP physicians of any changes on a quarterly basis.
Participating CAP physicians will be notified of changes to their approved CAP vendor’s CAP drug list on a quarterly basis and at least 30 days before the approved changes are due to take effect. Physicians who participate in the CAP are required to obtain all CAP drugs, including those that have been added or otherwise updated, from the approved CAP vendor, unless medical necessity requires the use of a formulation not supplied by the vendor. Please note that approved changes will apply only to the list of drugs supplied by the approved CAP vendor who submitted the request; therefore, each vendor’s drug list may contain different drugs after changes to the initial drug list are approved.
Payment Amount
The payment amount for new HCPCS codes added to an approved CAP drug vendor’s drug list will be Average Sales Price (ASP) plus six percent (ASP+ 6%).
Addition or substitution of NDC numbers under an existing HCPCS code supplied by an approved CAP vendor will not change the CAP single payment amount for that HCPCS code.
CMS will update the single payment amount based on the approved CAP vendor’s reported net acquisition costs for the category of drugs on an annual basis.
Disaster Contingency
Business requirements intended to cover situations where an approved CAP vendor is not able to fill CAP orders or is no longer able to supply drugs under the CAP have also been added. Physicians will be able to revert to the ASP (buy and bill) payment methodology.
Claims for Railroad Retirement Board (RRB) Beneficiaries
As claims for RRB beneficiaries cannot be paid under the CAP, physicians should not order drugs for RRB beneficiaries under the program. However, should this occur, and the claim is sent to the carrier that processes claims for RRB beneficiaries, that carrier will treat the claim as unprocessable. The physician will have to resubmit the claim as a non-CAP claim with the drugs billed as ASP. The vendor will then have to look to the physician for reimbursement of the drugs that were mistakenly ordered under CAP.
Implementation
The implementation date for the instruction is October 2, 2006.
Additional Information
For complete details, please see the official instruction issued to your carrier regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R1055CP.pdf  on the CMS Web site.
If you have any questions, please contact your carrier at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip  on the CMS Web site.
Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.
MLN Matters Number: MM5079 Revised
Pub. 100-4, Transmittal# R1055CP, CR# 5079
Related CR Release Date: September 11, 2006
Effective Date: October 1, 2006 Implementation Date: October 2, 2006
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