Monday, 

November 21, 2005 

Part III 

Department of 

Health and Human 

Services 

Centers for Medicare & Medicaid Services 

42 CFR Part 414 

Medicare Program; Exclusion of Vendor 

Purchases Made Under the Competitive 

Acquisition Program (CAP) for Outpatient 

Drugs and Biologicals Under Part B for 

the Purpose of Calculating the Average 

Sales Price (ASP); Interim Final Rule 

70478 Federal Register / Vol. 70, No. 223 / Monday, November 21, 2005 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 414 

[CMS–1325–IFC3] 

RIN 0938–AN58 

Medicare Program; Exclusion of 

Vendor Purchases Made Under the 

Competitive Acquisition Program 

(CAP) for Outpatient Drugs and 

Biologicals Under Part B for the 

Purpose of Calculating the Average 

Sales Price (ASP) 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Interim final rule with comment 

period. 

SUMMARY: This interim final rule with 

comment period provides clarification 

and solicits comments on the 

relationship between drugs supplied 

under the Competitive Acquisition 

Program (CAP) for Part B Drugs and 

Biologicals and the calculation of 

Average Sales Price (ASP). (For 

purposes of this interim final rule, the 

term ‘‘drug’’ refers to drugs and 

biologicals.) This interim final rule with 

comment period also will exclude units 

of drugs supplied under the CAP from 

ASP calculations for a period of up to 

3 years, at which time the policy will be 

re-evaluated. In addition, this rule 

revises the definition of unit to reflect 

the exclusion of units of CAP drugs 

administered to beneficiaries by 

participating CAP physicians. 

DATES: Effective Date: November 21, 

2005. 

Comment Date: To be assured 

consideration, comments must be 

received at one of the addresses 

provided below, no later than 5 p.m. on 

January 20, 2006. 

ADDRESSES: In commenting, please refer 

to file code CMS–1325–IFC3. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments on specific issues 

in this regulation to http:// 

www.cms.hhs.gov/regulations/ 

ecomments. (Attachments should be in 

Microsoft Word, WordPerfect, or Excel; 

however, we prefer Microsoft Word.) 

2. By regular mail. You may mail 

written comments (one original and two 

copies) to the following address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–1325– 

IFC3, P.O. Box 8017, Baltimore, MD 

21244–8017. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments (one 

original and two copies) to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–1325–IFC3, Mail Stop C4–26– 

05,7500 Security Boulevard, Baltimore, 

MD 21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

7197 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH Building is not readily available to 

persons without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

the CMS drop slots located in the main 

lobby of the building. A stamp-in clock 

is available for persons wishing to retain 

a proof of filing by stamping in and 

retaining an extra copy of the comments 

being filed.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by mailing 

your comments to the addresses 

provided at the end of the ‘‘Collection 

of Information Requirements’’ section in 

this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Angela Mason (410) 786–7452 (for 

issues related to payment for covered 

outpatient drugs and biologicals). 

Corinne Axelrod (410) 786–5620 (for 

issues related to the competitive 

acquisition program (CAP) for Part B 

drugs). 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–1325– 

IFC3. 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on a public Web site as 

soon as possible after they are received. 

Hard copy comments received timely 

will be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

This Federal Register document is 

also available from the Federal Register 

online database through GPO Access a 

service of the U.S. Government Printing 

Office. The web site address is: http:// 

www.access.gpo.gov/nara/index.html. 

Information on covered outpatient 

drugs and biologicals can be found at: 

http://www.cms.hhs.gov/providers/ 

drugs/asp.asp. 

Information on the Competitive 

Acquisition Program can be found at: 

http://www.cms.hhs.gov/providers/ 

drugs/compbid. 

Some of the issues discussed in this 

preamble affect the payment policies, 

but do not require changes to the 

regulations in the Code of Federal 

Regulations. Information on the 

regulation’s impact appears throughout 

the preamble and is not exclusively in 

section IV. 

I. Background 

A. Average Sales Price (ASP) 

Section 303(c) of the Medicare 

Modernization Act (MMA) revised the 

drug payment methodology by creating 

a new pricing system based on a drug’s 

ASP. Effective January 2005, Medicare 

pays for the vast majority of Part B 

covered drugs and biologicals using a 

drug payment methodology based on 

the ASP. In accordance with section 

1847A of the Social Security Act (the 

Act), manufacturers submit the ASP 

data for their products to us on a 

quarterly basis. These data include the 

manufacturer’s total sales (in dollars) 

and number of units of a drug to all 

purchasers in the United States in a 

Federal Register / Vol. 70, No. 223 / Monday, November 21, 2005 / Rules and Regulations 70479 

calendar quarter (excluding certain sales 

exempted by statute), with limited 

exceptions. The sales price is net of 

discounts such as volume discounts, 

prompt pay discounts, cash discounts, 

free goods that are contingent on any 

purchase requirement, chargebacks, and 

rebates (other than rebates under section 

1927 of the Act). The Medicare payment 

rate is based on 106 percent of the ASP, 

less applicable deductible and 

coinsurance, and is updated quarterly. 

B. Competitive Acquisition Program 

(CAP) 

Section 303(d) of the MMA provides 

for an alternative payment methodology 

to the ASP for certain Part B covered 

drugs that are not paid on a cost or 

prospective payment basis. The MMA 

amended Title XVIII of the Social 

Security Act by adding a new section 

1847B, which established a competitive 

acquisition program for the acquisition 

of and payment for competitivelybiddable Part B covered drugs. This 

program is anticipated to begin on July 

1, 2006. At that time, physicians will 

have a choice between: (1) Obtaining 

these drugs from entities selected to 

participate in the CAP in a competitive 

bidding process; or (2) acquiring and 

billing for Part B covered drugs under 

the ASP system. The provisions for 

acquiring and billing for drugs through 

the CAP were first described in the 

March 4, 2005 proposed rule (70 FR 

10746). 

In response to the March 4, 2005 

proposed rule, many commenters 

requested clarification about whether 

the prices determined under the CAP 

will be taken into account in computing 

the ASP under section 1847A of the Act. 

Most commenters recommended that 

purchases made under the CAP be 

excluded from the ASP calculation, 

although one commenter noted that the 

CAP was not included in the section 

1847A(c)(2) of the Act list of sales that 

are exempt from the ASP calculation 

and, therefore, could not be excluded. 

Our response in the Competitive 

Acquisition Program of Outpatient 

Drugs and Biologicals under Part B 

interim final rule with comment period 

published July 6, 2005 (70 FR 39022) 

was that because the CAP was not 

included in the section 1847A(c)(2) of 

the Act list of sales that are exempt from 

the ASP calculation, we believed that 

sales to vendors made under the CAP 

must be included in the ASP. 

We received similar comments on the 

July 6, 2005 CAP interim final rule with 

comment period reiterating concern 

about including purchases made by 

vendors under the CAP in the ASP 

calculations and requesting that we 

change our interpretation of our 

statutory authority. Several commenters 

provided detailed legal arguments 

supporting the exclusion of purchases 

by vendors made under the CAP from 

the calculation of ASP. 

Some commenters argued that we 

could use our demonstration authority 

to exclude CAP prices from ASP. Other 

commenters took the position that we 

could use our authority to establish CAP 

drug categories to establish a category of 

drugs that are excluded from the ASP 

calculation. Several commenters argued 

that sales to approved CAP vendors 

should be considered excluded from the 

determination of ‘‘best price’’ under 

section 1927(c)(1)(C) of the Act and, by 

virtue of this exclusion, be excluded 

from the calculation of ASP. One 

commenter contended that sales to CAP 

vendors are excluded from best price 

because CAP vendors do not fit squarely 

into the list of entities contained in the 

definition of ‘‘best price’’ in section 

1927(c)(1)(C)(i) of the Act. Another 

commenter suggested that approved 

CAP vendors, as Medicare contractors, 

should be considered Federal 

purchasers exempt from the 

determination of best price under 

section 1927(c)(1)(C)(i)(I–II) of the Act. 

Finally, several commenters stated 

that the intent of the Congress was to 

create two different and separate 

structures, with separate pricing, to 

provide physicians with a choice of 

programs. These commenters reference 

the language contained in section 

1847A(a)(2) of the Act, which states that 

section 1847A ‘‘shall not apply in the 

case of a physician who elects under 

subsection (a)(1)(A)(ii) of section 1847B 

for that section to apply instead of this 

section for the payment for drugs and 

biologicals,’’ and in section 

1847B(a)(1)(A), which states that ‘‘this 

section shall not apply in the case of a 

physician who elects section 1847A to 

apply.’’ These commenters argue that 

this language, which is contained in 

both the ASP and CAP statutes, clearly 

indicates that the Congress intended the 

two programs to operate independently. 

These commenters assert that as 

independent programs, the pricing 

methodologies under ASP and the CAP 

should not be linked. These commenters 

further believe that including CAP 

prices in the calculation of ASP would 

undermine the CAP program by 

virtually eliminating any incentive that 

a manufacturer might have to offer 

discounts to CAP vendors. 

II. Provisions of the Interim Final Rule 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘PROVISIONS’’ at the 

beginning of your comments.] 

Although we did not take a position 

on whether sales of CAP drugs should 

be part of the computation of the ASP, 

we were not convinced that we had the 

statutory authority to exclude sales of 

CAP drugs from the calculation of ASP. 

However, in response to the comments 

that we received on this issue, we 

revisited our analysis of our statutory 

authority. We do not find the 

commenters’ arguments above regarding 

demonstration authority, best price, or 

the definition of categories entirely 

persuasive. However, we recognize the 

commenters’ concerns about the effect 

of including CAP prices in the 

calculation of ASP and agree that the 

best outcome for both the ASP 

methodology and the CAP programs 

would be one in which prices under 

CAP did not affect payment amounts 

under the ASP methodology. In 

particular, we find compelling the 

commenters’ arguments about the 

separation of the ASP and CAP 

programs and that the two programs are 

intended to be alternatives to each 

other. We acknowledge the possibility 

that the Congress intended the programs 

to be completely independent of each 

other. Therefore, as a result of our 

reassessment, and in accordance with 

our statutory authority, including our 

authority under section 1847A(b)(2)(B) 

of the Act to establish methods for 

counting units, we have decided to 

exclude, for the initial 3-year contract 

period under the CAP, units of CAP 

drugs that are administered to 

beneficiaries by participating CAP 

physicians. In light of Congress’s intent 

to give physicians a choice between the 

two programs, we believe the 

relationship between the CAP and the 

ASP methodology represents a unique 

circumstance. We believe it is 

appropriate to implement this exclusion 

from the ASP calculation because this 

exclusion is necessary for implementing 

the CAP, a program that the Congress 

has expressly identified as an 

alternative to the ASP payment 

methodology. We intend to examine the 

effect of this exclusion and, if necessary, 

revisit our decision at the end of the 

initial 3-year period of the CAP. 

Because CAP prices will not be 

included in the ASP calculation for at 

least the first 3 years of the CAP, we are 

revising § 414.802 (definition of unit) to 

reflect the exclusion of units of CAP 

drugs administered to beneficiaries by 

participating CAP physicians. 

Manufacturers also must exclude 

rebates and lagged price concessions 

attributable to units of CAP drugs 

administered to a beneficiary by a 

70480 Federal Register / Vol. 70, No. 223 / Monday, November 21, 2005 / Rules and Regulations 

participating CAP physician when using 

the estimation methodology specified in 

§ 414.804. (To assist manufacturers in 

the implementation of this exclusion, 

we are requiring approved CAP vendors 

to provide manufacturers with 

information necessary to determine 

which sales to the approved CAP 

vendor are sales of CAP drugs that are 

excluded from the ASP calculation. This 

requirement will be reflected in the 

approved CAP vendor’s contract with 

CMS.) We welcome further comment on 

the exclusion of CAP drug units from 

the calculation of the ASP. We also seek 

comment on accounting for this 

exclusion when estimating lagged price 

concessions. We will provide additional 

guidance regarding lagged price 

concessions in a future ASP document. 

For the reasons stated in section IV. of 

this preamble, these changes to the 

calculation of the ASP are effective 

upon publication of this interim final 

rule with comment period. However, 

because there will not be any excludable 

CAP units until the CAP begins, which 

we expect to occur on July 1, 2006, this 

exclusion will not affect manufacturers’

calculation of ASP until the third 

quarter of 2006. 

After the initial 3-year period of the 

CAP, we will evaluate the impact on 

approved CAP vendors, manufacturers, 

and others of excluding units supplied 

under the CAP from the calculation of 

ASP. If there appears to be a reason not 

to continue to exclude units supplied 

under the CAP from the calculation of 

ASP, we will undertake rulemaking to 

describe our findings and conclusions 

and to seek public comment. 

III. Response to Comments 

Because of the large number of 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

IV. Waiver of Proposed Rulemaking 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register and invite public comment on 

the proposed rule. The notice of 

proposed rulemaking includes a 

reference to the legal authority under 

which the rule is proposed, and the 

terms and substances of the proposed 

rule or a description of the subjects and 

issues involved. This procedure can be 

waived, however, if an agency finds 

good cause that a notice-and-comment 

procedure is impracticable, 

unnecessary, or contrary to the public 

interest and incorporates a statement of 

the finding and its reasons in the rule 

issued. 

We find good cause to waive the 

requirement for publication of a notice 

of proposed rulemaking and public 

comment on the grounds that it is 

contrary to the public interest. We have 

re-examined our statutory authority and 

have determined that both the CAP and 

ASP payment methodologies are best 

served by excluding units supplied 

under the CAP from the calculation of 

ASP for an initial period of 3 years. We 

believe that excluding CAP drug units 

from the ASP calculation will give 

manufacturers an incentive to provide 

discounts to approved CAP vendors that 

will, in turn, result in lower prices 

under the CAP. However, unless it is 

implemented immediately, any 

beneficial effects of this policy could 

not be achieved, because it would not be 

effective in time to allow vendor 

applicants to take it into consideration 

as they prepare their CAP bids. In order 

to comply with the statutory mandate 

that the CAP begin in 2006, the bidding 

process for the CAP must commence in 

time to allow vendors sufficient time to 

formulate their bids, to allow us to 

assess the bids and vendor applications 

and select the approved CAP vendors, 

and to allow physicians a meaningful 

opportunity to review and select an 

approved CAP vendor. For this reason, 

it is necessary that policies affecting the 

CAP bidding process be in place now. 

In addition, the Administrative 

Procedure Act normally requires a 30- 

day delay in the effective date of a final 

rule. This delay may be waived if an 

agency for good cause finds that the 

delay is impracticable, unnecessary or 

contrary to the public interest, and 

incorporates a statement of the finding 

and the reasons in the rule issued. (5 

U.S.C. 553(d)(3)) 

We find that good cause exists to 

waive the 30-day delay so that this rule 

takes effect immediately upon 

publication in the Federal Register. As 

noted above, to comply with the 

statutory mandate that the CAP begin in 

2006, it will be necessary for us to have 

contracts in place with approved CAP 

vendors in time to give physicians a 

meaningful opportunity to review and 

select an available approved CAP 

vendor in their competitive acquisition 

areas. An effective date of November 21, 

2005 will ensure that the selection of 

CAP vendors can proceed and will 

afford the approved CAP vendors 

needed time to prepare for the 

enrollment of physicians and education 

of beneficiaries concerning the CAP 

program in time for the anticipated CAP 

start date, July 1, 2006. 

V. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements. 

In summary, this interim final rule 

with comment period requires 

manufacturers of Medicare Part B 

covered drugs paid under sections 

1847A, 1842(o)(1)(D), or 

1881(b)(13)(A)(iii) of the Act to exclude 

all units supplied under the CAP from 

their calculation of ASP as well as 

adjust for this exclusion in their 

estimation of rebates and lagged price 

concessions using the estimation 

methodology. This interim final rule 

with comment period lays out the 

specifications for complying with these 

requirements. 

The burden associated with the 

requirements in this rule is the time and 

effort required by manufacturers of 

Medicare Part B drugs to prepare and 

submit the required data to CMS. While 

these requirements are subject to the 

PRA, this requirement is currently 

approved under OMB control number 

0938–0921, with a current expiration 

date of September 30, 2007. 

If you comment on these information 

collection and recordkeeping 

requirements, please mail copies 

directly to the following: Centers for 

Medicare & Medicaid Services, Office of 

Strategic Operations and Regulatory 

Affairs, Regulations Development and 

Issuances Group, Attn: William Parham, 

CMS–1325–IFC3, Room C4–26–05, 7500 

Security Boulevard, Baltimore, MD 

21244–1850; and Office of Information 

Federal Register / Vol. 70, No. 223 / Monday, November 21, 2005 / Rules and Regulations 70481 

and Regulatory Affairs, Office of 

Management and Budget, Room 10235, 

New Executive Office Building, 

Washington, DC 20503, Attn: Brenda 

Aguilar, CMS Desk Officer, 

baquilar@omb.eop.gov. Fax (202) 395–

6974. 

VI. Regulatory Impact 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘IMPACT’’ at the beginning of 

your comments.] 

We have examined the impact of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), and Executive Order 13132. 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). A regulatory impact 

analysis (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). Because this rule clarifies 

the reporting requirements for ASP data 

and does not affect actual payment, it 

does not reach the economic threshold 

and thus is not considered a major rule. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and 

government agencies. Most hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $6 

million to $29 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. We 

are not preparing an analysis for the 

RFA because we have determined that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 604 for final 

rules of the RFA. For purposes of 

section 1102(b) of the Act, we define a 

small rural hospital as a hospital that is 

located outside of a Core-Based 

Statistical Area and has fewer than 100 

beds. We are not preparing an analysis 

of section 1102(b) of the Act because we 

have determined that this rule will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

That threshold level is currently 

approximately $120 million. While this 

interim final rule with comment period 

does implement a new data reporting 

requirement for drug manufacturers, the 

costs associated with this requirement 

are expected to be below the $120 

million annual threshold established by 

section 202 of the Unfunded Mandates 

Reform Act. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

This regulation does not impose any 

costs on State or local governments, and 

there is no direct effect on States, or the 

relationship between the national 

government and the States, or the 

distribution of power or responsibilities 

between the national and State or local 

governments, and, therefore, the 

requirements of E.O. 13132 are not 

applicable. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 414 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medicare, 

Reporting and recordkeeping 

requirements. 

■ For the reasons set forth in this 

preamble, the Centers for Medicare & 

Medicaid Services amends 42 CFR 

chapter IV as set forth below: 

PART 414—PAYMENT FOR PART B 

MEDICAL AND OTHER HEALTH 

SERVICES 

■ 1. The authority citation for part 414 

continues to read as follows: 

Authority: Secs. 1102, 1871, and 1881(b)(1) 

of the Social Security Act (42 U.S.C. 1302, 

1395hh, and 1395rr(b)(1)). 

Subpart J—Submission of 

Manufacturer’s Average Sales Price 

Data 

■ 2. Section 414.802 is amended by 

revising the definition of ‘‘unit,’’ to read 

as follows: 

§ 414.802 Definitions. 

* * * * * 

Unit means the product represented 

by the 11-digit National Drug Code. 

During the first 3 years of the CAP (as 

defined in § 414.902), the method of 

counting units excludes units of CAP 

drugs (as defined in § 414.902) 

administered to a beneficiary by a 

participating CAP physician (as defined 

in § 414.902). 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: November 1, 2005. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: November 1, 2005. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 05–22175 Filed 11–2–05; 5:07 pm] 

BILLING CODE 4120–01–P