(Medicare Claims Processing Manual)

Section 303 (d) of the Medicare Prescription Improvement and Modernization Act (MMA) of 2003 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 b asis.  Beginning with drugs administered on or after July 1, 2006, physicians will be given a choice between buying and billing these drugs under the average sales price (ASP) system, or obtaining these drugs from vendors selected in a competitive bidding process.  For purposes of the CAP, the term a physician includes individuals defined under 1861(s) of the Social Security Act who are authorized to provide physician services under 1861(s) of the Act and who can, within their States scope of practice, prescribe and order drugs covered under Medicare Part B.   For 2006, the first CAP year will run from July 1, 2006 through December 31, 2006. In subsequent years, it will run annually on a calendar year basis.   The Secretary may exclude drugs from the CAP if competitive pricing will not result in significant savings, or is likely to have an adverse impact on access to such drugs.  The statute gives CMS the authority to select drugs, or categories of drugs, that w ill be included in the program, to establish geographic competitive acquisition areas, and to phase in these elements as appropriate.   A competition will be held every 3 years to award contracts to approved CAP vendors that will supply drugs and biologicals for the program.  A 3- year contract will be awarded to qualified approved CAP vendors in each geographic area who have and maintain: 1) Sufficient means to acquire and deliver competitively biddable drugs within the specified contract area; 2) Arrangements in effect for shipping at least 5 days each week for the competitively biddable drugs under the contract and means to ship drugs in emergency situations; 3) Quality, service, financial performance, and solvency standards; and 4) A grievance and appeals process for dispute resolution.  A vendors contract may be terminated during the contract period if they do not abide by the terms of their contract with CMS.  CMS will establish a single payment amount for each of the competitively bid drugs and areas, for this 3year cycle there will be one drug category and one  geographic area.  After CAP drug prices are determined and vendor contracts are awarded the information will be posted to a directory on the Medicare Web site.  Medicare physicians will be given an opportunity to elect to participate in the CAP on an annual basis.  Physicians who elect to participate in CAP will continue to bill their local A/B MAC (B) for drug administration.  Except where applicable State pharmacy law prohibits it, the CAP Participating Physicians will supply the following information to the approved CAP vendor at the time that a CAP drug order is placed:  date of order, beneficiary name, addre ss, and phone number, physician identifying information:  name, practice location/shipping address, group practice information, NPI; drug name, strength, quantity ordered, dose, frequency/ instructions, anticipated date of administration, Medicare benefici ary identifier, supplementary insurance information (if applicable), Medicaid information (if applicable), additional patient information: date of birth, allergies, height/weight, and diagnosis if necessary.  Claims for erythropoiesis stimulating agents (E SAs) must contain the most recent hematocrit or hemoglobin value.  CAP drug claims for any drugs furnished to an individual for the treatment of anemia shall be returned if the most recent laboratory values for hemoglobin or hematocrit are not reported on the claim per Medicare requirements.   The participating CAP physicians will receive all of their drugs from the approved CAP vendor for the drug categories they have selected, with only one exception.  The exception will be for furnish as written situations where the participating CAP physic ian requires that, due to medical necessity, the beneficiary must have a specific drug, defined by its National Drug Code (NDC), for one of the HCPCS codes within the approved CAP vendors drug list if that specific drug NDC is not available on the CAP drug list.  The participating CAP physician may buy the drug, administer it to the beneficiary and bill Medicare using the ASP system.  The local A/B MAC (B) will monitor drugs obtained using the furnish as written provision to ensure that the participating  CAP physician is complying with Medicare payment rules.   The CAP will also allow a participating CAP physician to provide a drug to a Medicare beneficiary from his or her own stock and obtain the replacement drug from the approved CAP vendor when certain conditions are met.  The A/B MAC (B) will monitor drugs ordered under the replacement provision to ensure that the participating CAP physician is complying with Medicare payment rules.   Approved CAP vendors must qualify for enrollment in Medicare as a supplier, and will be enrolled as a new provider specialty type.  The approved CAP vendors claims for the drugs will be submitted to one designated Medicare A/B MAC (B).  The approved CAP vendor will bill the Medicare designated A/B MAC (B) for the drug and the beneficiary for any applicable coinsurance and deductible under the MMA, for CAP claims submitted after July 1, 2006 but before April 1, 2007, payment to the approved CAP vendor for t he drug was conditioned on verification that the drug was administered to the Medicare beneficiary.  Proof that the drug was administered was established by matching the participating CAP physicians claim for drug administration with the approved CAP vendors claim for the drug in the Medicare claims processing system by means of a  prescription number on both claims.  When the claims matched in the claims processing system, the approved CAP vendor was paid in full.  Title II, section 108(a) of the Tax Relief and Health Care Act of 2006 (TRHCA), struck language used to develop the existing CAP claims matching process and furthermore required the implementation of a post payment review process effective April 1, 2007.  The post payment review process is required to assure that drugs supplied under the CAP have been administered to a beneficiary and the process must establish a mechanism to recoup, offset or collect any overpayments to the approved CAP vendor.  The CMS is  implementing CAP claims processing changes in order to comply with THRCA by April 1, 2007.  Pending CAP claims submitted prior to April 1, 2007, and all new CAP claims submitted on or after April 1 will be subject to the post payment review process.  Unti l drug administration is verified, the approved CAP vendor may not bill the beneficiary and/or his third party insurance for any applicable coinsurance and deductible.  For more information on the CAP claims processing see FR70251.  100.1 - Physician Election and Information Transfer Between A/B MACs (B) and the Designated A/B MAC (B) for CAP Claims (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  Prior to each annual election period, CMS will post on its Web site a list of the vendors that have been selected to participate in the CAP, the categories of drugs they will be providing, and the geographic areas within which each vendor will operate.  Physicians will then elect the approved CAP vendors they choose to receive drugs from under the CAP.  The election period will end each year approximately 45 days after the list of vendors is posted on the CMS Web site.  100.1.1 - Physician Information for the Designated A/B MAC (B)  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  10 Calendar days after the end of the annual election period, the 2006 election period, by May 25, 2006 A/B MACs (B) shall create a table and forward it to the designated A/B MAC (B).  The table will indicate which physicians have elected to participate in  CAP, for which drugs, and with which vendors.  When A/B MACs (B) receive applications, they shall verify that the chosen vendor is valid per the CMS Web site.  If an invalid vendor has been chosen, an educational contact shall be made to resolve the issue .  A/B MACs (B) shall forward this table each year to the designated A/B MAC (B) by 7calender days after the end of the election period.  Should that date fall on a weekend, it shall be extended to the following Monday.  The table shall include the physicians name, the street address, city, state, zip code, and phone number of each practice address/shipping address (the physical location where the drugs will be administered and the CAP drugs shipped to), PIN, UPIN (or NPI  when effective), e -mail address (if available).  If the mailing/correspondence address (where the participating CAP physician can be contacted directly) is different from the  practice/shipping address, the mailing/correspondence shall be included.  If the group or individual practice has more than one practice location where drugs are administered, each practice address/shipping location where drugs will be administered shall a lso be included.  For group practices that elect to participate in CAP, the group PIN as well as the individual PINs and UPINs (NPI when effective) shall be included.   The A/B MACs (B) shall manually add any additional practice/shipping addresses and the mailing/correspondence address to the spreadsheet provided to them by the shared system before sending the information to the designated A/B MAC (B).  A/B MACs (B) shall  also remove any members of a group practice who do not qualify to provide services under the CAP.  In order to qualify to provide services under the cap the providers must have prescriptive authority in their state to prescribe medications.  Examples of provider types that may or may not have prescriptive authority in their states are nurse practitioners and physicians assistants.  Since group practices must commit as a practice to enroll in the CAP program if they bill using the groups PIN, if the A/B MAC (B) receives from the shared system names of providers in a group for whom an election form has not been received, they shall contact the group practice to verbally request the required election form information.  A/B MACs (B) shall only remove names from the CAP provider table when it has been determined that the physician is no longer a member of a group practice.  A/B MACs (B) s hall not allow a group practice to participate in the CAP until all election information has been obtained for each eligible practice member within that group who bills using the groups PIN.  The designated A/B MAC (B) shall transmit information to each vendor on the physicians and practitioners who have elected that particular vendor 30 days prior to the start of the CAP year.   100.1.1.1 - Quarterly Updates (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  On a quarterly basis, CMS may provide updates to the HCPCS codes that the participating CAP physician must accept for the CAP.  A/B MACs (B) must add these HCPCS codes to the table created in 100.1.1 by 7 days after receipt of the changes from CMS.   100.1.2 - Format for Data  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  In order to simplify the transfer of physician election information, prior to end of the election period, the A/B MACs (B) and the designated A/B MAC (B) shall determine a common format in which to send the information to the designated A/B MAC (B).  This format shall remain constant for subsequent years unless CMS issues instructions that it is to be changed.    100.1.3 - Physician Information for the Vendors  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  One month before the beginning of the calendar year, the designated A/B MAC (B) shall transmit the following information to each vendor on the physicians who have elected that particular vendor:  the name, the street address, city, state, zip code, and phone number of each practice address/shipping address (physical location where the drugs will be administered), UPIN (or NPI when effective), e -mail address (if available) of the physicians who have elected to participate in CAP with that vendor and the drugs they have chosen.  If the mailing/correspondence address (where the participating CAP physician can be contacted directly) is different from the practice/shipping address, the mailing/correspondence shall be included.  If the group or individual practice  has more than one practice location where drugs are administered, each practice address/shipping location where drugs will be administered shall also be included.  ( NOTE:  For the 2006 claims processing period, the information must be sent by June 1, 2006).   For group practices that elect to participate in CAP, the individual UPINs (NPI when effective) shall be included.   Each year the date the designated A/B MAC (B) shall transmit information to each vendor on the physicians who have elected that particular vendor shall be 7 calendar days after the final date the A/B MACs (B) forward to the designated A/B MAC (B) the list of all the physicians who have elected to participate in CAP.  Should that date fall on a weekend, it shall be extended to the following Monday.  The designated A/B MAC (B) shall not send a vendor any information pertaining to other vendors.