(Medicare Claims Processing Manual)

The furnish as written modifier is: J3 -  Competitive Acquisition Program, (CAP) drug not available through CAP as written, reimbursed under average sales price methodology.  When the J3 modifier is used, the physician will be allowed to bill Medicare for a CAP drug in addition to the claim for the administration of that drug.   A/B MACs (B) shall consider furnish as written drug administration claims for payment outside of the CAP program when the new furnish as written modifier is used.   By using only the J3 modifier on the claim, the physician is asserting that:   a) A specific drug product was medically necessary;   b) The selected drug vendor could not provide that specific brand and/or NDC for the CAP HCPCS code;   and  c) Documentation is being maintained on file to validate the information in a) and b) and will be made available to the A/B MAC (B) at their request.   100.2.7 - Monitoring of Claims Submitted With the J2 and/or J3 Modifiers  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  As part of their normal data analysis, A/B MACs (B) shall monitor these claims submitted with the J2, restocking modifier, or J3, the furnish as written modifier, for  patterns of abuse and follow the Progressive Corrective Action (PCA) process described in the Program Integrity Manual, Chapter 3, Section 11.  100.2.8 - Claims Submitted for Only Drugs Listed on the Approved CAP Vendors Drug List  (Rev. 3721, Issued: 02- 24-17, Effective: 05 -25-17, Implementation: 05- 25-17)  The A/B MAC (B) shall edit to verify that the no -pay lines (lines with the CAP drug HCPCS code and the J1modifier) that the participating CAP physician has billed is for a drug included in the CAP and is from the particular CAP vendor they have chosen to receive drugs from.   If the A/B MAC (B) determines that the physician has billed no -pay lines along with the codes for the payment of the administration for drug HCPCS code(s) that are not provided by the approved CAP vendor that the physician had selected, it shall return as unprocessable those no- pay lines along with the lines for the codes for the payment of the administration for these drugs.  The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Three   Group Code: CO  CARC: 96  RARC: N348  MSN: 7.8  100.2.9 - Submission of Claims With the Modifier JW, Drug Amount Discarded/Not Administered to Any Patient  (Rev. 1313; Issued:  07- 23-07; Effective/Implementation Dates:  08 -23-07)  The JW modifier must not be used on Medicare Part B Drug CAP claims; providers shall not code for wastage for drugs furnished under the CAP.  Claims for drugs provided under CAP submitted with the JW modifier will be treated as unprocessable.  100.2.10 - MSP Situations Under CAP  (Rev. 1088, Issued: 10- 27-06, Effective: 01 -01-07, Implementation: 01- 02-07)  Drugs Obtained Through the CAP for Beneficiaries With Insurance Primary to Medicare   Providers who elect into the CAP voluntarily agree to obtain CAP drugs for Medicare beneficiaries exclusively through an approved CAP vendor.  In situations where participating CAP providers obtain a drug from the CAP vendor for a beneficiary who is incorr ectly determined to have Medicare as their primary insurer, but the provider and the  CAP vendor must first bill the appropriate primary insurer for the drug and the administration service.   Upon receipt of the primary insurers payment, MSP claims should then be submitted by the physician to their A/B MAC (B) for the administration service and by the approved CAP vendor to the CAP designated A/B MAC (B) for the drug.  Providers are required t o submit MSP claims even if they believe there is no outstanding balance due.  Such claims must adhere to CAP guidelines and include the drug HCPCS code, the prescription number provided by the approved CAP vendor and an appropriate CAP no- pay modifier.  Approved CAP vendor claims must also adhere to CAP requirements and include the assigned prescription number.  All participating CAP providers to submit MSP claims for drug administration services where the drug was obtained from the approved CAP vendor.  Failure to submit an MSP claim for the drug administration prevents the processing of the vendors MSP claim by the CAP designated A/B MAC (B).  Drugs Obtained Outside of the CAP for Beneficiaries With Medicare   In certain rare situations, participating CAP providers may mistakenly obtain drugs for Medicare beneficiaries outside of the CAP vendor because they had determined that the beneficiary had another insurer that was primary to Medicare.  In order to make an appropriate payment for drugs administered under these unusual circumstances, we are allowing temporary use of the J3 modifier to bypass CAP edits and pay the participating CAP provider at the current ASP rate.   We have requested a modifier for use in this rare situation.  A/B MACs (B) will be notified through the usual quarterly update process when a new modifier is available.  At that time, the J3 modifier will no longer be accepted for this purpose.   As we expect the situations that require this modifier to be infrequent, A/B MACs (B) have the ability to review claims with this modifier to monitor for proper use and educational opportunities.  MSP Claims For Drugs Present on the Providers CAP Drug List   In order to prevent processing errors for MSP claims where the drug billed on the providers claim is present on the selected CAP drug list, A/B MACs (B) are to implement a SCF rule allowing an override of the CAP claims processing edits.  This SCF rule wi ll allow claims to be identified as MSP and not require the CAP modifiers or prescription number.   100.3 - Application of Local Medical Review Policies  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)   A/B MACs (B) and/or Program Safeguard Contractors shall apply all Local Coverage Determination (LCD) policies and National Coverage Determination (NCD) policies to the administration and no- pay drug code lines on the CAP claims.  Should it be determined that a drug administration or drug code service line does not meet the requirements of the LCD, the A/B MAC (B) shall follow current processes to determine how to adjudicate the related services.   If appropriate, the A/B MACs (B) shall include messages on the MSN and RA to indicate which LCD was applied.   The A/B MACs (B) shall also apply all regular edits to the administration and no- pay drug lines and send appropriate denial messages.   100.4 - Claims Processing Instructions for the Designated A/B MAC (B)  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  The designated A/B MAC (B) shall follow normal procedures to enroll the Drug Vendors as provider specialty type, 95, Competitive Acquisition Program (CAP) for Part B Drug Vendors.   A separate 4 position, alpha -numeric vendor identification number (VIN) shall be assigned to be used in the prescription number and a master list of which numbers are assigned to which vendors shall be kept.  The designated A/B MACs (B) shall forward the VIN to the A/B MACs (B) and to CMS 14 days after new CAP vendor contractors have been announced by CMS.  CMS will post the VIN on the CMS Web site.  A/B MACs (B) shall download these identification codes from t he CMS Web site and added them to the A/B MAC (B)s table.  For subsequent CAP years, this date will be the first Monday in November.  These codes shall be added to the A/B MACs (B)s table by 14 days after receipt.   The designated A/B MAC (B) shall track the name, the address, zip code, and phone number of each practice location/shipping address (location where the drugs will be administered), PIN, UPIN, (or NPI when effective), and e -mail (if available) of the physic ians and physician groups and which vendors and which drugs they have chosen.  In addition, the mailing/correspondence address (where the participating CAP physician can be contacted directly) for each physician shall also be tracked.  This information sha ll be made available to CMS upon request.  On a quarterly basis, the designated A/B MAC (B) shall manually add additional HCPCS codes to the information above when received from the A/B MACs (B).  They shall add this information by 14 days after its receipt from the A/B MACs (B).   The designated A/B MAC (B) shall only process CAP claims from approved drug vendors submitted in the ASC X12 837 professional claim format.  All vendor claims shall be processed by the designated A/B MAC (B).  These will not include claims for United Mine Worker, Railroad or Medicare Advantage beneficiaries.   100.4.1 - Creation of Internal Vendor Provider Files  (Rev. 3721, Issued: 02- 24-17, Effective: 05 -25-17, Implementation: 05- 25-17)  The designated A/B MAC (B) shall create an internal provider file for each vendor which includes the names, addresses, and UPINs, (NPI when effective), of those physicians who have elected that vendor.   The designated A/B MAC (B) shall edit incoming vendor claims to verify that the UPIN number on the claim for the ordering physician is one of the UPINs on the provider file for that vendor.  The designated A/B MAC (B) shall treat the claim as unprocessable  when it receives claims from vendors with ordering physician UPINs that do not match a physician UPIN on the provider file.   The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Two  Group Code: CO  CARC: 16  RARC: N265  MSN: 9.7 and 17.11  100.4.2 - Submission of Paper Claims by Vendors  (Rev. 3721, Issued: 02- 24-17, Effective: 05 -25-17, Implementation: 05 -25-17)  The designated A/B MAC (B) shall treat as unprocessable paper claims submitted by vendors and the contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Three   Group Code: CO  CARC: 96  RARC: M117  MSN:  N/A  100.4.3 - Submission of Claims from Vendors With the J1 No Pay Modifier  (Rev. 3721, Issued: 02- 24-17, Effective: 05 -25-17, Implementation: 05- 25-17)  The designated A/B MAC (B) shall treat as unprocessable claims submitted by vendors with a no- pay modifier, the contractor shall use the following remittance advice messages  and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Two   Group Code: CO  CARC: 16  RARC: N265  MSN: 9.7 and 17.11  100.4.4 - Submission of Claims from Vendors Without a Provider Primary Identifier for the Ordering Physician  (Rev. 3721, Issued: 02- 24-17, Effective: 05 -25-17, Implementation: 05- 25-17)  The designated A/B MACs (B) shall edit to determine if a UPIN, (or NPI when effective), of the ordering physician has been entered on the claim.  If the UPIN, (or NPI when effective), has not been entered on the claim, the designated A/B MAC (B) shall treat the claim as unprocessable.   The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Two   Group Code: CO  CARC: 206  RARC: N265  MSN: N/A  100.4.5 - New MSN Message to Be Included on All Vendor Claims  (Rev. 866, Issued: 02- 17-06, Effective: 07 -01-06, Implementation: 07- 03-06)  On all vendor claims, whether paid or denied, the designated A/B MACs (B) shall include the following new Medicare Summary Notice Message: