The interim final rules for the Competitive Acquisition Program (CAP), which goes into effect Jan. 1, 2006, have been published, although the final rules may not be published for 2 to 3 years.
I will try to give you an overview of CAP, discuss some of the surprises published in the interim rules, and your options for next year.
You have a choice. Keep that fact in mind as you read this article. In 2006 you will be able to continue to purchase all drugs under the average sales price (ASP) program, or you may voluntarily choose to participate in the CAP. The three biggest surprises are:
The Centers for Medicare & Medicaid Services has decided to include the entire nation in a single national competitive acquisition area. The Medicare Modernization Act, passed by Congress in 2003, called for CMS to develop the program and to implement it in 2006.
CMS could have phased in the CAP in a geographic area or in a single specialty. It was a significant surprise to see that the agency had decided to go with a single national competitive acquisition program that included most drugs used by oncology specialists, ophthalmologists, psychologists, and rheumatologists—at least 181 drugs or categories of drugs.
Leuprolide acetate (Eligard, Lupron) has been excluded from the CAP. All other LHRH agonists, such as triptorelin pamoate (Trelstar), goserelin acetate (Zoladex), and leuprolide implant (Viadur) are included. Histrelin (Vantas) also is excluded initially, since it is reported with a nonspecific code.
CMS is going to allow the CAP vendor to charge the patient the difference between the cost of the drug and the least costly alternative (LCA) payment. Currently, urologists in most states are not allowed to charge the difference.
Your options –
The big decision physicians must make is whether they’re going to participate in the CAP or continue to buy all of their drugs through the ASP plus 6%. This decision must be made prior to Nov. 15, 2005. The enrollment period is Oct. 1 through Nov. 15. If you decide to participate, you must agree to obtain all available drugs for Medicare patients from a given vendor for 1 year. The second option, continuing to buy all drugs through the ASP plus 6%, will be automatic if you choose not to enroll in the CAP.
If you choose to participate in the CAP, you must sign a CAP election agreement, agree to provide all patients with a CMS-developed fact sheet on the program, and abide by all rules. The CAP vendor will provide only the specified drugs for Medicare patients. You will have to continue to buy all other drugs through the ASP plus 6%. In addition, you must buy all drugs for non-Medicare patients.
Among the rules participating physicians must abide by are the following:
The physician must submit an order to the vendor, including the drug dose delivery schedule and the patient’s demographic and coinsurance information.
If the physician is using an LCA drug, the vendor may call and encourage the use of a less expensive product.
The physician must ensure that patients receive only the drugs that are assigned to them for that visit.
The physician must submit a claim to the local carrier within 14 days of administration.
The claim must contain the unique prescription identification number unique to that patient that day, in addition to all other required information.
If denied, the physician must submit an appeal in a timely fashion.
The vendor can ask the patient to sign an advance beneficiary notice and charge the patient the difference between LCA and the price of the drug given.
A total of 181 drugs are included in the program, including many drugs used by urologists, such as most antibiotics, bacillus Calmette-Guérin (Pacis, TherCys, TICE BCG), interferon, and dimethyl sulfoxide (Rimso-50). However, many other drugs administered by urologists are not included, such as testosterone, Lupron, and Eligard.
I have other concerns about the program. The vendor chosen to be the CAP vendor must provide part B drugs in all 50 states. They will be paid according to ASP and LCA rules on all drugs. The vendor will have to collect from Medicare, secondary insurance, and patients. You are required to furnish all needed information, bill for the services, and appeal denied claims. It would appear to me that the vendor is your surrogate billing partner. You do a significant amount of work, with no pay or risk.
One troubling issue for the pharmaceutical companies will be that the drugs sold to the CAP vendor will be included in the ASP calculations.
What it means to you –
In summary, this looks like a very difficult program for urologists because of the administrative burden and the potential restriction on availability of drugs. Unfortunately, even if you participate, it will not prevent you from continuing to buy drugs for your non-Medicare patients and drugs for Medicare patients that are not available through the vendor. I would think this would be particularly bothersome for the vendor. Rumors are that most vendors do not like the program. It will be interesting to see if vendors decide to participate.
Some offices have looked at the administrative burden of participating and have calculated that it will cost more to participate in the program than they would lose by purchasing drugs under the ASP system.
By making the rules so cumbersome and by setting it up as one national competitive acquisition area, one has to wonder if CMS is against the program and is setting it up to fail.
In my opinion, it would not be in the best interest of the urologist to participate in this program. Explore all of your options, refine your calculations, and think long and hard before signing on the dotted line. Also, most pharmaceutical companies likely will take steps to encourage you to continue to buy the drugs directly from them, rather than participate in the CAP, by simplifying the buy/sell process and minimizing the potential for lost income. I am aware of one such program and have heard rumors of others. Stay tuned.
If you have a different read on the program or a different interpretation, I would be like to hear from you.
Urologist Ray Painter, MD, is president of Physician Reimbursement Systems, Inc., in Denver and is also publisher of Urology Coding and Reimbursement Sourcebook
