CMS Names First Competitive Acquisition Program Vendor

Family physicians who administer drugs and biologicals to patients in their offices under Medicare Part B now have the option to acquire those medications from BioScrip, the vendor selected for the first phase of CMS' Competitive Acquisition Program, or CAP.

The program, described in an online MedLearn Matters document (PDF file: 7 pages / 338 KB. More about PDFs.), is scheduled to begin July 1 and will expand to include additional vendors as more contracts are awarded, according to CMS Administrator Mark McClellan, M.D., Ph.D.

According to a CMS announcement of the CAP interim final rule, under the CAP, physicians can get 180 of the most common physician-administered drugs from BioScrip. The program is limited to injectable and infused drugs currently billed under Part B. The CAP does not apply to the new Medicare Part D prescription drug program.

Participating physicians will obtain medications from BioScrip, administer them to patients and bill Medicare for the drug administration fee. BioScrip will bill Medicare for the drug cost and bill patients for the deductible and copayment.

Participation is voluntary, and physicians who decline to participate can continue buying drugs directly in the market and billing Medicare for 106 percent of the so-called average sale price, an amount that includes the drug administration fee.

Barring emergency or other exceptional circumstances, physicians who contract with BioScrip agree to obtain all the drugs on the CAP list that they use from the company.

CMS developed the CAP in response to mandates in the Medicare Modernization Act of 2003. Congress called for the program in the wake of studies indicating the payment formula for physician-administered drugs resulted in payment "far in excess of physicians' acquisition costs," according to the CMS interim rule announcement. Excessive charges stemmed from physicians' administrative costs associated with billing Medicare for both the cost of the medication and the cost for the physician to administer it to the patient. The CAP is designed to streamline physicians' administrative costs and reduce Medicare's drug costs, according to CMS documents.