MSP Situations Under the Competitive Acquisition Program (CAP)

30.6 - MSP Situations Under the Competitive Acquisition Program (CAP) (Rev. 11874, Issued: 02-23-23, Effective: 03-24-23; Implementation: 03-24-23) Drugs Obtained Through the CAP for Beneficiaries with Insurance Primary to Medicare Providers that 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 incorrectly 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 insurer’s payment, MSP claims should then be submitted by the physician to their local carrier for the administration service and by the approved CAP vendor to the CAP designated carrier for the drug. Providers are required to 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. Payer 2 Submitted Covered Charges Other Payer Allowed Amount (Medicare Part B only) OTAF Other Payer Paid Amount Line 1 $60.00 $50.00 $50.00 $40.00 Line 2 $40.00 $30.00 $0 $30.00 Total $100.00 $80.00 $50.00 $70.00 Line 1: Other Payer Allowed Amount (Part B): $60.00 OTAF: $50.00 Other Payer Paid Amount: $50.00 (the OTAF amount is substituted for line1) Line 2 Other Payer Allowed Amount (Part B) $40.00 OTAF: $30.00 Other Payer Paid Amount $30.00 (the billed amount is substituted for line1) 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 vendor’s MSP claim by the CAP designated carrier. 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. Local carriers 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, local carriers have the ability to review claims with this modifier to monitor for proper use and educational opportunities. MSP Claims for Drugs Present on the Provider’s CAP Drug List In order to prevent processing errors for MSP claims where the drug billed on the provider’s claim is present on the selected CAP drug list, local carriers are to implement a SCF rule allowing an override of the CAP claims processing edits. This SCF rule will allow claims to be identified as MSP and not require the CAP modifiers or prescription number.