Risë Marie ClelandRisë Marie ClelandPresident, OplincPresident, OplincRise@Oplinc.comRise@Oplinc.com

Evaluating CAP ParticipationEvaluating CAP Participation

ANCO 2005 Annual MeetingANCO 2005 Annual MeetingYosemiteYosemite

AgendaAgenda

ASP in 2006ASP in 2006 ASP issuesASP issues CAP & ASPCAP & ASP

CAP IssuesCAP Issues PhysiciansPhysicians VendorsVendors

Practice DeterminationsPractice Determinations

ASP Issues Going ForwardASP Issues Going Forward

Two quarter lag continues Two quarter lag continues Where are you on ASP scale?Where are you on ASP scale?

High volume purchaserHigh volume purchaser Exclusive contracts – formulariesExclusive contracts – formularies

Some ASP +6% rates below costSome ASP +6% rates below cost Current OIG “audits” Current OIG “audits”

CAP & ASPCAP & ASP

CAP pricing included in the Average CAP pricing included in the Average Sales Price (ASP) calculation Sales Price (ASP) calculation Section 1847A of the Social Security ActSection 1847A of the Social Security Act ASP will decrease in proportion to the ASP will decrease in proportion to the

volume of drug sold at the CAP pricevolume of drug sold at the CAP price US Oncology?US Oncology? CAP pricing extended to all customers?CAP pricing extended to all customers?

“ “Under-water” ASP adjustments Under-water” ASP adjustments Physicians referred to the CAPPhysicians referred to the CAP

CAP ViabilityCAP Viability

Will CAP be implemented?Will CAP be implemented? Section 303(d) of the MMA of 2003 Section 303(d) of the MMA of 2003

requires the implementation of a requires the implementation of a competitive acquisition program for competitive acquisition program for Medicare Part B drugs not paid on a cost Medicare Part B drugs not paid on a cost or prospective payment system basis or prospective payment system basis

Other specialties are supportiveOther specialties are supportive NephrologyNephrology Internal MedicineInternal Medicine Mental HealthMental Health Infectious DiseaseInfectious Disease

CAP DrugsCAP Drugs

One category of CAP drugs including most One category of CAP drugs including most of the drugs now administered “incident to” of the drugs now administered “incident to” in the oncology clinic. in the oncology clinic.

OncolyticsOncolytics Chemotherapy adjunctsChemotherapy adjuncts Anti-emeticsAnti-emetics Hematologics Hematologics Drugs in the HCPCS J9000 series (with the exception of J9999)Drugs in the HCPCS J9000 series (with the exception of J9999)

The following drugs will not be included:The following drugs will not be included: Drugs that don’t meet the claims volume threshold; Drugs that don’t meet the claims volume threshold; Drugs billed with the not otherwise classified code (NOC);Drugs billed with the not otherwise classified code (NOC); Depot LupronDepot Lupron Immune globulinsImmune globulins Drugs administered through DMEDrugs administered through DME Orphan drugsOrphan drugs

CAP Issues for Physicians & CAP Issues for Physicians & Patients: Patients:

Off-label useOff-label use How will vendor react to “medical necessity” How will vendor react to “medical necessity”

denials?denials? Practice must appeal these denialsPractice must appeal these denials

Possible negative impact on referralsPossible negative impact on referrals Non-CAP providers sending pts elsewhere for Non-CAP providers sending pts elsewhere for

treatmenttreatment Impact on ancillary servicesImpact on ancillary services Patient assistance/ drug replacement Patient assistance/ drug replacement

programsprograms

Delivery of DrugsDelivery of Drugs

Refusal to ship drug when copay is lateRefusal to ship drug when copay is late How will physician be notified of the action?How will physician be notified of the action? Will site-of-care be affected?Will site-of-care be affected?

Pt must pay invoice within 45 days of Pt must pay invoice within 45 days of postmarkpostmark

Request for financial assistance info provides Request for financial assistance info provides a 15 day extensiona 15 day extension

The Physician may opt out of CAP if he/she The Physician may opt out of CAP if he/she wishes to continue treatment of this patient wishes to continue treatment of this patient under “buy & bill”under “buy & bill” Must opt out for all Medicare patientsMust opt out for all Medicare patients If group practice the practice opts outIf group practice the practice opts out

Delivery of DrugsDelivery of Drugs

Drugs are to be shipped in unopened Drugs are to be shipped in unopened manufacturers packagingmanufacturers packaging Packages containing multiple individual units Packages containing multiple individual units

may be divided & shipped in unopened individual may be divided & shipped in unopened individual vials.vials.

CAP vendor can not refuse shipment of drug CAP vendor can not refuse shipment of drug based on reimbursement the vendor may:based on reimbursement the vendor may: Contact the ordering physician to discuss the Contact the ordering physician to discuss the

orderorder Seek an ABN from the patient Seek an ABN from the patient The vendor must send the drug regardless of The vendor must send the drug regardless of

whether or not they are able to obtain a signed whether or not they are able to obtain a signed ABN from the patientABN from the patient

Who Will Participate in CAP?Who Will Participate in CAP?

PhysiciansPhysicians

VendorsVendors

Association of Community Cancer Centers www.accc-cancer.org

How likely are you to participate in How likely are you to participate in CAP?CAP?

52

25

3

Definitely Not

Undecided

Definitely

Yes if cost is greater than or equal to ASP +6% =>50%

Your decision to participate in CAP will Your decision to participate in CAP will be based on:be based on:

121

11

3241

30

Financial impact on pt Pt access

Opposition to program Pt Finanacial impact & access

All of the above None of the above

If you had to choose between CAP & If you had to choose between CAP & sending Medicare patients elsewhere sending Medicare patients elsewhere

for treatment?for treatment?

19

81

Participate in CAP Refer patients to other facility

If the CAP vendor offered additional If the CAP vendor offered additional services such as an EMR or billing services such as an EMR or billing services for all payers would that services for all payers would that

affect your decision to participate in affect your decision to participate in CAP?CAP?

13

64

23

As a PercentageYes No Undecided

Influencing Vendor Influencing Vendor ParticipationParticipation

Vendor could capture and develop a database Vendor could capture and develop a database that is valued by health plans and that is valued by health plans and manufacturers including:manufacturers including: Drug utilizationDrug utilization DosingDosing Diagnosis Diagnosis Treatment costTreatment cost

Strategic positioning with pharmaceutical Strategic positioning with pharmaceutical companies, private payers, employer health companies, private payers, employer health plans and government programsplans and government programs

Market share increaseMarket share increase Practices might elect to have the CAP vendor supply Practices might elect to have the CAP vendor supply

and bill for and bill for all all drugs, making up for losses on the drugs, making up for losses on the Medicare sideMedicare side

Evaluating CAP Evaluating CAP ParticipationParticipation

Key issues to consider:Key issues to consider: Ability to meet program requirements Ability to meet program requirements How will waste & returns be handled?How will waste & returns be handled? The percentage of patients on treatment who The percentage of patients on treatment who

would be affected by CAPwould be affected by CAP The percentage of your cost and revenue that The percentage of your cost and revenue that

would be impacted by participation in CAPwould be impacted by participation in CAP Top regimens used for Medicare fee-for-service Top regimens used for Medicare fee-for-service

patients patients

Evaluating CAP Evaluating CAP ParticipationParticipation

Are the drugs most frequently used by this Are the drugs most frequently used by this patient population those drugs that represent patient population those drugs that represent a revenue loss at ASP + 6%?a revenue loss at ASP + 6%? Include all rebates and discounts when comparing Include all rebates and discounts when comparing

acquisition cost to reimbursementacquisition cost to reimbursement Will the drugs on those regimens be available Will the drugs on those regimens be available

through the CAP vendor? through the CAP vendor? A complete list of drugs included in the CAP can be A complete list of drugs included in the CAP can be

found in the Interim Final Rulefound in the Interim Final Rule How often do you administer drugs on an How often do you administer drugs on an

emergency emergency basis?basis? Supportive care drugsSupportive care drugs AntibioticsAntibiotics

Evaluating CAP Evaluating CAP ParticipationParticipation

How will your contracts with pharmaceutical How will your contracts with pharmaceutical manufacturers and distributors/ GPO’s be manufacturers and distributors/ GPO’s be affected? affected? Contracts and rebates based on volume and/or market Contracts and rebates based on volume and/or market

shareshare

Example: Example:

Purchases of $300,000 per quarter = 1% rebate Purchases of $300,000 per quarter = 1% rebate

Purchases of $500,000 per quarter =3% rebatePurchases of $500,000 per quarter =3% rebate

Purchases of over $500,000 per quarter = 5% rebatePurchases of over $500,000 per quarter = 5% rebate If drugs purchased under CAP are removed from your If drugs purchased under CAP are removed from your

total volume calculation is the loss of revenue through total volume calculation is the loss of revenue through rebates and volume discounts greater than the savings rebates and volume discounts greater than the savings achieved through CAP participation?achieved through CAP participation?

Evaluating CAP Evaluating CAP ParticipationParticipation

If you outsource your billing how will CAP If you outsource your billing how will CAP participation affect your contract?participation affect your contract? Contracts based on a percentage of collectionsContracts based on a percentage of collections

Billing companies may want to renegotiate Billing companies may want to renegotiate the contract based on:the contract based on: Reduced collectionsReduced collections Increased administrative burdenIncreased administrative burden

If you pay B&O tax CAP would reduce tax If you pay B&O tax CAP would reduce tax burdenburden

Evaluating CAP Evaluating CAP ParticipationParticipation

Can technology currently in place in your Can technology currently in place in your office automate or streamline the transfer office automate or streamline the transfer of information necessary for CAP?of information necessary for CAP?

Can your practice management system, EMR Can your practice management system, EMR or drug inventory cabinet generate a or drug inventory cabinet generate a document (electronic or hard-copy) document (electronic or hard-copy) containing all necessary information for containing all necessary information for ordering drugs through the CAP vendor?ordering drugs through the CAP vendor?

Do you regularly generate a treatment Do you regularly generate a treatment order form (either electronically or hard-order form (either electronically or hard-copy) for each new treatment?copy) for each new treatment?

Evaluating CAP Evaluating CAP ParticipationParticipation

Are practice efficiencies, effective claims Are practice efficiencies, effective claims and collections procedures in place? and collections procedures in place? If your practice is currently unable to file claims in If your practice is currently unable to file claims in

14 days you would not meet the billing 14 days you would not meet the billing requirements of CAPrequirements of CAP

Is your billing software program capable of Is your billing software program capable of storing and transmitting multiple storing and transmitting multiple prescription numbers?prescription numbers?

Do you currently have an effective and Do you currently have an effective and efficient system and processes for handling efficient system and processes for handling denied claims?denied claims?

Evaluating CAP Evaluating CAP ParticipationParticipation

Which staff member(s) will perform Which staff member(s) will perform additional administrative duties for CAP?additional administrative duties for CAP? CAP drugs will likely be ordered and received on a CAP drugs will likely be ordered and received on a

daily basis requiring additional staff time for:daily basis requiring additional staff time for: Ordering and stocking drugsOrdering and stocking drugs Maintaining separate inventory – patient specificMaintaining separate inventory – patient specific CAP drugs must be delivered to the location at which CAP drugs must be delivered to the location at which

they will be administeredthey will be administered Is the CAP vendor offering other valuable Is the CAP vendor offering other valuable

services?services? CAP vendor can offer other services as long CAP vendor can offer other services as long

as it does not violate any Federal or State as it does not violate any Federal or State LawLaw

Evaluating CAP Evaluating CAP ParticipationParticipation

In response to the question of whether a CAP physician can In response to the question of whether a CAP physician can enter into an agreement with the CAP vendor to purchase enter into an agreement with the CAP vendor to purchase drugs for their non-Medicare patients CMS states:drugs for their non-Medicare patients CMS states:

““This interim final rule does not prohibit approved CAP vendors This interim final rule does not prohibit approved CAP vendors and physicians from entering into a contract or agreement and physicians from entering into a contract or agreement governing their arrangements for the provision of CAP drugs or governing their arrangements for the provision of CAP drugs or other items or services. However, parties to such arrangements other items or services. However, parties to such arrangements must ensure that the arrangements do not violate the physician must ensure that the arrangements do not violate the physician self-referral (‘‘Stark’’) prohibition (section 1877 of the Act), the self-referral (‘‘Stark’’) prohibition (section 1877 of the Act), the Federal anti-kickback statute (section 1128B(b) of the Act), or any Federal anti-kickback statute (section 1128B(b) of the Act), or any other Federal or State law or regulation governing billing or claims other Federal or State law or regulation governing billing or claims submission. For example, an agreement under which the approved submission. For example, an agreement under which the approved CAP vendor provides billing services to a physician must comply CAP vendor provides billing services to a physician must comply with the Stark law, antikickback statute, and Medicare rules with the Stark law, antikickback statute, and Medicare rules regarding billing agents (§ 447.10). On the other hand, an regarding billing agents (§ 447.10). On the other hand, an approved CAP vendor may not contract to furnish drugs at below approved CAP vendor may not contract to furnish drugs at below market rates to a physician or a group for their private pay market rates to a physician or a group for their private pay patients in exchange for the physician’s or group’s CAP business.”patients in exchange for the physician’s or group’s CAP business.”

Additional InformationAdditional Information

All relevant CAP information will be All relevant CAP information will be posted on the CAP web-page at: posted on the CAP web-page at:

www.cms.hhs.gov/providers/drugs/compbidwww.cms.hhs.gov/providers/drugs/compbid