CMS Pub. 100-05, ch. 5, § 40.7.7

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

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 A/B MAC (Part B) for the administration service and by the

approved CAP vendor to the CAP designated A/B MAC (Part B) 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.

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 A/B MAC (Part 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.