CMS proposes competitive acquisition program for injectables

June 1, 2005

Washington--The federal government is proposing a new way to pay for injectable or intravenous drugs administered by physicians in their offices, but AUA says the plan is so confusing, burdensome, and administratively costly that it will not be used unless significant changes are made.

Under the Medicare Modernization Act of 2003, Congress ordered the Centers for Medicare and Medicaid Services to create the new competitive acquisition program (CAP) as an alternative to the controversial system whereby the federal government reimburses physicians for the drugs based on 106% of the average sales price (ASP).

The policy has been sharply criticized by AUA, which contends it does not cover the cost of many chemotherapy drugs, let alone administration expenses, even though CMS has boosted some of those payment levels.

According to CMS, the option is intended both to save the Medicare program money and provide a simpler, less cumbersome alternative for physicians.

"The competitive acquisition program provides opportunities for physicians who do not wish to be in the business of drug acquisition," CMS said in its proposal, explaining that the CAP is intended to reduce the financial burdens and risk for physicians who must acquire the drugs under the ASP program.

In addition, the CAP eliminates the need for physicians to collect coinsurance for the drugs from Medicare beneficiaries, thus reducing headaches and paperwork.

But AUA isn't impressed with CMS's first crack at the rules that would implement the program and submitted a detailed critique to the agency, making 19 specific recommendations for changes and improvements.

In fact, AUA said so many unanswered questions surround the complex new program that CMS should publish an "interim" final rule that can be more easily modified. In its proposed regulations, CMS acknowledged that much remains to be done before the program can be finalized, including the following:

CMS said there could be a "phase-in" procedure for the program, perhaps enacting it on a limited basis before expanding it to cover all areas of the country or all drug products.

AUA proposals In its response to the agency, AUA recommended that CMS: