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115th Congress } { Rept. 115-761
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
PREVENTING ADDICTION FOR SUSCEPTIBLE SENIORS ACT OF 2018
_______
June 19, 2018.--Ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 5773]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 5773) to amend title XVIII of the Social Security
Act to require Medicare prescription drug plans to establish
drug management programs for at-risk beneficiaries, require
electronic prior authorization for covered part D drugs, and to
provide for other program integrity measures under parts C and
D of the Medicare program, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................5
A. Purpose and Summary................................... 5
B. Background and Need for Legislation................... 6
C. Legislative History................................... 6
II. EXPLANATION OF THE BILL...........................................7
A. Preventing Addiction for Susceptible Seniors Act...... 7
III.VOTES OF THE COMMITTEE...........................................11
IV. BUDGET EFFECTS OF THE BILL.......................................11
A. Committee Estimate of Budgetary Effects............... 11
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 12
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 12
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......20
A. Committee Oversight Findings and Recommendations...... 20
B. Statement of General Performance Goals and Objectives. 20
C. Information Relating to Unfunded Mandates............. 20
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 20
E. Duplication of Federal Programs....................... 20
F. Disclosure of Directed Rule Makings................... 20
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............21
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported.......................................... 21
B. Changes in Existing Law Proposed by the Bill, as
Reported............................................. 21
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Preventing Addiction for Susceptible
Seniors Act of 2018'' or the ``PASS Act of 2018''.
SEC. 2. REQUIRING PRESCRIPTION DRUG PLAN SPONSORS UNDER MEDICARE TO
ESTABLISH DRUG MANAGEMENT PROGRAMS FOR AT-RISK
BENEFICIARIES.
Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)) is amended--
(1) in paragraph (1), by inserting after subparagraph (E) the
following new subparagraph:
``(F) With respect to plan years beginning on or
after January 1, 2021, a drug management program for
at-risk beneficiaries described in paragraph (5).'';
and
(2) in paragraph (5)(A), by inserting ``(and for plan years
beginning on or after January 1, 2021, a PDP sponsor shall)''
after ``A PDP sponsor may''.
SEC. 3. ELECTRONIC PRIOR AUTHORIZATION FOR COVERED PART D DRUGS.
(a) Inclusion in Electronic Prescription Program.--Section 1860D-
4(e)(2) of the Social Security Act (42 U.S.C. 1395w-104(e)(2)) is
amended by adding at the end the following new subparagraph:
``(E) Electronic prior authorization.--
``(i) In general.--Not later than January 1,
2021, the program shall provide for the secure
electronic transmission of--
``(I) a prior authorization request
from the prescribing health care
professional for coverage of a covered
part D drug for a part D eligible
individual enrolled in a part D plan
(as defined in section 1860D-23(a)(5))
to the PDP sponsor or Medicare
Advantage organization offering such
plan; and
``(II) a response, in accordance with
this subparagraph, from such PDP
sponsor or Medicare Advantage
organization, respectively, to such
professional.
``(ii) Electronic transmission.--
``(I) Exclusions.--For purposes of
this subparagraph, a facsimile, a
proprietary payer portal that does not
meet standards specified by the
Secretary, or an electronic form shall
not be treated as an electronic
transmission described in clause (i).
``(II) Standards.--In order to be
treated, for purposes of this
subparagraph, as an electronic
transmission described in clause (i),
such transmission shall comply with
technical standards adopted by the
Secretary in consultation with the
National Council for Prescription Drug
Programs, other standard setting
organizations determined appropriate by
the Secretary, and stakeholders
including PDP sponsors, Medicare
Advantage organizations, health care
professionals, and health information
technology software vendors.
``(III) Application.--Notwithstanding
any other provision of law, for
purposes of this subparagraph, the
Secretary may require the use of such
standards adopted under subclause (II)
in lieu of any other applicable
standards for an electronic
transmission described in clause (i)
for a covered part D drug for a part D
eligible individual.''.
(b) Sense of Congress Regarding Electronic Prior Authorization.--It
is the sense of the Congress that--
(1) there should be increased use of electronic prior
authorizations for coverage of covered part D drugs for part D
eligible individuals enrolled in prescription drug plans under
part D of title XVIII of the Social Security Act and MA-PD
plans under part C of such title to reduce access delays by
resolving coverage issues before prescriptions for such drugs
are transmitted; and
(2) greater priority should be placed on increasing the
adoption of use of such electronic prior authorizations among
prescribers of such drugs, pharmacies, PDP sponsors, and
Medicare Advantage organizations.
SEC. 4. PROGRAM INTEGRITY TRANSPARENCY MEASURES UNDER MEDICARE PARTS C
AND D.
(a) In General.--Section 1859 of the Social Security Act (42 U.S.C.
1395w-28) is amended by adding at the end the following new subsection:
``(i) Program Integrity Transparency Measures.--
``(1) Program integrity portal.--
``(A) In general.--Not later than two years after the
date of the enactment of this subsection, the Secretary
shall, after consultation with stakeholders, establish
a secure Internet website portal (or other successor
technology) that would allow a secure path for
communication between the Secretary, MA plans under
this part, prescription drug plans under part D, and an
eligible entity with a contract under section 1893
(such as a Medicare drug integrity contractor or an
entity responsible for carrying out program integrity
activities under this part and part D) for the purpose
of enabling through such portal (or other successor
technology)--
``(i) the referral by such plans of
substantiated fraud, waste, and abuse for
initiating or assisting investigations
conducted by the eligible entity; and
``(ii) data sharing among such MA plans,
prescription drug plans, and the Secretary.
``(B) Required uses of portal.--The Secretary shall
disseminate the following information to MA plans under
this part and prescription drug plans under part D
through the secure Internet website portal (or other
successor technology) established under subparagraph
(A):
``(i) Providers of services and suppliers
that have been referred pursuant to
subparagraph (A)(i) during the previous 12-
month period.
``(ii) Providers of services and suppliers
who are the subject of an active exclusion
under section 1128 or who are subject to a
suspension of payment under this title pursuant
to section 1862(o) or otherwise.
``(iii) Providers of services and suppliers
who are the subject of an active revocation of
participation under this title, including for
not satisfying conditions of participation.
``(iv) In the case of such a plan that makes
a referral under subparagraph (A)(i) through
the portal (or other successor technology) with
respect to activities of substantiated fraud,
waste, or abuse of a provider of services or
supplier, if such provider or supplier has been
the subject of an administrative action under
this title or title XI with respect to similar
activities, a notification to such plan of such
action so taken.
``(C) Rulemaking.--For purposes of this paragraph,
the Secretary shall, through rulemaking, specify what
constitutes substantiated fraud, waste, and abuse,
using guidance such as what is provided in the Medicare
Program Integrity Manual 4.7.1. In carrying out this
subsection, a fraud hotline tip (as defined by the
Secretary) without further evidence shall not be
treated as sufficient evidence for substantiated fraud,
waste, or abuse.
``(D) HIPAA compliant information only.--For purposes
of this subsection, communications may only occur if
the communications are permitted under the Federal
regulations (concerning the privacy of individually
identifiable health information) promulgated under
section 264(c) of the Health Insurance Portability and
Accountability Act of 1996.
``(2) Quarterly reports.--Beginning two years after the date
of enactment of this subsection, the Secretary shall make
available to MA plans under this part and prescription drug
plans under part D in a timely manner (but no less frequently
than quarterly) and using information submitted to an entity
described in paragraph (1) through the portal (or other
successor technology) described in such paragraph or pursuant
to section 1893, information on fraud, waste, and abuse schemes
and trends in identifying suspicious activity. Information
included in each such report shall--
``(A) include administrative actions, pertinent
information related to opioid overprescribing, and
other data determined appropriate by the Secretary in
consultation with stakeholders; and
``(B) be anonymized information submitted by plans
without identifying the source of such information.
``(3) Clarification.--Nothing in this subsection shall be
construed as precluding or otherwise affecting referrals
described in subparagraph (A) that may otherwise be made to law
enforcement entities or to the Secretary.''.
(b) Contract Requirement to Communicate Plan Corrective Actions
Against Opioid Over-prescribers.--Section 1857(e)(4)(C) of the Social
Security Act (42 U.S.C. 1395w-27(e)(4)(C)) is amended by adding at the
end the following new paragraph:
``(5) Communicating plan corrective actions against opioids
over-prescribers.--
``(A) In general.--Beginning with plan years
beginning on or after January 1, 2021, a contract under
this section with an MA organization shall require the
organization to submit to the Secretary, through the
process established under subparagraph (B), information
on the investigations and other actions taken by such
plans related to providers of services who prescribe a
high volume of opioids.
``(B) Process.--Not later than January 1, 2021, the
Secretary shall, in consultation with stakeholders,
establish a process under which MA plans and
prescription drug plans shall submit to the Secretary
information described in subparagraph (A).
``(C) Regulations.--For purposes of this paragraph,
including as applied under section 1860D-12(b)(3)(D),
the Secretary shall, pursuant to rulemaking--
``(i) specify a definition for the term `high
volume of opioids' and a method for determining
if a provider of services prescribes such a
high volume; and
``(ii) establish the process described in
subparagraph (B) and the types of information
that shall be submitted through such
process.''.
(c) Reference Under Part D to Program Integrity Transparency
Measures.--Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-
104) is amended by adding at the end the following new subsection:
``(m) Program Integrity Transparency Measures.--For program integrity
transparency measures applied with respect to prescription drug plan
and MA plans, see section 1859(i).''.
SEC. 5. EXPANDING ELIGIBILITY FOR MEDICATION THERAPY MANAGEMENT
PROGRAMS UNDER PART D.
Section 1860D-4(c)(2)(A)(ii) of the Social Security Act (42 U.S.C.
1395w-104(c)(2)(A)(ii)) is amended--
(1) by redesignating subclauses (I) through (III) as items
(aa) through (cc), respectively, and adjusting the margins
accordingly;
(2) by striking ``are part D eligible individuals who--'' and
inserting ``are the following:
``(I) Part D eligible individuals
who--''; and
(3) by adding at the end the following new subclause:
``(II) Beginning January 1, 2021, at-
risk beneficiaries for prescription
drug abuse (as defined in paragraph
(5)(C)).''.
SEC. 6. MEDICARE NOTIFICATIONS TO OUTLIER PRESCRIBERS OF OPIOIDS.
Section 1860D-4(c)(4) of the Social Security Act (42 U.S.C. 1395w-
104(c)(4)) is amended by adding at the end the following new paragraph:
``(D) Outlier prescriber notification.--
``(i) Notification.--Beginning not later than
two years after the date of the enactment of
this subparagraph, the Secretary shall, in the
case of a prescriber identified by the
Secretary under clause (ii) to be an outlier
prescriber of opioids, provide, subject to
clause (iv), an annual notification to such
prescriber that such prescriber has been so
identified and that includes resources on
proper prescribing methods and other
information specified in accordance with clause
(iii).
``(ii) Identification of outlier prescribers
of opioids.--
``(I) In general.--The Secretary
shall, subject to subclause (III),
using the valid prescriber National
Provider Identifiers included pursuant
to subparagraph (A) on claims for
covered part D drugs for part D
eligible individuals enrolled in
prescription drug plans under this part
or MA-PD plans under part C and based
on the threshold established under
subclause (II), conduct an analysis to
identify prescribers that are outlier
opioid prescribers for a period
specified by the Secretary.
``(II) Establishment of threshold.--
For purposes of subclause (I) and
subject to subclause (III), the
Secretary shall, after consultation
with stakeholders, establish a
threshold, based on prescriber
specialty and geographic area, for
identifying whether a prescriber in a
specialty and geographic area is an
outlier prescriber of opioids as
compared to other prescribers of
opioids within such specialty and area.
``(III) Exclusions.--The Secretary
may exclude the following individuals
and prescribers from the analysis under
this clause:
``(aa) Individuals receiving
hospice services.
``(bb) Individuals with a
cancer diagnosis.
``(cc) Prescribers who are
the subject of an investigation
by the Centers for Medicare &
Medicaid Services or the Office
of Inspector General of the
Department of Health and Human
Services.
``(iii) Contents of notification.--The
Secretary shall, based on input from
stakeholders, specify the resources and other
information to be included in notifications
provided under clause (i).
``(iv) Modifications and expansions.--
``(I) Frequency.--Beginning 5 years
after the date of the enactment of this
subparagraph, the Secretary may change
the frequency of the notifications
described in clause (i) based on
stakeholder input.
``(II) Expansion to other
prescriptions.--The Secretary may
expand notifications under this
subparagraph to include identifications
and notifications with respect to
concurrent prescriptions of covered
Part D drugs used in combination with
opioids that are considered to have
adverse side effects when so used in
such combination, as determined by the
Secretary.
``(v) Opioids defined.--For purposes of this
subparagraph, the term `opioids' has such
meaning as specified by the Secretary through
program instruction or otherwise.''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 5773, the ``Preventing Addiction for
Susceptible Seniors (PASS) Act of 2018,'' was ordered reported
by the Committee on Ways and Means on May 16, 2018.
The bill requires Medicare prescription drug plans to
establish lock-in programs for seniors at-risk of opioid
overuse. These programs prevent doctor and pharmacy shopping by
requiring individuals to use a single pharmacy for all
prescriptions, providing a central location for all
transactions that can be monitored for abuse or misuse.
Further, the Secretary of Health and Human Services (HHS)
(referred to as the Secretary) is required to establish a
standard, secure electronic prior authorization (ePA) system.
Currently, ePA systems are not standardized. By ensuring
prescriptions are transmitted electronically, plans and
providers can better integrate this information in medical
records and monitor for abuse or misuse of certain medications.
The bill requires the Secretary to establish a secure
Internet website portal (or other successor technology) that
would allow for a secure communication between the Centers for
Medicare & Medicaid Services (CMS), plans providing Part D
coverage, and the Medicare Drug Integrity Contractor (MEDIC)
regarding certain program integrity activities. Plans must
submit information on the investigations and other actions
taken by such plans related to providers who inappropriately
prescribe a high volume of opioids.
The bill defines ``at-risk'' beneficiaries as eligible for
the benefits provided under the Medication Therapy Management
(MTM) Program. The MTM Program was established in 2003 and is a
patient-centric and comprehensive approach to improve
medication use, reduce the risk of adverse events, and improve
medication adherence.
Lastly, the bill requires the Secretary to notify providers
that prescribe opioids in amounts or dosages in excess of their
peers. This analysis would be conducted compared to peers in
the same specialty and geographic area.
B. Background and Need for Legislation
Many Medicare beneficiaries receive opioid prescriptions
through Medicare Part D. Broadly, the Centers for Medicare &
Medicaid Services' (CMS) role in Part D oversight is to provide
guidance to private plans (plan sponsors) that contract with
CMS to offer drug coverage to Medicare beneficiaries. Plan
sponsors are encouraged to identify providers that prescribe
inappropriate amounts of opioids, and in cases of fraud or
abuse, refer those cases for further investigation.
Accordingly, CMS has programs and processes in place to monitor
overprescribing, crack down on abuse, and identify at-risk
beneficiaries.
According to a July 2017 report released by the Department
of Health and Human Services Office of Inspector General, one
third of Medicare Part D beneficiaries received an opioid
prescription in 2016, costing the program $4.1 billion and
representing 79.4 million prescriptions. The analysis also
found that 501,008 Part D beneficiaries received high amounts
of opioids, and 69,563 received ``extreme'' amounts--many as a
result of ``doctor shopping,'' a practice through which
beneficiaries obtain medically unnecessary prescriptions from
multiple pharmacies and prescribers.
This legislation enhances CMS and plan actions and
authority relating to identification of beneficiaries at risk
of opioid abuse or misuse and provides new authority to monitor
and reach out to patients that are at risk. The legislation
also provides new requirements for CMS to monitor and educate
providers that are prescribing opioids in amounts or doses that
exceed their peers.
C. Legislative History
Background
H.R. 5773 was introduced on May 11, 2018, and was referred
to the Committee on Ways and Means and additionally the
Committee on Energy and Commerce.
Committee hearings
On January 17, 2018, the Subcommittee on Oversight held a
hearing on the current landscape and CMS actions to prevent
opioid misuse.
On February 6, 2018, the Subcommittee on Health held a
hearing on removing barriers to prevent and treat opioid abuse
and dependence in Medicare.
On April 25, 2018, the Subcommittee on Trade held a hearing
on stopping the flow of synthetic opioids in the international
mail system.
Committee action
The Committee on Ways and Means marked up H.R. 5773, the
``Preventing Addiction for Susceptible Seniors (PASS) Act of
2018,'' on May 16, 2018, and ordered the bill, as amended,
favorably reported (with a quorum being present) by voice vote.
II. EXPLANATION OF THE BILL
A. The Preventing Addiction for Susceptible Seniors Act of 2018
CURRENT LAW
Under current law, many of the issues addressed by this
bill are voluntary on the part of plans or CMS. As a result,
there is inconsistency across the nation as to how patients and
providers at risk of opioid misuse or abuse are treated.
Plans are not required to have a safe prescribing and
dispensing program for beneficiaries that are prescribed
opioids. Section 704 of the Comprehensive Addiction and
Recovery Act (CARA) of 2016 allows Medicare prescription drug
plans to voluntarily develop a safe prescribing and dispensing
program for beneficiaries that are at risk of abusing or
diverting medications.
Likewise, electronic prior authorization (ePA) transactions
are not required to be standardized across all stakeholders. A
recent HHS report entitled ``Ways to Improve the Part D Appeals
Process'' suggested that increased industry use of ePA
transactions may help resolve issues at the pharmacy between
the ordering provider and the plan, resolving denials before
they enter the appeals process unnecessarily. In Part D, the
ordering prescriber is not a party to the claim rejection
transaction in the pharmacy and cannot provide additional
information to resolve the coverage determination criteria.
This disconnect can adversely affect beneficiary safety and
care.
Additionally, current law Medication Therapy Management
(MTM) Programs do not include beneficiaries at risk of opioid
abuse or misuse. They are limited to beneficiaries that fit the
following criteria:
1. Have multiple chronic diseases (plans may set a
minimum threshold at two or three);
2. Are taking multiple Part D drugs (plans may set a
minimum threshold at any number equal to or between two
and eight); and
3. Are likely to incur annual costs for covered Part
D drugs that are greater or equal to a specified amount
(the cost threshold for 2018 is $3,967).
Finally, while the Secretary is required to monitor and
profile physicians' billing patterns within each area or
locality and provide comparative data to physicians whose
utilization patterns vary significantly from other physicians
in the same payment area or locality, there is no specific
statutory requirement that CMS analyze opioid prescribing
patterns to target education to those who are outliers.
REASONS FOR CHANGE
To prevent opioid overuse by increasing program integrity
efforts and resources for beneficiaries to help ensure
appropriate adherence to prescribed pain medications.
EXPLANATION OF PROVISIONS
Section 1: Short Title: Preventing Addiction for
Susceptible Seniors (PASS) Act of 2018
Section 2: Requiring Prescription Drug Plan Sponsors Under
Medicare to Establish Drug Management Programs for At-Risk
Beneficiaries.
Requires Medicare prescription drug plans to establish
lock-in programs for seniors at-risk of opioid overuse
beginning on or after January 1, 2021.
Section 3: Electronic Prior Authorization for Covered Part
D Drugs.
Inclusion of Electronic Prescription Program: Requires the
Secretary to establish a standard, secure electronic prior
authorization (ePA) system for transmittal of prescriptions
between providers, pharmacies, and plans no later than January
1, 2021. Such program is required to provide for the secure
electronic transmission of a prior authorization request from
the prescribing health care professional for coverage of a Part
D eligible drug for a Part D eligible individual enrolled in
such plan and a response from such plan sponsor to such
healthcare professional.
Electronic Transmission Exclusions: For the purpose of
electronic prior authorization, a fax, a proprietary payer
portal that does not meet standard specified by the Secretary,
or an electronic form will not count as an electronic
transmission.
Electronic Transmission Standards: The electronic
transmission must comply with technical standards adopted by
the Secretary in consultation with the National Council for
Prescription Drug Programs, or other standard setting
organizations determined appropriate by the Secretary, and
other stakeholders including Prescription Drug Plan sponsors,
Medicare Advantage Plan sponsors, healthcare professionals, and
health information technology software vendors.
Electronic Transmission Application: The Secretary may
require the use of such standards in lieu of any other
applicable standards for an electronic transmission.
Sense of Congress: It is the sense of Congress that
increased use of electronic prior authorization will reduce
access delays by resolving coverage issues before prescriptions
for such drugs are transmitted and that a greater priority
should be placed on increasing the adoption of electronic prior
authorization use.
Section 4: Program Integrity Transparency Measures Under
Medicare Parts C and D.
Program Integrity Portal: The Secretary, no later than two
years after the date of enactment, is required to establish a
secure Internet website portal (or other successor technology)
that would allow for a secure communication between the
Secretary, Medicare Advantage and Part D plans, and the
Medicare Drug Integrity Contractor (MEDIC), or other entity
eligible with a contract under section 1893 for carrying out
program integrity activities. Nothing in this section is
intended to prevent the Secretary from implementing this
requirement through new technologies that may deviate from an
internet website portal technology, so long as alternative
technologies are capable of fulfilling the requirements laid
out in statute. The portal is intended to enable referrals by
such plans of substantiated fraud, waste, and abuse for
initiating or assisting investigations, as well as data sharing
among such plans.
Required Uses of Portal: The Secretary is required to use
the portal to disseminate the following information to plans:
(1) providers and suppliers that have been referred through the
portal during the previous 12-month period for program
integrity violations; (2) providers and suppliers who are the
subject of an active exclusion under section 1128 or who are
subject to suspension of payment under 1862(o); and (3)
providers and suppliers who are the subject of an active
revocation of Medicare participation for not satisfying
conditions of participation. If the plan makes a referral
through the portal and such provider or supplier has been the
subject of an administrative action under Medicare or Title XI
with respect to similar activities, the plans in which the
provider or supplier participates are required to be notified.
A plan's referrals could result in additional provider
education, or in serious cases, disciplinary action.
Rulemaking: The Secretary is required to go through
rulemaking to define substantiated fraud, waste, and abuse
using existing guidance provided in the Medicare Program
Integrity Manual 4.7.1. A fraud hotline tip without further
supporting evidence does not constitute sufficient evidence to
be considered substantiated fraud, waste, and abuse.
HIPPA Complaint Information: Communications may only occur
as permitted under Federal regulations concerning the privacy
of individually identifiable health information promulgated
under section 264(c) of the Health Insurance Portability and
Accountability Act of 1996.
Quarterly Reports: Beginning two years after the date of
enactment, the Secretary is required to report to plans, in a
timely manner but not less frequently than quarterly,
information on fraud, waste, and abuse schemes and trends in
identifying suspicious activity based on the information
submitted through the portal. Information included in such
reports must include: (1) administrative actions, pertinent
information related to opioid overprescribing and other data
determined appropriate by the Secretary in consultation with
stakeholders; and (2) anonymized information submitted by plans
without identifying the source of such information.
Clarification: Nothing in this section should be construed
as precluding or otherwise affecting referrals that may
otherwise be made to law enforcement entities or to the
Secretary.
Contract Requirement to Communicate Plan Corrective Actions
Against Opioid Over-Prescribers: Plans are required to submit
to the Secretary, on or after January 1, 2021, information on
the investigations and other actions taken by such plans
related to providers who inappropriately prescribe a high
volume of opioids. The Committee does not intend for this
requirement to take effect if the Secretary has not yet
established a functional portal for the plans to report
corrective actions.
Process: No later than January 1, 2021, the Secretary is
required, in consultation with stakeholders, to establish a
process under which plans will submit information to the
Secretary. The Committee urges CMS to provide plans with
sufficient guidance in a timely manner to smooth reporting and
compliance with these provisions. The Secretary, in developing
this process, is encouraged to address instances in which a
plan may identify a prescriber who prescribes a high volume of
opioids, investigates the issue, and determines that no action
is necessary.
Regulations: Through rulemaking, the Secretary is required
to: (1) define ``high volume of opioids,'' a method for
determining if a provider inappropriately prescribes high
volumes of such drugs; (2) establish a process for reporting
information related to high volume prescribers; and (3)
identify the types of information required to be reported.
Section 5: Expanding Eligibility for Medication Therapy
Management Programs Under Part D.
Beneficiaries defined as ``at-risk'' for opioid overuse are
required to be included in the Medication Therapy Management
(MTM) Programs, beginning January 1, 2021. The Secretary in
implementing these provisions shall ensure that requirements
under MTM do not duplicate those case management services
provided under the ``lock-in'' program. Additionally, the
Committee intends for the Secretary to establish adequate
training protocols, and encourage the use of innovative
technologies, that will ensure that pharmacists and other
healthcare professionals engaging with the at-risk beneficiary
population through MTM are adequately trained to address the
needs of this population, particularly as it applies to drugs
that when used in combination with an opioid may result in an
adverse drug interaction as well as potentiator drugs.
Section 6: Medicare Notification to Outlier Prescribers of
Opioids.
Outlier Prescriber Notification: Beginning no later than
two years after the date of enactment and annually thereafter,
the Secretary is required to notify Medicare Part D prescribers
who are outlier prescribers of opioids.
Identification of Outlier Prescribers of Opioids: The
Secretary's analysis shall be based on an established threshold
and the valid prescriber National Provider Identifiers on
claims for covered Part D drugs provided under prescription
drug plans or Medicare Advantage Prescription Drug Plans. The
Committee intends for all Part D opioid prescribers to be
subject to analysis, with exceptions established below.
Establishment of Threshold: The Secretary, after
consultation with stakeholders, shall establish a threshold,
based on prescriber specialty and geographic area for
identifying an outlier prescriber of opioids as compared to
other prescribers of opioids within such specialty and area.
The intent of the Committee is for the threshold to reflect a
statistically valid method for identifying prescribers whose
prescribing patterns vary significantly from other physicians
in their specialty and geographic area, modeled after the
Comparative Billing Reports CMS has previously developed for
opioid prescribers in other parts of Medicare.
Exclusions: The Secretary may exclude the following
individuals and prescribers from the analysis: (1) individuals
receiving hospice services, (2) individuals with a cancer
diagnosis, and (3) prescribers who are subjects of an
investigation by the Inspector General.
Contents of Notification: Based on input from stakeholders,
the Secretary is required to specify the resources and other
information to be included in the notifications to prescribers.
Frequency: Beginning five years after the date of
enactment, the Secretary may change the frequency of the
notifications based on stakeholder input.
Expansion to Other Prescriptions: The Secretary may also
expand notifications to concurrent prescriptions used in
combination with opioids that are considered to have adverse
side effects when used in such combination and potentiator
drugs.
EFFECTIVE DATE
Requiring Prescription Drug Plan Sponsors Under Medicare to
Establish Drug Management Programs for At-Risk Beneficiaries:
Effective beginning on or after January 1, 2021.
Inclusion of Electronic Prescription Program: The Secretary
is required to establish a standard, secure electronic prior
authorization (ePA) system no later than January 1, 2021.
Program Integrity Portal: No later than two years after the
date of enactment, the Secretary is required to establish a
secure Internet website portal (or other successor technology).
Quarterly Reports: Beginning two years after the date of
enactment, the Secretary is required to report to plans
information on fraud, waste, and abuse schemes and trends in
identifying suspicious activity based on the information
submitted through the portal.
Contract Requirement to Communicate Plan Corrective Actions
Against Opioid Over-Prescribers: On or after January 1, 2021,
plans are required to submit to the Secretary information on
the investigations and other actions taken by such plans
related to providers who prescribe a high volume of opioids. No
later than January 1, 2021, the Secretary is required to
establish a process under which plans will submit to the
Secretary information.
Expanding Eligibility for Medication Therapy Management
Programs Under Part D: Effective January 1, 2021, beneficiaries
defined as ``at-risk'' for opioid overuse are required to be
eligible.
Outlier Prescriber Notification: No later than two years
after the date of enactment, the Secretary is required to
annually notify Medicare Part D prescribers of their outlier
status.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 5773, the PASS Act of 2018, on May 16,
2018.
The Chairman`s amendment in the nature of a substitute was
adopted by a voice vote (with a quorum being present).
The bill, H.R. 5773, was ordered favorably reported as
amended by voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 5773, as
reported. The Committee agrees with the estimate prepared by
the Congressional Budget Office (CBO), which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 6, 2018.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for the opioid-related
legislation ordered to be reported on May 16, 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Tom Bradley.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
Opioid Legislation
Summary: On May 16, 2018, the House Committee on Ways and
Means ordered seven bills to be reported related to the
nation's response to the opioid epidemic. Generally, the bills
would:
Expand Medicare coverage of treatment for
opioid use disorder;
Give Medicare providers and health plans
additional tools to curtail inappropriate prescribing
and use of opioids;
Require the completion of studies and
reports related to opioid use and misuse in Medicare;
and
Require the United States Postal Service and
Customs and Border Protection (CBP) to reduce illegal
shipment of opioids across international borders.
Because the bills are related, CBO is publishing a single
comprehensive document that includes estimates for each piece
of legislation.
CBO estimates that enacting four of the bills would affect
direct spending; therefore, pay-as-you-go procedures apply for
those bills. None of the bills would affect revenues.
CBO estimates that although enacting one bill of the seven
included in this document (H.R. 5776) would increase net direct
spending and on-budget deficits over the four consecutive 10-
year periods beginning in 2029, those effects would not exceed
the threshold established by the Congress for long-term costs.
CBO estimates that none of the remaining bills would increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
None of the bills contain intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA).
Estimated cost to the Federal Government: The estimates in
this document do not include the effects of interactions among
the bills. If all seven bills were combined and enacted as one
piece of legislation, the budgetary effects would be different
from the sum of the estimates in this document, although CBO
expects that those differences would be small. The effects of
this legislation fall within functions 550 (health), 570
(Medicare), and 750 (administration of justice).
Basis of estimate: For this estimate, CBO assumes that all
of the legislation will be enacted late in 2018 and that
authorized and estimated amounts will be appropriated each
year. Outlays for discretionary programs are estimated based on
historical spending patterns for similar programs.
Uncertainty
CBO aims to produce estimates that generally reflect the
middle of a range of the most likely budgetary outcomes that
would result if the legislation was enacted. Because data on
the utilization of mental health and substance abuse treatment
under Medicaid and Medicare is scarce, CBO cannot precisely
predict how patients or providers would respond to some policy
changes or what budgetary effects would result. In addition,
several of the bills would give the Department of Health and
Human Services (HHS) considerable latitude in designing and
implementing policies. Budgetary effects could differ from
those provided in CBO's analyses depending on those decisions.
Direct Spending
Table 1 lists the four bills included in this estimate that
would affect direct spending.
H.R. 5676, the Stop Excessive Narcotics in our Retirement
Communities Protection Act of 2018, would allow prescription
drug plans to suspend payments to pharmacies while fraud
investigations are pending. CBO expects that enacting the
legislation would reduce payments by those plans to pharmacies
and result in lower premiums for benefits under Medicare's Part
D. CBO estimates that the reduction in premiums would lower
federal spending for Part D by $9 million over the 2019-2028
period.
TABLE 1.--ESTIMATED CHANGES IN MANDATORY SPENDING
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019-2023 2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
H.R. 5676, Stop Excessive
Narcotics in our Retirement
Communities Protection Act of
2018:
Budget Authority........... 0 0 -1 -1 -1 -1 -1 -1 -1 -1 -1 -4 -9
Outlays.................... 0 0 -1 -1 -1 -1 -1 -1 -1 -1 -1 -4 -9
H.R. 5773, Preventing Addiction
for Susceptible Seniors Act of
2018:a
Budget Authority........... 0 0 0 -6 -7 -7 -7 -8 -9 -9 -11 -20 -64
Outlays.................... 0 0 0 -6 -7 -7 -7 -8 -9 -9 -11 -20 -64
H.R. 5776, the Medicare and
Opioid Safe Treatment Act of
2018:a
Budget Authority........... 0 8 0 20 20 25 30 30 35 35 40 73 243
Outlays.................... 0 2 4 22 20 25 30 30 35 35 40 73 243
H.R. 5788, Securing the
International Mail Against
Opioids Act of 2018:a
Budget Authority........... 0 0 * * * * * * * * * * *
Outlays.................... 0 0 * * * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
1Annual amounts may not sum to totals because of rounding. * = between -$500,000 and $500,000.
aThis bill also would affect spending subject to appropriation.
H.R. 5773, the Preventing Addiction for Susceptible Seniors
Act of 2018, would require Part D prescription drug plans to
provide drug management programs for Medicare beneficiaries who
are at risk for prescription drug abuse. (Under current law,
Part D plans are permitted but not required to establish such
programs as of 2019.) Based on an analysis of the number of
plans currently providing those programs, CBO estimates that
enacting H.R. 5773 would lower federal spending by $64 million
over the 2019-2028 period by reducing the number of
prescriptions filled and Medicare's payments for controlled
substances.
Two provisions of H.R. 5773 would have no significant
budgetary effect; they are described later in this document.
H.R. 5776, the Medicare and Opioid Safe Treatment Act of
2018, would appropriate $8 million in 2019, which would be
available until expended, for Federally Qualified Health
Centers and Rural Health Clinics to support training in the
treatment of opioid use disorder. CBO expects that $8 million
would be spent between 2019 and 2021.
H.R. 5776 also would expand the availability of medication-
assisted treatment (MAT) for Medicare beneficiaries with opioid
use disorder. The bill would allow treatment programs certified
by the Substance Abuse and Mental Health Services
Administration (SAMHSA) to become Medicare-participating
providers.\1\ H.R. 5776 also would direct the Secretary of HHS
to create a new schedule of bundled payments for MAT through
certified programs and grant the Secretary considerable
discretion for defining bundles and establishing payment rates.
---------------------------------------------------------------------------
\1\MAT combines behavioral therapy and pharmaceutical treatment for
substance use disorders. Under current law, methadone (an opioid used
to treat and manage dependence on other drugs, such as heroin) can be
dispensed only by SAMHSA-certified treatment programs, which do not
participate in Medicare. Other drugs used in MAT, including
buprenorphine and naltrexone, can be dispensed more widely.
---------------------------------------------------------------------------
CBO projects that, beginning in 2021, about 3,000 Medicare
beneficiaries who would not be treated for opioid abuse under
current law would newly enroll each year in treatment offered
by SAMHSA-certified programs and that the annual cost per
participant would range from about $6,000 to about $10,000,
depending largely on the medications dispensed and the period
for which beneficiaries adhered to the protocol. CBO's
projection of the number of beneficiaries who would receive
treatment takes into consideration the number of beneficiaries
estimated to have opioid-use disorder, the number already
receiving some form of treatment, and the availability of
providers to treat those who newly enroll in MAT. To develop a
per capita treatment cost, CBO analyzed rates for MAT paid by
other payers, as well as Medicare spending for health care
services typically used by people receiving MAT. CBO estimates
that the new MAT benefit would increase direct spending by $235
million over the 2019-2028 period.
CBO estimates that enacting H.R. 5776 would increase net
Medicare spending by $243 million over the 2019-2028 period.
(If enacted, H.R. 5776 would also affect spending subject to
appropriation; CBO has not completed an estimate of that
amount.)
H.R. 5788, the Securing the International Mail Against
Opioids Act of 2018, would establish a new fee for certain
items mailed to the United States from overseas, beginning
January 1, 2020. Initially, the fee for most such items would
be one dollar, but the amount could be adjusted annually
thereafter. Using information provided by CBP, CBO estimates
that about $100 million in new fees would be collected over the
2020-2028 period. The collections would be divided equally
between CBP and the Postal Service and spent by those agencies
on activities related to the processing of inbound mail. CBO
estimates that the net effect on federal spending in each year
would be insignificant. (If enacted, H.R. 5788 would also
affect spending subject to appropriation; those effects are
described below.)
Spending Subject to Appropriation
For this document, CBO has grouped bills with spending that
would be subject to appropriation into three general
categories:
Bills with provisions that would have no
budgetary effect;
Bills with provisions for which CBO has
estimated an authorization of appropriations (see Table
2); and
Bills with provisions that would affect
spending subject to appropriation for which CBO has not
yet completed an estimate.
No Budgetary Effect. CBO estimates that three of the bills
have provisions that would not significantly affect direct
spending, revenues, or spending subject to appropriation.
H.R. 5773, the Preventing Addiction for Susceptible Seniors
Act of 2018, would require health care professionals to submit
prior authorization requests electronically, starting on
January 1, 2021, for drugs covered under Medicare Part D.
Taking into account that many prescribers already use
electronic methods to submit such requests, CBO estimates that
enacting that Section 3 of H.R. 5773 would not significantly
affect direct spending for Part D.
Section 5 of that bill would expand medication therapy
management programs under Medicare Part D to include
beneficiaries who are at risk for prescription drug abuse.
Because relatively few beneficiaries would be affected by this
provision, CBO estimates that its enactment would not
significantly affect direct spending for Part D.
Section 6 of that bill would require the Secretary of HHS
on an annual basis to identify high prescribers of opioids and
furnish them with information about proper prescribing methods.
Because HHS already has the capacity to meet those
requirements, CBO estimates that enacting that provision would
not impose additional administrative costs on the agency.
H.R. 5775, the Providing Reliable Options for Patients and
Educational Resources Act of 2018, would require prescription
drug plans that provide coverage under Medicare Part D to
furnish information to beneficiaries about the risks of opioid
use and the availability of alternative treatments for pain.
The bill also would require Medicare Advantage plans and
prescription drug plans to provide information regarding safe
disposal of controlled substances in home health risk
assessments and medication therapy management programs,
respectively. In CBO's estimation, neither proposal would have
a budgetary effect because those activities would not impose
significant administrative costs on plans or federal agencies.
In addition, H.R. 5775 would restrict the use of certain
pain-related questions on the Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) survey, which is
administered by the Centers for Medicare & Medicaid Services
(CMS). The survey is one measure used in CMS's Hospital Value-
Based Purchasing (VBP) Program, which adjusts payments to acute
care hospitals on the basis of the quality of care they provide
to Medicare beneficiaries. Because the VBP program is funded by
reducing base payments to all hospitals, CBO estimates that
changing the HCAHPS survey would not affect the total amount
paid by Medicare.
H.R. 5776, the Medicare and Opioid Safe Treatment Act of
2018, in section 3, would require CMS, beginning on January 1,
2020, to review and possibly modify payments made through
Medicare's Hospital Outpatient Prospective Payment System for
certain opioid and nonopioid pain management treatments and
technologies. CMS could revise payments if the Secretary of HHS
determined that there was a financial incentive to use opioids
in place of nonopioid medications. The budget neutrality
requirement under current law would apply to such revisions,
and the rest of the payment rates within the system would be
subject to offsetting adjustments. Because the changes would be
made in a budget-neutral manner, CBO estimates that this
provision would have no budgetary effect.
Section 6 of H.R. 5776 would explicitly authorize the
Center for Medicare and Medicaid Innovation (CMMI) to test
approaches for expanding beneficiaries' awareness of
psychological services and to help those beneficiaries curtail
use of hospital-based mental health or behavioral health
services. Because CMMI already has that authority, CBO
estimates that enacting the legislation would not affect
federal spending.
Estimated Authorizations. Table 2 shows CBO's estimates of
the authorization of appropriations for provisions in four
bills. For those estimates, CBO assumes that appropriated funds
would be available to implement those provisions.
H.R. 5723, the Expanding Oversight of Opioid Prescribing
and Payment Act of 2018, would require the Medicare Payment
Advisory Commission to report to the Congress on payments for
pain treatment, incentives for prescribing opioids in inpatient
and outpatient settings, and documented tracking of opioid use
from Medicare claims data. CBO estimates that producing such a
report would cost less than $500,000 over the 2019-2023 period.
TABLE 2.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2019-2023
----------------------------------------------------------------------------------------------------------------
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
H.R. 5723, Expanding Oversight of Opioid
Prescribing and Payment Act of 2018:
Estimated Authorization Level.............. 0 * 0 0 0 0 *
Estimated Outlays.......................... 0 * 0 0 0 0 *
H.R. 5773, Preventing Addiction for Susceptible
Seniors Act of 2018:a
Estimated Authorization Level.............. 0 2 2 2 2 2 9
Estimated Outlays.......................... 0 2 2 2 2 2 9
H.R. 5776, Medicare and Opioid Safe Treatment
Act of 2018:a
Estimated Authorization Level.............. 0 1 0 0 0 0 1
Estimated Outlays.......................... 0 1 0 0 0 0 1
H.R. 5788, Securing the International Mail
Against Opioids Act of 2018:a
Estimated Authorization Level.............. 0 100 0 0 0 0 100
Estimated Outlays.......................... 0 40 40 20 0 0 100
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between zero and $500,000.
aThis bill also would affect mandatory spending.
H.R. 5773, the Preventing Addiction for Susceptible Seniors
Act of 2018, would require the Secretary of HHS to establish a
secure Internet portal to allow HHS, Medicare Advantage plans,
and Medicare Part D plans to exchange information about fraud,
waste, and abuse among providers and suppliers no later than
two years after enactment. H.R. 5773 also would require
organizations with Medicare Advantage contracts to submit
information on investigations related to providers suspected of
prescribing large volumes of opioids through a process
established by the Secretary no later than January 2021. Based
on historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5773 would cost approximately
$9 million over the 2019-2023 period.
H.R. 5776, the Medicare and Opioid Safe Treatment Act of
2018, would direct the Secretary of HHS to report to the
Congress on the availability of supplemental benefits to pay
for treatment or prevention of substance abuse among enrollees
in Medicare Advantage plans. The Secretary also would report on
coverage of and payment for pain treatment and substance use
disorders under Medicare. CBO estimates that producing those
reports would cost $1 million over five years.
H.R. 5788, the Securing the International Mail Against
Opioids Act of 2018, would direct the Postal Service, CBP, and
other federal agencies to collaborate to develop technology to
detect opioids and other drugs that enter the United States in
the mail. Using information provided by CBP, CBO estimates that
it would cost roughly $100 million over the 2019-2021 period to
deploy drug detection systems at international mail facilities.
Other Authorizations. CBO has determined that provisions in
two bills--H.R. 5774, Combating Opioid Abuse for Care in
Hospitals Act of 2018; and H.R. 5776, the Medicare and Safe
Opioid Treatment Act of 2018--would increase authorization
levels, but has not completed estimates of amounts. Any
spending that would result from those authorizations would be
subject to future appropriation action.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. Four of the bills discussed in this document contain
direct spending and are subject to pay-as-you-go procedures.
Details about the amount of direct spending in those bills can
be found in Table 1.
Increase in long-term direct spending and deficits: CBO
estimates that although enacting H.R. 5776, the Medicare and
Opioid Safe Treatment Act of 2018, would increase net direct
spending and on-budget deficits over the four consecutive 10-
year periods beginning in 2029, those effects would not exceed
the threshold established by the Congress for long-term costs
($2.5 billion for net direct spending and $5 billion for on-
budget deficits). CBO estimates that none of the remaining
bills would increase net direct spending or on-budget deficits
in any of the four consecutive 10-year periods beginning in
2029.
Mandates: None of the bills contains intergovernmental or
private-sector mandates as defined in UMRA.
Previous CBO estimate: On June 6, 2018, CBO issued an
estimate for 59 opioid-related bills ordered reported by the
House Committee on Energy and Commerce on May 9 and May 17,
2018. Several of those bills contain provisions that are
identical or similar to those in the legislation ordered
reported by the Committee on Ways and Means, and for those
provisions, CBO's estimates are the same.
In particular, several sections in H.R. 5773, the
Preventing Addiction for Susceptible Seniors Act of 2018,
contain provisions that are identical or similar to those in
five bills listed in the other estimate:
Section 2, which would require prescription
drug plans to implement drug management programs, is
identical to a provision in H.R. 5675.
Section 3, regarding electronic prior
authorization for prescriptions under Medicare's Part
D, is similar to a provision in H.R. 4841.
Section 4, which would mandate the creation
of a new Internet portal to allow various stakeholders
to exchange information, is identical to a provision in
H.R. 5715.
Section 5, which would expand medication
therapy management, is the same as a provision in H.R.
5684.
Section 6, regarding prescriber
notification, is identical to H.R. 5716.
In addition, in this estimate, a provision related to
Medicare beneficiary education in section 2 of H.R. 5775, the
Providing Reliable Options for Patients and Educational
Resources Act of 2018, is the same as a provision in H.R. 5686,
the Medicare Clear Health Options in Care for Enrollees Act of
2018, in CBO's estimate for the Committee on Energy and
Commerce.
Estimate prepared by: Federal costs, Medicare: Philippa
Haven, Lori Housman, Jamease Kowalczyk, Lara Robillard, Sarah
Sajewski, Colin Yee, and Rebecca Yip; U.S. Postal Service and
Customs and Border Protection: Mark Grabowicz; Mandates: Andrew
Laughlin; Fact Checking: Zachary Byrum and Kate Kelly.
Estimate reviewed by: Tom Bradley, Chief, Health Systems
and Medicare Cost Estimates Unit; Kim P. Cawley, Chief, Natural
Resources Cost Estimates Unit; Susan Willie, Chief, Mandates
Unit; Leo Lex, Deputy Assistant Director for Budget Analysis;
Theresa A. Gullo, Assistant Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program;
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139; or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
F. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part C--Medicare+Choice Program
* * * * * * *
contracts with medicare+choice organizations
Sec. 1857. (a) In General.--The Secretary shall not permit
the election under section 1851 of a Medicare+Choice plan
offered by a Medicare+Choice organization under this part, and
no payment shall be made under section 1853 to an organization,
unless the Secretary has entered into a contract under this
section with the organization with respect to the offering of
such plan. Such a contract with an organization may cover more
than 1 Medicare+Choice plan. Such contract shall provide that
the organization agrees to comply with the applicable
requirements and standards of this part and the terms and
conditions of payment as provided for in this part.
(b) Minimum Enrollment Requirements.--
(1) In general.--Subject to paragraph (2), the
Secretary may not enter into a contract under this
section with a Medicare+Choice organization unless the
organization has--
(A) at least 5,000 individuals (or 1,500
individuals in the case of an organization that
is a provider-sponsored organization) who are
receiving health benefits through the
organization, or
(B) at least 1,500 individuals (or 500
individuals in the case of an organization that
is a provider-sponsored organization) who are
receiving health benefits through the
organization if the organization primarily
serves individuals residing outside of
urbanized areas.
(2) Application to msa plans.--In applying paragraph
(1) in the case of a Medicare+Choice organization that
is offering an MSA plan, paragraph (1) shall be applied
by substituting covered lives for individuals.
(3) Allowing transition.--The Secretary may waive the
requirement of paragraph (1) during the first 3
contract years with respect to an organization.
(c) Contract Period and Effectiveness.--
(1) Period.--Each contract under this section shall
be for a term of at least 1 year, as determined by the
Secretary, and may be made automatically renewable from
term to term in the absence of notice by either party
of intention to terminate at the end of the current
term.
(2) Termination authority.--In accordance with
procedures established under subsection (h), the
Secretary may at any time terminate any such contract
if the Secretary determines that the organization--
(A) has failed substantially to carry out the
contract;
(B) is carrying out the contract in a manner
inconsistent with the efficient and effective
administration of this part; or
(C) no longer substantially meets the
applicable conditions of this part.
(3) Effective date of contracts.--The effective date
of any contract executed pursuant to this section shall
be specified in the contract, except that in no case
shall a contract under this section which provides for
coverage under an MSA plan be effective before January
1999 with respect to such coverage.
(4) Previous terminations.--
(A) In general.--The Secretary may not enter
into a contract with a Medicare+Choice
organization if a previous contract with that
organization under this section was terminated
at the request of the organization within the
preceding 2-year period, except as provided in
subparagraph (B) and except in such other
circumstances which warrant special
consideration, as determined by the Secretary.
(B) Earlier re-entry permitted where change
in payment policy.--Subparagraph (A) shall not
apply with respect to the offering by a
Medicare+Choice organization of a
Medicare+Choice plan in a Medicare+Choice
payment area if during the 6-month period
beginning on the date the organization notified
the Secretary of the intention to terminate the
most recent previous contract, there was a
legislative change enacted (or a regulatory
change adopted) that has the effect of
increasing payment amounts under section 1853
for that Medicare+Choice payment area.
(5) Contracting authority.--The authority vested in
the Secretary by this part may be performed without
regard to such provisions of law or regulations
relating to the making, performance, amendment, or
modification of contracts of the United States as the
Secretary may determine to be inconsistent with the
furtherance of the purpose of this title.
(d) Protections Against Fraud and Beneficiary Protections.--
(1) Periodic auditing.--The Secretary shall provide
for the annual auditing of the financial records
(including data relating to medicare utilization and
costs, including allowable costs under section 1858(c))
of at least one-third of the Medicare+Choice
organizations offering Medicare+Choice plans under this
part. The Comptroller General shall monitor auditing
activities conducted under this subsection.
(2) Inspection and audit.--Each contract under this
section shall provide that the Secretary, or any person
or organization designated by the Secretary--
(A) shall have the right to timely inspect or
otherwise evaluate (i) the quality,
appropriateness, and timeliness of services
performed under the contract, and (ii) the
facilities of the organization when there is
reasonable evidence of some need for such
inspection, and
(B) shall have the right to timely audit and
inspect any books and records of the
Medicare+Choice organization that pertain (i)
to the ability of the organization to bear the
risk of potential financial losses, or (ii) to
services performed or determinations of amounts
payable under the contract.
(3) Enrollee notice at time of termination.--Each
contract under this section shall require the
organization to provide (and pay for) written notice in
advance of the contract's termination, as well as a
description of alternatives for obtaining benefits
under this title, to each individual enrolled with the
organization under this part.
(4) Disclosure.--
(A) In general.--Each Medicare+Choice
organization shall, in accordance with
regulations of the Secretary, report to the
Secretary financial information which shall
include the following:
(i) Such information as the Secretary
may require demonstrating that the
organization has a fiscally sound
operation.
(ii) A copy of the report, if any,
filed with the Secretary containing the
information required to be reported
under section 1124 by disclosing
entities.
(iii) A description of transactions,
as specified by the Secretary, between
the organization and a party in
interest. Such transactions shall
include--
(I) any sale or exchange, or
leasing of any property between
the organization and a party in
interest;
(II) any furnishing for
consideration of goods,
services (including management
services), or facilities
between the organization and a
party in interest, but not
including salaries paid to
employees for services provided
in the normal course of their
employment and health services
provided to members by
hospitals and other providers
and by staff, medical group (or
groups), individual practice
association (or associations),
or any combination thereof; and
(III) any lending of money or
other extension of credit
between an organization and a
party in interest.
The Secretary may require that information
reported respecting an organization which
controls, is controlled by, or is under common
control with, another entity be in the form of
a consolidated financial statement for the
organization and such entity.
(B) Party in interest defined.--For the
purposes of this paragraph, the term ``party in
interest'' means--
(i) any director, officer, partner,
or employee responsible for management
or administration of a Medicare+Choice
organization, any person who is
directly or indirectly the beneficial
owner of more than 5 percent of the
equity of the organization, any person
who is the beneficial owner of a
mortgage, deed of trust, note, or other
interest secured by, and valuing more
than 5 percent of the organization,
and, in the case of a Medicare+Choice
organization organized as a nonprofit
corporation, an incorporator or member
of such corporation under applicable
State corporation law;
(ii) any entity in which a person
described in clause (i)--
(I) is an officer or
director;
(II) is a partner (if such
entity is organized as a
partnership);
(III) has directly or
indirectly a beneficial
interest of more than 5 percent
of the equity; or
(IV) has a mortgage, deed of
trust, note, or other interest
valuing more than 5 percent of
the assets of such entity;
(iii) any person directly or
indirectly controlling, controlled by,
or under common control with an
organization; and
(iv) any spouse, child, or parent of
an individual described in clause (i).
(C) Access to information.--Each
Medicare+Choice organization shall make the
information reported pursuant to subparagraph
(A) available to its enrollees upon reasonable
request.
(5) Loan information.--The contract shall require the
organization to notify the Secretary of loans and other
special financial arrangements which are made between
the organization and subcontractors, affiliates, and
related parties.
(6) Review to ensure compliance with care management
requirements for specialized medicare advantage plans
for special needs individuals.--In conjunction with the
periodic audit of a specialized Medicare Advantage plan
for special needs individuals under paragraph (1), the
Secretary shall conduct a review to ensure that such
organization offering the plan meets the requirements
described in section 1859(f)(5).
(e) Additional Contract Terms.--
(1) In general.--The contract shall contain such
other terms and conditions not inconsistent with this
part (including requiring the organization to provide
the Secretary with such information) as the Secretary
may find necessary and appropriate.
(2) Cost-sharing in enrollment-related costs.--
(A) In general.--A Medicare+Choice
organization and a PDP sponsor under part D
shall pay the fee established by the Secretary
under subparagraph (B).
(B) Authorization.--The Secretary is
authorized to charge a fee to each
Medicare+Choice organization with a contract
under this part and each PDP sponsor with a
contract under part D that is equal to the
organization' or sponsor's pro rata share (as
determined by the Secretary) of the aggregate
amount of fees which the Secretary is directed
to collect in a fiscal year. Any amounts
collected shall be available without further
appropriation to the Secretary for the purpose
of carrying out section 1851 (relating to
enrollment and dissemination of information),
section 1860D-1(c), and section 4360 of the
Omnibus Budget Reconciliation Act of 1990
(relating to the health insurance counseling
and assistance program).
(C) Authorization of appropriations.--There
are authorized to be appropriated for the
purposes described in subparagraph (B) for each
fiscal year beginning with fiscal year 2001 and
ending with fiscal year 2005 an amount equal to
$100,000,000, and for each fiscal year
beginning with fiscal year 2006 an amount equal
to $200,000,000, reduced by the amount of fees
authorized to be collected under this paragraph
and section 1860D-12(b)(3)(D) for the fiscal
year.
(D) Limitation.--In any fiscal year the fees
collected by the Secretary under subparagraph
(B) shall not exceed the lesser of--
(i) the estimated costs to be
incurred by the Secretary in the fiscal
year in carrying out the activities
described in section 1851 and section
1860D-1(c) and section 4360 of the
Omnibus Budget Reconciliation Act of
1990; or
(ii)(I) $200,000,000 in fiscal year
1998;
(II) $150,000,000 in fiscal year
1999;
(III) $100,000,000 in fiscal year
2000;
(IV) the Medicare+Choice portion (as
defined in subparagraph (E)) of
$100,000,000 in fiscal year 2001 and
each succeeding fiscal year before
fiscal year 2006; and
(V) the applicable portion (as
defined in subparagraph (F)) of
$200,000,000 in fiscal year 2006 and
each succeeding fiscal year.
(E) Medicare+choice portion defined.--In this
paragraph, the term ``Medicare+Choice portion''
means, for a fiscal year, the ratio, as
estimated by the Secretary, of--
(i) the average number of individuals
enrolled in Medicare+Choice plans
during the fiscal year, to
(ii) the average number of
individuals entitled to benefits under
part A, and enrolled under part B,
during the fiscal year.
(F) Applicable portion defined.--In this
paragraph, the term ``applicable portion''
means, for a fiscal year--
(i) with respect to MA organizations,
the Secretary's estimate of the total
proportion of expenditures under this
title that are attributable to
expenditures made under this part
(including payments under part D that
are made to such organizations); or
(ii) with respect to PDP sponsors,
the Secretary's estimate of the total
proportion of expenditures under this
title that are attributable to
expenditures made to such sponsors
under part D.
(3) Agreements with federally qualified health
centers.--
(A) Payment levels and amounts.--A contract
under this section with an MA organization
shall require the organization to provide, in
any written agreement described in section
1853(a)(4) between the organization and a
federally qualified health center, for a level
and amount of payment to the federally
qualified health center for services provided
by such health center that is not less than the
level and amount of payment that the plan would
make for such services if the services had been
furnished by a entity providing similar
services that was not a federally qualified
health center.
(B) Cost-sharing.--Under the written
agreement referred to in subparagraph (A), a
federally qualified health center must accept
the payment amount referred to in such
subparagraph plus the Federal payment provided
for in section 1833(a)(3)(B) as payment in full
for services covered by the agreement, except
that such a health center may collect any
amount of cost-sharing permitted under the
contract under this section, so long as the
amounts of any deductible, coinsurance, or
copayment comply with the requirements under
section 1854(e).
(4) Requirement for minimum medical loss ratio.--If
the Secretary determines for a contract year (beginning
with 2014) that an MA plan has failed to have a medical
loss ratio of at least .85--
(A) the MA plan shall remit to the Secretary
an amount equal to the product of--
(i) the total revenue of the MA plan
under this part for the contract year;
and
(ii) the difference between .85 and
the medical loss ratio;
(B) for 3 consecutive contract years, the
Secretary shall not permit the enrollment of
new enrollees under the plan for coverage
during the second succeeding contract year; and
(C) the Secretary shall terminate the plan
contract if the plan fails to have such a
medical loss ratio for 5 consecutive contract
years.
(5) Communicating plan corrective actions against
opioids over-prescribers.--
(A) In general.--Beginning with plan years
beginning on or after January 1, 2021, a
contract under this section with an MA
organization shall require the organization to
submit to the Secretary, through the process
established under subparagraph (B), information
on the investigations and other actions taken
by such plans related to providers of services
who prescribe a high volume of opioids.
(B) Process.--Not later than January 1, 2021,
the Secretary shall, in consultation with
stakeholders, establish a process under which
MA plans and prescription drug plans shall
submit to the Secretary information described
in subparagraph (A).
(C) Regulations.--For purposes of this
paragraph, including as applied under section
1860D-12(b)(3)(D), the Secretary shall,
pursuant to rulemaking--
(i) specify a definition for the term
``high volume of opioids'' and a method
for determining if a provider of
services prescribes such a high volume;
and
(ii) establish the process described
in subparagraph (B) and the types of
information that shall be submitted
through such process.
(f) Prompt Payment by Medicare+Choice Organization.--
(1) Requirement.--A contract under this part shall
require a Medicare+Choice organization to provide
prompt payment (consistent with the provisions of
sections 1816(c)(2) and 1842(c)(2)) of claims submitted
for services and supplies furnished to enrollees
pursuant to the contract, if the services or supplies
are not furnished under a contract between the
organization and the provider or supplier (or in the
case of a Medicare+Choice private fee-for-service plan,
if a claim is submitted to such organization by an
enrollee).
(2) Secretary's option to bypass noncomplying
organization.--In the case of a Medicare+Choice
eligible organization which the Secretary determines,
after notice and opportunity for a hearing, has failed
to make payments of amounts in compliance with
paragraph (1), the Secretary may provide for direct
payment of the amounts owed to providers and suppliers
(or, in the case of a Medicare+Choice private fee-for-
service plan, amounts owed to the enrollees) for
covered services and supplies furnished to individuals
enrolled under this part under the contract. If the
Secretary provides for the direct payments, the
Secretary shall provide for an appropriate reduction in
the amount of payments otherwise made to the
organization under this part to reflect the amount of
the Secretary's payments (and the Secretary's costs in
making the payments).
(3) Incorporation of certain prescription drug plan
contract requirements.--The following provisions shall
apply to contracts with a Medicare Advantage
organization offering an MA-PD plan in the same manner
as they apply to contracts with a PDP sponsor offering
a prescription drug plan under part D:
(A) Prompt payment.--Section 1860D-12(b)(4).
(B) Submission of claims by pharmacies
located in or contracting with long-term care
facilities.--Section 1860D-12(b)(5).
(C) Regular update of prescription drug
pricing standard.--Section 1860D-12(b)(6).
(g) Intermediate Sanctions.--
(1) In general.--If the Secretary determines that a
Medicare+Choice organization with a contract under this
section--
(A) fails substantially to provide medically
necessary items and services that are required
(under law or under the contract) to be
provided to an individual covered under the
contract, if the failure has adversely affected
(or has substantial likelihood of adversely
affecting) the individual;
(B) imposes premiums on individuals enrolled
under this part in excess of the amount of the
Medicare+Choice monthly basic and supplemental
beneficiary premiums permitted under section
1854;
(C) acts to expel or to refuse to re-enroll
an individual in violation of the provisions of
this part;
(D) engages in any practice that would
reasonably be expected to have the effect of
denying or discouraging enrollment (except as
permitted by this part) by eligible individuals
with the organization whose medical condition
or history indicates a need for substantial
future medical services;
(E) misrepresents or falsifies information
that is furnished--
(i) to the Secretary under this part,
or
(ii) to an individual or to any other
entity under this part;
(F) fails to comply with the applicable
requirements of section 1852(j)(3) or
1852(k)(2)(A)(ii);
(G) employs or contracts with any individual
or entity that is excluded from participation
under this title under section 1128 or 1128A
for the provision of health care, utilization
review, medical social work, or administrative
services or employs or contracts with any
entity for the provision (directly or
indirectly) through such an excluded individual
or entity of such services;
(H) except as provided under subparagraph (C)
or (D) of section 1860D-1(b)(1), enrolls an
individual in any plan under this part without
the prior consent of the individual or the
designee of the individual;
(I) transfers an individual enrolled under
this part from one plan to another without the
prior consent of the individual or the designee
of the individual or solely for the purpose of
earning a commission;
(J) fails to comply with marketing
restrictions described in subsections (h) and
(j) of section 1851 or applicable implementing
regulations or guidance; or
(K) employs or contracts with any individual
or entity who engages in the conduct described
in subparagraphs (A) through (J) of this
paragraph;
the Secretary may provide, in addition to any other
remedies authorized by law, for any of the remedies
described in paragraph (2). The Secretary may provide,
in addition to any other remedies authorized by law,
for any of the remedies described in paragraph (2), if
the Secretary determines that any employee or agent of
such organization, or any provider or supplier who
contracts with such organization, has engaged in any
conduct described in subparagraphs (A) through (K) of
this paragraph.
(2) Remedies.--The remedies described in this
paragraph are--
(A) civil money penalties of not more than
$25,000 for each determination under paragraph
(1) or, with respect to a determination under
subparagraph (D) or (E)(i) of such paragraph,
of not more than $100,000 for each such
determination, except with respect to a
determination under subparagraph (E), an
assessment of not more than the amount claimed
by such plan or plan sponsor based upon the
misrepresentation or falsified information
involved, plus, with respect to a determination
under paragraph (1)(B), double the excess
amount charged in violation of such paragraph
(and the excess amount charged shall be
deducted from the penalty and returned to the
individual concerned), and plus, with respect
to a determination under paragraph (1)(D),
$15,000 for each individual not enrolled as a
result of the practice involved,
(B) suspension of enrollment of individuals
under this part after the date the Secretary
notifies the organization of a determination
under paragraph (1) and until the Secretary is
satisfied that the basis for such determination
has been corrected and is not likely to recur,
or
(C) suspension of payment to the organization
under this part for individuals enrolled after
the date the Secretary notifies the
organization of a determination under paragraph
(1) and until the Secretary is satisfied that
the basis for such determination has been
corrected and is not likely to recur.
(3) Other intermediate sanctions.--In the case of a
Medicare+Choice organization for which the Secretary
makes a determination under subsection (c)(2) the basis
of which is not described in paragraph (1), the
Secretary may apply the following intermediate
sanctions:
(A) Civil money penalties of not more than
$25,000 for each determination under subsection
(c)(2) if the deficiency that is the basis of
the determination has directly adversely
affected (or has the substantial likelihood of
adversely affecting) an individual covered
under the organization's contract.
(B) Civil money penalties of not more than
$10,000 for each week beginning after the
initiation of civil money penalty procedures by
the Secretary during which the deficiency that
is the basis of a determination under
subsection (c)(2) exists.
(C) Suspension of enrollment of individuals
under this part after the date the Secretary
notifies the organization of a determination
under subsection (c)(2) and until the Secretary
is satisfied that the deficiency that is the
basis for the determination has been corrected
and is not likely to recur.
(D) Civil monetary penalties of not more than
$100,000, or such higher amount as the
Secretary may establish by regulation, where
the finding under subsection (c)(2)(A) is based
on the organization's termination of its
contract under this section other than at a
time and in a manner provided for under
subsection (a).
(4) Civil money penalties.--The provisions of section
1128A (other than subsections (a) and (b)) shall apply
to a civil money penalty under paragraph (2) or (3) in
the same manner as they apply to a civil money penalty
or proceeding under section 1128A(a).
(h) Procedures for Termination.--
(1) In general.--The Secretary may terminate a
contract with a Medicare+Choice organization under this
section in accordance with formal investigation and
compliance procedures established by the Secretary
under which--
(A) the Secretary provides the organization
with the reasonable opportunity to develop and
implement a corrective action plan to correct
the deficiencies that were the basis of the
Secretary's determination under subsection
(c)(2); and
(B) the Secretary provides the organization
with reasonable notice and opportunity for
hearing (including the right to appeal an
initial decision) before terminating the
contract.
(2) Exception for imminent and serious risk to
health.--Paragraph (1) shall not apply if the Secretary
determines that a delay in termination, resulting from
compliance with the procedures specified in such
paragraph prior to termination, would pose an imminent
and serious risk to the health of individuals enrolled
under this part with the organization.
(3) Delay in contract termination authority for plans
failing to achieve minimum quality rating.--During the
period beginning on the date of the enactment of this
paragraph and through the end of plan year 2018, the
Secretary may not terminate a contract under this
section with respect to the offering of an MA plan by a
Medicare Advantage organization solely because the MA
plan has failed to achieve a minimum quality rating
under the 5-star rating system under section
1853(o)(4).
(i) Medicare+Choice Program Compatibility With Employer or
Union Group Health Plans.--
(1) Contracts with ma organizations.--To facilitate
the offering of Medicare+Choice plans under contracts
between Medicare+Choice organizations and employers,
labor organizations, or the trustees of a fund
established by one or more employers or labor
organizations (or combination thereof) to furnish
benefits to the entity's employees, former employees
(or combination thereof) or members or former members
(or combination thereof) of the labor organizations,
the Secretary may waive or modify requirements that
hinder the design of, the offering of, or the
enrollment in such Medicare+Choice plans.
(2) Employer sponsored ma plans.--To facilitate the
offering of MA plans by employers, labor organizations,
or the trustees of a fund established by one or more
employers or labor organizations (or combination
thereof) to furnish benefits to the entity's employees,
former employees (or combination thereof) or members or
former members (or combination thereof) of the labor
organizations, the Secretary may waive or modify
requirements that hinder the design of, the offering
of, or the enrollment in such MA plans. Notwithstanding
section 1851(g), an MA plan described in the previous
sentence may restrict the enrollment of individuals
under this part to individuals who are beneficiaries
and participants in such plan.
* * * * * * *
definitions; miscellaneous provisions
Sec. 1859. (a) Definitions Relating to Medicare+Choice
Organizations.--In this part--
(1) Medicare+choice organization.--The term
``Medicare+Choice organization'' means a public or
private entity that is certified under section 1856 as
meeting the requirements and standards of this part for
such an organization.
(2) Provider-sponsored organization.--The term
``provider-sponsored organization'' is defined in
section 1855(d)(1).
(b) Definitions Relating to Medicare+Choice Plans.--
(1) Medicare+choice plan.--The term ``Medicare+Choice
plan'' means health benefits coverage offered under a
policy, contract, or plan by a Medicare+Choice
organization pursuant to and in accordance with a
contract under section 1857.
(2) Medicare+Choice private fee-for-service plan.--
The term ``Medicare+Choice private fee-for-service
plan'' means a Medicare+Choice plan that--
(A) reimburses hospitals, physicians, and
other providers at a rate determined by the
plan on a fee-for-service basis without placing
the provider at financial risk;
(B) does not vary such rates for such a
provider based on utilization relating to such
provider; and
(C) does not restrict the selection of
providers among those who are lawfully
authorized to provide the covered services and
agree to accept the terms and conditions of
payment established by the plan.
Nothing in subparagraph (B) shall be construed to
preclude a plan from varying rates for such a provider
based on the specialty of the provider, the location of
the provider, or other factors related to such provider
that are not related to utilization, or to preclude a
plan from increasing rates for such a provider based on
increased utilization of specified preventive or
screening services.
(3) MSA plan.--
(A) In general.--The term ``MSA plan'' means
a Medicare+Choice plan that--
(i) provides reimbursement for at
least the items and services described
in section 1852(a)(1) in a year but
only after the enrollee incurs
countable expenses (as specified under
the plan) equal to the amount of an
annual deductible (described in
subparagraph (B));
(ii) counts as such expenses (for
purposes of such deductible) at least
all amounts that would have been
payable under parts A and B, and that
would have been payable by the enrollee
as deductibles, coinsurance, or
copayments, if the enrollee had elected
to receive benefits through the
provisions of such parts; and
(iii) provides, after such deductible
is met for a year and for all
subsequent expenses for items and
services referred to in clause (i) in
the year, for a level of reimbursement
that is not less than--
(I) 100 percent of such
expenses, or
(II) 100 percent of the
amounts that would have been
paid (without regard to any
deductibles or coinsurance)
under parts A and B with
respect to such expenses,
whichever is less.
(B) Deductible.--The amount of annual
deductible under an MSA plan--
(i) for contract year 1999 shall be
not more than $6,000; and
(ii) for a subsequent contract year
shall be not more than the maximum
amount of such deductible for the
previous contract year under this
subparagraph increased by the national
per capita Medicare+Choice growth
percentage under section 1853(c)(6) for
the year.
If the amount of the deductible under clause
(ii) is not a multiple of $50, the amount shall
be rounded to the nearest multiple of $50.
(4) MA regional plan.--The term ``MA regional plan''
means an MA plan described in section
1851(a)(2)(A)(i)--
(A) that has a network of providers that have
agreed to a contractually specified
reimbursement for covered benefits with the
organization offering the plan;
(B) that provides for reimbursement for all
covered benefits regardless of whether such
benefits are provided within such network of
providers; and
(C) the service area of which is one or more
entire MA regions.
(5) MA local plan.--The term ``MA local plan'' means
an MA plan that is not an MA regional plan.
(6) Specialized ma plans for special needs
individuals.--
(A) In general.--The term ``specialized MA
plan for special needs individuals'' means an
MA plan that exclusively serves special needs
individuals (as defined in subparagraph (B))
and that, as of January 1, 2010, meets the
applicable requirements of paragraph (2), (3),
or (4) of subsection (f), as the case may be.
(B) Special needs individual.--The term
``special needs individual'' means an MA
eligible individual who--
(i) is institutionalized (as defined
by the Secretary);
(ii) is entitled to medical
assistance under a State plan under
title XIX; or
(iii) meets such requirements as the
Secretary may determine would benefit
from enrollment in such a specialized
MA plan described in subparagraph (A)
for individuals with severe or
disabling chronic conditions who--
(I) before January 1, 2022,
have one or more comorbid and
medically complex chronic
conditions that are
substantially disabling or life
threatening, have a high risk
of hospitalization or other
significant adverse health
outcomes, and require
specialized delivery systems
across domains of care; and
(II) on or after January 1,
2022, have one or more comorbid
and medically complex chronic
conditions that is life
threatening or significantly
limits overall health or
function, have a high risk of
hospitalization or other
adverse health outcomes, and
require intensive care
coordination and that is listed
under subsection (f)(9)(A).
The Secretary may apply rules similar to the
rules of section 1894(c)(4) for continued
eligibility of special needs individuals.
(c) Other References to Other Terms.--
(1) Medicare+choice eligible individual.--The term
``Medicare+Choice eligible individual'' is defined in
section 1851(a)(3).
(2) Medicare+choice payment area.--The term
``Medicare+Choice payment area'' is defined in section
1853(d).
(3) National per capita medicare+choice growth
percentage.--The ``national per capita Medicare+Choice
growth percentage'' is defined in section 1853(c)(6).
(4) Medicare+choice monthly basic beneficiary
premium; medicare+choice monthly supplemental
beneficiary premium.--The terms ``Medicare+Choice
monthly basic beneficiary premium'' and
``Medicare+Choice monthly supplemental beneficiary
premium'' are defined in section 1854(a)(2).
(5) MA local area.--The term ``MA local area'' is
defined in section 1853(d)(2).
(d) Coordinated Acute and Long-Term Care Benefits Under a
Medicare+Choice Plan.--Nothing in this part shall be construed
as preventing a State from coordinating benefits under a
medicaid plan under title XIX with those provided under a
Medicare+Choice plan in a manner that assures continuity of a
full-range of acute care and long-term care services to poor
elderly or disabled individuals eligible for benefits under
this title and under such plan.
(e) Restriction on Enrollment for Certain Medicare+Choice
Plans.--
(1) In general.--In the case of a Medicare+Choice
religious fraternal benefit society plan described in
paragraph (2), notwithstanding any other provision of
this part to the contrary and in accordance with
regulations of the Secretary, the society offering the
plan may restrict the enrollment of individuals under
this part to individuals who are members of the church,
convention, or group described in paragraph (3)(B) with
which the society is affiliated.
(2) Medicare+choice religious fraternal benefit
society plan described.--For purposes of this
subsection, a Medicare+Choice religious fraternal
benefit society plan described in this paragraph is a
Medicare+Choice plan described in section 1851(a)(2)
that--
(A) is offered by a religious fraternal
benefit society described in paragraph (3) only
to members of the church, convention, or group
described in paragraph (3)(B); and
(B) permits all such members to enroll under
the plan without regard to health status-
related factors.
Nothing in this subsection shall be construed as
waiving any plan requirements relating to financial
solvency.
(3) Religious fraternal benefit society defined.--For
purposes of paragraph (2)(A), a ``religious fraternal
benefit society'' described in this section is an
organization that--
(A) is described in section 501(c)(8) of the
Internal Revenue Code of 1986 and is exempt
from taxation under section 501(a) of such Act;
(B) is affiliated with, carries out the
tenets of, and shares a religious bond with, a
church or convention or association of churches
or an affiliated group of churches;
(C) offers, in addition to a Medicare+Choice
religious fraternal benefit society plan,
health coverage to individuals not entitled to
benefits under this title who are members of
such church, convention, or group; and
(D) does not impose any limitation on
membership in the society based on any health
status-related factor.
(4) Payment adjustment.--Under regulations of the
Secretary, in the case of individuals enrolled under
this part under a Medicare+Choice religious fraternal
benefit society plan described in paragraph (2), the
Secretary shall provide for such adjustment to the
payment amounts otherwise established under section
1854 as may be appropriate to assure an appropriate
payment level, taking into account the actuarial
characteristics and experience of such individuals.
(f) Requirements Regarding Enrollment in Specialized MA Plans
for Special Needs Individuals.--
(1) Requirements for enrollment.--In the case of a
specialized MA plan for special needs individuals (as
defined in subsection (b)(6)), notwithstanding any
other provision of this part and in accordance with
regulations of the Secretary, the plan may restrict the
enrollment of individuals under the plan to individuals
who are within one or more classes of special needs
individuals.
(2) Additional requirements for institutional snps.--
In the case of a specialized MA plan for special needs
individuals described in subsection (b)(6)(B)(i), the
applicable requirements described in this paragraph are
as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individuals described in subsection
(b)(6)(B)(i). In the case of an individual who
is living in the community but requires an
institutional level of care, such individual
shall not be considered a special needs
individual described in subsection (b)(6)(B)(i)
unless the determination that the individual
requires an institutional level of care was
made--
(i) using a State assessment tool of
the State in which the individual
resides; and
(ii) by an entity other than the
organization offering the plan.
(B) The plan meets the requirements described
in paragraph (5).
(C) If applicable, the plan meets the
requirement described in paragraph (7).
(3) Additional requirements for dual snps.--In the
case of a specialized MA plan for special needs
individuals described in subsection (b)(6)(B)(ii), the
applicable requirements described in this paragraph are
as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individuals described in subsection
(b)(6)(B)(ii).
(B) The plan meets the requirements described
in paragraph (5).
(C) The plan provides each prospective
enrollee, prior to enrollment, with a
comprehensive written statement (using
standardized content and format established by
the Secretary) that describes--
(i) the benefits and cost-sharing
protections that the individual is
entitled to under the State Medicaid
program under title XIX; and
(ii) which of such benefits and cost-
sharing protections are covered under
the plan.
Such statement shall be included with any
description of benefits offered by the plan.
(D) The plan has a contract with the State
Medicaid agency to provide benefits, or arrange
for benefits to be provided, for which such
individual is entitled to receive as medical
assistance under title XIX. Such benefits may
include long-term care services consistent with
State policy.
(E) If applicable, the plan meets the
requirement described in paragraph (7).
(F) The plan meets the requirements
applicable under paragraph (8).
(4) Additional requirements for severe or disabling
chronic condition snps.--In the case of a specialized
MA plan for special needs individuals described in
subsection (b)(6)(B)(iii), the applicable requirements
described in this paragraph are as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individual described in subsection
(b)(6)(B)(iii).
(B) The plan meets the requirements described
in paragraph (5).
(C) If applicable, the plan meets the
requirement described in paragraph (7).
(5) Care management requirements for all snps.--
(A) In general.--Subject to subparagraph (B),
the requirements described in this paragraph
are that the organization offering a
specialized MA plan for special needs
individuals--
(i) have in place an evidenced-based
model of care with appropriate networks
of providers and specialists; and
(ii) with respect to each individual
enrolled in the plan--
(I) conduct an initial
assessment and an annual
reassessment of the
individual's physical,
psychosocial, and functional
needs;
(II) develop a plan, in
consultation with the
individual as feasible, that
identifies goals and
objectives, including
measurable outcomes as well as
specific services and benefits
to be provided; and
(III) use an
interdisciplinary team in the
management of care.
(B) Improvements to care management
requirements for severe or disabling chronic
condition snps.--For 2020 and subsequent years,
in the case of a specialized MA plan for
special needs individuals described in
subsection (b)(6)(B)(iii), the requirements
described in this paragraph include the
following:
(i) The interdisciplinary team under
subparagraph (A)(ii)(III) includes a
team of providers with demonstrated
expertise, including training in an
applicable specialty, in treating
individuals similar to the targeted
population of the plan.
(ii) Requirements developed by the
Secretary to provide face-to-face
encounters with individuals enrolled in
the plan not less frequently than on an
annual basis.
(III) As part of the model of care
under clause (i) of subparagraph (A),
the results of the initial assessment
and annual reassessment under clause
(ii)(I) of such subparagraph of each
individual enrolled in the plan are
addressed in the individual's
individualized care plan under clause
(ii)(II) of such subparagraph.
(iv) As part of the annual evaluation
and approval of such model of care, the
Secretary shall take into account
whether the plan fulfilled the previous
year's goals (as required under the
model of care).
(v) The Secretary shall establish a
minimum benchmark for each element of
the model of care of a plan. The
Secretary shall only approve a plan's
model of care under this paragraph if
each element of the model of care meets
the minimum benchmark applicable under
the preceding sentence.
(6) Transition and exception regarding restriction on
enrollment.--
(A) In general.--Subject to subparagraph (C),
the Secretary shall establish procedures for
the transition of applicable individuals to--
(i) a Medicare Advantage plan that is
not a specialized MA plan for special
needs individuals (as defined in
subsection (b)(6)); or
(ii) the original medicare fee-for-
service program under parts A and B.
(B) Applicable individuals.--For purposes of
clause (i), the term ``applicable individual''
means an individual who--
(i) is enrolled under a specialized
MA plan for special needs individuals
(as defined in subsection (b)(6)); and
(ii) is not within the 1 or more of
the classes of special needs
individuals to which enrollment under
the plan is restricted to.
(C) Exception.--The Secretary shall provide
for an exception to the transition described in
subparagraph (A) for a limited period of time
for individuals enrolled under a specialized MA
plan for special needs individuals described in
subsection (b)(6)(B)(ii) who are no longer
eligible for medical assistance under title
XIX.
(D) Timeline for initial transition.--The
Secretary shall ensure that applicable
individuals enrolled in a specialized MA plan
for special needs individuals (as defined in
subsection (b)(6)) prior to January 1, 2010,
are transitioned to a plan or the program
described in subparagraph (A) by not later than
January 1, 2013.
(7) Authority to require special needs plans be ncqa
approved.--For 2012 and subsequent years, the Secretary
shall require that a Medicare Advantage organization
offering a specialized MA plan for special needs
individuals be approved by the National Committee for
Quality Assurance (based on standards established by
the Secretary).
(8) Increased integration of dual snps.--
(A) Designated contact.--The Secretary,
acting through the Federal Coordinated Health
Care Office established under section 2602 of
Public Law 111-148, shall serve as a dedicated
point of contact for States to address
misalignments that arise with the integration
of specialized MA plans for special needs
individuals described in subsection
(b)(6)(B)(ii) under this paragraph and,
consistent with such role, shall establish--
(i) a uniform process for
disseminating to State Medicaid
agencies information under this title
impacting contracts between such
agencies and such plans under this
subsection; and
(ii) basic resources for States
interested in exploring such plans as a
platform for integration, such as a
model contract or other tools to
achieve those goals.
(B) Unified grievances and appeals process.--
(i) In general.--Not later than April
1, 2020, the Secretary shall establish
procedures, to the extent feasible as
determined by the Secretary, unifying
grievances and appeals procedures under
sections 1852(f), 1852(g), 1902(a)(3),
1902(a)(5), and 1932(b)(4) for items
and services provided by specialized MA
plans for special needs individuals
described in subsection (b)(6)(B)(ii)
under this title and title XIX. With
respect to items and services described
in the preceding sentence, procedures
established under this clause shall
apply in place of otherwise applicable
grievances and appeals procedures. The
Secretary shall solicit comment in
developing such procedures from States,
plans, beneficiaries and their
representatives, and other relevant
stakeholders.
(ii) Procedures.--The procedures
established under clause (i) shall be
included in the plan contract under
paragraph (3)(D) and shall--
(I) adopt the provisions for
the enrollee that are most
protective for the enrollee
and, to the extent feasible as
determined by the Secretary,
are compatible with unified
timeframes and consolidated
access to external review under
an integrated process;
(II) take into account
differences in State plans
under title XIX to the extent
necessary;
(III) be easily navigable by
an enrollee; and
(IV) include the elements
described in clause (iii), as
applicable.
(iii) Elements described.--Both
unified appeals and unified grievance
procedures shall include, as
applicable, the following elements
described in this clause:
(I) Single written
notification of all applicable
grievances and appeal rights
under this title and title XIX.
For purposes of this
subparagraph, the Secretary may
waive the requirements under
section 1852(g)(1)(B) when the
specialized MA plan covers
items or services under this
part or under title XIX.
(II) Single pathways for
resolution of any grievance or
appeal related to a particular
item or service provided by
specialized MA plans for
special needs individuals
described in subsection
(b)(6)(B)(ii) under this title
and title XIX.
(III) Notices written in
plain language and available in
a language and format that is
accessible to the enrollee,
including in non-English
languages that are prevalent in
the service area of the
specialized MA plan.
(IV) Unified timeframes for
grievances and appeals
processes, such as an
individual's filing of a
grievance or appeal, a plan's
acknowledgment and resolution
of a grievance or appeal, and
notification of decisions with
respect to a grievance or
appeal.
(V) Requirements for how the
plan must process, track, and
resolve grievances and appeals,
to ensure beneficiaries are
notified on a timely basis of
decisions that are made
throughout the grievance or
appeals process and are able to
easily determine the status of
a grievance or appeal.
(iv) Continuation of benefits pending
appeal.--The unified procedures under
clause (i) shall, with respect to all
benefits under parts A and B and title
XIX subject to appeal under such
procedures, incorporate provisions
under current law and implementing
regulations that provide continuation
of benefits pending appeal under this
title and title XIX.
(C) Requirement for unified grievances and
appeals.--For 2021 and subsequent years, the
contract of a specialized MA plan for special
needs individuals described in subsection
(b)(6)(B)(ii) with a State Medicaid agency
under paragraph (3)(D) shall require the use of
unified grievances and appeals procedures as
described in subparagraph (B).
(D) Requirements for integration.--
(i) In general.--For 2021 and
subsequent years, a specialized MA plan
for special needs individuals described
in subsection (b)(6)(B)(ii) shall meet
one or more of the following
requirements, to the extent permitted
under State law, for integration of
benefits under this title and title
XIX:
(I) The specialized MA plan
must meet the requirements of
contracting with the State
Medicaid agency described in
paragraph (3)(D) in addition to
coordinating long-term services
and supports or behavioral
health services, or both, by
meeting an additional minimum
set of requirements determined
by the Secretary through the
Federal Coordinated Health Care
Office established under
section 2602 of the Patient
Protection and Affordable Care
Act based on input from
stakeholders, such as notifying
the State in a timely manner of
hospitalizations, emergency
room visits, and hospital or
nursing home discharges of
enrollees, assigning one
primary care provider for each
enrollee, or sharing data that
would benefit the coordination
of items and services under
this title and the State plan
under title XIX. Such minimum
set of requirements must be
included in the contract of the
specialized MA plan with the
State Medicaid agency under
such paragraph.
(II) The specialized MA plan
must meet the requirements of a
fully integrated plan described
in section
1853(a)(1)(B)(iv)(II) (other
than the requirement that the
plan have similar average
levels of frailty, as
determined by the Secretary, as
the PACE program), or enter
into a capitated contract with
the State Medicaid agency to
provide long-term services and
supports or behavioral health
services, or both.
(III) In the case of a
specialized MA plan that is
offered by a parent
organization that is also the
parent organization of a
Medicaid managed care
organization providing long
term services and supports or
behavioral services under a
contract under section 1903(m),
the parent organization must
assume clinical and financial
responsibility for benefits
provided under this title and
title XIX with respect to any
individual who is enrolled in
both the specialized MA plan
and the Medicaid managed care
organization.
(ii) Suspension of enrollment for
failure to meet requirements during
initial period.--During the period of
plan years 2021 through 2025, if the
Secretary determines that a specialized
MA plan for special needs individuals
described in subsection (b)(6)(B)(ii)
has failed to comply with clause (i),
the Secretary may provide for the
application against the Medicare
Advantage organization offering the
plan of the remedy described in section
1857(g)(2)(B) in the same manner as the
Secretary may apply such remedy, and in
accordance with the same procedures as
would apply, in the case of an MA
organization determined by the
Secretary to have engaged in conduct
described in section 1857(g)(1). If the
Secretary applies such remedy to a
Medicare Advantage organization under
the preceding sentence, the
organization shall submit to the
Secretary (at a time, and in a form and
manner, specified by the Secretary)
information describing how the plan
will come into compliance with clause
(i).
(E) Study and report to congress.--
(i) In general.--Not later than March
15, 2022, and, subject to clause (iii),
biennially thereafter through 2032, the
Medicare Payment Advisory Commission
established under section 1805, in
consultation with the Medicaid and CHIP
Payment and Access Commission
established under section 1900, shall
conduct (and submit to the Secretary
and the Committees on Ways and Means
and Energy and Commerce of the House of
Representatives and the Committee on
Finance of the Senate a report on) a
study to determine how specialized MA
plans for special needs individuals
described in subsection (b)(6)(B)(ii)
perform among each other based on data
from Healthcare Effectiveness Data and
Information Set (HEDIS) quality
measures, reported on the plan level,
as required under section 1852(e)(3)
(or such other measures or data sources
that are available and appropriate,
such as encounter data and Consumer
Assessment of Healthcare Providers and
Systems data, as specified by such
Commissions as enabling an accurate
evaluation under this subparagraph).
Such study shall include, as feasible,
the following comparison groups of
specialized MA plans for special needs
individuals described in subsection
(b)(6)(B)(ii):
(I) A comparison group of
such plans that are described
in subparagraph (D)(i)(I).
(II) A comparison group of
such plans that are described
in subparagraph (D)(i)(II).
(III) A comparison group of
such plans operating within the
Financial Alignment Initiative
demonstration for the period
for which such plan is so
operating and the demonstration
is in effect, and, in the case
that an integration option that
is not with respect to
specialized MA plans for
special needs individuals is
established after the
conclusion of the demonstration
involved.
(IV) A comparison group of
such plans that are described
in subparagraph (D)(i)(III).
(V) A comparison group of MA
plans, as feasible, not
described in a previous
subclause of this clause, with
respect to the performance of
such plans for enrollees who
are special needs individuals
described in subsection
(b)(6)(B)(ii).
(ii) Additional reports.--Beginning
with 2033 and every five years
thereafter, the Medicare Payment
Advisory Commission, in consultation
with the Medicaid and CHIP Payment and
Access Commission, shall conduct a
study described in clause (i).
(9) List of conditions for clarification of the
definition of a severe or disabling chronic conditions
specialized needs individual.--
(A) In general.--Not later than December 31,
2020, and every 5 years thereafter, subject to
subparagraphs (B) and (C), the Secretary shall
convene a panel of clinical advisors to
establish and update a list of conditions that
meet each of the following criteria:
(i) Conditions that meet the
definition of a severe or disabling
chronic condition under subsection
(b)(6)(B)(iii) on or after January 1,
2022.
(ii) Conditions that require
prescription drugs, providers, and
models of care that are unique to the
specific population of enrollees in a
specialized MA plan for special needs
individuals described in such
subsection on or after such date and--
(I) as a result of access to,
and enrollment in, such a
specialized MA plan for special
needs individuals, individuals
with such condition would have
a reasonable expectation of
slowing or halting the
progression of the disease,
improving health outcomes and
decreasing overall costs for
individuals diagnosed with such
condition compared to available
options of care other than
through such a specialized MA
plan for special needs
individuals; or
(II) have a low prevalence in
the general population of
beneficiaries under this title
or a disproportionally high
per-beneficiary cost under this
title.
(B) Inclusion of certain conditions.--The
conditions listed under subparagraph (A) shall
include HIV/AIDS, end stage renal disease, and
chronic and disabling mental illness.
(C) Requirement.--In establishing and
updating the list under subparagraph (A), the
panel shall take into account the availability
of varied benefits, cost-sharing, and
supplemental benefits under the model described
in paragraph (2) of section 1859(h), including
the expansion under paragraph (1) of such
section.
(g) Special Rules for Senior Housing Facility Plans.--
(1) In general.--In the case of a Medicare Advantage
senior housing facility plan described in paragraph
(2), notwithstanding any other provision of this part
to the contrary and in accordance with regulations of
the Secretary, the service area of such plan may be
limited to a senior housing facility in a geographic
area.
(2) Medicare advantage senior housing facility plan
described.--For purposes of this subsection, a Medicare
Advantage senior housing facility plan is a Medicare
Advantage plan that--
(A) restricts enrollment of individuals under
this part to individuals who reside in a
continuing care retirement community (as
defined in section 1852(l)(4)(B));
(B) provides primary care services onsite and
has a ratio of accessible physicians to
beneficiaries that the Secretary determines is
adequate;
(C) provides transportation services for
beneficiaries to specialty providers outside of
the facility; and
(D) has participated (as of December 31,
2009) in a demonstration project established by
the Secretary under which such a plan was
offered for not less than 1 year.
(h) National Testing of Medicare Advantage Value-Based
Insurance Design Model.--
(1) In general.--In implementing the Medicare
Advantage Value-Based Insurance Design model that is
being tested under section 1115A(b), the Secretary
shall revise the testing of the model under such
section to cover, effective not later than January 1,
2020, all States.
(2) Termination and modification provision not
applicable until january 1, 2022.--The provisions of
section 1115A(b)(3)(B) shall apply to the Medicare
Advantage Value-Based Insurance Design model, including
such model as revised under paragraph (1), beginning
January 1, 2022, but shall not apply to such model, as
so revised, prior to such date.
(3) Funding.--The Secretary shall allocate funds made
available under section 1115A(f)(1) to design,
implement, and evaluate the Medicare Advantage Value-
Based Insurance Design model, as revised under
paragraph (1).
(i) Program Integrity Transparency Measures.--
(1) Program integrity portal.--
(A) In general.--Not later than two years
after the date of the enactment of this
subsection, the Secretary shall, after
consultation with stakeholders, establish a
secure Internet website portal (or other
successor technology) that would allow a secure
path for communication between the Secretary,
MA plans under this part, prescription drug
plans under part D, and an eligible entity with
a contract under section 1893 (such as a
Medicare drug integrity contractor or an entity
responsible for carrying out program integrity
activities under this part and part D) for the
purpose of enabling through such portal (or
other successor technology)--
(i) the referral by such plans of
substantiated fraud, waste, and abuse
for initiating or assisting
investigations conducted by the
eligible entity; and
(ii) data sharing among such MA
plans, prescription drug plans, and the
Secretary.
(B) Required uses of portal.--The Secretary
shall disseminate the following information to
MA plans under this part and prescription drug
plans under part D through the secure Internet
website portal (or other successor technology)
established under subparagraph (A):
(i) Providers of services and
suppliers that have been referred
pursuant to subparagraph (A)(i) during
the previous 12-month period.
(ii) Providers of services and
suppliers who are the subject of an
active exclusion under section 1128 or
who are subject to a suspension of
payment under this title pursuant to
section 1862(o) or otherwise.
(iii) Providers of services and
suppliers who are the subject of an
active revocation of participation
under this title, including for not
satisfying conditions of participation.
(iv) In the case of such a plan that
makes a referral under subparagraph
(A)(i) through the portal (or other
successor technology) with respect to
activities of substantiated fraud,
waste, or abuse of a provider of
services or supplier, if such provider
or supplier has been the subject of an
administrative action under this title
or title XI with respect to similar
activities, a notification to such plan
of such action so taken.
(C) Rulemaking.--For purposes of this
paragraph, the Secretary shall, through
rulemaking, specify what constitutes
substantiated fraud, waste, and abuse, using
guidance such as what is provided in the
Medicare Program Integrity Manual 4.7.1. In
carrying out this subsection, a fraud hotline
tip (as defined by the Secretary) without
further evidence shall not be treated as
sufficient evidence for substantiated fraud,
waste, or abuse
(D) HIPAA compliant information only.--For
purposes of this subsection, communications may
only occur if the communications are permitted
under the Federal regulations (concerning the
privacy of individually identifiable health
information) promulgated under section 264(c)
of the Health Insurance Portability and
Accountability Act of 1996.
(2) Quarterly reports.--Beginning two years after the
date of enactment of this subsection, the Secretary
shall make available to MA plans under this part and
prescription drug plans under part D in a timely manner
(but no less frequently than quarterly) and using
information submitted to an entity described in
paragraph (1) through the portal (or other successor
technology) described in such paragraph or pursuant to
section 1893, information on fraud, waste, and abuse
schemes and trends in identifying suspicious activity.
Information included in each such report shall--
(A) include administrative actions, pertinent
information related to opioid overprescribing,
and other data determined appropriate by the
Secretary in consultation with stakeholders;
and
(B) be anonymized information submitted by
plans without identifying the source of such
information.
(3) Clarification.--Nothing in this subsection shall
be construed as precluding or otherwise affecting
referrals described in subparagraph (A) that may
otherwise be made to law enforcement entities or to the
Secretary.
Part D--Voluntary Prescription Drug Benefit Program
Subpart 1--Part D Eligible Individuals and Prescription Drug Benefits
* * * * * * *
beneficiary protections for qualified prescription drug coverage
Sec. 1860D-4. (a) Dissemination of Information.--
(1) General information.--
(A) Application of ma information.--A PDP
sponsor shall disclose, in a clear, accurate,
and standardized form to each enrollee with a
prescription drug plan offered by the sponsor
under this part at the time of enrollment and
at least annually thereafter, the information
described in section 1852(c)(1) relating to
such plan, insofar as the Secretary determines
appropriate with respect to benefits provided
under this part, and including the information
described in subparagraph (B).
(B) Drug specific information.--The
information described in this subparagraph is
information concerning the following:
(i) Access to specific covered part D
drugs, including access through
pharmacy networks.
(ii) How any formulary (including any
tiered formulary structure) used by the
sponsor functions, including a
description of how a part D eligible
individual may obtain information on
the formulary consistent with paragraph
(3).
(iii) Beneficiary cost-sharing
requirements and how a part D eligible
individual may obtain information on
such requirements, including tiered or
other copayment level applicable to
each drug (or class of drugs),
consistent with paragraph (3).
(iv) The medication therapy
management program required under
subsection (c).
(v) The drug management program for
at-risk beneficiaries under subsection
(c)(5).
(2) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request
of a part D eligible individual who is eligible to
enroll in a prescription drug plan, the PDP sponsor
offering such plan shall provide information similar
(as determined by the Secretary) to the information
described in subparagraphs (A), (B), and (C) of section
1852(c)(2) to such individual.
(3) Provision of specific information.--
(A) Response to beneficiary questions.--Each
PDP sponsor offering a prescription drug plan
shall have a mechanism for providing specific
information on a timely basis to enrollees upon
request. Such mechanism shall include access to
information through the use of a toll-free
telephone number and, upon request, the
provision of such information in writing.
(B) Availability of information on changes in
formulary through the internet.--A PDP sponsor
offering a prescription drug plan shall make
available on a timely basis through an Internet
website information on specific changes in the
formulary under the plan (including changes to
tiered or preferred status of covered part D
drugs).
(4) Claims information.--A PDP sponsor offering a
prescription drug plan must furnish to each enrollee in
a form easily understandable to such enrollees--
(A) an explanation of benefits (in accordance
with section 1806(a) or in a comparable
manner); and
(B) when prescription drug benefits are
provided under this part, a notice of the
benefits in relation to--
(i) the initial coverage limit for
the current year; and
(ii) the annual out-of-pocket
threshold for the current year.
Notices under subparagraph (B) need not be
provided more often than as specified by the
Secretary and notices under subparagraph
(B)(ii) shall take into account the application
of section 1860D-2(b)(4)(C) to the extent
practicable, as specified by the Secretary.
(b) Access to Covered Part D Drugs.--
(1) Assuring pharmacy access.--
(A) Participation of any willing pharmacy.--A
prescription drug plan shall permit the
participation of any pharmacy that meets the
terms and conditions under the plan.
(B) Discounts allowed for network
pharmacies.--For covered part D drugs dispensed
through in-network pharmacies, a prescription
drug plan may, notwithstanding subparagraph
(A), reduce coinsurance or copayments for part
D eligible individuals enrolled in the plan
below the level otherwise required. In no case
shall such a reduction result in an increase in
payments made by the Secretary under section
1860D-15 to a plan.
(C) Convenient access for network
pharmacies.--
(i) In general.--The PDP sponsor of
the prescription drug plan shall secure
the participation in its network of a
sufficient number of pharmacies that
dispense (other than by mail order)
drugs directly to patients to ensure
convenient access (consistent with
rules established by the Secretary).
(ii) Application of tricare
standards.--The Secretary shall
establish rules for convenient access
to in-network pharmacies under this
subparagraph that are no less favorable
to enrollees than the rules for
convenient access to pharmacies
included in the statement of work of
solicitation (#MDA906-03-R-0002) of the
Department of Defense under the TRICARE
Retail Pharmacy (TRRx) as of March 13,
2003.
(iii) Adequate emergency access.--
Such rules shall include adequate
emergency access for enrollees.
(iv) Convenient access in long-term
care facilities.--Such rules may
include standards with respect to
access for enrollees who are residing
in long-term care facilities and for
pharmacies operated by the Indian
Health Service, Indian tribes and
tribal organizations, and urban Indian
organizations (as defined in section 4
of the Indian Health Care Improvement
Act).
(D) Level playing field.--Such a sponsor
shall permit enrollees to receive benefits
(which may include a 90-day supply of drugs or
biologicals) through a pharmacy (other than a
mail order pharmacy), with any differential in
charge paid by such enrollees.
(E) Not required to accept insurance risk.--
The terms and conditions under subparagraph (A)
may not require participating pharmacies to
accept insurance risk as a condition of
participation.
(2) Use of standardized technology.--
(A) In general.--The PDP sponsor of a
prescription drug plan shall issue (and
reissue, as appropriate) such a card (or other
technology) that may be used by an enrollee to
assure access to negotiated prices under
section 1860D-2(d).
(B) Standards.--
(i) In general.--The Secretary shall
provide for the development, adoption,
or recognition of standards relating to
a standardized format for the card or
other technology required under
subparagraph (A). Such standards shall
be compatible with part C of title XI
and may be based on standards developed
by an appropriate standard setting
organization.
(ii) Consultation.--In developing the
standards under clause (i), the
Secretary shall consult with the
National Council for Prescription Drug
Programs and other standard setting
organizations determined appropriate by
the Secretary.
(iii) Implementation.--The Secretary
shall develop, adopt, or recognize the
standards under clause (i) by such date
as the Secretary determines shall be
sufficient to ensure that PDP sponsors
utilize such standards beginning
January 1, 2006.
(3) Requirements on development and application of
formularies.--If a PDP sponsor of a prescription drug
plan uses a formulary (including the use of tiered
cost-sharing), the following requirements must be met:
(A) Development and revision by a pharmacy
and therapeutic (p&t;) committee.--
(i) In general.--The formulary must
be developed and reviewed by a pharmacy
and therapeutic committee. A majority
of the members of such committee shall
consist of individuals who are
practicing physicians or practicing
pharmacists (or both).
(ii) Inclusion of independent
experts.--Such committee shall include
at least one practicing physician and
at least one practicing pharmacist,
each of whom--
(I) is independent and free
of conflict with respect to the
sponsor and plan; and
(II) has expertise in the
care of elderly or disabled
persons.
(B) Formulary development.--In developing and
reviewing the formulary, the committee shall--
(i) base clinical decisions on the
strength of scientific evidence and
standards of practice, including
assessing peer-reviewed medical
literature, such as randomized clinical
trials, pharmacoeconomic studies,
outcomes research data, and on such
other information as the committee
determines to be appropriate; and
(ii) take into account whether
including in the formulary (or in a
tier in such formulary) particular
covered part D drugs has therapeutic
advantages in terms of safety and
efficacy.
(C) Inclusion of drugs in all therapeutic
categories and classes.--
(i) In general.--Subject to
subparagraph (G), the formulary must
include drugs within each therapeutic
category and class of covered part D
drugs, although not necessarily all
drugs within such categories and
classes.
(ii) Model guidelines.--The Secretary
shall request the United States
Pharmacopeia to develop, in
consultation with pharmaceutical
benefit managers and other interested
parties, a list of categories and
classes that may be used by
prescription drug plans under this
paragraph and to revise such
classification from time to time to
reflect changes in therapeutic uses of
covered part D drugs and the additions
of new covered part D drugs.
(iii) Limitation on changes in
therapeutic classification.--The PDP
sponsor of a prescription drug plan may
not change the therapeutic categories
and classes in a formulary other than
at the beginning of each plan year
except as the Secretary may permit to
take into account new therapeutic uses
and newly approved covered part D
drugs.
(D) Provider and patient education.--The PDP
sponsor shall establish policies and procedures
to educate and inform health care providers and
enrollees concerning the formulary.
(E) Notice before removing drug from
formulary or changing preferred or tier status
of drug.--Any removal of a covered part D drug
from a formulary and any change in the
preferred or tiered cost-sharing status of such
a drug shall take effect only after appropriate
notice is made available (such as under
subsection (a)(3)) to the Secretary, affected
enrollees, physicians, pharmacies, and
pharmacists.
(F) Periodic evaluation of protocols.--In
connection with the formulary, the sponsor of a
prescription drug plan shall provide for the
periodic evaluation and analysis of treatment
protocols and procedures.
(G) Required inclusion of drugs in certain
categories and classes.--
(i) Formulary requirements.--
(I) In general.--Subject to
subclause (II), a PDP sponsor
offering a prescription drug
plan shall be required to
include all covered part D
drugs in the categories and
classes identified by the
Secretary under clause (ii)(I).
(II) Exceptions.--The
Secretary may establish
exceptions that permit a PDP
sponsor offering a prescription
drug plan to exclude from its
formulary a particular covered
part D drug in a category or
class that is otherwise
required to be included in the
formulary under subclause (I)
(or to otherwise limit access
to such a drug, including
through prior authorization or
utilization management).
(ii) Identification of drugs in
certain categories and classes.--
(I) In general.--Subject to
clause (iv), the Secretary
shall identify, as appropriate,
categories and classes of drugs
for which the Secretary
determines are of clinical
concern.
(II) Criteria.--The Secretary
shall use criteria established
by the Secretary in making any
determination under subclause
(I).
(iii) Implementation.--The Secretary
shall establish the criteria under
clause (ii)(II) and any exceptions
under clause (i)(II) through the
promulgation of a regulation which
includes a public notice and comment
period.
(iv) Requirement for certain
categories and classes until criteria
established.--Until such time as the
Secretary establishes the criteria
under clause (ii)(II) the following
categories and classes of drugs shall
be identified under clause (ii)(I):
(I) Anticonvulsants.
(II) Antidepressants.
(III) Antineoplastics.
(IV) Antipsychotics.
(V) Antiretrovirals.
(VI) Immunosuppressants for
the treatment of transplant
rejection.
(H) Use of single, uniform exceptions and
appeals process.--Notwithstanding any other
provision of this part, each PDP sponsor of a
prescription drug plan shall--
(i) use a single, uniform exceptions
and appeals process (including, to the
extent the Secretary determines
feasible, a single, uniform model form
for use under such process) with
respect to the determination of
prescription drug coverage for an
enrollee under the plan; and
(ii) provide instant access to such
process by enrollees through a toll-
free telephone number and an Internet
website.
(c) Cost and Utilization Management; Quality Assurance;
Medication Therapy Management Program.--
(1) In general.--The PDP sponsor shall have in place,
directly or through appropriate arrangements, with
respect to covered part D drugs, the following:
(A) A cost-effective drug utilization
management program, including incentives to
reduce costs when medically appropriate, such
as through the use of multiple source drugs (as
defined in section 1927(k)(7)(A)(i)).
(B) Quality assurance measures and systems to
reduce medication errors and adverse drug
interactions and improve medication use.
(C) A medication therapy management program
described in paragraph (2).
(D) A program to control fraud, abuse, and
waste.
(E) A utilization management tool to prevent
drug abuse (as described in paragraph (6)(A)).
(F) With respect to plan years beginning on
or after January 1, 2021, a drug management
program for at-risk beneficiaries described in
paragraph (5).
Nothing in this section shall be construed as impairing
a PDP sponsor from utilizing cost management tools
(including differential payments) under all methods of
operation.
(2) Medication therapy management program.--
(A) Description.--
(i) In general.--A medication therapy
management program described in this
paragraph is a program of drug therapy
management that may be furnished by a
pharmacist and that is designed to
assure, with respect to targeted
beneficiaries described in clause (ii),
that covered part D drugs under the
prescription drug plan are
appropriately used to optimize
therapeutic outcomes through improved
medication use, and to reduce the risk
of adverse events, including adverse
drug interactions. Such a program may
distinguish between services in
ambulatory and institutional settings.
(ii) Targeted beneficiaries
described.--Targeted beneficiaries
described in this clause [are part D
eligible individuals who--] are the
following:
(I) Part D eligible
individuals who--
[(I)] (aa) have
multiple chronic
diseases (such as
diabetes, asthma,
hypertension,
hyperlipidemia, and
congestive heart
failure);
[(II)] (bb) are
taking multiple covered
part D drugs; and
[(III)] (cc) are
identified as likely to
incur annual costs for
covered part D drugs
that exceed a level
specified by the
Secretary.
(II) Beginning January 1,
2021, at-risk beneficiaries for
prescription drug abuse (as
defined in paragraph (5)(C)).
(B) Elements.--Such program may include
elements that promote--
(i) enhanced enrollee understanding
to promote the appropriate use of
medications by enrollees and to reduce
the risk of potential adverse events
associated with medications, through
beneficiary education, counseling, and
other appropriate means;
(ii) increased enrollee adherence
with prescription medication regimens
through medication refill reminders,
special packaging, and other compliance
programs and other appropriate means;
and
(iii) detection of adverse drug
events and patterns of overuse and
underuse of prescription drugs.
(C) Required interventions.--For plan years
beginning on or after the date that is 2 years
after the date of the enactment of the Patient
Protection and Affordable Care Act,
prescription drug plan sponsors shall offer
medication therapy management services to
targeted beneficiaries described in
subparagraph (A)(ii) that include, at a
minimum, the following to increase adherence to
prescription medications or other goals deemed
necessary by the Secretary:
(i) An annual comprehensive
medication review furnished person-to-
person or using telehealth technologies
(as defined by the Secretary) by a
licensed pharmacist or other qualified
provider. The comprehensive medication
review--
(I) shall include a review of
the individual's medications
and may result in the creation
of a recommended medication
action plan or other actions in
consultation with the
individual and with input from
the prescriber to the extent
necessary and practicable; and
(II) shall include providing
the individual with a written
or printed summary of the
results of the review.
The Secretary, in consultation with
relevant stakeholders, shall develop a
standardized format for the action plan
under subclause (I) and the summary
under subclause (II).
(ii) Follow-up interventions as
warranted based on the findings of the
annual medication review or the
targeted medication enrollment and
which may be provided person-to-person
or using telehealth technologies (as
defined by the Secretary).
(D) Assessment.--The prescription drug plan
sponsor shall have in place a process to
assess, at least on a quarterly basis, the
medication use of individuals who are at risk
but not enrolled in the medication therapy
management program, including individuals who
have experienced a transition in care, if the
prescription drug plan sponsor has access to
that information.
(E) Automatic enrollment with ability to opt-
out.--The prescription drug plan sponsor shall
have in place a process to--
(i) subject to clause (ii),
automatically enroll targeted
beneficiaries described in subparagraph
(A)(ii), including beneficiaries
identified under subparagraph (D), in
the medication therapy management
program required under this subsection;
and
(ii) permit such beneficiaries to
opt-out of enrollment in such program.
(E) Development of program in cooperation
with licensed pharmacists.--Such program shall
be developed in cooperation with licensed and
practicing pharmacists and physicians.
(F) Coordination with care management
plans.--The Secretary shall establish
guidelines for the coordination of any
medication therapy management program under
this paragraph with respect to a targeted
beneficiary with any care management plan
established with respect to such beneficiary
under a chronic care improvement program under
section 1807.
(G) Considerations in pharmacy fees.--The PDP
sponsor of a prescription drug plan shall take
into account, in establishing fees for
pharmacists and others providing services under
such plan, the resources used, and time
required to, implement the medication therapy
management program under this paragraph. Each
such sponsor shall disclose to the Secretary
upon request the amount of any such management
or dispensing fees. The provisions of section
1927(b)(3)(D) apply to information disclosed
under this subparagraph.
(3) Reducing wasteful dispensing of outpatient
prescription drugs in long-term care facilities.--The
Secretary shall require PDP sponsors of prescription
drug plans to utilize specific, uniform dispensing
techniques, as determined by the Secretary, in
consultation with relevant stakeholders (including
representatives of nursing facilities, residents of
nursing facilities, pharmacists, the pharmacy industry
(including retail and long-term care pharmacy),
prescription drug plans, MA-PD plans, and any other
stakeholders the Secretary determines appropriate),
such as weekly, daily, or automated dose dispensing,
when dispensing covered part D drugs to enrollees who
reside in a long-term care facility in order to reduce
waste associated with 30-day fills.
(4) Requiring valid prescriber national provider
identifiers on pharmacy claims.--
(A) In general.--For plan year 2016 and
subsequent plan years, the Secretary shall
require a claim for a covered part D drug for a
part D eligible individual enrolled in a
prescription drug plan under this part or an
MA-PD plan under part C to include a prescriber
National Provider Identifier that is determined
to be valid under the procedures established
under subparagraph (B)(i).
(B) Procedures.--
(i) Validity of prescriber national
provider identifiers.--The Secretary,
in consultation with appropriate
stakeholders, shall establish
procedures for determining the validity
of prescriber National Provider
Identifiers under subparagraph (A).
(ii) Informing beneficiaries of
reason for denial.--The Secretary shall
establish procedures to ensure that, in
the case that a claim for a covered
part D drug of an individual described
in subparagraph (A) is denied because
the claim does not meet the
requirements of this paragraph, the
individual is properly informed at the
point of service of the reason for the
denial.
(C) Report.--Not later than January 1, 2018,
the Inspector General of the Department of
Health and Human Services shall submit to
Congress a report on the effectiveness of the
procedures established under subparagraph
(B)(i).
(D) Outlier prescriber notification.--
(i) Notification.--Beginning not
later than two years after the date of
the enactment of this subparagraph, the
Secretary shall, in the case of a
prescriber identified by the Secretary
under clause (ii) to be an outlier
prescriber of opioids, provide, subject
to clause (iv), an annual notification
to such prescriber that such prescriber
has been so identified and that
includes resources on proper
prescribing methods and other
information specified in accordance
with clause (iii).
(ii) Identification of outlier
prescribers of opioids.--
(I) In general.--The
Secretary shall, subject to
subclause (III), using the
valid prescriber National
Provider Identifiers included
pursuant to subparagraph (A) on
claims for covered part D drugs
for part D eligible individuals
enrolled in prescription drug
plans under this part or MA-PD
plans under part C and based on
the threshold established under
subclause (II), conduct an
analysis to identify
prescribers that are outlier
opioid prescribers for a period
specified by the Secretary.
(II) Establishment of
threshold.--For purposes of
subclause (I) and subject to
subclause (III), the Secretary
shall, after consultation with
stakeholders, establish a
threshold, based on prescriber
specialty and geographic area,
for identifying whether a
prescriber in a specialty and
geographic area is an outlier
prescriber of opioids as
compared to other prescribers
of opioids within such
specialty and area.
(III) Exclusions.--The
Secretary may exclude the
following individuals and
prescribers from the analysis
under this clause:
(aa) Individuals
receiving hospice
services.
(bb) Individuals with
a cancer diagnosis.
(cc) Prescribers who
are the subject of an
investigation by the
Centers for Medicare &
Medicaid Services or
the Office of Inspector
General of the
Department of Health
and Human Services.
(iii) Contents of notification.--The
Secretary shall, based on input from
stakeholders, specify the resources and
other information to be included in
notifications provided under clause
(i).
(iv) Modifications and expansions.--
(I) Frequency.--Beginning 5
years after the date of the
enactment of this subparagraph,
the Secretary may change the
frequency of the notifications
described in clause (i) based
on stakeholder input.
(II) Expansion to other
prescriptions.--The Secretary
may expand notifications under
this subparagraph to include
identifications and
notifications with respect to
concurrent prescriptions of
covered Part D drugs used in
combination with opioids that
are considered to have adverse
side effects when so used in
such combination, as determined
by the Secretary.
(v) Opioids defined.--For purposes of
this subparagraph, the term ``opioids''
has such meaning as specified by the
Secretary through program instruction
or otherwise.
(5) Drug management program for at-risk
beneficiaries.--
(A) Authority to establish.--A PDP sponsor
may (and for plan years beginning on or after
January 1, 2021, a PDP sponsor shall) establish
a drug management program for at-risk
beneficiaries under which, subject to
subparagraph (B), the PDP sponsor may, in the
case of an at-risk beneficiary for prescription
drug abuse who is an enrollee in a prescription
drug plan of such PDP sponsor, limit such
beneficiary's access to coverage for frequently
abused drugs under such plan to frequently
abused drugs that are prescribed for such
beneficiary by one or more prescribers selected
under subparagraph (D), and dispensed for such
beneficiary by one or more pharmacies selected
under such subparagraph.
(B) Requirement for notices.--
(i) In general.--A PDP sponsor may
not limit the access of an at-risk
beneficiary for prescription drug abuse
to coverage for frequently abused drugs
under a prescription drug plan until
such sponsor--
(I) provides to the
beneficiary an initial notice
described in clause (ii) and a
second notice described in
clause (iii); and
(II) verifies with the
providers of the beneficiary
that the beneficiary is an at-
risk beneficiary for
prescription drug abuse.
(ii) Initial notice.--An initial
notice described in this clause is a
notice that provides to the
beneficiary--
(I) notice that the PDP
sponsor has identified the
beneficiary as potentially
being an at-risk beneficiary
for prescription drug abuse;
(II) information describing
all State and Federal public
health resources that are
designed to address
prescription drug abuse to
which the beneficiary has
access, including mental health
services and other counseling
services;
(III) notice of, and
information about, the right of
the beneficiary to appeal such
identification under subsection
(h) and the option of an
automatic escalation to
external review;
(IV) a request for the
beneficiary to submit to the
PDP sponsor preferences for
which prescribers and
pharmacies the beneficiary
would prefer the PDP sponsor to
select under subparagraph (D)
in the case that the
beneficiary is identified as an
at-risk beneficiary for
prescription drug abuse as
described in clause (iii)(I);
(V) an explanation of the
meaning and consequences of the
identification of the
beneficiary as potentially
being an at-risk beneficiary
for prescription drug abuse,
including an explanation of the
drug management program
established by the PDP sponsor
pursuant to subparagraph (A);
(VI) clear instructions that
explain how the beneficiary can
contact the PDP sponsor in
order to submit to the PDP
sponsor the preferences
described in subclause (IV) and
any other communications
relating to the drug management
program for at-risk
beneficiaries established by
the PDP sponsor; and
(VII) contact information for
other organizations that can
provide the beneficiary with
assistance regarding such drug
management program (similar to
the information provided by the
Secretary in other standardized
notices provided to part D
eligible individuals enrolled
in prescription drug plans
under this part).
(iii) Second notice.--A second notice
described in this clause is a notice
that provides to the beneficiary
notice--
(I) that the PDP sponsor has
identified the beneficiary as
an at-risk beneficiary for
prescription drug abuse;
(II) that such beneficiary is
subject to the requirements of
the drug management program for
at-risk beneficiaries
established by such PDP sponsor
for such plan;
(III) of the prescriber (or
prescribers) and pharmacy (or
pharmacies) selected for such
individual under subparagraph
(D);
(IV) of, and information
about, the beneficiary's right
to appeal such identification
under subsection (h) and the
option of an automatic
escalation to external review;
(V) that the beneficiary can,
in the case that the
beneficiary has not previously
submitted to the PDP sponsor
preferences for which
prescribers and pharmacies the
beneficiary would prefer the
PDP sponsor select under
subparagraph (D), submit such
preferences to the PDP sponsor;
and
(VI) that includes clear
instructions that explain how
the beneficiary can contact the
PDP sponsor.
(iv) Timing of notices.--
(I) In general.--Subject to
subclause (II), a second notice
described in clause (iii) shall
be provided to the beneficiary
on a date that is not less than
30 days after an initial notice
described in clause (ii) is
provided to the beneficiary.
(II) Exception.--In the case
that the PDP sponsor, in
conjunction with the Secretary,
determines that concerns
identified through rulemaking
by the Secretary regarding the
health or safety of the
beneficiary or regarding
significant drug diversion
activities require the PDP
sponsor to provide a second
notice described in clause
(iii) to the beneficiary on a
date that is earlier than the
date described in subclause
(I), the PDP sponsor may
provide such second notice on
such earlier date.
(C) At-risk beneficiary for prescription drug
abuse.--
(i) In general.--For purposes of this
paragraph, the term ``at-risk
beneficiary for prescription drug
abuse'' means a part D eligible
individual who is not an exempted
individual described in clause (ii)
and--
(I) who is identified as such
an at-risk beneficiary through
the use of clinical guidelines
that indicate misuse or abuse
of prescription drugs described
in subparagraph (G) and that
are developed by the Secretary
in consultation with PDP
sponsors and other
stakeholders, including
individuals entitled to
benefits under part A or
enrolled under part B, advocacy
groups representing such
individuals, physicians,
pharmacists, and other
clinicians, retail pharmacies,
plan sponsors, entities
delegated by plan sponsors, and
biopharmaceutical
manufacturers; or
(II) with respect to whom the
PDP sponsor of a prescription
drug plan, upon enrolling such
individual in such plan,
received notice from the
Secretary that such individual
was identified under this
paragraph to be an at-risk
beneficiary for prescription
drug abuse under the
prescription drug plan in which
such individual was most
recently previously enrolled
and such identification has not
been terminated under
subparagraph (F).
(ii) Exempted individual described.--
An exempted individual described in
this clause is an individual who--
(I) receives hospice care
under this title;
(II) is a resident of a long-
term care facility, of a
facility described in section
1905(d), or of another facility
for which frequently abused
drugs are dispensed for
residents through a contract
with a single pharmacy; or
(III) the Secretary elects to
treat as an exempted individual
for purposes of clause (i).
(iii) Program size.--The Secretary
shall establish policies, including the
guidelines developed under clause
(i)(I) and the exemptions under clause
(ii)(III), to ensure that the
population of enrollees in a drug
management program for at-risk
beneficiaries operated by a
prescription drug plan can be
effectively managed by such plans.
(iv) Clinical contact.--With respect
to each at-risk beneficiary for
prescription drug abuse enrolled in a
prescription drug plan offered by a PDP
sponsor, the PDP sponsor shall contact
the beneficiary's providers who have
prescribed frequently abused drugs
regarding whether prescribed
medications are appropriate for such
beneficiary's medical conditions.
(D) Selection of prescribers and
pharmacies.--
(i) In general.--With respect to each
at-risk beneficiary for prescription
drug abuse enrolled in a prescription
drug plan offered by such sponsor, a
PDP sponsor shall, based on the
preferences submitted to the PDP
sponsor by the beneficiary pursuant to
clauses (ii)(IV) and (iii)(V) of
subparagraph (B) (except as otherwise
provided in this subparagraph) select--
(I) one, or, if the PDP
sponsor reasonably determines
it necessary to provide the
beneficiary with reasonable
access under clause (ii), more
than one, individual who is
authorized to prescribe
frequently abused drugs
(referred to in this paragraph
as a ``prescriber'') who may
write prescriptions for such
drugs for such beneficiary; and
(II) one, or, if the PDP
sponsor reasonably determines
it necessary to provide the
beneficiary with reasonable
access under clause (ii), more
than one, pharmacy that may
dispense such drugs to such
beneficiary.
For purposes of subclause (II), in the
case of a pharmacy that has multiple
locations that share real-time
electronic data, all such locations of
the pharmacy shall collectively be
treated as one pharmacy.
(ii) Reasonable access.--In making
the selections under this
subparagraph--
(I) a PDP sponsor shall
ensure that the beneficiary
continues to have reasonable
access to frequently abused
drugs (as defined in
subparagraph (G)), taking into
account geographic location,
beneficiary preference, impact
on costsharing, and reasonable
travel time; and
(II) a PDP sponsor shall
ensure such access (including
access to prescribers and
pharmacies with respect to
frequently abused drugs) in the
case of individuals with
multiple residences, in the
case of natural disasters and
similar situations, and in the
case of the provision of
emergency services.
(iii) Beneficiary preferences.--If an
at-risk beneficiary for prescription
drug abuse submits preferences for
which in-network prescribers and
pharmacies the beneficiary would prefer
the PDP sponsor select in response to a
notice under subparagraph (B), the PDP
sponsor shall--
(I) review such preferences;
(II) select or change the
selection of prescribers and
pharmacies for the beneficiary
based on such preferences; and
(III) inform the beneficiary
of such selection or change of
selection.
(iv) Exception regarding beneficiary
preferences.--In the case that the PDP
sponsor determines that a change to the
selection of prescriber or pharmacy
under clause (iii)(II) by the PDP
sponsor is contributing or would
contribute to prescription drug abuse
or drug diversion by the beneficiary,
the PDP sponsor may change the
selection of prescriber or pharmacy for
the beneficiary without regard to the
preferences of the beneficiary
described in clause (iii). If the PDP
sponsor changes the selection pursuant
to the preceding sentence, the PDP
sponsor shall provide the beneficiary
with--
(I) at least 30 days written
notice of the change of
selection; and
(II) a rationale for the
change.
(v) Confirmation.--Before selecting a
prescriber or pharmacy under this
subparagraph, a PDP sponsor must notify
the prescriber and pharmacy that the
beneficiary involved has been
identified for inclusion in the drug
management program for at-risk
beneficiaries and that the prescriber
and pharmacy has been selected as the
beneficiary's designated prescriber and
pharmacy.
(E) Terminations and appeals.--The
identification of an individual as an at-risk
beneficiary for prescription drug abuse under
this paragraph, a coverage determination made
under a drug management program for at-risk
beneficiaries, the selection of prescriber or
pharmacy under subparagraph (D), and
information to be shared under subparagraph
(I), with respect to such individual, shall be
subject to reconsideration and appeal under
subsection (h) and the option of an automatic
escalation to external review to the extent
provided by the Secretary.
(F) Termination of identification.--
(i) In general.--The Secretary shall
develop standards for the termination
of identification of an individual as
an at-risk beneficiary for prescription
drug abuse under this paragraph. Under
such standards such identification
shall terminate as of the earlier of--
(I) the date the individual
demonstrates that the
individual is no longer likely,
in the absence of the
restrictions under this
paragraph, to be an at-risk
beneficiary for prescription
drug abuse described in
subparagraph (C)(i); and
(II) the end of such maximum
period of identification as the
Secretary may specify.
(ii) Rule of construction.--Nothing
in clause (i) shall be construed as
preventing a plan from identifying an
individual as an at-risk beneficiary
for prescription drug abuse under
subparagraph (C)(i) after such
termination on the basis of additional
information on drug use occurring after
the date of notice of such termination.
(G) Frequently abused drug.--For purposes of
this subsection, the term ``frequently abused
drug'' means a drug that is a controlled
substance that the Secretary determines to be
frequently abused or diverted.
(H) Data disclosure.--
(i) Data on decision to impose
limitation.--In the case of an at-risk
beneficiary for prescription drug abuse
(or an individual who is a potentially
at-risk beneficiary for prescription
drug abuse) whose access to coverage
for frequently abused drugs under a
prescription drug plan has been limited
by a PDP sponsor under this paragraph,
the Secretary shall establish rules and
procedures to require the PDP sponsor
to disclose data, including any
necessary individually identifiable
health information, in a form and
manner specified by the Secretary,
about the decision to impose such
limitations and the limitations imposed
by the sponsor under this part.
(ii) Data to reduce fraud, abuse, and
waste.--The Secretary shall establish
rules and procedures to require PDP
sponsors operating a drug management
program for at-risk beneficiaries under
this paragraph to provide the Secretary
with such data as the Secretary
determines appropriate for purposes of
identifying patterns of prescription
drug utilization for plan enrollees
that are outside normal patterns and
that may indicate fraudulent, medically
unnecessary, or unsafe use.
(I) Sharing of information for subsequent
plan enrollments.--The Secretary shall
establish procedures under which PDP sponsors
who offer prescription drug plans shall share
information with respect to individuals who are
at-risk beneficiaries for prescription drug
abuse (or individuals who are potentially at-
risk beneficiaries for prescription drug abuse)
and enrolled in a prescription drug plan and
who subsequently disenroll from such plan and
enroll in another prescription drug plan
offered by another PDP sponsor.
(J) Privacy issues.--Prior to the
implementation of the rules and procedures
under this paragraph, the Secretary shall
clarify privacy requirements, including
requirements under the regulations promulgated
pursuant to section 264(c) of the Health
Insurance Portability and Accountability Act of
1996 (42 U.S.C. 1320d-2 note), related to the
sharing of data under subparagraphs (H) and (I)
by PDP sponsors. Such clarification shall
provide that the sharing of such data shall be
considered to be protected health information
in accordance with the requirements of the
regulations promulgated pursuant to such
section 264(c).
(K) Education.--The Secretary shall provide
education to enrollees in prescription drug
plans of PDP sponsors and providers regarding
the drug management program for at-risk
beneficiaries described in this paragraph,
including education--
(i) provided by Medicare
administrative contractors through the
improper payment outreach and education
program described in section 1874A(h);
and
(ii) through current education
efforts (such as State health insurance
assistance programs described in
subsection (a)(1)(A) of section 119 of
the Medicare Improvements for Patients
and Providers Act of 2008 (42 U.S.C.
1395b-3 note)) and materials directed
toward such enrollees.
(L) Application under ma-pd plans.--Pursuant
to section 1860D-21(c)(1), the provisions of
this paragraph apply under part D to MA
organizations offering MA-PD plans to MA
eligible individuals in the same manner as such
provisions apply under this part to a PDP
sponsor offering a prescription drug plan to a
part D eligible individual.
(M) CMS compliance review.--The Secretary
shall ensure that existing plan sponsor
compliance reviews and audit processes include
the drug management programs for at-risk
beneficiaries under this paragraph, including
appeals processes under such programs.
(6) Utilization management tool to prevent drug
abuse.--
(A) In general.--A tool described in this
paragraph is any of the following:
(i) A utilization tool designed to
prevent the abuse of frequently abused
drugs by individuals and to prevent the
diversion of such drugs at pharmacies.
(ii) Retrospective utilization review
to identify--
(I) individuals that receive
frequently abused drugs at a
frequency or in amounts that
are not clinically appropriate;
and
(II) providers of services or
suppliers that may facilitate
the abuse or diversion of
frequently abused drugs by
beneficiaries.
(iii) Consultation with the
contractor described in subparagraph
(B) to verify if an individual
enrolling in a prescription drug plan
offered by a PDP sponsor has been
previously identified by another PDP
sponsor as an individual described in
clause (ii)(I).
(B) Reporting.--A PDP sponsor offering a
prescription drug plan (and an MA organization
offering an MA-PD plan) in a State shall submit
to the Secretary and the Medicare drug
integrity contractor with which the Secretary
has entered into a contract under section 1893
with respect to such State a report, on a
monthly basis, containing information on--
(i) any provider of services or
supplier described in subparagraph
(A)(ii)(II) that is identified by such
plan sponsor (or organization) during
the 30-day period before such report is
submitted; and
(ii) the name and prescription
records of individuals described in
paragraph (5)(C).
(C) CMS compliance review.--The Secretary
shall ensure that plan sponsor compliance
reviews and program audits biennially include a
certification that utilization management tools
under this paragraph are in compliance with the
requirements for such tools.
(6) Providing prescription drug plans with parts a
and b claims data to promote the appropriate use of
medications and improve health outcomes.--
(A) Process.--Subject to subparagraph (B),
the Secretary shall establish a process under
which a PDP sponsor of a prescription drug plan
may submit a request for the Secretary to
provide the sponsor, on a periodic basis and in
an electronic format, beginning in plan year
2020, data described in subparagraph (D) with
respect to enrollees in such plan. Such data
shall be provided without regard to whether
such enrollees are described in clause (ii) of
paragraph (2)(A).
(B) Purposes.--A PDP sponsor may use the data
provided to the sponsor pursuant to
subparagraph (A) for any of the following
purposes:
(i) To optimize therapeutic outcomes
through improved medication use, as
such phrase is used in clause (i) of
paragraph (2)(A).
(ii) To improving care coordination
so as to prevent adverse health
outcomes, such as preventable emergency
department visits and hospital
readmissions.
(iii) For any other purpose
determined appropriate by the
Secretary.
(C) Limitations on data use.--A PDP sponsor
shall not use data provided to the sponsor
pursuant to subparagraph (A) for any of the
following purposes:
(i) To inform coverage determinations
under this part.
(ii) To conduct retroactive reviews
of medically accepted indications
determinations.
(iii) To facilitate enrollment
changes to a different prescription
drug plan or an MA-PD plan offered by
the same parent organization.
(iv) To inform marketing of benefits.
(v) For any other purpose that the
Secretary determines is necessary to
include in order to protect the
identity of individuals entitled to, or
enrolled for, benefits under this title
and to protect the security of personal
health information.
(D) Data described.--The data described in
this clause are standardized extracts (as
determined by the Secretary) of claims data
under parts A and B for items and services
furnished under such parts for time periods
specified by the Secretary. Such data shall
include data as current as practicable.
(d) Consumer Satisfaction Surveys.--In order to provide for
comparative information under section 1860D-1(c)(3)(A)(v), the
Secretary shall conduct consumer satisfaction surveys with
respect to PDP sponsors and prescription drug plans in a manner
similar to the manner such surveys are conducted for MA
organizations and MA plans under part C.
(e) Electronic Prescription Program.--
(1) Application of standards.--As of such date as the
Secretary may specify, but not later than 1 year after
the date of promulgation of final standards under
paragraph (4)(D), prescriptions and other information
described in paragraph (2)(A) for covered part D drugs
prescribed for part D eligible individuals that are
transmitted electronically shall be transmitted only in
accordance with such standards under an electronic
prescription drug program that meets the requirements
of paragraph (2).
(2) Program requirements.--Consistent with uniform
standards established under paragraph (3)--
(A) Provision of information to prescribing
health care professional and dispensing
pharmacies and pharmacists.--An electronic
prescription drug program shall provide for the
electronic transmittal to the prescribing
health care professional and to the dispensing
pharmacy and pharmacist of the prescription and
information on eligibility and benefits
(including the drugs included in the applicable
formulary, any tiered formulary structure, and
any requirements for prior authorization) and
of the following information with respect to
the prescribing and dispensing of a covered
part D drug:
(i) Information on the drug being
prescribed or dispensed and other drugs
listed on the medication history,
including information on drug-drug
interactions, warnings or cautions,
and, when indicated, dosage
adjustments.
(ii) Information on the availability
of lower cost, therapeutically
appropriate alternatives (if any) for
the drug prescribed.
(B) Application to medical history
information.--Effective on and after such date
as the Secretary specifies and after the
establishment of appropriate standards to carry
out this subparagraph, the program shall
provide for the electronic transmittal in a
manner similar to the manner under subparagraph
(A) of information that relates to the medical
history concerning the individual and related
to a covered part D drug being prescribed or
dispensed, upon request of the professional or
pharmacist involved.
(C) Limitations.--Information shall only be
disclosed under subparagraph (A) or (B) if the
disclosure of such information is permitted
under the Federal regulations (concerning the
privacy of individually identifiable health
information) promulgated under section 264(c)
of the Health Insurance Portability and
Accountability Act of 1996.
(D) Timing.--To the extent feasible, the
information exchanged under this paragraph
shall be on an interactive, real-time basis.
(E) Electronic prior authorization.--
(i) In general.--Not later than
January 1, 2021, the program shall
provide for the secure electronic
transmission of--
(I) a prior authorization
request from the prescribing
health care professional for
coverage of a covered part D
drug for a part D eligible
individual enrolled in a part D
plan (as defined in section
1860D-23(a)(5)) to the PDP
sponsor or Medicare Advantage
organization offering such
plan; and
(II) a response, in
accordance with this
subparagraph, from such PDP
sponsor or Medicare Advantage
organization, respectively, to
such professional.
(ii) Electronic transmission.--
(I) Exclusions.--For purposes
of this subparagraph, a
facsimile, a proprietary payer
portal that does not meet
standards specified by the
Secretary, or an electronic
form shall not be treated as an
electronic transmission
described in clause (i).
(II) Standards.--In order to
be treated, for purposes of
this subparagraph, as an
electronic transmission
described in clause (i), such
transmission shall comply with
technical standards adopted by
the Secretary in consultation
with the National Council for
Prescription Drug Programs,
other standard setting
organizations determined
appropriate by the Secretary,
and stakeholders including PDP
sponsors, Medicare Advantage
organizations, health care
professionals, and health
information technology software
vendors.
(III) Application.--
Notwithstanding any other
provision of law, for purposes
of this subparagraph, the
Secretary may require the use
of such standards adopted under
subclause (II) in lieu of any
other applicable standards for
an electronic transmission
described in clause (i) for a
covered part D drug for a part
D eligible individual.
(3) Standards.--
(A) In general.--The Secretary shall provide
consistent with this subsection for the
promulgation of uniform standards relating to
the requirements for electronic prescription
drug programs under paragraph (2).
(B) Objectives.--Such standards shall be
consistent with the objectives of improving--
(i) patient safety;
(ii) the quality of care provided to
patients; and
(iii) efficiencies, including cost
savings, in the delivery of care.
(C) Design criteria.--Such standards shall--
(i) be designed so that, to the
extent practicable, the standards do
not impose an undue administrative
burden on prescribing health care
professionals and dispensing pharmacies
and pharmacists;
(ii) be compatible with standards
established under part C of title XI,
standards established under subsection
(b)(2)(B)(i), and with general health
information technology standards; and
(iii) be designed so that they permit
electronic exchange of drug labeling
and drug listing information maintained
by the Food and Drug Administration and
the National Library of Medicine.
(D) Permitting use of appropriate
messaging.--Such standards shall allow for the
messaging of information only if it relates to
the appropriate prescribing of drugs, including
quality assurance measures and systems referred
to in subsection (c)(1)(B).
(E) Permitting patient designation of
dispensing pharmacy.--
(i) In general.--Consistent with
clause (ii), such standards shall
permit a part D eligible individual to
designate a particular pharmacy to
dispense a prescribed drug.
(ii) No change in benefits.--Clause
(i) shall not be construed as
affecting--
(I) the access required to be
provided to pharmacies by a
prescription drug plan; or
(II) the application of any
differences in benefits or
payments under such a plan
based on the pharmacy
dispensing a covered part D
drug.
(4) Development, promulgation, and modification of
standards.--
(A) Initial standards.--Not later than
September 1, 2005, the Secretary shall develop,
adopt, recognize, or modify initial uniform
standards relating to the requirements for
electronic prescription drug programs described
in paragraph (2) taking into consideration the
recommendations (if any) from the National
Committee on Vital and Health Statistics (as
established under section 306(k) of the Public
Health Service Act (42 U.S.C. 242k(k))) under
subparagraph (B).
(B) Role of ncvhs.--The National Committee on
Vital and Health Statistics shall develop
recommendations for uniform standards relating
to such requirements in consultation with the
following:
(i) Standard setting organizations
(as defined in section 1171(8))
(ii) Practicing physicians.
(iii) Hospitals.
(iv) Pharmacies.
(v) Practicing pharmacists.
(vi) Pharmacy benefit managers.
(vii) State boards of pharmacy.
(viii) State boards of medicine.
(ix) Experts on electronic
prescribing.
(x) Other appropriate Federal
agencies.
(C) Pilot project to test initial
standards.--
(i) In general.--During the 1-year
period that begins on January 1, 2006,
the Secretary shall conduct a pilot
project to test the initial standards
developed under subparagraph (A) prior
to the promulgation of the final
uniform standards under subparagraph
(D) in order to provide for the
efficient implementation of the
requirements described in paragraph
(2).
(ii) Exception.--Pilot testing of
standards is not required under clause
(i) where there already is adequate
industry experience with such
standards, as determined by the
Secretary after consultation with
effected standard setting organizations
and industry users.
(iii) Voluntary participation of
physicians and pharmacies.--In order to
conduct the pilot project under clause
(i), the Secretary shall enter into
agreements with physicians, physician
groups, pharmacies, hospitals, PDP
sponsors, MA organizations, and other
appropriate entities under which health
care professionals electronically
transmit prescriptions to dispensing
pharmacies and pharmacists in
accordance with such standards.
(iv) Evaluation and report.--
(I) Evaluation.--The
Secretary shall conduct an
evaluation of the pilot project
conducted under clause (i).
(II) Report to congress.--Not
later than April 1, 2007, the
Secretary shall submit to
Congress a report on the
evaluation conducted under
subclause (I).
(D) Final standards.--Based upon the
evaluation of the pilot project under
subparagraph (C)(iv)(I) and not later than
April 1, 2008, the Secretary shall promulgate
uniform standards relating to the requirements
described in paragraph (2).
(5) Relation to state laws.--The standards
promulgated under this subsection shall supersede any
State law or regulation that--
(A) is contrary to the standards or restricts
the ability to carry out this part; and
(B) pertains to the electronic transmission
of medication history and of information on
eligibility, benefits, and prescriptions with
respect to covered part D drugs under this
part.
(6) Establishment of safe harbor.--The Secretary, in
consultation with the Attorney General, shall
promulgate regulations that provide for a safe harbor
from sanctions under paragraphs (1) and (2) of section
1128B(b) and an exception to the prohibition under
subsection (a)(1) of section 1877 with respect to the
provision of nonmonetary remuneration (in the form of
hardware, software, or information technology and
training services) necessary and used solely to receive
and transmit electronic prescription information in
accordance with the standards promulgated under this
subsection--
(A) in the case of a hospital, by the
hospital to members of its medical staff;
(B) in the case of a group practice (as
defined in section 1877(h)(4)), by the practice
to prescribing health care professionals who
are members of such practice; and
(C) in the case of a PDP sponsor or MA
organization, by the sponsor or organization to
pharmacists and pharmacies participating in the
network of such sponsor or organization, and to
prescribing health care professionals.
(f) Grievance Mechanism.--Each PDP sponsor shall provide
meaningful procedures for hearing and resolving grievances
between the sponsor (including any entity or individual through
which the sponsor provides covered benefits) and enrollees with
prescription drug plans of the sponsor under this part in
accordance with section 1852(f).
(g) Coverage Determinations and Reconsiderations.--
(1) Application of coverage determination and
reconsideration provisions.--A PDP sponsor shall meet
the requirements of paragraphs (1) through (3) of
section 1852(g) with respect to covered benefits under
the prescription drug plan it offers under this part in
the same manner as such requirements apply to an MA
organization with respect to benefits it offers under
an MA plan under part C.
(2) Request for a determination for the treatment of
tiered formulary drug.--In the case of a prescription
drug plan offered by a PDP sponsor that provides for
tiered cost-sharing for drugs included within a
formulary and provides lower cost-sharing for preferred
drugs included within the formulary, a part D eligible
individual who is enrolled in the plan may request an
exception to the tiered cost-sharing structure. Under
such an exception, a nonpreferred drug could be covered
under the terms applicable for preferred drugs if the
prescribing physician determines that the preferred
drug for treatment of the same condition either would
not be as effective for the individual or would have
adverse effects for the individual or both. A PDP
sponsor shall have an exceptions process under this
paragraph consistent with guidelines established by the
Secretary for making a determination with respect to
such a request. Denial of such an exception shall be
treated as a coverage denial for purposes of applying
subsection (h).
(h) Appeals.--
(1) In general.--Subject to paragraph (2), a PDP
sponsor shall meet the requirements of paragraphs (4)
and (5) of section 1852(g) with respect to benefits
(including a determination related to the application
of tiered cost-sharing described in subsection (g)(2))
in a manner similar (as determined by the Secretary) to
the manner such requirements apply to an MA
organization with respect to benefits under the
original medicare fee-for-service program option it
offers under an MA plan under part C. In applying this
paragraph only the part D eligible individual shall be
entitled to bring such an appeal.
(2) Limitation in cases on nonformulary
determinations.--A part D eligible individual who is
enrolled in a prescription drug plan offered by a PDP
sponsor may appeal under paragraph (1) a determination
not to provide for coverage of a covered part D drug
that is not on the formulary under the plan only if the
prescribing physician determines that all covered part
D drugs on any tier of the formulary for treatment of
the same condition would not be as effective for the
individual as the nonformulary drug, would have adverse
effects for the individual, or both.
(3) Treatment of nonformulary determinations.--If a
PDP sponsor determines that a plan provides coverage
for a covered part D drug that is not on the formulary
of the plan, the drug shall be treated as being
included on the formulary for purposes of section
1860D-2(b)(4)(C)(i).
(i) Privacy, Confidentiality, and Accuracy of Enrollee
Records.--The provisions of section 1852(h) shall apply to a
PDP sponsor and prescription drug plan in the same manner as it
applies to an MA organization and an MA plan.
(j) Treatment of Accreditation.--Subparagraph (A) of section
1852(e)(4) (relating to treatment of accreditation) shall apply
to a PDP sponsor under this part with respect to the following
requirements, in the same manner as it applies to an MA
organization with respect to the requirements in subparagraph
(B) (other than clause (vii) thereof) of such section:
(1) Subsection (b) of this section (relating to
access to covered part D drugs).
(2) Subsection (c) of this section (including quality
assurance and medication therapy management).
(3) Subsection (i) of this section (relating to
confidentiality and accuracy of enrollee records).
(k) Public Disclosure of Pharmaceutical Prices for Equivalent
Drugs.--
(1) In general.--A PDP sponsor offering a
prescription drug plan shall provide that each pharmacy
that dispenses a covered part D drug shall inform an
enrollee of any differential between the price of the
drug to the enrollee and the price of the lowest priced
generic covered part D drug under the plan that is
therapeutically equivalent and bioequivalent and
available at such pharmacy.
(2) Timing of notice.--
(A) In general.--Subject to subparagraph (B),
the information under paragraph (1) shall be
provided at the time of purchase of the drug
involved, or, in the case of dispensing by mail
order, at the time of delivery of such drug.
(B) Waiver.--The Secretary may waive
subparagraph (A) in such circumstances as the
Secretary may specify.
(l) Requirements with Respect to Sales and Marketing
Activities.--The following provisions shall apply to a PDP
sponsor (and the agents, brokers, and other third parties
representing such sponsor) in the same manner as such
provisions apply to a Medicare Advantage organization (and the
agents, brokers, and other third parties representing such
organization):
(1) The prohibition under section 1851(h)(4)(C) on
conducting activities described in section 1851(j)(1).
(2) The requirement under section 1851(h)(4)(D) to
conduct activities described in section 1851(j)(2) in
accordance with the limitations established under such
subsection.
(3) The inclusion of the plan type in the plan name
under section 1851(h)(6).
(4) The requirements regarding the appointment of
agents and brokers and compliance with State
information requests under subparagraphs (A) and (B),
respectively, of section 1851(h)(7).
(m) Program Integrity Transparency Measures.--For program
integrity transparency measures applied with respect to
prescription drug plan and MA plans, see section 1859(i).
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