[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2753 Placed on Calendar Senate (PCS)]
Calendar No. 609
106th CONGRESS
2d Session
S. 2753
To amend title XVIII of the Social Security Act to provide a
prescription drug benefit for the aged and disabled under the medicare
program, to enhance the preventive benefits covered under such program,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 19, 2000
Mr. Daschle (for himself, Mr. Moynihan, Mr. Kennedy, Mr. Akaka, Mr.
Baucus, Mr. Biden, Mr. Bingaman, Mrs. Boxer, Mr. Bryan, Mr. Byrd, Mr.
Cleland, Mr. Dodd, Mr. Dorgan, Mr. Durbin, Mrs. Feinstein, Mr. Graham,
Mr. Harkin, Mr. Hollings, Mr. Inouye, Mr. Johnson, Mr. Kerry, Mr.
Lautenberg, Mr. Leahy, Mr. Levin, Mrs. Lincoln, Ms. Mikulski, Mrs.
Murray, Mr. Reed, Mr. Reid, Mr. Robb, Mr. Rockefeller, Mr. Sarbanes,
Mr. Schumer, and Mr. Wellstone) introduced the following bill; which
was read twice and ordered placed on the calendar
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to provide a
prescription drug benefit for the aged and disabled under the medicare
program, to enhance the preventive benefits covered under such program,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare Expansion
for Needed Drugs (MEND) Act of 2000''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--PRESCRIPTION DRUG BENEFIT PROGRAM
Sec. 101. Prescription drug benefit program.
``Part D--Prescription Drug Benefit for the Aged and Disabled
``Sec. 1860. Establishment of prescription drug benefit program
for the aged and disabled.
``Sec. 1860A. Scope of benefits.
``Sec. 1860B. Payment of benefits; benefit limits.
``Sec. 1860C. Eligibility and enrollment.
``Sec. 1860D. Premiums.
``Sec. 1860F. Prescription Drug Insurance Account.
``Sec. 1860G. Administration of benefits.
``Sec. 1860H. Employer incentive program for employment-based
retiree drug coverage.
``Sec. 1860I. Appropriations to cover Government contributions.
``Sec. 1860J. Prescription drug defined.''.
Sec. 102. Medicaid buy-in of medicare prescription drug coverage for
certain low-income individuals.
``Sec. 1860E. Special eligibility, enrollment, and copayment
rules for low-income individuals.''.
Sec. 103. Catastrophic prescription drug coverage benefit.
Sec. 104. Comprehensive immunosuppressive drug coverage for transplant
patients.
Sec. 105. GAO study and biennial reports on competition and savings.
Sec. 106. MedPAC study and annual reports on the pharmaceutical market,
pharmacies, and beneficiary access.
TITLE II--ENHANCED MEDICARE PREVENTION PROGRAM
Sec. 201. MedPAC biennial report.
Sec. 202. National Institute on Aging study and report.
Sec. 203. Institute of Medicine 5-year medicare prevention benefit
study and report.
Sec. 204. Fast-track consideration of prevention benefit legislation.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Prescription drug coverage was not a standard part of
health insurance when the medicare program under title XVIII of
the Social Security Act was enacted in 1965. Since 1965,
however, drug coverage has become a key component of most
private and public health insurance coverage, except for the
medicare program.
(2) At least \2/3\ of medicare beneficiaries have
unreliable, inadequate, or no drug coverage at all.
(3) Seniors who do not have drug coverage typically pay, at
a minimum, 15 percent more than people with coverage.
(4) Medicare beneficiaries at all income levels lack
prescription drug coverage, with more than \1/2\ of such
beneficiaries having incomes greater than 150 percent of the
poverty line.
(5) The number of private firms offering retiree health
coverage is declining.
(6) Medigap premiums for drugs are too expensive for most
beneficiaries and are highest for older senior citizens, who
need prescription drug coverage the most and typically have the
lowest incomes.
(7) The management of a medicare prescription drug benefit
should mirror the practices employed by private entities in
delivering prescription drugs. Discounts should be achieved
through competition.
(8) All medicare beneficiaries should have access to a
voluntary, reliable, affordable outpatient drug benefit as part
of the medicare program that assists with the high cost of
prescription drugs and protects them against excessive out-of-
pocket costs.
(9) The addition of a medicare drug benefit should be
consistent with an overall plan to strengthen and modernize the
medicare program.
TITLE I--PRESCRIPTION DRUG BENEFIT PROGRAM
SEC. 101. PRESCRIPTION DRUG BENEFIT PROGRAM.
(a) In General.--Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) is amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:
``Part D--Prescription Drug Benefit for the Aged and Disabled
``establishment of prescription drug benefit program for the aged and
disabled
``Sec. 1860. (a) In General.--There is established a voluntary
insurance program to provide prescription drug benefits in accordance
with the provisions of this part for individuals who are aged or
disabled or have end-stage renal disease and who elect to enroll under
such program, to be financed from premium payments by enrollees
together with contributions from funds appropriated by the Federal
Government.
``(b) Noninterference.--In administering the prescription drug
benefit program established under this part, the Secretary may not--
``(1) require a particular formulary or institute a price
structure for benefits;
``(2) interfere in any way with negotiations between
private entities and drug manufacturers, or wholesalers; or
``(3) otherwise interfere with the competitive nature of
providing a prescription drug benefit through private entities.
``scope of benefits
``Sec. 1860A. (a) In General.--The benefits provided to an
individual enrolled in the insurance program under this part shall
consist of--
``(1) payments made, in accordance with the provisions of
this part, for covered prescription drugs (as specified in
subsection (b)) dispensed by any pharmacy participating in the
program under this part (and, in circumstances designated by
the private entity, by a nonparticipating pharmacy), including
any specifically named drug prescribed for the individual by a
qualified health care professional regardless of whether the
drug is included in a formulary established by the private
entity if such drug is certified as medically necessary by such
health care professional, up to the benefit limits specified in
section 1860B; and
``(2) charging by pharmacies of the negotiated price--
``(A) for all covered prescription drugs, without
regard to such benefit limit; and
``(B) established with respect to any drugs or
classes of drugs described in subparagraphs (A) through
(D) or (F) of section 1927(d)(2) that are available to
individuals receiving benefits under this title.
``(b) Covered Prescription Drugs.--
``(1) In general.--Covered prescription drugs, for purposes
of this part, include all prescription drugs (as defined in
section 1860J(1)), including smoking cessation agents, except
as otherwise provided in this subsection.
``(2) Exclusions from coverage.--Covered prescription drugs
shall not include drugs or classes of drugs described in
subparagraphs (A) through (D) and (F) through (H) of section
1927(d)(2) unless--
``(A) specifically provided otherwise by the
Secretary with respect to a drug in any of such
classes; or
``(B) a drug in any of such classes is certified to
be medically necessary by a health care professional.
``(3) Exclusion of prescription drugs to the extent covered
under part a or b.--A drug prescribed for an individual that
would otherwise be a covered prescription drug under this part
shall not be so considered to the extent that payment for such
drug is available under part A or B, including all injectable
drugs and biologicals for which payment was made or should have
been made by a carrier under section 1861(s)(2) (A) or (B) as
of the date of enactment of the Medicare Expansion for Needed
Drugs (MEND) Act of 2000. Drugs otherwise covered under part A
or B shall be covered under this part to the extent that
benefits under part A or B are exhausted.
``payment of benefits; benefit limits
``Sec. 1860B. (a) Payment of Benefits.--There shall be paid from
the Prescription Drug Insurance Account within the Supplementary
Medical Insurance Trust Fund, in the case of each individual who is
enrolled in the insurance program under this part and who purchases
covered prescription drugs in a calendar year, an amount, not to exceed
50 percent of the applicable limit under subsection (b), equal to 50
percent of the negotiated price for each such covered prescription drug
or such higher percentage as is proposed by a private entity pursuant
to section 1860G(d)(7), if the Secretary finds that such percentage
will not increase aggregate costs to the Prescription Drug Insurance
Account.
``(b) Benefit Limits.--
``(1) Calendar years 2002 through 2009.--For purposes of
subsection (a), the limit under this subsection is--
``(A) for each of calendar years 2002, 2003, and
2004, $2,000;
``(B) for each of calendar years 2005, 2006, and
2007, $3,000;
``(C) for calendar year 2008, $4,000; and
``(D) for calendar year 2009, $5,000.
``(2) Calendar year 2010 and subsequent years.--For
purposes of subsection (a), the limit under this subsection for
calendar year 2010 and each subsequent calendar year is equal
to the greater of--
``(A) the limit for the preceding year adjusted by
the percentage change in the Consumer Price Index for
all urban consumers (U.S. urban average) for the 12-
month period ending with June of the preceding year; or
``(B) the limit for the preceding year.
``eligibility and enrollment
``Sec. 1860C. (a) Eligibility.--Every individual who, in or after
2002, is entitled to hospital insurance benefits under part A or
enrolled in the medical insurance program under part B is eligible to
enroll, in accordance with the provisions of this section, in the
insurance program under this part, during an enrollment period
prescribed in or under this section, in such manner and form as may be
prescribed by regulations.
``(b) Enrollment.--
``(1) In general.--Each individual who satisfies subsection
(a) shall be enrolled (or eligible to enroll) in the program
under this part in accordance with the provisions of section
1837, as if that section applied to this part, except as
otherwise explicitly provided in this part.
``(2) Single enrollment period.--Except as provided in
section 1837(i) (as such section applies to this part), 1860E,
or 1860H, or as otherwise explicitly provided, no individual
shall be entitled to enroll in the program under this part at
any time after the initial enrollment period.
``(3) Special enrollment period for 2002.--
``(A) In general.--An individual who first
satisfies subsection (a) in 2002 may, at any time on or
before December 31, 2002--
``(i) enroll in the program under this
part; and
``(ii) enroll or reenroll in such program
after having previously declined or terminated
enrollment in such program.
``(B) Effective date of coverage.--An individual
who enrolls under the program under this part pursuant
to subparagraph (A) shall be entitled to benefits under
this part beginning on the first day of the month
following the month in which such enrollment occurs.
``(c) Period of Coverage.--
``(1) In general.--Except as otherwise provided in this
part, an individual's coverage under the program under this
part shall be effective for the period provided in section
1838, as if that section applied to the program under this
part.
``(2) Part d coverage terminated by termination of coverage
under parts a and b.--In addition to the causes of termination
specified in section 1838, an individual's coverage under this
part shall be terminated when the individual retains coverage
under neither the program under part A nor the program under
part B, effective on the effective date of termination of
coverage under part A or (if later) under part B.
``premiums
``Sec. 1860D. (a) Annual Establishment of Monthly Premium Rates.--
``(1) In general.--The Secretary shall, during September of
2001 and of each succeeding year, determine and promulgate a
monthly premium rate for the succeeding year in accordance with
the provisions of this subsection.
``(2) Actuarial determinations.--
``(A) Determination of annual benefit costs.--The
Secretary shall estimate annually for the succeeding
year the amount equal to the total of the benefits that
will be payable from the Prescription Drug Insurance
Account for prescription drugs dispensed in such
calendar year with respect to enrollees in the program
under this part. In calculating such amount, the
Secretary shall include an appropriate amount for a
contingency margin.
``(B) Determination of monthly premium rates.--
``(i) In general.--The Secretary shall
determine the monthly premium rate with respect
to such enrollees for such succeeding year,
which shall be \1/12\ of the share specified in
clause (ii) of the amount determined under
subparagraph (A), divided by the total number
of such enrollees, and rounded (if such rate is
not a multiple of 10 cents) to the nearest
multiple of 10 cents.
``(ii) Enrollee and employer percentage
shares.--The share specified in this clause,
for purposes of clause (i), shall be--
``(I) one-half, in the case of
premiums paid by an individual enrolled
in the program under this part; and
``(II) two-thirds, in the case of
premiums paid for such an individual by
a former employer (as defined in
section 1860H(f)(2)).
``(3) Publication of assumptions.--The Secretary shall
publish, together with the promulgation of the monthly premium
rates for the succeeding year, a statement setting forth the
actuarial assumptions and bases employed in arriving at the
amounts and rates determined under paragraphs (1) and (2).
``(b) Payment of Premiums.--
``(1) Payments by deduction from social security, railroad
retirement benefits, or benefits administered by opm.--
``(A) Deduction from benefits.--In the case of an
individual who is entitled to or receiving benefits as
described in subsection (a), (b), or (d) of section
1840, premiums payable under this part shall be
collected by deduction from such benefits at the same
time and in the same manner as premiums payable under
part B are collected pursuant to section 1840.
``(B) Transfers to prescription drug insurance
account.--The Secretary of the Treasury shall, from
time to time, but not less often than quarterly,
transfer premiums collected pursuant to subparagraph
(A) to the Prescription Drug Insurance Account from the
appropriate funds and accounts described in subsections
(a)(2), (b)(2), and (d)(2) of section 1840, on the
basis of the certifications described in such
subsections. The amounts of such transfers shall be
appropriately adjusted to the extent that prior
transfers were too great or too small.
``(2) Direct payments to secretary.--
``(A) Additional payment by enrollee.--An
individual to whom paragraph (1) applies (other than an
individual receiving benefits as described in section
1840(d)) and who estimates that the amount that will be
available for deduction under such paragraph for any
premium payment period will be less than the amount of
the monthly premiums for such period may (under
regulations) pay to the Secretary the estimated
balance, or such greater portion of the monthly premium
as the individual chooses.
``(B) Payments by other enrollees.--An individual
enrolled in the insurance program under this part with
respect to whom none of the preceding provisions of
this subsection applies (or to whom section 1840(c)
applies) shall pay premiums to the Secretary at such
times and in such manner as the Secretary shall by regulations
prescribe.
``(C) Deposit of premiums.--Amounts paid to the
Secretary under this paragraph shall be deposited in
the Treasury to the credit of the Prescription Drug
Insurance Account in the Supplementary Medical
Insurance Trust Fund.
``(c) Certain Low-Income Individuals.--For rules concerning
premiums for certain low-income individuals, see section 1860E.
``prescription drug insurance account
``Sec. 1860F. (a) Establishment.--There is created within the
Federal Supplemental Medical Insurance Trust Fund established by
section 1841 an account to be known as the `Prescription Drug Insurance
Account' (in this section referred to as the `Account').
``(b) Amounts in Account.--
``(1) In general.--The Account shall consist of--
``(A) such amounts as may be deposited in, or
appropriated to, such fund as provided in this part;
and
``(B) such gifts and bequests as may be made as
provided in section 201(i)(1).
``(2) Separation of funds.--Funds provided under this part
to the Account shall be kept separate from all other funds
within the Federal Supplemental Medical Insurance Trust Fund.
``(c) Payments From Account.--The Managing Trustee shall pay from
time to time from the Account such amounts as the Secretary certifies
are necessary to make the payments provided for by this part, and the
payments with respect to administrative expenses in accordance with
section 201(g).
``administration of benefits
``Sec. 1860G. (a) In General.--The Secretary shall provide for
administration of the benefits under this part through a contract with
a private entity designated in accordance with subsection (c), for
enrolled individuals residing in each service area designated pursuant
to subsection (b) (other than such individuals enrolled in a
Medicare+Choice program under part C), in accordance with the
provisions of this section.
``(b) Designation of Service Areas.--
``(1) In general.--The Secretary shall divide the total
geographic area served by the programs under this title into at
least 15 service areas for purposes of administration of
benefits under this part.
``(2) Considerations.--In determining or adjusting the
number and boundaries of service areas under this subsection,
the Secretary shall seek to ensure that--
``(A) there is a reasonable level of competition
among entities eligible to contract to administer the
benefit program under this section for each area;
``(B) the designation of areas is consistent with
the goal of securing contracts under this section with
respect to the maximum feasible number of areas so
designated; and
``(C) the designation of areas will foster the
existence of a sufficient number of entities that are
eligible and willing to administer the benefits under
this part.
``(c) Designation of Private Entity.--
``(1) Award and duration of contract.--
``(A) Competitive award.--Each contract for a
service area shall be awarded competitively in
accordance with section 5 of title 41, United States
Code, for a period (subject to subparagraph (B)) of not
less than 2 nor more than 5 years.
``(B) Review.--A contract for a service area shall
be subject to an evaluation after 2 years.
``(2) Eligible private entities.--A private entity eligible
for consideration as a private entity responsible for
administering the prescription drug benefit program under this
part in a service area shall meet at least the following
criteria:
``(A) Type.--The private entity shall be capable of
administering a prescription drug benefit program, and
may be a prescription drug vendor, wholesale and retail
pharmacist delivery system, health care provider or
insurer, any other type of entity as the Secretary may
specify, or a consortium of such entities.
``(B) Performance capability.--The entity shall
have sufficient expertise, personnel, and resources to
perform effectively the benefit administration
functions for such area.
``(C) Financial integrity.--The entity and its
officers, directors, agents, and managing employees
shall have a satisfactory record of professional
competence and professional and financial integrity,
and the entity shall have adequate financial resources
to perform services under the contract without risk of
insolvency.
``(3) Proposal requirements.--
``(A) In general.--An entity's proposal for award
or renewal of a contract under this section shall
include such material and information as the Secretary
may require.
``(B) Specific information.--A proposal described
in subparagraph (A) shall include a detailed
description of--
``(i) the schedule of negotiated prices
that will be charged to enrollees;
``(ii) how the entity will deter medical
errors that are related to prescription drugs;
and
``(iii) proposed contracts with local
pharmacy providers designed to ensure access,
including compensation for local pharmacists'
services.
``(4) Exceptions to conflict of interest rules.--In
awarding contracts under this subsection, the Secretary may
waive conflict of interest rules generally applicable to
Federal acquisitions (subject to such safeguards as the
Secretary may find necessary to impose) in circumstances where
the Secretary finds that such waiver--
``(A) is not inconsistent with the purposes of the
programs under this title and the best interests of
enrolled individuals; and
``(B) will permit a sufficient level of competition
for such contracts, promote efficiency of benefits
administration, or otherwise serve the objectives of
the program under this part.
``(5) Maximizing competition.--In awarding contracts under
this section, the Secretary shall give consideration to the
need to maintain sufficient numbers of entities eligible and
willing to administer benefits under this part to ensure
vigorous competition for such contracts.
``(d) Functions of Private Entity.--The private entity for a
service area shall (or in the case of the function described in
paragraph (7), may) perform the following functions:
``(1) Participation agreements, prices, and fees.--
``(A) Privately negotiated prices.--Each private
entity shall establish, through negotiations with drug
manufacturers and wholesalers and pharmacies, a
schedule of prices for covered prescription drugs.
``(B) Agreements with pharmacies.--Each private
entity shall enter into participation agreements under
subsection (e) with pharmacies, that include terms
that--
``(i) secure the participation of
sufficient numbers of pharmacies to ensure
convenient access (including adequate emergency
access); and
``(ii) permit the participation of any
pharmacy in the service area that meets the
participation requirements described in
subsection (e).
``(C) Lists of prices and participating
pharmacies.--Each private entity shall ensure that the
negotiated prices established under subparagraph (A)
and the list of pharmacies with agreements under
subsection (e) are regularly updated and readily
available in the service area to health care
professionals authorized to prescribe drugs,
participating pharmacies, and enrolled individuals.
``(2) Payment and coordination of benefits.--
``(A) Payment.--Each private entity shall--
``(i) administer claims for payment of
benefits under this part;
``(ii) determine amounts of benefit
payments to be made; and
``(iii) receive, disburse, and account for
funds used in making such payments, including
through the activities specified in the
provisions of this paragraph.
``(B) Coordination.--Each private entity shall
coordinate with the Secretary, other private entities,
pharmacies, and other relevant entities as necessary to
ensure appropriate coordination of benefits with
respect to enrolled individuals, including coordination
of access to and payment for covered prescription drugs
according to an individual's in-service area plan
provisions, when such individual is traveling outside
the home service area, and under such other
circumstances as the Secretary may specify.
``(C) Explanation of benefits.--Each private entity
shall furnish to enrolled individuals an explanation of
benefits in accordance with section 1806(a), and a
notice of the balance of benefits remaining for the
current year, whenever prescription drug benefits are
provided under this part (except that such notice need
not be provided more often than monthly).
``(3) Cost and utilization management; quality assurance.--
Each private entity shall have in place effective cost and
utilization management, quality assurance measures, and systems
to reduce medical errors, including at least the following,
together with such additional measures as the Secretary may
specify:
``(A) Drug utilization review.--A drug utilization
review program conforming to the standards provided in
section 1927(g)(2) (with such modifications as the
Secretary finds appropriate).
``(B) Fraud and abuse control.--Activities to
control fraud, abuse, and waste.
``(4) Education and information activities.--Each private
entity shall have in place mechanisms for disseminating
educational and informational materials to enrolled individuals
and health care providers designed to encourage effective and
cost-effective use of prescription drug benefits and to ensure
that enrolled individuals understand their rights and
obligations under the program.
``(5) Beneficiary protections.--
``(A) Confidentiality of health information.--Each
private entity shall have in effect systems to
safeguard the confidentiality of health care
information on enrolled individuals, which comply with
section 1106 and with section 552a of title 5, United
States Code, and meet such additional standards as the
Secretary may prescribe.
``(B) Grievance and appeal procedures.--Each
private entity have in place such procedures as the
Secretary may specify for hearing and resolving
grievances and appeals brought by enrolled individuals
against the private entity or a pharmacy concerning
benefits under this part, which shall, to the extent
the Secretary finds necessary and appropriate, include
procedures equivalent to those specified in subsections
(f) and (g) of section 1852.
``(6) Records, reports, and audits of private entities.--
``(A) Records and audits.--Each private entity
shall maintain adequate records, and afford the
Secretary access to such records (including for audit
purposes).
``(B) Reports.--Each private entity shall make such
reports and submissions of financial and utilization
data as the Secretary may require taking into account
standard commercial practices.
``(7) Proposal for alternative coinsurance amount.--
``(A) Submission.--Each private entity may submit a
proposal for increased Government cost-sharing for
generic prescription drugs, prescription drugs on the
private entity's formulary, or prescription drugs
obtained through mail order pharmacies.
``(B) Contents.--The proposal submitted under
subparagraph (A) shall contain evidence that such
increased cost-sharing would not result in an increase
in aggregate costs to the Account, including an
analysis of differences in projected drug utilization
patterns by beneficiaries whose cost-sharing would be
reduced under the proposal and those making the cost-
sharing payments that would otherwise apply.
``(8) Other requirements.--Each private entity shall meet
such other requirements as the Secretary may specify.
``(e) Pharmacy Participation Agreements.--
``(1) In general.--A pharmacy that meets the requirements
of this subsection shall be eligible to enter an agreement with
a private entity to furnish covered prescription drugs and
pharmacists' services to enrolled individuals residing in the
service area.
``(2) Terms of agreement.--An agreement under this
subsection shall include the following terms and requirements:
``(A) Licensing.--The pharmacy and pharmacists
shall meet (and throughout the contract period will
continue to meet) all applicable State and local
licensing requirements.
``(B) Limitation on charges.--Pharmacies
participating under this part shall not charge an
enrolled individual more than the negotiated price for
an individual drug as established under subsection
(d)(1), regardless of whether such individual has
attained the benefit limit under section 1860B(b), and
shall not charge an enrolled individual more than the
individual's share of the negotiated price as
determined under the provisions of this part.
``(C) Performance standards.--The pharmacy shall
comply with performance standards relating to--
``(i) measures for quality assurance,
reduction of medical errors, and participation
in the drug utilization review program
described in subsection (d)(3)(A);
``(ii) systems to ensure compliance with
the confidentiality standards applicable under
subsection (d)(5)(A); and
``(iii) other requirements as the Secretary
may impose to ensure integrity, efficiency, and
the quality of the program.
``(f) Flexibility in Assigning Workload Among Private Entities.--
During the period after the Secretary has given notice of intent to
terminate a contract with a private entity, the Secretary may transfer
responsibilities of the private entity under such contract to another
private entity.
``(g) Special Attention to Rural and Hard-To-Serve Areas.--
``(1) In general.--The Secretary shall ensure that all
beneficiaries have access to the full range of pharmaceuticals
under this part, and shall give special attention to access,
pharmacist counseling, and delivery in rural and hard-to-serve
areas (as the Secretary may define by regulation).
``(2) Special attention defined.--For purposes of paragraph
(1), the term `special attention' may include bonus payments to
retail pharmacists in rural areas, extra payments to the
private entity for the cost of rapid delivery of
pharmaceuticals, and any other actions the Secretary determines
are necessary to ensure full access to rural and hard-to-serve
beneficiaries.
``(3) GAO report.--Not later than 2 years after the
implementation of this part the Comptroller General of the
United States shall submit to Congress a report on the access
of medicare beneficiaries to pharmaceuticals and pharmacists'
services in rural and hard-to-serve areas under this part
together with any recommendations of the Comptroller General
regarding any additional steps the Secretary may need to take
to ensure the access of medicare beneficiaries to
pharmaceuticals and pharmacists' services in such areas under
this part.
``(h) Incentives for Cost and Utilization Management and Quality
Improvement.--The Secretary is authorized to include in a contract
awarded under subsection (c) such incentives for cost and utilization
management and quality improvement as the Secretary may deem
appropriate, including--
``(1) bonus and penalty incentives to encourage
administrative efficiency;
``(2) incentives under which private entities share in any
benefit savings achieved;
``(3) risk-sharing arrangements related to benefit
payments; and
``(4) any other incentive that the Secretary deems
appropriate and likely to be effective in managing costs or
utilization.
``employer incentive program for employment-based retiree drug coverage
``Sec. 1860H. (a) Program Authority.--The Secretary is authorized
to develop and implement a program under this section called the
`Employer Incentive Program' that encourages employers and other
sponsors of employment-based health care coverage to provide adequate
prescription drug benefits to retired individuals and to maintain such
existing benefit programs, by subsidizing, in part, the sponsor's cost
of providing coverage under qualifying plans.
``(b) Sponsor Requirements.--In order to be eligible to receive an
incentive payment under this section with respect to coverage of an
individual under a qualified retiree prescription drug plan (as defined
in subsection (f)(3)), a sponsor shall meet the following requirements:
``(1) Assurances.--The sponsor shall--
``(A) annually attest, and provide such assurances
as the Secretary may require, that the coverage offered
by the sponsor is a qualified retiree prescription drug
plan, and will remain such a plan for the duration of
the sponsor's participation in the program under this
section; and
``(B) guarantee that it will give notice to the
Secretary and covered retirees--
``(i) at least 120 days before terminating
its plan; and
``(ii) immediately upon determining that
the actuarial value of the prescription drug
benefit under the plan falls below the
actuarial value of the insurance benefit under
this part.
``(2) Other requirements.--The sponsor shall provide such
information, and comply with such requirements, including
information requirements to ensure the integrity of the
program, as the Secretary may find necessary to administer the
program under this section.
``(c) Incentive Payment.--
``(1) In general.--A sponsor that meets the requirements of
subsection (b) with respect to a quarter in a calendar year
shall have payment made by the Secretary on a quarterly basis
(to the sponsor or, at the sponsor's direction, to the
appropriate employment-based health plan) of an incentive
payment, in the amount determined as described in paragraph
(2), for each retired individual (or spouse) who--
``(A) was covered under the sponsor's qualified
retiree prescription drug plan during such quarter; and
``(B) was eligible for but was not enrolled in the
insurance program under this part.
``(2) Amount of incentive.--The payment under this section
with respect to each individual described in paragraph (1) for
a month shall be equal to \2/3\ of the monthly premium amount
payable by an enrolled individual, as set for the calendar year
pursuant to section 1860D(a)(2).
``(3) Payment date.--The incentive under this section with
respect to a calendar quarter shall be payable as of the end of
the next succeeding calendar quarter.
``(d) Civil Money Penalties.--A sponsor, health plan, or other
entity that the Secretary determines has, directly or through its
agent, provided information in connection with a request for an
incentive payment under this section that the entity knew or should
have known to be false shall be subject to a civil monetary penalty in
an amount up to 3 times the total incentive amounts under subsection
(c) that were paid (or would have been payable) on the basis of such
information.
``(e) Part D Enrollment for Certain Individuals Covered by
Employment-Based Retiree Health Coverage Plans.--
``(1) Eligible individuals.--An individual shall be given
the opportunity to enroll in the program under this part during
the period specified in paragraph (2) if--
``(A) the individual declined enrollment in the
program under this part at the time the individual
first satisfied section 1860C(a);
``(B) at that time, the individual was covered
under a qualified retiree prescription drug plan for
which an incentive payment was paid under this section;
and
``(C)(i) the sponsor subsequently ceased to offer
such plan; or
``(ii) the value of prescription drug coverage
under such plan became less than the value of the
coverage under the program under this part.
``(2) Special enrollment period.--An individual described
in paragraph (1) shall be eligible to enroll in the program
under this part during the 6-month period beginning on the
first day of the month in which--
``(A) the individual receives a notice that
coverage under such plan has terminated (in the
circumstance described in paragraph (1)(C)(i)) or
notice that a claim has been denied because of such a
termination; or
``(B) the individual received notice of the change
in benefits (in the circumstance described in paragraph
(1)(C)(ii)).
``(f) Definitions.--In this section:
``(1) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance or other coverage of health care costs for retired
individuals (or for such individuals and their spouses and
dependents) based on their status as former employees or labor
union members.
``(2) Employer.--The term `employer' has the meaning given
to such term by section 3(5) of the Employee Retirement Income
Security Act of 1974 (except that such term shall include only
employers of 2 or more employees).
``(3) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' means health
insurance coverage included in employment-based retiree health
coverage that--
``(A) provides coverage of the cost of prescription
drugs whose actuarial value to each retired beneficiary
equals or exceeds the actuarial value of the benefits
provided to an individual enrolled in the program under
this part; and
``(B) does not deny, limit, or condition the
coverage or provision of prescription drug benefits for
retired individuals based on age or any health status-
related factor described in section 2702(a)(1) of the
Public Health Service Act.
``(4) Sponsor.--The term `sponsor' has the meaning given
the term `plan sponsor' by section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.
``appropriations to cover government contributions
``Sec. 1860I. (a) In General.--There are authorized to be
appropriated from time to time, out of any moneys in the Treasury not
otherwise appropriated, to the Prescription Drug Insurance Account, a
Government contribution equal to--
``(1) the aggregate premiums payable for a month pursuant
to section 1860D(a)(2) by individuals enrolled in the program
under this part; plus
``(2) one-half the aggregate premiums payable for a month
pursuant to such section for such individuals by former
employers.
``(b) Appropriations To Cover Incentives for Employment-Based
Retiree Drug Coverage.--There are authorized to be appropriated to the
Prescription Drug Insurance Account from time to time, out of any
moneys in the Treasury not otherwise appropriated such sums as may be
necessary for payment of incentive payments under section 1860H(c).
``prescription drug defined
``Sec. 1860J. As used in this part, the term `prescription drug'
means--
``(1) a drug that may be dispensed only upon a
prescription, and that is described in subparagraph (A)(i),
(A)(ii), or (B) of section 1927(k)(2); and
``(2) insulin certified under section 506 of the Federal
Food, Drug, and Cosmetic Act, and needles, syringes, and
disposable pumps for the administration of such insulin.''.
(b) Study of Annual Open Enrollment.--
(1) Study.--During 2002 and 2003, the Secretary shall
conduct a study on the feasibility and advisability of
establishing an annual open enrollment period for the program
under part D (as added by subsection (a)). Such study shall
reflect data reported by private entities administering
benefits under such part and shall include--
(A) a review of the costs, effectiveness, and
administrative feasibility of an annual open enrollment
period for beneficiaries who--
(i) previously declined enrollment; or
(ii) who previously disenrolled and desire
to reenroll;
(B) an evaluation of a premium penalty for late
enrollment based on actuarially determined costs to the
program of late enrollment; and
(C) a projection of the costs if open enrollment
was allowed without a penalty.
(2) Report.--The Secretary shall prepare a report setting
forth the outcome of the study and may include in the report a
recommendation as to whether an annual open enrollment period
should be implemented under such part.
(c) Conforming Amendments.--
(1) Amendments to federal supplementary health insurance
trust fund.--Section 1841 of the Social Security Act (42 U.S.C.
1395t) is amended--
(A) in the last sentence of subsection (a)--
(i) by striking ``and'' after ``section
201(i)(1)''; and
(ii) by inserting before the period the
following: ``, and such amounts as may be
deposited in, or appropriated to, the
Prescription Drug Insurance Account established
by section 1860F'';
(B) in subsection (g), by inserting after ``by this
part,'' the following: ``the payments provided for
under part D (in which case the payments shall come
from the Prescription Drug Insurance Account in the
Supplementary Medical Insurance Trust Fund),'';
(C) in the first sentence of subsection (h), by
inserting before the period the following: ``and
section 1860D(b)(4) (in which case the payments shall
come from the Prescription Drug Insurance Account in
the Supplementary Medical Insurance Trust Fund)''; and
(D) in the first sentence of subsection (i)--
(i) by striking ``and'' after ``section
1840(b)(1)''; and
(ii) by inserting before the period the
following: ``, section 1860D(b)(2) (in which
case the payments shall come from the
Prescription Drug Insurance Account in the
Supplementary Medical Insurance Trust Fund)''.
(2) Prescription drug option under medicare+choice plans.--
(A) Eligibility, election, and enrollment.--Section
1851 of the Social Security Act (42 U.S.C. 1395w-21) is
amended--
(i) in subsection (a)(1)(A), by striking
``parts A and B'' inserting ``parts A, B, and
D''; and
(ii) in subsection (i)(1), by striking
``parts A and B'' and inserting ``parts A, B,
and D''.
(B) Voluntary beneficiary enrollment for drug
coverage.--Section 1852(a)(1)(A) of such Act (42 U.S.C.
1395w-22(a)(1)(A)) is amended by inserting ``(and under
part D to individuals also enrolled under that part)''
after ``parts A and B''.
(C) Access to services.--Section 1852(d)(1) of such
Act (42 U.S.C. 1395w-22(d)(1)) is amended--
(i) in subparagraph (D), by striking
``and'' at the end;
(ii) in subparagraph (E), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following
new subparagraph:
``(F) the plan for prescription drug benefits under
part D guarantees coverage of any specifically named
covered prescription drug for an enrollee, when
prescribed by a physician in accordance with the
provisions of such part, regardless of whether such
drug would otherwise be covered under an applicable
formulary or discount arrangement.''.
(D) Payments to organizations.--Section
1853(a)(1)(A) of such Act (42 U.S.C. 1395w-23(a)(1)(A))
is amended--
(i) by inserting ``determined separately
for benefits under parts A and B and under part
D (for individuals enrolled under that part)''
after ``as calculated under subsection (c)'';
(ii) by striking ``that area, adjusted for
such risk factors'' and inserting ``that area.
In the case of payment for benefits under parts
A and B, such payment shall be adjusted for
such risk factors as''; and
(iii) by inserting before the last sentence
the following: ``In the case of the payments
for benefits under part D, such payment shall
initially be adjusted for the risk factors of
each enrollee as the Secretary determines to be
feasible and appropriate. By 2006, the
adjustments would be for the same risk factors
applicable for benefits under parts A and B.''.
(E) Calculation of annual medicare +choice
capitation rates.--Section 1853(c) of such Act (42
U.S.C. 1395w-23(c)) is amended--
(i) in paragraph (1), in the matter
preceding subparagraph (A), by inserting ``for
benefits under parts A and B'' after
``capitation rate'';
(ii) in paragraph (6)(A), by striking
``rate of growth in expenditures under this
title'' and inserting ``rate of growth in
expenditures for benefits available under parts
A and B''; and
(iii) by adding at the end the following
new paragraph:
``(8) Payment for prescription drugs.--The Secretary shall
determine a capitation rate for prescription drugs--
``(A) dispensed in 2002, which is based on the
projected national per capita costs for prescription
drug benefits under part D and associated claims
processing costs for beneficiaries under the original
medicare fee-for-service program; and
``(B) dispensed in each subsequent year, which
shall be equal to the rate for the previous year
updated by the Secretary's estimate of the projected
per capita rate of growth in expenditures under this
title for an individual enrolled under part D.''.
(F) Limitation on enrollee liability.--Section
1854(e) of such Act (42 U.S.C. 1395w-24(e)) is amended
by adding at the end the following new paragraph:
``(5) Special rule for provision of part d benefits.--In no
event may a Medicare+Choice organization include as part of a
plan for prescription drug benefits under part D a requirement
that an enrollee pay a deductible, or a coinsurance percentage
that exceeds 50 percent.''.
(G) Requirement for additional benefits.--Section
1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is
amended by adding at the end the following new
sentence: ``Such determination shall be made separately
for benefits under parts A and B and for prescription
drug benefits under part D.''.
(H) Protections against fraud and beneficiary
protections.--Section 1857(d) is amended by adding at
the end the following new paragraph:
``(6) Availability of negotiated prices.--Each contract
under this section shall provide that enrollees who exhaust
prescription drug benefits under the plan will continue to have
access to prescription drugs at negotiated prices equivalent to
the total combined cost of such drugs to the plan and the
enrollee prior to such exhaustion of benefits.''.
(3) Exclusions from coverage.--
(A) Application to part d.--Section 1862(a) of the
Social Security Act (42 U.S.C. 1395y(a)) is amended in
the matter preceding paragraph (1) by striking ``part A
or part B'' and inserting ``part A, B, or D''.
(B) Prescription drugs not excluded from coverage
if appropriately prescribed.--Section 1862(a)(1) of
such Act (42 U.S.C. 1395y(a)(1)) is amended--
(i) in subparagraph (H), by striking
``and'' at the end;
(ii) in subparagraph (I), by striking the
semicolon at the end and inserting ``, and'';
and
(iii) by adding at the end the following
new subparagraph:
``(J) in the case of prescription drugs covered
under part D, which are not prescribed in accordance
with such part;''.
SEC. 102. MEDICAID BUY-IN OF MEDICARE PRESCRIPTION DRUG COVERAGE FOR
CERTAIN LOW-INCOME INDIVIDUALS.
(a) State Option To Buy-In Dually Eligible Individuals.--
(1) Coverage of premiums as medical assistance.--Section
1905(a) of the Social Security Act (42 U.S.C. 1396d) is amended
in the second sentence of the flush matter at the end by
striking ``premiums under part B'' the first place it appears
and inserting ``premiums under parts B and D''.
(2) State commitment to continue participation in part d
after benefit limit reached.--Section 1902(a) of such Act (42
U.S.C. 1396a) is amended--
(A) by striking ``and'' at the end of paragraph
(64);
(B) by striking the period at the end of paragraph
(65)(B) and inserting ``; and''; and
(C) by adding at the end the following new
paragraph:
``(66) provide that in the case of any individual whose
eligibility for medical assistance is not limited to medicare
or medicare drug cost-sharing and for whom the State elects to
pay premiums under part D of title XVIII pursuant to section
1860E, the State will purchase all prescription drugs for such
individual in accordance with the provisions of such part D,
without regard to whether the benefit limit for such individual
under section 1860B(b) has been reached.''.
(b) Medicare Cost-Sharing Required for Qualified Medicare
Beneficiaries.--Section 1905(p)(3) of the Social Security Act (42
U.S.C. 1396d(p)(3)) is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and'' at the
end; and
(C) by adding at the end the following new clause:
``(iii) premiums under section 1860D.'';
and
(2) in subparagraph (D)--
(A) by inserting ``(i)'' after ``(D)''; and
(B) by adding at the end the following:
``(ii) The difference between the amount that is
paid under section 1860B and the amount that would be
paid under such section if any reference to `50
percent' therein were deemed a reference to `100
percent' (or, if the Secretary approves a higher
percentage under such section, if such percentage were
deemed to be 100 percent).''.
(c) Medicare Drug Cost-Sharing Required for Medicare-Eligible
Individuals With Incomes Between 100 and 150 Percent of Poverty Line.--
(1) Definitions of eligible beneficiaries and coverage.--
Section 1905 of the Social Security Act (42 U.S.C. 1396d) is
amended by adding at the end the following new subsection:
``(x)(1) The term `qualified medicare drug beneficiary' means an
individual--
``(A) who is entitled to hospital insurance benefits under
part A of title XVIII (including an individual entitled to such
benefits pursuant to an enrollment under section 1818, but not
including an individual entitled to such benefits only pursuant
to an enrollment under section 1818A);
``(B) whose income (as determined under section 1612 for
purposes of the supplemental security income program, except as
provided in subsection (p)(2)(D)) is above 100 percent but
below 150 percent of the official poverty line (as defined by
the Office of Management and Budget, and revised annually in
accordance with section 673(2) of the Omnibus Budget
Reconciliation Act of 1981) applicable to a family of the size
involved; and
``(C) whose resources (as determined under section 1613 for
purposes of the supplemental security income program) do not
exceed twice the maximum amount of resources that an individual
may have and obtain benefits under that program.
``(2) The term `medicare drug cost-sharing' means the following
costs incurred with respect to a qualified medicare drug beneficiary,
without regard to whether the costs incurred were for items and
services for which medical assistance is otherwise available under the
plan:
``(A) In the case of a qualified medicare drug beneficiary
whose income (as determined under paragraph (1)) is less than
135 percent of the official poverty line--
``(i) premiums under section 1860D; and
``(ii) the difference between the amount that is
paid under section 1860B and the amount that would be
paid under such section if any reference to `50
percent' therein were deemed a reference to `100
percent' (or, if the Secretary approves a higher
percentage under such section, if such percentage were
deemed to be 100 percent).
``(B) In the case of a qualified medicare drug beneficiary
whose income (as determined under paragraph (1)) is at least
135 percent but less than 150 percent of the official poverty
line, a percentage of premiums under section 1860D, determined
on a linear sliding scale ranging from 100 percent for
individuals with incomes at 135 percent of such line to 0
percent for individuals with incomes at 150 percent of such
line.
``(3) In the case of any State which is providing medical
assistance to its residents under a waiver granted under section 1115,
the Secretary shall require the State to meet the requirement of
section 1902(a)(10)(E) in the same manner as the State would be
required to meet such requirement if the State had in effect a plan
approved under this title.''.
(2) State plan requirement.--Section 1902(a)(10)(E) of the
Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
(A) in clause (iii), by striking ``and'' at the
end; and
(B) by adding at the end the following new clause:
``(v) for making medical assistance available for
medicare drug cost-sharing (as defined in section
1905(x)(2)) for qualified medicare drug beneficiaries
described in section 1905(x)(1); and''.
(3) 100 percent federal matching of state medical
assistance costs for medicare drug cost-sharing.--Section
1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is
amended--
(A) by redesignating paragraph (7) as paragraph
(8); and
(B) by inserting after paragraph (6) the following
new paragraph:
``(7) except in the case of amounts expended for an
individual whose eligibility for medical assistance is not
limited to medicare or medicare drug cost-sharing, an amount
equal to 100 percent of amounts as expended as medicare drug
cost-sharing for qualified medicare drug beneficiaries (as
defined in section 1905(x)); plus''.
(d) Medicaid Drug Price Rebates Unavailable With Respect to Drugs
Purchased Through Medicare Buy-In.--Section 1927 of the Social Security
Act (42 U.S.C. 1396r-8) is amended by adding at the end the following
new subsection:
``(l) Drugs Purchased Through Medicare Buy-In.--The provisions of
this section shall not apply to prescription drugs purchased under part
D of title XVIII pursuant to an agreement with the Secretary under
section 1860E (including any drugs so purchased after the limit under
section 1860B(b) has been exceeded).''.
(e) Amendments to Medicare Part D.--Part D of title XVIII of the
Social Security Act (as added by section 2) is amended by inserting
after section 1860D the following new section:
``special eligibility, enrollment, and copayment rules for low-income
individuals
``Sec. 1860E. (a) State Agreements for Coverage.--
``(1) In general.--The Secretary shall, at the request of a
State, enter into an agreement with the State under which all
individuals described in paragraph (2) are enrolled in the
program under this part, without regard to whether any such
individual has previously declined the opportunity to enroll in
such program.
``(2) Eligibility groups.--The individuals described in
this paragraph, for purposes of paragraph (1), are individuals
who satisfy section 1860C(a) and who are--
``(A)(i) eligible individuals within the meaning of
section 1843; and
``(ii) in a coverage group or groups permitted
under section 1843 (as selected by the State and
specified in the agreement); or
``(B) qualified medicare drug beneficiaries (as
defined in section 1905(v)(1)).
``(3) Coverage period.--The period of coverage under this
part of an individual enrolled under an agreement under this
subsection shall be as follows:
``(A) Individuals eligible (at state option) for
part b buy-in.--In the case of an individual described
in subsection (a)(2)(A), the coverage period shall be
the same period that applies (or would apply) pursuant
to section 1843(d).
``(B) Qualified medicare drug beneficiaries.--In
the case of an individual described in subsection
(a)(2)(B)--
``(i) the coverage period shall begin on
the latest of--
``(I) January 1, 2002;
``(II) the first day of the third
month following the month in which the
State agreement is entered into; or
``(III) the first day of the first
month following the month in which the
individual satisfies section 1860C(a);
and
``(ii) the coverage period shall end on the
last day of the month in which the individual
is determined by the State to have become
ineligible for medicare drug cost-sharing.
``(b) Special Part D Enrollment Opportunity for Individuals Losing
Medicaid Eligibility.--In the case of an individual who--
``(1) satisfies section 1860C(a); and
``(2) loses eligibility for benefits under the State plan
under title XIX after having been enrolled under such plan or
having been determined eligible for such benefits;
the Secretary shall provide an opportunity for enrollment under the
program under this part during the period that begins on the date that
such individual loses such eligibility and ends on the date specified
by the Secretary.
``(c) Definition.--For purposes of this section, the term `State'
has the meaning given such term under section 1101(a) for purposes of
title XIX.''.
(f) Removal of Sunset Date for Cost-Sharing in Medicare Part B
Premiums for Certain Qualifying Individuals.--
(1) In general.--Section 1902(a)(10)(E)(iv) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(E)(iv))is amended to read
as follows--
``(iv) subject to section 1905(p)(4), for
making medical assistance available for
medicare cost-sharing described in section
1905(p)(3)(A)(ii) for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) and is at
least 120 percent, but less than 135 percent,
of the official poverty line (referred to in
such section) for a family of the size involved
and who are not otherwise eligible for medical
assistance under the State plan;''.
(2) Relocation of provision requiring 100 percent federal
matching of state medical assistance costs for certain
qualifying individuals.--Section 1903(a) of the Social Security
Act (42 U.S.C. 1396b(a)), as amended by subsection (c)(3), is
amended--
(A) by redesignating paragraph (8) as paragraph
(9); and
(B) by inserting after paragraph (7) the following
new paragraph:
``(8) an amount equal to 100 percent of amounts as expended
as medicare drug cost-sharing for individuals described in
section 1903(a)(10)(E)(iv); plus''.
(3) Repeal of section 1933.--Section 1933 is repealed.
(4) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2002.
SEC. 103. CATASTROPHIC PRESCRIPTION DRUG COVERAGE BENEFIT.
(a) Recommendations With Respect to a Medicare Catastrophic Drug
Benefit.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Health and Human
Services (in this section referred to as the ``Secretary'')
shall submit to the Committee on Finance of the Senate and the
Committee on Ways and Means and the Committee on Commerce of
the House of Representatives detailed recommendations on
structuring a catastrophic drug benefit for medicare
beneficiaries.
(2) Recommendations described.--The recommendations under
paragraph (1) shall--
(A) ensure coverage of the costs of prescription
drugs above a specified level of out-of-pocket
expenditures;
(B) conform to the administrative structure
established in this Act;
(C) have a projected cost that does not exceed the
amounts described in subsection (b)(3)(A); and
(D) take effect no later than January 1, 2003.
(3) Final regulations.--
(A) In general.--If legislation of a medicare
catastrophic drug benefit is not enacted that meets the
requirements of paragraph (2) by June 1, 2001, the
Secretary of Health and Human Services shall promulgate
final regulations containing such standards no later
than January 1, 2002.
(B) Certification by omb and hcfa.--A final
regulation promulgated by the Secretary under
subparagraph (A) shall not take effect unless the
Director of the Office of Management and Budget and the
Chief Actuary of the Health Care Financing
Administration certify that aggregate Federal expenses
incurred in providing the catastrophic drug benefit
under this section will not exceed $50,000,000,000
between fiscal years 2003 and 2010. If either
certification is not provided, the Secretary shall
submit a revised recommendation on structuring a
catastrophic drug benefit to the appropriate committees
of Congress under paragraph (1) no later than 30 days
after the Secretary receives a notification that such
certification will not be provided.
(b) Catastrophic Prescription Drug Coverage Reserve Fund.--
(1) Establishment of reserve fund.--There is established a
reserve fund which shall be known as the ``Catastrophic
Prescription Drug Coverage Reserve Fund'' (in this subsection
referred to as the ``Reserve Fund'').
(2) Amounts in reserve fund.--Subject to subparagraph (B),
the Reserve Fund shall consist of such amounts as are
appropriated to the Reserve Fund under paragraph (3).
(3) Appropriation to reserve fund.--
(A) In general.--
(i) Fiscal years 2003 through 2010.--There
are appropriated to the Reserve Fund for the
period beginning with fiscal year 2003 and
ending with fiscal year 2010, $50,000,000,000.
(ii) Subsequent fiscal years.--There are
authorized to be appropriated to the Reserve
Fund for each subsequent fiscal year, such sums
as may be necessary to carry out the provisions
of this section.
(B) Availability.--Sums appropriated under
subparagraph (A)(i) shall remain available, without
fiscal year limitation, until expended.
SEC. 104. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR TRANSPLANT
PATIENTS.
(a) Revision of Medicare Coverage for Immunosuppressive Drugs.--
(1) In general.--Section 1861(s)(2)(J) of the Social
Security Act (42 U.S.C. 1395x(s)(2)(J)) (as amended by section
227(a) of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (113 Stat. 1501A-354), as enacted into
law by section 1000(a)(6) of Public Law 106-113) is amended by
striking ``, to an individual who receives'' and all that
follows before the semicolon at the end and inserting ``to an
individual who has received an organ transplant''.
(2) Conforming amendments.--
(A) Section 1832 of the Social Security Act (42
U.S.C. 1395k) (as amended by section 227(b) of the
Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (113 Stat. 1501A-354), as
enacted into law by section 1000(a)(6) of Public Law
106-113) is amended--
(i) by striking subsection (b); and
(ii) by redesignating subsection (c) as
subsection (b).
(B) Subsections (c) and (d) of section 227 of the
Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (113 Stat. 1501A-355), as
enacted into law by section 1000(a)(6) of Public Law
106-113, are repealed.
(3) Effective date.--The amendments made by this subsection
shall apply to drugs furnished on or after the date of
enactment of this Act.
(b) Extension of Certain Secondary Payer Requirements.--Section
1862(b)(1)(C) of the Social Security Act (42 U.S.C. 1395y(b)(1)(C)) is
amended by adding at the end the following: ``With regard to
immunosuppressive drugs furnished on or after the date of enactment of
the Medicare Expansion for Needed Drugs (MEND) Act of 2000, this
subparagraph shall be applied without regard to any time limitation.''.
SEC. 105. GAO STUDY AND BIENNIAL REPORTS ON COMPETITION AND SAVINGS.
(a) Ongoing Study.--The Comptroller General of the United States
shall conduct an ongoing study and analysis of the prescription drug
benefit program under part D of the medicare program under title XVIII
of the Social Security Act (as added by this title), including an
analysis of--
(1) the extent to which the competitive bidding process
under such program fosters maximum competition and efficiency;
and
(2) the savings to the medicare program resulting from such
prescription drug benefit program, including the reduction in
the number or length of hospital visits.
(b) Initial Report.--Not later than September 1, 2001, the
Comptroller General shall submit to Congress a report on the extent to
which the competitive bidding process under the prescription drug
benefit program under part D of the medicare program under title XVIII
of the Social Security Act (as added by this title) is expected to
foster maximum competition and efficiency.
(c) Biennial Reports.--Not later than January 1, 2004, and
biennially thereafter, the Comptroller General of the United States
shall submit to Congress a report on the results of the study conducted
under this section, together with any recommendations for legislation
that the Comptroller General determines to be appropriate as a result
of such study.
SEC. 106. MEDPAC STUDY AND ANNUAL REPORTS ON THE PHARMACEUTICAL MARKET,
PHARMACIES, AND BENEFICIARY ACCESS.
(a) Ongoing Study.--The Medicare Payment Advisory Commission
established under section 1805 of the Social Security Act (42 U.S.C.
1395b-6) shall conduct an ongoing study and analysis of the
prescription drug benefit program under part D of the Social Security
Act (as added by this title), including an analysis of the impact of
the prescription drug benefit program on--
(1) the pharmaceutical market, including costs and pricing
of pharmaceuticals, beneficiary access to such pharmaceuticals,
and trends in research and development;
(2) franchise, independent, and rural pharmacies; and
(3) beneficiary access to prescription drugs, including an
assessment of--
(A) out-of-pocket spending;
(B) generic and brand-name utilization; and
(C) pharmacists' services.
(b) Report.--Not later than January 1, 2004, and annually
thereafter, the Medicare Payment Advisory Commission shall submit to
Congress a report on the results of the study conducted under this
section, together with any recommendations for legislation that such
Commission determines to be appropriate as a result of such study.
TITLE II--ENHANCED MEDICARE PREVENTION PROGRAM
SEC. 201. MEDPAC BIENNIAL REPORT.
(a) In General.--Section 1805(b) of the Social Security Act (42
U.S.C. 1395b-6(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (C), by striking ``and'' at the
end;
(B) in subparagraph (D), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(E) by not later than January 1, 2002, and
biennially thereafter, submit the report to Congress
described in paragraph (7).''; and
(2) by adding at the end the following new paragraph:
``(7) Evaluation of actuarial equivalence of medicare and
private sector benefit packages.--
``(A) Evaluation.--The Commission shall--
``(i) evaluate the benefit package offered
under the medicare program under this title;
and
``(ii) determine the degree to which such
benefit package is actuarially equivalent to
that offered by health benefit programs
available in the private sector to individuals
over age 65.
``(B) Report.--The Commission shall submit a report
to Congress that shall contain--
``(i) a detailed statement of the findings
and conclusions of the Commission regarding the
evaluation conducted under subparagraph (A);
``(ii) the recommendations of the
Commission regarding changes in the benefit
package offered under the medicare program
under this title that would keep the program
modern and competitive in relation to health
benefit programs available in the private
sector; and
``(iii) the recommendations of the
Commission for such legislation and
administrative actions as it considers
appropriate.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of enactment of this Act.
SEC. 202. NATIONAL INSTITUTE ON AGING STUDY AND REPORT.
(a) Studies.--The Director of the National Institute on Aging shall
conduct 1 or more studies focusing on ways to--
(1) improve quality of life for the elderly;
(2) develop better ways to prevent or delay the onset of
age-related functional decline and disease and disability among
the elderly; and
(3) develop means of assessing the long-term development of
cost-effective benefits and cost-savings benefits for health
promotion and disease prevention among the elderly.
(b) Report.--Not later than January 1, 2006, the Director of the
National Institute on Aging shall submit a report to the Secretary
regarding each study conducted under subsection (a) and containing a
detailed statement of research findings and conclusions that are
scientifically valid and are demonstrated to prevent or delay the onset
of chronic illness or disability among the elderly.
(c) Transmission to Institute of Medicine.--Upon receipt of each
report described in subsection (b), the Secretary shall transmit such
report to the Institute of Medicine of the National Academy of Sciences
for consideration in its effort to conduct the comprehensive study of
current literature and best practices in the field of health promotion
and disease prevention among the medicare beneficiaries described in
section 204.
(d) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
$100,000,000 for fiscal years 2001 through 2006 to carry out
the purposes of this section.
(2) Availability.--Any sums appropriated under the
authorization contained in this subsection shall remain
available, without fiscal year limitation, until September 30,
2005.
SEC. 203. INSTITUTE OF MEDICINE 5-YEAR MEDICARE PREVENTION BENEFIT
STUDY AND REPORT.
(a) Study.--
(1) In general.--The Secretary shall contract with the
Institute of Medicine of the National Academy of Sciences to
conduct a comprehensive study of current literature and best
practices in the field of health promotion and disease
prevention among medicare beneficiaries including the issues
described in paragraph (2) and to submit the report described in
subsection (b).
(2) Issues studied.--The study required under paragraph (1)
shall include an assessment of--
(A) whether each covered benefit is--
(i) medically effective; and
(ii) a cost-effective benefit or a cost-
saving benefit;
(B) utilization of covered benefits (including any
barriers to or incentives to increase utilization); and
(C) quality of life issues associated with both
health promotion and disease prevention benefits
covered under the medicare program and those that are
not covered under such program that would affect all
medicare beneficiaries.
(b) Report.--
(1) In general.--Not later than 5 years after the date of
enactment of this section, and every fifth year thereafter, the
Institute of Medicine of the National Academy of Sciences shall
submit to the President a report that contains a detailed
statement of the findings and conclusions of the study
conducted under subsection (a) and the recommendations for
legislation described in paragraph (2).
(2) Recommendations for legislation.--The Institute of
Medicine of the National Academy of Sciences, in consultation
with the Partnership for Prevention, shall develop
recommendations in legislative form that--
(A) prioritize the preventive benefits under the
medicare program; and
(B) modify preventive benefits offered under the
medicare program based on the study conducted under
subsection (a).
(c) Transmission to Congress.--
(1) In general.--On the day on which the report described
in subsection (b) is submitted to the President, the President
shall transmit the report and recommendations in legislative
form described in subsection (b)(2) to Congress.
(2) Delivery.--Copies of the report and recommendations in
legislative form required to be transmitted to Congress under
paragraph (1) shall be delivered--
(A) to both Houses of Congress on the same day;
(B) to the Clerk of the House of Representatives if
the House of Representatives is not in session; and
(C) to the Secretary of the Senate if the Senate is
not in session.
SEC. 204. FAST-TRACK CONSIDERATION OF PREVENTION BENEFIT LEGISLATION.
(a) Rules of House of Representatives and Senate.--This section is
enacted by Congress--
(1) as an exercise of the rulemaking power of the House of
Representatives and the Senate, respectively, and is deemed a
part of the rules of each House of Congress, but--
(A) is applicable only with respect to the
procedure to be followed in that House of Congress in
the case of an implementing bill (as defined in
subsection (d)); and
(B) supersedes other rules only to the extent that
such rules are inconsistent with this section; and
(2) with full recognition of the constitutional right of
either House of Congress to change the rules (so far as
relating to the procedure of that House of Congress) at any
time, in the same manner and to the same extent as in the case
of any other rule of that House of Congress.
(b) Introduction and Referral.--
(1) Introduction.--
(A) In general.--Subject to paragraph (2), on the
day on which the President transmits the report
pursuant to section 203(c) to the House of
Representatives and the Senate, the recommendations in
legislative form transmitted by the President with
respect to such report shall be introduced as a bill
(by request) in the following manner:
(i) House of representatives.--In the House
of Representatives, by the Majority Leader, for
himself and the Minority Leader, or by Members
of the House of Representatives designated by
the Majority Leader and Minority Leader.
(ii) Senate.--In the Senate, by the
Majority Leader, for himself and the Minority
Leader, or by Members of the Senate designated
by the Majority Leader and Minority Leader.
(B) Special rule.--If either House of Congress is
not in session on the day on which such recommendations
in legislative form are transmitted, the
recommendations in legislative form shall be introduced
as a bill in that House of Congress, as provided in
subparagraph (A), on the first day thereafter on which
that House of Congress is in session.
(2) Referral.--Such bills shall be referred by the
presiding officers of the respective Houses to the appropriate
committee, or, in the case of a bill containing provisions
within the jurisdiction of 2 or more committees, jointly to
such committees for consideration of those provisions within
their respective jurisdictions.
(c) Consideration.--After the recommendations in legislative form
have been introduced as a bill and referred under subsection (b), such
implementing bill shall be considered in the same manner as an
implementing bill is considered under subsections (d), (e), (f), and
(g) of section 151 of the Trade Act of 1974 (19 U.S.C. 2191).
(d) Implementing Bill Defined.--In this section, the term
``implementing bill'' means only the recommendations in legislative
form of the Institute of Medicine of the National Academy of Sciences
described in section 203(b)(2), transmitted by the President to the
House of Representatives and the Senate under section 203(c), and
introduced and referred as provided in subsection (b) as a bill of
either House of Congress.
(e) Counting of Days.--For purposes of this section, any period of
days referred to in section 151 of the Trade Act of 1974 shall be
computed by excluding--
(1) the days on which either House of Congress is not in
session because of an adjournment of more than 3 days to a day
certain or an adjournment of Congress sine die; and
(2) any Saturday and Sunday, not excluded under paragraph
(1), when either House is not in session.
Calendar No. 609
106th CONGRESS
2d Session
S. 2753
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to provide a
prescription drug benefit for the aged and disabled under the medicare
program, to enhance the preventive benefits covered under such program,
and for other purposes.
_______________________________________________________________________
June 19, 2000
Read twice and ordered placed on the calendar
Introduced in Senate
Introduced in the Senate. Read twice. Placed on Senate Legislative Calendar under General Orders. Calendar No. 609.
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