Allows low-income Medicare beneficiaries and Medicare beneficiaries with high drug costs to elect to suspend Medicare supplemental (Medigap) insurance.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3016 Introduced in Senate (IS)]
106th CONGRESS
2d Session
S. 3016
To amend the Social Security Act to establish an outpatient
prescription drug assistance program for low-income medicare
beneficiaries and medicare beneficiaries with high drug costs.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 7, 2000
Mr. Roth (for himself, Mr. Jeffords, Mr. Gramm, Mr. Murkowski, Mr.
Campbell, Mr. Nickles, Mr. Lott, Mr. Stevens, Mr. Frist, Mr. Domenici,
Mr. Craig, and Mr. Grams) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Social Security Act to establish an outpatient
prescription drug assistance program for low-income medicare
beneficiaries and medicare beneficiaries with high drug costs.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare Temporary Drug Assistance
Act''.
SEC. 2. OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PROGRAM.
(a) Establishment.--The Social Security Act (42 U.S.C. 301 et seq.)
is amended by adding at the end the following new title:
``TITLE XXII--OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PROGRAM
``SEC. 2201. PURPOSE; OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PLANS.
``(a) Purpose.--The purpose of this title is to provide funds to
States to enable States, individually or in a group, to establish a
program, separate from the medicaid program under title XIX, to provide
assistance to low-income medicare beneficiaries (as defined in section
2202(b)) and, at State option, medicare beneficiaries with high drug
costs (as defined in section 2202(c)) to obtain coverage for outpatient
prescription drugs.
``(b) Outpatient Prescription Drug Assistance Plan Required.--A
State may not receive payments under section 2205 unless the State,
individually or as part of a group of States, submits in writing to the
Secretary an outpatient prescription drug assistance plan under section
2206(a)(1) that--
``(1) describes how the State or group of States intends to
use the funds provided under this title to provide outpatient
prescription drug assistance to low-income medicare
beneficiaries and, if applicable, medicare beneficiaries with
high drug costs consistent with the provisions of this title;
``(2) includes a description of the budget for the plan
(updated periodically as necessary) and details on the planned
use of funds, the sources of the non-Federal share of plan
expenditures, and any requirements for cost-sharing by
beneficiaries;
``(3) describes the procedures to be used to ensure that
the outpatient prescription drug assistance provided to low-
income medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs under the plan does not
supplant coverage for outpatient prescription drugs available
to such beneficiaries under group health plans; and
``(4) has been approved by the Secretary under section
2206(a)(2).
``(c) Entitlement.--Subject to subsection (d)(2), this title
constitutes budget authority in advance of appropriations Acts and
represents the obligation of the Federal Government to provide for the
payment to States, groups of States, and contractors described in
section 2209(a)(2)(A), of amounts provided under section 2204.
``(d) Period of Applicability.--
``(1) In general.--No State, group of States, or contractor
described in section 2209(a)(2)(A), may receive payments under
section 2205 for outpatient prescription drug assistance
provided for periods beginning before October 1, 2000, or after
December 31, 2003.
``(2) Medicare reform.--If medicare reform legislation that
includes coverage for outpatient prescription drugs is enacted
during the period that begins on October 1, 2000, and ends on
December 31, 2003, this title shall be repealed upon the
effective date of such legislation, and no State, group of
States, or contractor described in section 2209(a)(2)(A) shall
be entitled to receive payments for any outpatient prescription
drug assistance provided on or after such date.
``SEC. 2202. BENEFICIARY ELIGIBILITY.
``(a) Eligibility.--
``(1) In general.--In order for a State (individually or as
part of a group of States) to receive payments under section
2205 with respect to an outpatient prescription drug assistance
program, the program must provide, subject to the availability
of funds, outpatient prescription drug assistance to each
individual who--
``(A) resides in the State;
``(B) applies for such assistance; and
``(C) establishes that the individual is--
``(i) a low-income medicare beneficiary (as
defined in subsection (b)); or
``(ii) at the option of the State, a
medicare beneficiary with high drug costs (as
defined in subsection (c)).
``(2) Residency rules.--In applying paragraph (1),
residency rules similar to the residency rules applicable to
the State plan under title XIX shall apply.
``(b) Low-Income Medicare Beneficiary Defined.--
``(1) In general.--In this title, except as provided in
section 2209(a)(2)(B), the term `low-income medicare
beneficiary' means an individual who--
``(A) is entitled to benefits under part A of title
XVIII or enrolled under part B of such title, including
an individual enrolled in a Medicare+Choice plan under
part C of such title;
``(B) subject to subsection (d), is not entitled to
medical assistance with respect to prescribed drugs
under title XIX or under a waiver under section 1115 of
the requirements of such title;
``(C) is determined to have family income that does
not exceed a percentage of the poverty line for a
family of the size involved specified by the State
that, subject to paragraph (2), may not exceed 150
percent; and
``(D) at the option of the State, is determined to
have resources that do not exceed a level specified by
the State.
``(2) State-only drug assistance programs.--In the case of
a State that has a State-based drug assistance program
described in section 2203(e) that provides outpatient
prescription drug coverage for individuals described in
paragraph (1)(A) who have family income up to or exceeding 150
percent of the poverty line, the State may specify a percentage
of the poverty line under paragraph (1)(C) that exceeds the
income eligibility level specified by the State for such
program but does not exceed 50 percentage points above such
income eligibility level.
``(c) Medicare Beneficiary With High Drug Costs Defined.--
``(1) In general.--In this title, except as provided in
section 2209(a)(2)(C), the term `medicare beneficiary with high
drug costs' means an individual--
``(A) who satisfies the requirements of
subparagraphs (A) and (B) of subsection (b)(1);
``(B) whose family income exceeds the percentage of
the poverty line specified by the State in accordance
with subsection (b)(1)(C);
``(C) at the option of the State, whose resources
exceed a level (if any) specified by the State in
accordance with subsection (b)(1)(D); and
``(D) who has out-of-pocket expenses for outpatient
prescription drugs and biologicals (including insulin
and insulin supplies) for which outpatient prescription
drug assistance is available under this title that
exceed such amount as the State specifies in accordance
with paragraph (2).
``(2) Determination of out-of-pocket expenses.--A State
that elects to provide outpatient prescription drug assistance
to an individual described in paragraph (1) shall provide the
Secretary with the methodology and standards used to determine
the individual's eligibility under subparagraph (D) of such
paragraph.
``(d) Access for Medicaid Expansion States.--
``(1) In general.--Notwithstanding any other provision of
this title, with respect to any State that, as of the date of
enactment of this title, has made outpatient prescription drug
coverage for individuals described in paragraph (2) available
through the State medicaid program under title XIX under a
section 1115 waiver, the Secretary, in consultation with such
State, shall establish procedures under which the State shall
be able to receive payments from the allotment made available
under section 2204 for such State for a fiscal year for
purposes of offsetting the costs of making such coverage
available to such individuals.
``(2) Individuals described.--Individuals described in this
paragraph are individuals who are--
``(A) entitled to benefits under part A of title
XVIII or enrolled under part B of such title, including
an individual enrolled in a Medicare+Choice plan under
part C of such title; and
``(B) eligible for outpatient prescription drug
coverage only, under a State medicaid program under
title XIX as a result of a section 1115 waiver.
``(e) Individual Nonentitlement.--Nothing in this title shall be
construed as providing an individual with an entitlement to outpatient
prescription drug assistance provided under this title.
``SEC. 2203. COVERAGE REQUIREMENTS.
``(a) Required Scope of Coverage.--
``(1) In general.--The outpatient prescription drug
assistance provided under the plan may consist of any of the
following:
``(A) Benchmark coverage.--Outpatient prescription
drug coverage that is equivalent to the outpatient
prescription drug coverage in a benchmark benefit
package described in subsection (b).
``(B) Aggregate actuarial value equivalent to
benchmark package.--Outpatient prescription drug
coverage that has an aggregate actuarial value that is
at least equivalent to one of the benchmark benefit
packages.
``(C) Existing comprehensive state-based
coverage.--Outpatient prescription drug coverage under
an existing State-based program, described in
subsection (e).
``(D) Secretary-approved coverage.--Any other
outpatient prescription drug coverage that the
Secretary determines, upon application by a State or
group of States, provides appropriate outpatient
prescription drug coverage for the population of
medicare beneficiaries proposed to be provided such
coverage.
``(2) Consistent design.--A State or group of States may
only select one of the options described in paragraph (1) (and,
if the State or group chooses to provide outpatient
prescription drug coverage that is equivalent to the outpatient
prescription drug coverage in a benchmark benefit package, only
one of the benchmark benefit package options described in
subsection (b)) in order to provide outpatient prescription
drug assistance in a uniform manner for the population of
medicare beneficiaries provided such coverage.
``(b) Benchmark Benefit Packages.--The benchmark benefit packages
are as follows:
``(1) Medicaid outpatient prescription drug coverage.--In
the case of--
``(A) a State, the outpatient prescription drug
coverage provided under the State medicaid plan under
title XIX; or
``(B) a group of States, the outpatient
prescription drug coverage provided under the State
medicaid plan under such title of one of the States in
the group, as identified in the outpatient prescription
drug assistance plan.
``(2) FEHBP-equivalent outpatient prescription drug
coverage.--The outpatient prescription drug coverage provided
under the Standard Option Blue Cross and Blue Shield Service
Benefit Plan described in and offered under section 8903(1) of
title 5, United States Code.
``(3) State employee outpatient prescription drug
coverage.--In the case of--
``(A) a State, the outpatient prescription drug
coverage provided under a health benefits coverage plan
that is offered and generally available to State
employees in the State involved; or
``(B) a group of States, the outpatient
prescription drug coverage provided under a health
benefits coverage plan that is offered and generally
available to State employees in one of the States in
the group, as identified in the outpatient prescription
drug assistance plan.
``(4) Outpatient prescription drug coverage offered through
largest hmo.--In the case of--
``(A) a State, the outpatient prescription drug
coverage provided under a health insurance coverage
plan that is offered by a health maintenance
organization (as defined in section 2791(b)(3) of the
Public Health Service Act) and has the largest insured
commercial, nonmedicaid enrollment of covered lives of
such coverage plans offered by such a health
maintenance organization in the State involved; or
``(B) a group of States, the outpatient
prescription drug coverage provided under a health
insurance coverage plan that is offered by a health
maintenance organization (as defined in section
2791(b)(3) of the Public Health Service Act) and has
the largest insured commercial, nonmedicaid enrollment
of covered lives of such coverage plans offered by such
a health maintenance organization in one of the States
involved.
``(c) Determination of Actuarial Value of Coverage.--
``(1) In general.--The actuarial value of outpatient
prescription drug coverage offered under benchmark benefit
packages and the outpatient prescription drug assistance plan
shall be set forth in an opinion in a report that has been
prepared--
``(A) by an individual who is a member of the
American Academy of Actuaries;
``(B) using generally accepted actuarial principles
and methodologies;
``(C) using a standardized set of utilization and
price factors;
``(D) using a standardized population that is
representative of the population to be covered under
the outpatient prescription drug assistance plan;
``(E) applying the same principles and factors in
comparing the value of different coverage;
``(F) without taking into account any differences
in coverage based on the method of delivery or means of
cost control or utilization used; and
``(G) taking into account the ability of a State or
group of States to reduce benefits by taking into
account the increase in actuarial value of benefits
coverage offered under the outpatient prescription drug
assistance plan that results from the limitations on
cost-sharing under such coverage.
``(2) Requirement.--The actuary preparing the opinion shall
select and specify in the report the standardized set and
population to be used under subparagraphs (C) and (D) of
paragraph (1).
``(d) Prohibited Coverage.--Nothing in this section shall be
construed as requiring any outpatient prescription drug coverage
offered under the plan to provide coverage for an outpatient
prescription drug for which payment is prohibited under this title,
notwithstanding that any benchmark benefit package includes coverage
for such an outpatient prescription drug.
``(e) Description of Existing Comprehensive State-Based Coverage.--
``(1) In general.--A program described in this paragraph is
an outpatient prescription drug coverage program for
individuals who are entitled to benefits under part A of title
XVIII or enrolled under part B of such title, including an
individual enrolled in a Medicare+Choice plan under part C of
such title, that--
``(A) is administered or overseen by the State and
receives funds from the State;
``(B) was offered as of the date of the enactment
of this title;
``(C) does not receive or use any Federal funds;
and
``(D) is certified by the Secretary as providing
outpatient prescription drug coverage that satisfies
the scope of coverage required under subparagraph (A),
(B), or (D) of subsection (a)(1).
``(2) Modifications.--A State may modify a program
described in paragraph (1) from time to time so long as it does
not reduce the actuarial value (evaluated as of the time of the
modification) of the outpatient prescription drug coverage
under the program below the lower of--
``(A) the actuarial value of the coverage under the
program as of the date of enactment of this title; or
``(B) the actuarial value described in subsection
(a)(1)(B).
``(f) Beneficiary Premiums and Cost-Sharing.--
``(1) Description; general conditions.--
``(A) Description.--
``(i) In general.--An outpatient
prescription drug assistance plan shall include
a description, consistent with this subsection,
of the amount of any premiums or cost-sharing
imposed under the plan.
``(ii) Public schedule of charges.--Any
premium or cost-sharing described under clause
(i) shall be imposed under the plan pursuant to
a public schedule.
``(B) Protection for beneficiaries.--The outpatient
prescription drug assistance plan may only vary
premiums and cost-sharing based on the family income of
low-income medicare beneficiaries and, if applicable,
medicare beneficiaries with high drug costs, in a
manner that does not favor such beneficiaries with
higher income over beneficiaries with low-income.
``(2) Limitations on premiums and cost-sharing.--
``(A) No premiums or cost-sharing for beneficiaries
with income below 100 percent of poverty line.--In the
case of a low-income medicare beneficiary whose family
income does not exceed 100 percent of the poverty line,
the outpatient prescription drug assistance plan may
not impose any premium or cost-sharing.
``(B) Other beneficiaries.--For low-income medicare
beneficiaries not described in subparagraph (A) and, if
applicable, medicare beneficiaries with high drug
costs, any premiums or cost-sharing imposed under the
outpatient prescription drug assistance plan may be
imposed, subject to paragraph (1)(B), on a sliding
scale related to income, except that the total annual
aggregate of such premiums and cost-sharing with
respect to all such beneficiaries in a family under
this title may not exceed 5 percent of such family's
income for the year involved.
``(g) Restriction on Application of Preexisting Condition
Exclusions.--The outpatient prescription drug assistance plan shall not
permit the imposition of any preexisting condition exclusion for
covered benefits under the plan and may not discriminate in the pricing
of premiums under such plan because of health status, claims
experience, receipt of health care, or medical condition.
``SEC. 2204. ALLOTMENTS.
``(a) Appropriation.--
``(1) In general.--For the purpose of providing allotments
under this section to States, there is appropriated, out of any
money in the Treasury not otherwise appropriated--
``(A) for fiscal year 2001, $1,200,000,000;
``(B) for fiscal year 2002, $4,200,000,000;
``(C) for fiscal year 2003, $9,000,000,000; and
``(D) for fiscal year 2004, $3,000,000,000.
``(2) Availability.--Amounts appropriated under paragraph
(1) shall only be available for providing the allotments
described in such paragraph during the fiscal year for which
such amounts are appropriated. Any amounts that have not been
obligated by the Secretary for the purposes of making payments
from such allotments under section 2205, or under contracts
entered into under section 2209(b)(2)(B), on or before
September 30 of fiscal year 2001, 2002, or 2003 (as applicable)
or, with respect to fiscal year 2004, December 31, 2003, shall
be returned to the Treasury.
``(b) Allotments to 50 States and District of Columbia.--
``(1) In general.--Subject to paragraph (3), of the amount
available for allotment under subsection (a) for a fiscal year,
reduced by the amount of allotments made under subsection (c)
for the fiscal year, the Secretary shall allot to each State
(other than a State described in such subsection) with an
outpatient prescription drug assistance plan approved under
this title the same proportion as the ratio of--
``(A) the number of medicare beneficiaries with
family income that does not exceed 150 percent of the
poverty line residing in the State for the fiscal year;
to
``(B) the total number of such beneficiaries
residing in all such States.
``(2) Determination of number of medicare beneficiaries
with income that does not exceed 150 percent of poverty.--For
purposes of paragraph (1), a determination of the number of
medicare beneficiaries with family income that does not exceed
150 percent of the poverty line residing in a State for the
calendar year in which such fiscal year begins shall be made on
the basis of the arithmetic average of the number of such
medicare beneficiaries, as reported and defined in the 5 most
recent March supplements to the Current Population Survey of
the Bureau of the Census before the beginning of the fiscal
year.
``(3) Minimum allotment.--In no case shall the amount of
the allotment under this subsection for one of the 50 States or
the District of Columbia for a fiscal year be less than an
amount equal to 0.5 percent of the amount provided for
allotments under subsection (a) for that fiscal year (reduced
by the amount of allotments made under subsection (c) for the
fiscal year). To the extent that the application of the
previous sentence results in an increase in the allotment to a
State or the District of Columbia above the amount otherwise
provided, the allotments for the other States and the District
of Columbia under this subsection shall be reduced in a pro
rata manner (but not below the minimum allotment described in
such preceding sentence) so that the total of such allotments
in a fiscal year does not exceed the amount otherwise provided
for allotment under subsection (a) for that fiscal year (as so
reduced).
``(c) Allotments to Territories.--
``(1) In general.--Of the amount available for allotment
under subsection (a) for a fiscal year, the Secretary shall
allot 0.25 percent among each of the commonwealths and
territories described in paragraph (3) in the same proportion as the
percentage specified in paragraph (2) for such commonwealth or
territory bears to the sum of such percentages for all such
commonwealths or territories so described.
``(2) Percentage.--The percentage specified in this
paragraph for--
``(A) Puerto Rico is 91.6 percent;
``(B) Guam is 3.5 percent;
``(C) the United States Virgin Islands is 2.6
percent;
``(D) American Samoa is 1.2 percent; and
``(E) the Northern Mariana Islands is 1.1 percent.
``(3) Commonwealths and territories.--A commonwealth or
territory described in this paragraph is any of the following
if it has an outpatient prescription drug assistance plan
approved under this title:
``(A) Puerto Rico.
``(B) Guam.
``(C) The United States Virgin Islands.
``(D) American Samoa.
``(E) The Northern Mariana Islands.
``(d) Transfer of Certain Allotments and Portions of Allotments.--
``(1) Transfer and redistribution.--
``(A) In general.--Subject to subparagraph (B), not
later than 30 days after the date described in
paragraph (2)--
``(i) 90 percent of the allotment
determined for a fiscal year under subsection
(b) or (c) for a State shall be transferred and
made available in such fiscal year to the
Secretary, acting through the Administrator of
the Health Care Financing Administration, for
purposes of carrying out the default program
established under section 2209; and
``(ii) 10 percent of such allotment shall
be redistributed in accordance with subsection
(e).
``(B) Applicability.--Subparagraph (A) shall not
apply if, not later than the date described in
paragraph (2) for such fiscal year, a State submits a
plan or is part of a group of States that submits a
plan to the Secretary that the Secretary finds meets
the requirements of section 2201(b).
``(2) Date described.--The date described in this paragraph
is--
``(A) in the case of fiscal year 2001, December 31,
2000; and
``(B) in the case of fiscal year 2002, 2003, or
2004, September 1 of the fiscal year preceding such
fiscal year.
``(e) Redistribution of Portion of Allotments.--With respect to a
fiscal year, not later than 30 days after the date described in
subsection (d)(2) for such fiscal year, the Secretary shall
redistribute the total amount made available for redistribution for
such fiscal year under subsection (d)(1)(A)(ii) to each State that
submits a plan or is part of a group of States that submits a plan to
the Secretary that the Secretary finds meets the requirements of this
title. Such amount shall be redistributed in the same manner as
allotments are determined under subsections (b) and (c) and shall be
available only to the extent consistent with subsection (a)(2).
``SEC. 2205. PAYMENTS TO STATES.
``(a) In General.--Subject to the succeeding provisions of this
section, the Secretary shall pay to each State with a plan approved
under section 2206(a)(2) (individually or as part of a group of States)
from the State's allotment under section 2204, an amount for each
quarter equal to the applicable percentage of expenditures in the
quarter--
``(1) for outpatient prescription drug assistance under the
plan for low-income medicare beneficiaries and, if applicable,
medicare beneficiaries with high drug costs in the form of
providing coverage for outpatient prescription drugs that meets
the requirements of section 2203; and
``(2) only to the extent permitted consistent with
subsection (c), for reasonable costs incurred to administer the
plan.
``(b) Applicable Percentage.--For purposes of subsection (a), the
applicable percentage is--
``(1) for low-income medicare beneficiaries with family
incomes that do not exceed 135 percent of the poverty line, 100
percent; and
``(2) for all other low-income medicare beneficiaries and
for medicare beneficiaries with high drug costs, the enhanced
FMAP (as defined in section 2105(b)).
``(c) Limitation on Payments for Certain Expenditures.--
``(1) General limitations.--Funds provided to a State or
group of States under this title shall only be used to carry
out the purposes of this title.
``(2) Administrative expenditures.--
``(A) In general.--Subject to subparagraph (B),
payment shall not be made under subsection (a) for
expenditures described in subsection (a)(2) for a
fiscal year to the extent the total of such
expenditures (for which payment is made under such
subsection) exceeds 10 percent of the total
expenditures described in subsection (a)(1) made by--
``(i) in the case of a State that is not
part of a group of States, the State for such
fiscal year; and
``(ii) in the case of a group of States,
the group for such fiscal year.
``(B) Special rule.--With respect to the first
fiscal year that a State or group of States provides
outpatient prescription drug assistance under a plan
approved under this title, the 10 percent limitation
described in subparagraph (A) shall be applied--
``(i) in the case of a State that is not
part of a group of States, to the allotment
available for such State for such fiscal year;
and
``(ii) in the case of a group of States, to
the aggregate of the State allotments available
for all the States in such group for such
fiscal year.
``(3) Use of non-federal funds for state matching
requirement.--Amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, may not be included in determining the
amount of the non-Federal share of plan expenditures required
under the plan.
``(4) Offset of receipts attributable to premiums or cost-
sharing.--For purposes of subsection (a), the amount of the
expenditures under the plan shall be reduced by the amount of
any premiums or cost-sharing received by a State.
``(5) Prevention of duplicative payments.--
``(A) Other health plans.--No payment shall be made
under this section for expenditures for outpatient
prescription drug assistance provided under an
outpatient prescription drug assistance plan to the
extent that a private insurer (as defined by the
Secretary by regulation and including a group health
plan, a service benefit plan, and a health maintenance
organization) would have been obligated to provide such
assistance but for a provision of its insurance
contract which has the effect of limiting or excluding
such obligation because the beneficiary is eligible for
or is provided outpatient prescription drug assistance
under the plan.
``(B) Other federal governmental programs.--Except
as otherwise provided by law, no payment shall be made
under this section for expenditures for outpatient
prescription drug assistance provided under an
outpatient prescription drug assistance plan to the
extent that payment has been made or can reasonably be
expected to be made promptly (as determined in
accordance with regulations) under any other federally
operated or financed health care insurance program
identified by the Secretary. For purposes of this
paragraph, rules similar to the rules for overpayments
under section 1903(d)(2) shall apply.
``(d) Advance Payment; Retrospective Adjustment.--The Secretary may
make payments under this section for each quarter on the basis of
advance estimates of expenditures submitted by a State or group of
States and such other investigation as the Secretary may find
necessary, and may reduce or increase the payments as necessary to
adjust for any overpayment or underpayment for prior quarters.
``(e) Flexibility in Submittal of Claims.--Nothing in this section
shall be construed as preventing a State or group of States from
claiming as expenditures in any quarter of a fiscal year expenditures
that were incurred in a previous quarter of such fiscal year.
``SEC. 2206. PROCESS FOR SUBMISSION, APPROVAL, AND AMENDMENT OF
OUTPATIENT PRESCRIPTION DRUG ASSISTANCE PLANS.
``(a) Initial Plan.--
``(1) Submission.--A State may receive payments under
section 2205 with respect to a fiscal year if the State,
individually or as part of a group of States, has submitted to
the Secretary, not later than the date described in section
2204(d)(2), an outpatient prescription drug assistance plan
that the Secretary has found meets the applicable requirements
of this title.
``(2) Approval.--Except as the Secretary may provide under
subsection (e), a plan submitted under paragraph (1)--
``(A) shall be approved for purposes of this title;
and
``(B) shall be effective beginning with a calendar
quarter that is specified in the plan, but in no case
earlier than October 1, 2000.
``(b) Plan Amendments.--Within 30 days after a State or group of
States amends an outpatient prescription drug assistance plan submitted
pursuant to subsection (a), the State or group shall notify the
Secretary of the amendment.
``(c) Disapproval of Plans and Plan Amendments.--
``(1) Prompt review of plan submittals.--The Secretary
shall promptly review plans and plan amendments submitted under
this section to determine if they substantially comply with the
requirements of this title.
``(2) 45-day approval deadlines.--A plan or plan amendment
is considered approved unless the Secretary notifies the State
or group of States in writing, within 45 days after receipt of
the plan or amendment, that the plan or amendment is
disapproved (and the reasons for the disapproval) or that
specified additional information is needed.
``(3) Correction.--In the case of a disapproval of a plan
or plan amendment, the Secretary shall provide a State or group
of States with a reasonable opportunity for correction before
taking financial sanctions against the State or group on the
basis of such disapproval.
``(d) Program Operation.--
``(1) In general.--A State or group of States shall conduct
the program in accordance with the plan (and any amendments)
approved under this section and with the requirements of this
title.
``(2) Violations.--The Secretary shall establish a process
for enforcing requirements under this title. Such process shall
provide for the withholding of funds in the case of substantial
noncompliance with such requirements. In the case of an
enforcement action against a State or group of States under
this paragraph, the Secretary shall provide a State or group of
States with a reasonable opportunity for correction and for
administrative and judicial appeal of the Secretary's action
before taking financial sanctions against the State or group of
States on the basis of such an action.
``(e) Continued Approval.--Subject to section 2201(d), an approved
outpatient prescription drug assistance plan shall continue in effect
unless and until the State or group of States amends the plan under
subsection (b) or the Secretary finds, under subsection (d),
substantial noncompliance of the plan with the requirements of this
title.
``SEC. 2207. PLAN ADMINISTRATION; APPLICATION OF CERTAIN GENERAL
PROVISIONS.
``(a) Plan Administration.--An outpatient prescription drug
assistance plan shall include an assurance that the State or group of
States administering the plan will collect the data, maintain the
records, afford the Secretary access to any records or information
relating to the plan for the purposes of review or audit, and furnish
reports to the Secretary, at the times and in the standardized format
the Secretary may require in order to enable the Secretary to monitor
program administration and compliance and to evaluate and compare the
effectiveness of plans under this title.
``(b) Application of Certain General Provisions.--The following
sections of this Act shall apply to the program established under this
title in the same manner as they apply to a State under title XIX:
``(1) Title xix provisions.--
``(A) Section 1902(a)(4)(C) (relating to conflict
of interest standards).
``(B) Paragraphs (2), (16), and (17) of section
1903(i) (relating to limitations on payment).
``(C) Section 1903(w) (relating to limitations on
provider taxes and donations).
``(2) Title xi provisions.--
``(A) Section 1115 (relating to waiver authority).
``(B) Section 1116 (relating to administrative and
judicial review), but only insofar as consistent with
this title.
``(C) Section 1124 (relating to disclosure of
ownership and related information).
``(D) Section 1126 (relating to disclosure of
information about certain convicted individuals).
``(E) Section 1128A (relating to civil monetary
penalties).
``(F) Section 1128B(d) (relating to criminal
penalties for certain additional charges).
``SEC. 2208. REPORTS.
``(a) In General.--Each State or group of States administering a
plan under this title shall annually--
``(1) assess the operation of the outpatient prescription
drug assistance plan under this title in each fiscal year; and
``(2) report to the Secretary on the result of the
assessment.
``(b) Required Information.--The annual report required under
subsection (a) shall include the following:
``(1) An assessment of the effectiveness of the plan in
providing outpatient prescription drug assistance to low-income
medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs.
``(2) A description and analysis of the effectiveness of
elements of the plan, including--
``(A) the characteristics of the low-income
medicare beneficiaries and, if applicable, medicare
beneficiaries with high drug costs assisted under the
plan, including family income and access to, or
coverage by, other health insurance prior to the plan
and after eligibility for the plan ends;
``(B) the amount and level of assistance provided
under the plan; and
``(C) the sources of the non-Federal share of plan
expenditures.
``(c) Annual Report of the Secretary.--The Secretary shall submit
to Congress and make available to the public an annual report based on
the reports required under subsection (a) and section 2209(b)(5),
containing any conclusions and recommendations the Secretary considers
appropriate.
``SEC. 2209. ESTABLISHMENT OF DEFAULT PROGRAM.
``(a) Program Authority.--
``(1) In general.--With respect to a fiscal year, in the
case of a State that fails to submit (individually or as part
of a group of States) an approved outpatient prescription drug
assistance plan to the Secretary by the date described in
section 2204(d)(2) for such fiscal year, outpatient
prescription drug assistance to low-income medicare
beneficiaries and, subject to the availability of funds,
medicare beneficiaries with high drug costs, who reside in such
State shall be provided during such fiscal year by the
Secretary, through the Administrator of the Health Care
Financing Administration, in accordance with this section.
``(2) Definitions.--In this section:
``(A) Contractor.--The term `contractor' means a
pharmaceutical benefit manager or other entity that
meets standards established by the Administrator of the
Health Care Financing Administration for the provision of outpatient
prescription drug assistance under a contract entered into under this
section.
``(B) Low-income medicare beneficiary.--The term
`low-income medicare beneficiary' means an individual
who--
``(i) satisfies the requirements of
subparagraphs (A) and (B) of section
2202(b)(1);
``(ii) is determined to have family income
that does not exceed a percentage of the
poverty line for a family of the size involved
specified by the Administrator of the Health
Care Financing Administration that may not
exceed 135 percent; and
``(iii) at the option of the Administrator
of the Health Care Financing Administration, is
determined to have resources that do not exceed
a level specified by such Administrator.
``(C) Medicare beneficiary with high drug costs.--
The term `medicare beneficiary with high drug costs'
means an individual--
``(i) who satisfies the requirements of
subparagraphs (A) and (B) of section
2202(b)(1);
``(ii) whose family income exceeds the
percentage of the poverty line specified by the
Administrator of the Health Care Financing
Administration under subparagraph (B)(ii) for a
low-income medicare beneficiary residing in the
same State;
``(iii) whose resources exceed a level (if
any) specified by the Administrator of the
Health Care Financing Administration under
subparagraph (B)(iii) for a low-income medicare
beneficiary residing in the same State; and
``(iv) with respect to any 3-month period,
who has out-of-pocket expenses for outpatient
prescription drugs and biologicals (including
insulin and insulin supplies) for which
outpatient prescription drug assistance is
available under this title that exceed a level
specified by such Administrator (consistent
with the availability of funds for the
operation of the program established under this
section in the State where the beneficiary
resides).
``(b) Administration.--In administering the default program
established under this section, the Administrator of the Health Care
Financing Administration shall--
``(1) establish procedures to determine the eligibility of
the low-income medicare beneficiaries and medicare
beneficiaries with high drug costs described in subsection (a)
for outpatient prescription drug assistance;
``(2) establish a process for accepting bids to provide
outpatient prescription drug assistance to such beneficiaries,
awarding contracts under such bids, and making payments under
such contracts;
``(3) establish policies and procedures for overseeing the
provision of outpatient prescription drug assistance under such
contracts;
``(4) develop and implement quality and service assessment
measures that include beneficiary quality surveys and annual
quality and service rankings for contractors awarded a contract
under this section;
``(5) annually assess the program established under this
section and submit a report to the Secretary containing the
information required under section 2208(b); and
``(6) carry out such other responsibilities as are
necessary for the administration of the provision of outpatient
prescription drug assistance under this section.
``(c) Contract Requirements.--
``(1) Authority; term.--
``(A) Use of competitive procedures.--
``(i) Fiscal year 2001.--With respect to
fiscal year 2001, the Administrator of the
Health Care Financing Administration may enter
into contracts under this section without using
competitive procedures, as defined in section
4(5) of the Office of Federal Procurement
Policy Act (41 U.S.C. 403(5)), or any other
provision of law requiring competitive bidding.
``(ii) Fiscal years 2002, 2003, and 2004.--
With respect to fiscal years 2002, 2003, and
2004, the Administrator of the Health Care
Financing Administration shall award contracts
under this section using competitive procedures
(as so defined).
``(B) Term.--Each contract shall be for a uniform
term of at least 1 year, but may be made automatically
renewable from term to term in the absence of notice of
termination by either party.
``(2) Benefit.--The contract shall require the contractor
to provide a low-income medicare beneficiary and, if
applicable, a medicare beneficiary with high drug costs,
outpatient prescription drug assistance that is equivalent to
the FEHBP-equivalent benchmark benefit package described in
section 2203(b)(2) in a manner that is consistent with the
provisions of this title as such provisions apply to a State
that provides such assistance.
``(3) Quality and service assessment.--The contract shall
require the contractor to cooperate with the quality and
service assessment measures implemented in accordance with
subsection (b)(4).
``(4) Payments.--The contract shall specify the amount and
manner by which payments (including any administrative fees)
shall be made to the contractor for the provision of outpatient
prescription drug assistance to low-income medicare
beneficiaries and, if applicable, medicare beneficiaries with
high drug costs.
``(d) Funding.--
``(1) Aggregate of transferred amounts.--The Secretary,
through the Administrator of the Health Care Financing
Administration, shall use the aggregate of the amounts
transferred and made available under section 2204(d)(1)(A)(i)
for purposes of carrying out the default program established
under this section. Such aggregate may be used to provide
outpatient prescription drug assistance to any low-income
medicare beneficiary, and, subject to the availability of
funds, medicare beneficiary with high drug costs, who resides
in a State described in subsection (a)(1).
``(2) Limitation on administrative costs.--Administrative
expenditures incurred by the Secretary or the Administrator of
the Health Care Financing Administration for a fiscal year to
carry out this section (other than administrative fees paid to
a contractor under a contract meeting the requirements of
subsection (c))--
``(A) shall be paid out of the aggregate amounts
described in paragraph (1); and
``(B) may not exceed an amount equal to 1 percent
of all premiums imposed for such fiscal year to provide
outpatient prescription drug assistance to low-income
medicare beneficiaries and medicare beneficiaries with
high drug costs under this section.
``(e) Termination.--Except as provided in section 2201(d)(2), the
program established under this section shall terminate on December 31,
2003.
``SEC. 2210. DEFINITIONS.
``In this title:
``(1) Cost-sharing.--The term `cost-sharing' means a
deductible, coinsurance, copayment, or similar charge, and
includes an enrollment fee.
``(2) Outpatient prescription drug assistance.--
``(A) In general.--The term `outpatient
prescription drug assistance' means, subject to
subparagraph (B), payment for part or all of the cost
of coverage of self-administered outpatient
prescription drugs and biologicals (including insulin
and insulin supplies) for low-income medicare
beneficiaries and, if applicable, medicare
beneficiaries with high drug costs.
``(B) Exclusions.--Such term does not include
payment or coverage with respect to--
``(i) items covered under title XVIII; or
``(ii) items for which coverage is not
available under a State plan under title XIX.
``(3) Outpatient prescription drug assistance plan; plan.--
Unless the context otherwise requires, the terms `outpatient
prescription drug assistance plan' and `plan' mean an
outpatient prescription drug assistance plan approved under
section 2206.
``(4) Group health plan; group health insurance coverage;
etc.--The terms `group health plan', `group health insurance
coverage', and `health insurance coverage' have the meanings
given such terms in section 2791 of the Public Health Service
Act (42 U.S.C. 300gg-91).
``(5) Poverty line.--The term `poverty line' has the
meaning given such term in section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)), including any
revision required by such section.
``(6) Preexisting condition exclusion.--The term
`preexisting condition exclusion' has the meaning given such
term in section 2701(b)(1)(A) of the Public Health Service Act
(42 U.S.C. 300gg(b)(1)(A)).
``(7) State.--The term `State' has the meaning given such
term for purposes of title XIX.''.
(b) Conforming Amendments.--
(1) Definition of state.--Section 1101(a)(1) of the Social
Security Act (42 U.S.C. 1301(a)(1)) is amended in the first and
fourth sentences, by striking ``and XXI'' each place it appears
and inserting ``XXI, and XXII''.
(2) Treatment as state health care program.--Section
1128(h) of such Act (42 U.S.C. 1320a-7(h)) is amended--
(A) in paragraph (3), by striking ``or'' at the
end;
(B) in paragraph (4), by striking the period at the
end and inserting ``, or''; and
(C) by adding at the end the following new
paragraph:
``(5) an outpatient prescription drug assistance plan
approved under title XXII.''.
SEC. 3. ELECTION BY LOW-INCOME MEDICARE BENEFICIARIES AND MEDICARE
BENEFICIARIES WITH HIGH DRUG COSTS TO SUSPEND MEDIGAP
INSURANCE.
Section 1882(q) of the Social Security Act (42 U.S.C. 1395ss(q)) is
amended--
(1) in paragraph (5)(C), by striking ``this paragraph or
paragraph (6)'' and inserting ``this paragraph, or paragraph
(6) or (7)''; and
(2) by adding at the end the following new paragraph:
``(7) Each medicare supplemental policy shall provide that
benefits and premiums under the policy shall be suspended at
the request of the policyholder if the policyholder is entitled
to benefits under section 226 and is covered under an
outpatient prescription drug assistance plan (as defined in
section 2210(3)) or provided outpatient prescription drug
assistance under the program established under section 2209. If
such suspension occurs and if the policyholder or certificate
holder loses coverage under such plan or program, such policy
shall be automatically reinstituted (effective as of the date
of such loss of coverage) under terms described in subsection
(n)(6)(A)(ii) as of the loss of such coverage if the
policyholder provides notice of loss of such coverage within 90
days after the date of such loss.''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S8198-8199)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S8199-8204)
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