Safety Net Inpatient Drug Affordability Act - Amends the Public Health Service Act to expand the discount drug program to include any inpatient or outpatient drug purchased by qualified hospitals without a group purchasing arrangement. (Currently, such hospitals are only allowed to purchase discounted outpatient drugs.) Requires such hospitals to provide the state with a rebate on the estimated annual costs of single source, innovator multiple source, and noninnovator multiple source drugs provided to Medicaid recipients for inpatient use. Sets forth a method for calculating the amount of such rebate.
Allows critical access hospitals that do not obtain covered outpatient drugs through a group purchasing organization or other group purchasing arrangement to participate in the discount drug program.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3547 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 3547
To amend section 340B of the Public Health Service Act to increase the
affordability of inpatient drugs for Medicaid and safety net hospitals.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 28, 2005
Mrs. Emerson (for herself, Mr. Rush, Mr. Berry, Mr. Simpson, Mr.
Strickland, and Mr. Jones of North Carolina) introduced the following
bill; which was referred to the Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To amend section 340B of the Public Health Service Act to increase the
affordability of inpatient drugs for Medicaid and safety net hospitals.
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 ``Safety Net Inpatient Drug
Affordability Act''.
SEC. 2. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.
(a) In General.--Section 340B(b) of the Public Health Service Act
(42 U.S.C. 256b(b)) is amended by inserting before the period the
following: ``, except that, notwithstanding the limiting definition set
forth in section 1927(k)(3) of the Social Security Act, the terms
`covered outpatient drug' and `covered drug' include any inpatient or
outpatient drug purchased by a hospital described in subsection
(a)(4)(L)''.
(b) Payment of Medicaid Rebates on Inpatient Drugs.--Section
340B(c) of such Act (42 U.S.C. 256b(c)) is amended to read as follows:
``(c) Payment of Medicaid Rebates on Inpatient Drugs.--
``(1) In general.--For the cost reporting period covered by
the most recently filed Medicare cost report, a hospital
described in subsection (a)(4)(L) shall provide to each State
with an approved State plan under title XIX of such Act--
``(A) a rebate on the estimated annual costs of
single source and innovator multiple source drugs
provided to Medicaid recipients for inpatient use; and
``(B) a rebate on the estimated annual costs of
noninnovator multiple source drugs provided to Medicaid
recipients for inpatient use.
``(2) Calculations of rebates.--
``(A) Single source and innovator multiple source
drugs.--For purposes of paragraph (1)(A)--
``(i) the rebate under such paragraph shall
be calculated by multiplying the estimated
annual costs of single source and innovator
multiple source drugs provided to Medicaid
recipients for inpatient use by the minimum
rebate percentage described in section
1927(c)(1)(B) of the Social Security Act;
``(ii) the estimated annual costs of single
source drugs and innovator multiple source
drugs provided to Medicaid recipients for
inpatient use under clause (i) shall be equal
to the product of--
``(I) the hospital's actual
acquisition costs of all drugs
purchased during the cost reporting
period for inpatient use;
``(II) the Medicaid inpatient drug
charges as reported on the hospital's
most recently filed Medicare cost
report divided by total inpatient drug
charges reported on the cost report;
and
``(III) the percent of the
hospital's annual inpatient drug costs
described in subclause (I) arising out
of the purchase of single source and
innovator multiple source drugs; and
``(iii) the terms `single source drug' and
`innovator multiple source drug' have the
meanings given such terms in section 1927(k)(7)
of the Social Security Act.
``(B) Noninnovator multiple source drugs.--For
purposes of subparagraph (1) (B)--
``(i) the rebate under such paragraph shall
be calculated by multiplying the estimated
annual costs of noninnovator multiple source
drugs provided to Medicaid recipients for
inpatient use by the applicable percentage as
defined in section 1927(c)(3)(B) of the Social
Security Act;
``(ii) the estimated annual costs of
noninnovator multiple source drugs provided to
Medicaid recipients for inpatient use shall be
equal to the product of--
``(I) the hospital's actual
acquisition cost of all drugs purchased
during the cost reporting period for
inpatient use;
``(II) the Medicaid inpatient drug
charges as reported on the hospital's
most recently filed Medicare cost
report divided by total inpatient drug
charges reported on the cost report;
and
``(III) the percent of the
hospital's annual inpatient drug costs
described in subclause (I) arising out
of the purchase of noninnovator
multiple source drugs; and
``(iii) the term `noninnovator multiple
source drug' has the meaning given such term in
section 1927(k)(7) of the Social Security Act.
``(3) Payment deadline.--The rebates provided by a hospital
under paragraph (1) shall be paid within 90 days of the filing
of the hospital's most recently filed Medicare cost report.
``(4) Offset against medical assistance.--Amounts received
by a State under this subsection in any quarter shall be
considered to be a reduction in the amount expended under the
State plan in the quarter for medical assistance for purposes
of section 1903(a)(1) of the Social Security Act.''.
(c) Clarification That Group Purchasing Prohibition for Certain
Hospitals Is not Applicable to Inpatient Drugs.--Section
340B(a)(4)(L)(iii) of such Act (42 U.S.C. 256b(a)(4)(L)(iii)) is
amended by inserting ``(not including such drugs purchased for
inpatient use)'' after ``covered outpatient drugs''.
SEC. 3. PROVIDING ACCESS TO DISCOUNTED DRUG PRICES FOR CRITICAL ACCESS
HOSPITALS.
(a) In General.--Section 340B of the Public Health Service Act (42
U.S.C. 256b) is amended--
(1) in subsection (a)(4), by adding at the end the
following:
``(M) An entity that--
``(i) is a critical access hospital (as
determined under section 1820(c)(2) of the
Social Security Act); and
``(ii) does not obtain covered outpatient
drugs though a group purchasing organization or
other group purchasing arrangement (not
including such drugs purchased for inpatient
use).'';
(2) in subsection (b), as amended by section 2(a), by
inserting ``or subsection (a)(4)(M)'' after ``subsection
(a)(4)(L)''; and
(3) in subsection (c)(1), as added by inserting ``or
subsection (a)(4)(M)'' after ``subsection (a)(4)(L)''.
(b) Exclusion From Medicaid Best Price Calculations.--Section
1927(c)(1)(C)(i)(I) of the Social Security Act (42 U.S.C. 1396r-
8(c)(1)(C)(i)(I)) is amended by inserting ``and to critical access
hospitals described in section 340B(a)(4)(M) of such Act'' after
``Public Health Service Act''.
(c) Effective Date.--The amendments made by this section shall
apply to drugs purchased on or after January 1, 2006.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Energy and Commerce.
Referred to the Subcommittee on Health.
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