Medicare Prescription Drug Program Integrity and Transparency Act of 2013 - Amends part D (Voluntary Prescription Drug Benefit Program) of title XVIII (Medicare) of the Social Security Act to require each contract entered into with a prescription drug plan (PDP) sponsor with respect to a PDP the sponsor offers to prohibit the PDP from entering into a contract with any pharmacy benefits manager (PBM) to manage the prescription drug coverage provided under such plan, or to control the costs of the prescription drug coverage under it, unless the manager satisfies specified PBM audit and disclosure requirements.
Requires a PBM to provide: (1) a particular aggregate average reimbursement rate for generics or a maximum average discount off of an accepted pharmaceutical pricing benchmark for multi-source generics as a whole ("generic effective rate"), and (2) a process for the generic effective rate to be appealed.
Revises requirements for contracts with PDP sponsors to require that the PDP sponsor or a subcontractor of the sponsor disclose to a pharmacy, at the time when a contract is offered and at least once every seven days, the methodology and actual per unit reimbursement amount for each covered drug for each contracted pharmacy.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 867 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 867
To amend title XVIII of the Social Security Act to provide for pharmacy
benefits manager standards under the Medicare prescription drug
program, to establish basic audit standards of pharmacies, to further
transparency of payment methodology to pharmacies, and to provide for
recoupment returns to Medicare.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 6, 2013
Mr. Pryor (for himself, Mr. Moran, Mr. Wicker, and Mr. Boozman)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to provide for pharmacy
benefits manager standards under the Medicare prescription drug
program, to establish basic audit standards of pharmacies, to further
transparency of payment methodology to pharmacies, and to provide for
recoupment returns to Medicare.
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 Prescription Drug Program
Integrity and Transparency Act of 2013''.
SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS UNDER THE MEDICARE PROGRAM.
(a) In General.--Section 1860D-12(b) of the Social Security Act (42
U.S.C. 1395w-112(b)) is amended by adding at the end the following new
paragraphs:
``(7) Pharmacy benefits manager transparency and proper
operations requirements.--
``(A) In general.--Each contract entered into with
a PDP sponsor under this part with respect to a
prescription drug plan offered by such sponsor shall
provide that the PDP may not enter into a contract with
any pharmacy benefits manager (referred to in this
paragraph as a `PBM') to manage the prescription drug
coverage provided under such plan, or to control the
costs of the prescription drug coverage under such
plan, unless the PBM satisfies the requirements
described in subparagraph (B).
``(B) Requirements.--The requirements described in
this subparagraph are as follows:
``(i) Proper audit procedures.--The
following shall apply to each audit of a
pharmacy conducted by or for the pharmacy
benefits manager with respect to such
prescription drug plan:
``(I) Assuring recoveries to
medicare.--
``(aa) The PBM (or auditing
entity) shall disclose the
amount of each payment
recovered pursuant to the audit
to the PDP sponsor with a copy
to the pharmacy.
``(bb) Any payment
recovered by the PBM (or
auditing entity) pursuant to
the audit shall be returned to
the PDP sponsor.
``(II) Assuring clinical decisions
in audits.--
``(aa) In the case the
audit involves clinical or
professional judgment, the
audit shall be conducted by, or
in consultation with, a
pharmacist licensed in the
State of the audit or the State
board of pharmacy.
``(bb) The pharmacy,
practice site, or other entity
may use a nursing home's
medication administration
record (MAR), the records of a
hospital, physician,
rehabilitation facility, State-
licensed healthcare facility,
or other authorized
practitioner to validate the
pharmacy records and any legal
prescription (one that complies
with State Board of Pharmacy
requirements) may be used to
validate claims submitted by
the pharmacy in connection with
prescriptions, refills, proof
of delivery, or changes in
prescriptions during any phase
of the audit, including appeal.
``(III) Assuring proper
procedures.--
``(aa) The PBM (or auditing
entity) may not apply
recordkeeping or other
requirements on the pharmacy
that are more stringent than
such requirements applied under
Federal law or the State law
involved.
``(bb) The PBM (or auditing
entity) shall accept all
pharmacy prescription records
related to the audit in an
electronic format or other
digital media.
``(cc) The PBM (or auditing
entity) may not, pursuant to
the audit, disallow the entire
payment with respect to a claim
submitted by the pharmacy
because of a clerical or
recordkeeping error (such as a
typographical error,
scrivener's error, or computer
error) if there is an absence
of intent to commit fraud, as
defined in section 1347 of
title 18, United States Code.
In the case of errors that have
no financial harm to the
patient or plan, the PBM shall
not assess any chargebacks.
``(dd) The PBM (or auditing
entity) may not use
extrapolation or other
statistical expansion
techniques in calculating any
recoupment or penalty pursuant
to the audit.
``(ee) The period covered
by the audit may not exceed 2
years from the date the claim
involved was submitted to, or
adjusted by, the PBM (or
auditing entity).
``(ff) The PBM (or auditing
entity) shall have in place a
written appeals process that
affords the pharmacy a minimum
of 60 days to respond to the
auditor findings, shall include
procedures for appeals from
preliminary reports and final
reports related to such audit,
and shall permit the pharmacy
to introduce any documentation
which would validate a claim
contested in the audit until
the final written decision is
issued on appeal.
``(ii) Business practice predictability.--A
PBM shall provide a particular aggregate
average reimbursement rate for generics or a
maximum average discount off of an accepted
pharmaceutical pricing benchmark for multi-
source generics as a whole (often referred to
as a `generic effective rate') and provide a
process for the generic effective rate to be
appealed. For the purposes of this rate or
benchmark amount, the PBM shall utilize a
pharmaceutical pricing benchmark published by a
nationally available compendium. The aggregate
average reimbursement rate for generics
(generic effective rate) shall be calculated
using the actual amount paid to the pharmacy
(typically the amount of reimbursement to the
PBM plus the patient co-pay), excluding the
dispensing fee, shall not be calculated solely
according to the amount allowed by the plan,
and shall include all generics dispensed,
regardless of whether they are subject to MAC
pricing.
``(iii) Protecting patient and claims
related data.--A PBM shall adhere to the
following criteria when handling personally
identifiable utilization and claims data or
other sensitive patient data:
``(I) A PBM may not transmit any
personally identifiable utilization or
claims data to a pharmacy owned by a
PBM if the plan enrollee has not
voluntarily elected in writing or via
secure electronic means to fill that
particular prescription at the PBM-
owned pharmacy.
``(II) A PBM may not require that a
plan enrollee use a retail pharmacy,
mail order pharmacy, specialty
pharmacy, or other pharmacy entity
providing pharmacy services in which
the PBM has an ownership interest or
that has an ownership interest in the
PBM or provide an incentive to a
beneficiary to encourage the individual
to use a retail pharmacy, mail order
pharmacy, specialty pharmacy, or other
pharmacy entity providing pharmacy
services in which the PBM has an
ownership interest or that has an
ownership interest in the PBM, if the
incentive is applicable only to such
pharmacies.''.
(b) Disclosure and Regular Update of Prescription Drug
Reimbursement.--Section 1860D-12(b) of the Social Security Act (42
U.S.C. 1395w-112(b)) is amended to read as follows:
``(6) Disclosure and regular update of prescription drug
reimbursement.--Each contract entered into with a PDP sponsor
under this part with respect to a prescription drug plan
offered by such sponsor shall provide that the sponsor or
subcontractor of such sponsor shall--
``(A) disclose to a pharmacy, at the time when a
contract is offered, the methodology and actual per
unit reimbursement amount for each covered drug for
each such pharmacy; and
``(B) not less frequently than once every 7 days,
beginning with an initial update on January 1 of each
year--
``(i) update such reimbursement amount to
accurately reflect the market price of
acquiring the drug; and
``(ii) disclose to each contracted pharmacy
such methodology and reimbursement amounts.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning on or after January 1, 2015.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line