Protecting Access to Diabetes Supplies Act of 2016

Summary: Protecting Access to Diabetes Supplies Act of 2016 This bill amends title XVIII (Medicare) of the Social Security Act to modify provisions relating to Medicare's competitive acquisition&nbsp;program&nbsp;(through which rates are set through a competitive bidding program rather than by an established fee schedule) with respect to diabetic testing strips. Specifically, the bill requires the Centers for Medicare &amp; Medicaid Services (CMS)&nbsp;to:  use specified data to determine whether a bid satisfies certain requirements related to volume of coverage with respect to such products,  reject a bid if the bidder does not demonstrate its ability to furnish such products in a manner consistent with its bid, and  establish a process to monitor the extent to which an entity continues to cover the product types included in its bid. CMS may terminate a contract if it determines that an entity, for reasons other than product discontinuation or market-wide shortage, fails to maintain ready access to such products included its bid. In addition, the bill specifies that an entity furnishing such products to beneficiaries under the program: (1)&nbsp;must furnish to each beneficiary a brand of strips that is compatible with the beneficiary's home blood glucose monitor, (2) may not attempt to influence or incentivize a beneficiary&nbsp;to switch the brand of either type of product, and (3) must contact and receive a request from a beneficiary no more than 14 days prior to dispensing a refill to the beneficiary.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Access to Diabetes 
Supplies Act of 2016''.

SEC. 2. STRENGTHENING RULES IN CASE OF COMPETITION FOR DIABETIC TESTING 
              STRIPS.

    (a) Special Rule in Case of Competition for Diabetic Testing 
Strips.--
            (1) In general.--Paragraph (10) of section 1847(b) of the 
        Social Security Act (42 U.S.C. 1395w-3(b)) is amended--
                    (A) in subparagraph (A), by striking the second 
                sentence and inserting the following new sentence: 
                ``With respect to bids to furnish such types of 
                products on or after January 1, 2019, the volume for 
                such types of products shall be determined by the 
                Secretary through the use of multiple sources of data, 
                including market based data measuring sales of diabetic 
                testing strip products described in section 1861(n) 
                that are not exclusively sold by, and marketed under 
                the name of, a single retailer that is not the 
                manufacturer of such products, from mail order, non-
                mail order, Medicare, and non-Medicare markets.''; and
                    (B) by adding at the end the following new 
                subparagraphs:
                    ``(C) Demonstration of ability to furnish types of 
                diabetic testing strip products.--With respect to bids 
                to furnish diabetic testing strip products on or after 
                January 1, 2019, under the program described in 
                subparagraph (A), the Secretary shall reject a bid 
                submitted by an entity if the entity does not attest to 
                the Secretary and demonstrate, through letters of 
                intent with manufacturers, wholesalers, or other 
                suppliers, or other evidence as the Secretary may 
                specify, that the entity has the ability to obtain an 
                inventory of the types and quantities of diabetic 
                testing strip products that will allow the entity to 
                furnish such products in a manner consistent with its 
                bid.
                    ``(D) Use of unlisted types in calculation of 
                percentage.--With respect to bids to furnish diabetic 
                testing strip products on or after January 1, 2019, in 
                determining under subparagraph (A) whether a bid 
                submitted by an entity under such subparagraph covers 
                50 percent (or such higher percentage as the Secretary 
                may specify) of all types of diabetic testing strip 
                products, the Secretary may not attribute a percentage 
                to types of diabetic testing strip products that the 
                Secretary does not identify by brand, model, and market 
                share volume.
                    ``(E) Adherence to demonstration.--
                            ``(i) In general.--In the case of an entity 
                        that is furnishing diabetic testing strip 
                        products on or after January 1, 2019, under a 
                        contract entered into under the competition 
                        conducted pursuant to paragraph (1), the 
                        Secretary shall establish a process to monitor, 
                        on an ongoing basis, the extent to which such 
                        entity continues to cover the product types 
                        included in the entity's bid.
                            ``(ii) Termination.--If the Secretary 
                        determines that an entity described in clause 
                        (i) fails to maintain in inventory, or 
                        otherwise maintain ready access to through 
                        requirements contracts or otherwise, a type of 
                        product included in the entity's bid, the 
                        Secretary may terminate such contract unless 
                        the Secretary finds that the failure of the 
                        entity to maintain inventory of, or ready 
                        access to, the product is the result of the 
                        discontinuation of the product by the product 
                        manufacturer or a market-wide shortage of the 
                        product.''.
    (b) Codifying and Expanding Anti-Switching Rule.--Section 1847(b) 
of the Social Security Act (42 U.S.C. 1395w-3(b)), as amended by 
subsection (a)(1), is further amended--
            (1) by redesignating paragraph (11) as paragraph (12); and
            (2) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) Additional special rules in case of competition for 
        diabetic testing strips.--
                    ``(A) In general.--With respect to an entity that 
                is furnishing diabetic testing strip products to 
                individuals under a contract entered into under the 
                competitive acquisition program established under this 
                section, the entity shall furnish to each individual a 
                brand of such strips that is compatible with the home 
                blood glucose monitor selected by the individual.
                    ``(B) Prohibition on influencing and 
                incentivizing.--An entity described in subparagraph (A) 
                may not attempt to influence or incentivize an 
                individual to switch the brand of glucose monitor or 
                diabetic testing strip product selected by the 
                individual, including by--
                            ``(i) persuading, pressuring, or advising 
                        the individual to switch; or
                            ``(ii) furnishing information about 
                        alternative brands to the individual where the 
                        individual has not requested such information.
                    ``(C) Provision of information.--
                            ``(i) Standardized information.--Not later 
                        than January 1, 2019, the Secretary shall 
                        develop and make available to entities 
                        described in subparagraph (A) standardized 
                        information that describes the rights of an 
                        individual with respect to such an entity. The 
                        information described in the preceding sentence 
                        shall include information regarding--
                                    ``(I) the requirements established 
                                under subparagraphs (A) and (B);
                                    ``(II) the right of the individual 
                                to purchase diabetic testing strip 
                                products from another mail order 
                                supplier of such products or a retail 
                                pharmacy if the entity is not able to 
                                furnish the brand of such product that 
                                is compatible with the home blood 
                                glucose monitor selected by the 
                                individual; and
                                    ``(III) the right of the individual 
                                to return diabetic testing strip 
                                products furnished to the individual by 
                                the entity.
                            ``(ii) Requirement.--With respect to 
                        diabetic testing strip products furnished on or 
                        after the date on which the Secretary develops 
                        the standardized information under clause (i), 
                        an entity described in subparagraph (A) may not 
                        communicate directly to an individual until the 
                        entity has verbally provided the individual 
                        with such standardized information.
                    ``(D) Order refills.--With respect to diabetic 
                testing strip products furnished on or after January 1, 
                2019, the Secretary shall require an entity furnishing 
                diabetic testing strip products to an individual to 
                contact and receive a request from the individual for 
                such products not more than 14 days prior to dispensing 
                a refill of such products to the individual.''.
    (c) Implementation; Non-Application of the Paperwork Reduction 
Act.--
            (1) Implementation.--Notwithstanding any other provision of 
        law, the Secretary of Health and Human Services may implement 
        the provisions of, and amendments made by, this section by 
        program instruction or otherwise.
            (2) Non-application of the paperwork reduction act.--
        Chapter 35 of title 44, United States Code (commonly referred 
        to as the `Paperwork Reduction Act of 1995') shall not apply to 
        this section or the amendments made by this section.