To amend title XIX of the Social Security Act to exclude abuse-deterrent formulations of prescription drugs from the Medicaid additional rebate requirement for new formulations of prescription drugs, and for other purposes.

Summary: This bill amends title XIX (Medicaid) of the Social Security Act to exclude abuse-deterrent formulations of prescription drugs from the requirement that manufacturers of single-source or innovator drugs pay additional rebates to state Medicaid programs. Under current law, the Centers for Medicare &amp; Medicaid Services (CMS)&nbsp;must use predictive modeling and other analytic technologies to identify improper Medicaid claims. The bill prohibits a state agency from using or disclosing such technologies except for purposes of administering a state Medicaid program or Children's Health Insurance Program (CHIP). A state agency shall have in effect adequate data security and control policies to ensure that access to such information is restricted to authorized persons for authorized uses. The bill places $5 million in the Medicaid Improvement Fund to be available beginning in FY2021.

SECTION 1. EXCLUDING ABUSE-DETERRENT FORMULATIONS OF PRESCRIPTION DRUGS 
              FROM THE MEDICAID ADDITIONAL REBATE REQUIREMENT FOR NEW 
              FORMULATIONS OF PRESCRIPTION DRUGS.

    (a) In General.--The last sentence of section 1927(c)(2)(C) of the 
Social Security Act (42 U.S.C. 1396r-8(c)(2)(C)) is amended by 
inserting before the period at the end the following: ``, but does not 
include an abuse-deterrent formulation of the drug (as determined by 
the Secretary), regardless of whether such abuse-deterrent formulation 
is an extended release formulation''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to drugs that are paid for by a State in calendar quarters 
beginning on or after the date of the enactment of this Act.

SEC. 2. LIMITING DISCLOSURE OF PREDICTIVE MODELING AND OTHER ANALYTICS 
              TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE, FRAUD, AND 
              ABUSE.

    (a) In General.--Title XI of the Social Security Act is amended by 
inserting after section 1128J (42 U.S.C. 1320a-7k) the following new 
section:

``SEC. 1128K. DISCLOSURE OF PREDICTIVE MODELING AND OTHER ANALYTICS 
              TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE, FRAUD, AND 
              ABUSE.

    ``(a) Reference to Predictive Modeling Technologies Requirements.--
For provisions relating to the use of predictive modeling and other 
analytics technologies to identify and prevent waste, fraud, and abuse 
with respect to the Medicare program under title XVIII, the Medicaid 
program under title XIX, and the Children's Health Insurance Program 
under title XXI, see section 4241 of the Small Business Jobs Act of 
2010 (42 U.S.C. 1320a-7m).
    ``(b) Limiting Disclosure of Predictive Modeling Technologies.--In 
implementing such provisions under such section 4241 with respect to 
covered algorithms (as defined in subsection (c)), the following shall 
apply:
            ``(1) Nonapplication of foia.--The covered algorithms used 
        or developed for purposes of such section (including by the 
        Secretary or a State (or an entity operating under a contract 
        with a State)) shall be exempt from disclosure under section 
        552(b)(3) of title 5, United States Code.
            ``(2) Limitation with respect to use and disclosure of 
        information by state agencies.--
                    ``(A) In general.--A State agency may not use or 
                disclose covered algorithms used or developed for 
                purposes of such section except for purposes of 
                administering the State plan (or a waiver of the plan) 
                under the Medicaid program under title XIX or the State 
                child health plan (or a waiver of the plan) under the 
                Children's Health Insurance Program under title XXI, 
                including by enabling an entity operating under a 
                contract with a State to assist the State to identify 
                or prevent waste, fraud and abuse with respect to such 
                programs.
                    ``(B) Information security.--A State agency shall 
                have in effect data security and control policies that 
                the Secretary finds adequate to ensure the security of 
                covered algorithms used or developed for purposes of 
                such section 4241 and to ensure that access to such 
                information is restricted to authorized persons for 
                purposes of authorized uses and disclosures described 
                in subparagraph (A).
                    ``(C) Procedural requirements.--State agencies to 
                which information is disclosed pursuant to such section 
                4241 shall adhere to uniform procedures established by 
                the Secretary.
    ``(c) Covered Algorithm Defined.--In this section, the term 
`covered algorithm'--
            ``(1) means a predictive modeling or other analytics 
        technology, as used for purposes of section 4241(a) of the 
        Small Business Jobs Act of 2010 (42 U.S.C. 1320a-7m(a)) to 
        identify and prevent waste, fraud, and abuse with respect to 
        the Medicare program under title XVIII, the Medicaid program 
        under title XIX, and the Children's Health Insurance Program 
        under title XXI; and
            ``(2) includes the mathematical expressions utilized in the 
        application of such technology and the means by which such 
        technology is developed.''.
    (b) Conforming Amendments.--
            (1) Medicaid state plan requirement.--Section 1902(a) of 
        the Social Security Act (42 U.S.C. 1396a(a)) is amended--
                    (A) in paragraph (80), by striking ``and'' at the 
                end;
                    (B) in paragraph (81), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by inserting after paragraph (81) the following 
                new paragraph:
            ``(82) provide that the State agency responsible for 
        administering the State plan under this title provides 
        assurances to the Secretary that the State agency is in 
        compliance with subparagraphs (A), (B), and (C) of section 
        1128K(b)(2).''.
            (2) State child health plan requirement.--Section 
        2102(a)(7) of the Social Security Act (42 U.S.C. 1397bb(a)(7)) 
        is amended--
                    (A) in subparagraph (A), by striking ``, and'' at 
                the end and inserting a semicolon;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) to ensure that the State agency involved is 
                in compliance with subparagraphs (A), (B), and (C) of 
                section 1128K(b)(2).''.

SEC. 3. MEDICAID IMPROVEMENT FUND.

    Section 1941(b)(1) of the Social Security Act (42 U.S.C. 1396w-
1(b)(1)) is amended to read as follows:
            ``(1) In general.--There shall be available to the Fund, 
        for expenditures from the Fund for fiscal year 2021 and 
        thereafter, $5,000,000.''.