SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Medication Evaluation and 
Dispensing System Act of 1995''.

SEC. 2. ESTABLISHMENT OF MEDICATION EVALUATION AND DISPENSING SYSTEM 
              UNDER MEDICARE.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by inserting after section 1888 the following 
new section:

         ``medicare medication evaluation and dispensing system

    ``Sec. 1889. (a) Establishment.--
            ``(1) In general.--In accordance with the requirements of 
        this section, the Secretary shall establish and operate the 
        Medicare Medication Evaluation and Dispensing System (hereafter 
        in this section referred to as the `MMEDS') to provide for--
                    ``(A) prospective and retrospective review of 
                prescription drugs furnished to Medicare beneficiaries 
                (in accordance with subsection (b));
                    ``(B) educating physicians, patients, and 
                pharmacists regarding the appropriate use of 
                prescription drugs (in accordance with subsection (c)); 
                and
                    ``(C) the establishment of standards for counseling 
                Medicare beneficiaries (consistent with the laws of the 
                State in which a beneficiary resides) regarding the 
                appropriate use of prescription drugs.
            ``(2) Treatment of drugs not covered under medicare.--The 
        MMEDS shall provide for review, information, and counseling 
        with respect to any prescription drug furnished to a Medicare 
        beneficiary without regard to whether or not payment may be 
        made for the drug under this title.
            ``(3) Medicare beneficiary defined.--In this section, a 
        `Medicare beneficiary' is any individual entitled to benefits 
        under part A or enrolled under part B.
    ``(b) Requirements for Review of Prescriptions.--
            ``(1) In general.--The MMEDS shall provide on-line 
        prospective review of prescriptions on a 24-hour basis and 
        periodic retrospective review of claims.
            ``(2) Prospective drug utilization review.--
                    ``(A) In general.--The MMEDS shall provide for on-
                line prospective review of each outpatient prescription 
                drug prescribed for a Medicare beneficiary before the 
                prescription is filled or the drug is furnished, 
                including screening for potential drug therapy problems 
                due to therapeutic duplication, drug-to-drug 
                interactions, drug-disease contraindications, and 
                incorrect drug dosage or duration of drug treatment.
                    ``(B) Discussion of appropriate use.--In conducting 
                prospective review under the MMEDS, any individual or 
                entity that dispenses an outpatient prescription drug 
                shall offer (consistent with the law of the State in 
                which the patient resides) to discuss with the patient 
                to whom the drug is furnished or the patient's 
                caregiver (in person if practicable, or through access 
                to a toll-free telephone service) information regarding 
                the appropriate use of the drug, potential interactions 
                between the drug and other drugs dispensed to the 
                individual, and such other matters as the Secretary may 
                require.
                    ``(C) Additional duties.--In carrying out this 
                paragraph, the Secretary shall--
                            ``(i) develop public domain software which 
                        could be used by carriers and pharmacies to 
                        provide the on-line prospective review; and
                            ``(ii) study the feasibility and 
                        desirability of requiring patient diagnosis 
                        codes on prescriptions and the feasibility of 
expanding the prospective drug utilization review program to include 
the identification of drug-disease contraindications, interactions with 
over-the-counter drugs, and drug-allergy interactions.
            ``(3) Retrospective drug utilization review.--As part of 
        the MMEDS, the Secretary shall provide for a retrospective drug 
        utilization review program to provide for the ongoing periodic 
        examination of claims data and other records on outpatient 
        prescription drugs furnished to Medicare beneficiaries in order 
        to identify patterns of inappropriate or medically unnecessary 
        patient care.
            ``(4) Use of electronic system.--
                    ``(A) In general.--As part of the MMEDS, the 
                Secretary shall establish, by not later than June 1, 
                1997, a point-of-sale electronic system for use by 
                carriers and pharmacies in the submission of 
                information respecting outpatient prescription drugs 
                dispensed to Medicare beneficiaries. Such system shall 
                be consistent with the standards established by the 
                National Council of Prescription Drug Programs.
                    ``(B) Technical assistance.--The Secretary shall 
                provide technical assistance in the use of the 
                electronic system established under subparagraph (A) to 
                carriers and pharmacies.
    ``(c) Education Regarding Appropriate Use of Prescription Drugs.--
            ``(1) In general.--Under the MMEDS, the Secretary (either 
        directly or through contract) shall provide for an educational 
        outreach program to educate patients, pharmacists, and other 
        health care providers concerning--
                    ``(A) instances or patterns of unnecessary or 
                inappropriate prescribing or dispensing practices for 
                outpatient prescription drugs,
                    ``(B) instances or patterns of substandard care 
                with respect to such drugs,
                    ``(C) potential adverse reactions and interactions, 
                and
                    ``(D) appropriate use of generic products.
            ``(2) Information on changes in prescribing and dispensing 
        practices.--Under the program described in paragraph (1), the 
        Secretary shall provide information (in such format as the 
        Secretary considers appropriate) on changes in prescribing and 
        dispensing practices to promote the appropriate use of 
        prescription drugs.
    ``(d) Privacy Protection.--The Secretary shall establish standards 
to protect from public disclosure any information provided by or 
through the MMEDS that identifies an individual and relates to the 
individual's physical or mental health and the identity of any 
individual (whether a patient or an individual involved in the 
prescribing, dispensing, or administration of the drug) who is the 
subject of such information.
    ``(e) Assistance for Participating Pharmacists.--
            ``(1) In general.--The Secretary shall provide to each 
        pharmacist meeting the requirements of paragraph (2)--
                    ``(A) a distinctive emblem (suitable for display to 
                the public) indicating that the pharmacy participates 
                in the MMEDS, and
                    ``(B) upon request, such technical assistance as 
                the Secretary determines may be necessary for the 
                pharmacist to submit information to and retrieve 
                information from the electronic system established 
                under subsection (b)(4).
            ``(2) Requirements described.--A pharmacist meets the 
        requirements of this paragraph if the pharmacist is legally 
        authorized under State law (or the State regulatory mechanism 
        provided by State law) of the State in which the drug is 
        received by the beneficiary to dispense outpatient prescription 
        drugs and meets other participation standards established by 
        the Secretary with respect to the following:
                    ``(A) Maintenance of patient records.
                    ``(B) Accuracy of information submitted under the 
                MMEDS.
                    ``(C) Patient counseling.
                    ``(D) Performance of drug use review activities 
                under the MMEDS.
    ``(f) Adoption of Medicaid Programs.--To the extent considered 
appropriate by the Secretary, the MMEDS with respect to drugs furnished 
in a State may include elements applicable to the furnishing of covered 
outpatient drugs under the State Medicaid program under section 
1927.''.
    (b) Recommendations on Coordination With Programs Under Other 
Plans.--Not later than October 1, 1996, the Secretary of Health and 
Human Services shall submit recommendations to Congress on measures--
            (1) to ensure the coordination of information collected and 
        disseminated under the Medicare Medication Evaluation and 
        Dispensing System established under section 1889 of the Social 
        Security Act (as added by subsection (a)) with information 
        provided to and collected from similar programs providing 
        services to Medicare beneficiaries enrolled in health care 
        plans (including plans of an organization described in section 
        1833(a)(1)(A) of such Act or an eligible organization with an 
        agreement in effect under section 1876 of such Act, plans 
        serving as primary plans section 1862(b) of such Act, and 
        medicare supplemental policies described in section 1882 of 
        such Act); and
            (2) to avoid the duplication of services provided under 
        such System with services provided under such similar programs.
    (c) Special Rules for Carriers.--
            (1) Use of regional carriers.--Section 1842(b)(2) of the 
        Social Security Act (42 U.S.C. 1395u(b)(2)) is amended by 
        adding at the end the following new subparagraph:
    ``(E) With respect to activities related to the Medicare Medication 
Evaluation and Dispensing System under section 1889, the Secretary may 
enter into contracts with carriers under this section to perform the 
activities on a regional basis.''.
            (2) Additional functions.--Section 1842(b)(3) of such Act 
        (42 U.S.C. 1395u(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (I); and
                    (B) by inserting after subparagraph (I) the 
                following new subparagraphs:
            ``(J) if it makes determinations with respect to outpatient 
        prescription drugs which are subject to the Medicare Medication 
        Evaluation and Dispensing System under section 1889, will 
        receive information transmitted under the electronic system 
        established under section 1889(b)(4);
            ``(K) will enter into such contracts with organizations 
        described in subsection (f)(3) as the Secretary determines may 
        be necessary to implement and operate (and for related 
        functions with respect to) the electronic system established 
        under section 1889(b)(4); and''.
            (3) Payment on other than a cost basis.--Section 
        1842(c)(1)(A) of such Act (42 U.S.C. 1395u(c)(1)(A)) is 
        amended--
                    (A) by inserting ``(A)'' after ``(c)(1)'',
                    (B) in the first sentence, by inserting ``, except 
                as otherwise provided in subparagraph (B),'' after 
                ``under this part, and'', and
                    (C) by adding at the end the following:
    ``(B) To the extent that a contract under this section provides for 
activities related to the Medicare Medication Evaluation and Dispensing 
System under section 1889, the Secretary may provide for payment for 
those activities based on any method of payment determined by the 
Secretary to be appropriate.''.
            (4) Use of other entities.--Section 1842(f) of such Act (42 
        U.S.C. 1395u(f)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (1),
                    (B) by striking the period at the end of paragraph 
                (2) and inserting ``; and'', and
                    (C) by adding at the end the following:
            ``(3) with respect to activities related to the Medicare 
        Medication Evaluation and Dispensing System under section 1889, 
        any other private entity which the Secretary determines is 
        qualified to conduct such activities.''.

SEC. 3. RECOMMENDATIONS ON MEDICARE COVERAGE OF PHARMACIST PROFESSIONAL 
              SERVICES.

    Not later than the expiration of the 2-year period which begins on 
the date of the initial operation of the Medicare Medication Evaluation 
and Dispensing System under section 1889 of the Social Security Act (as 
added by section 2(a)), the Secretary of Health and Human Services 
shall submit to Congress (in consultation with actively practicing 
pharmacists)--
            (1) an analysis of the effect on net aggregate expenditures 
        under the Medicare program from the establishment and operation 
        of such System; and
            (2) such recommendations as the Secretary considers 
        appropriate regarding the coverage of and payment for 
        pharmacist professional services under part B of the medicare 
        program as the Secretary considers appropriate, except that the 
        Secretary may recommend coverage of and payment for such 
        services only under a methodology which does not result in an 
        increase in net expenditures under the program (taking into 
        account reductions in expenditures under the program as a 
        result of demonstrable reductions in the inappropriate use of 
        outpatient prescription drugs).

SEC. 4. DISTRIBUTION OF CONSUMER GUIDE TO OUTPATIENT PRESCRIPTION 
              DRUGS.

    Not later than January 1, 1997, the Secretary of Health and Human 
Services shall publish and disseminate a consumer guide to outpatient 
prescription drugs to assist medicare beneficiaries in reducing 
expenditures for outpatient prescription drugs and to assist 
individuals and entities furnishing items and services to such 
beneficiaries in determining the cost-effectiveness of such drugs.
Medicare Medication Evaluation and Dispensing System Act of 1995 - Amends title XVIII (Medicare) of the Social Security Act to require the Secretary of Health and Human Services to establish and operate the Medicare Medication Evaluation and Dispensing System to provide for:  (1) prospective and retrospective review of prescription drugs furnished to Medicare beneficiaries; (2) education of physicians, patients, and pharmacists in the appropriate use of prescription drugs; (3) the establishment of standards for counseling Medicare beneficiaries regarding the appropriate use of prescription drugs; and (4) review, information, and counseling with respect to any prescription drug furnished to a Medicare beneficiary without regard to whether or not payment may be made for the drug under Medicare. Sets forth requirements for review of prescriptions. 
Requires the Secretary to report to the Congress:  (1) an analysis of the effect on net aggregate Medicare expenditures from the establishment of such a System; and (2) any recommendations on Medicare coverage of pharmacist professional services. 
Directs the Secretary to publish and disseminate a consumer guide to outpatient prescription drugs to assist:  (1) Medicare beneficiaries in reducing expenditures for them; and (2) individuals and entities furnishing items and services to such beneficiaries in determining the cost-effectiveness of such drugs.
Medicare Medication Evaluation and Dispensing System Act of 1995