Medicare Prescription Drug Integrity Act of 2013

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Prescription Drug Integrity 
Act of 2013''.

SEC. 2. PREVENTION OF FRAUD AND ABUSE IN MEDICARE PRESCRIPTION DRUG 
              PLANS.

    (a) Procedures for PDP Sponsors To Identify Fraud and Abuse.--
Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-104(c)) 
is amended--
            (1) in paragraph (1)(D)--
                    (A) by inserting ``, designed to'' after 
                ``program''; and
                    (B) by inserting ``, that includes the procedures 
                described in paragraph (4)'' after ``waste''; and
            (2) by adding at the end the following:
            ``(4) Procedures to prevent fraud and abuse.--
                    ``(A) PDP sponsor procedures.--A PDP sponsor shall 
                have in place procedures designed to--
                            ``(i) identify an individual that has 
                        obtained coverage for a covered part D drug at 
                        a frequency or amount not medically necessary, 
                        as determined in accordance with utilization 
                        guidelines established by the Secretary;
                            ``(ii) subject to procedures developed by 
                        the Secretary, limit coverage for some or all 
                        classes of covered part D drugs for an 
                        individual identified under clause (i) to drugs 
                        prescribed by one or more designated 
                        prescribers or dispensed by one or more 
                        designated dispensers, or both, for a 
                        reasonable period of time following the date 
                        the individual is notified of such 
                        identification;
                            ``(iii) provide to the Secretary the name, 
                        and other information that the Secretary may 
                        require, of individuals identified pursuant to 
                        clause (i);
                            ``(iv) as directed by the Secretary, limit 
                        coverage for some or all classes of covered 
                        part D drugs for an individual identified 
                        pursuant to clause (i) by a PDP sponsor with 
                        whom such individual was previously enrolled; 
                        and
                            ``(v) deny payment of a claim for a 
                        controlled substance in schedule II or III as 
                        established under Controlled Substances Act 
                        unless the PDP sponsor has verified at point-
                        of-sale that the prescriber and dispenser are 
                        authorized by the Administrator of the Drug 
                        Enforcement Administration to prescribe or 
                        dispense such controlled substances.
                    ``(B) Authorization for the secretary to share 
                information.--The Secretary may share information with 
                respect to an individual provided under subparagraph 
                (A)(iii) with a PDP sponsor enrolling such 
                individual.''.
    (b) Dual Eligibles.--Section 1860D-1(b)(3)(D) of the Social 
Security Act (42 U.S.C. 1395w-101(b)(3)(D)) is amended by inserting ``, 
subject to such limits as the Secretary may establish for individuals 
identified pursuant to section 1860D-4(c)(4)(A)(i)'' after ``the 
Secretary''.
    (c) Exclusion and Denial of Payment for Inappropriate Prescribing 
and Dispensing.--
            (1) Exclusion for inappropriate prescribing or 
        dispensing.--Section 1128(b) of the Social Security Act (42 
        U.S.C. 1320a-7(b)) is amended by adding at the end the 
        following:
            ``(17) Inappropriate prescribing or dispensing.--Any 
        individual or entity that the Secretary determines has 
        prescribed or dispensed under title XVIII--
                    ``(A) a covered part D drug to an individual under 
                a prescription drug plan or a MA-PD plan, as such terms 
                are defined for purposes of part D of such title, that 
                could not have been prescribed or dispensed to the 
                individual on the date of such prescribing or 
                dispensing; or
                    ``(B) any drug under such title at a frequency or 
                amount that--
                            ``(i) represents a practice or pattern of 
                        abusive prescribing or dispensing; or
                            ``(ii) presents a risk to enrollee health 
                        or safety.''.
            (2) Denial of payment for inappropriate prescribing or 
        dispensing.--Section 1860D-2(e)(3) of the Social Security Act 
        (42 U.S.C. 1395w-102(e)(3)) is amended--
                    (A) in subparagraph (A), by striking ``; or'' and 
                inserting a semicolon;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; or'';
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) which is prescribed or dispensed by an 
                individual or entity that the Secretary determines, 
                subject to such review, redetermination, and appeal as 
                the Secretary provides, has prescribed or dispensed to 
                an individual under a prescription drug plan or a MA-PD 
                plan a covered part D drug--
                            ``(i) that could not have been prescribed 
                        or dispensed to the individual on the date of 
                        such prescribing or dispensing; or
                            ``(ii) at a frequency or amount that 
                        presents a risk to the health or safety of an 
                        enrollee or that represents a practice or 
                        pattern of abusive prescribing or 
                        dispensing.''; and
                    (D) by adding at the end the following: ``The 
                exclusion of a prescriber or dispenser under 
                subparagraph (C) shall be for such period of time as 
                the Secretary shall specify.''
    (d) Registration of Authorization for Individuals To Prescribe and 
Dispense Controlled Substances.--Section 303 of the Controlled 
Substances Act (21 U.S.C. 823) is amended by adding at the end the 
following:
    ``(i) Unique Health Identifiers for Members of Group Practices.--
            ``(1) In general.--The Attorney General shall--
                    ``(A) compile and maintain a list of the unique 
                health identifiers of prescribers and dispensers that 
                are members of a group practice registered under this 
                section and have authority to prescribe or dispense 
                controlled substances in schedules II and III; and
                    ``(B) make the list compiled under subparagraph (A) 
                available to all PDP sponsors.
            ``(2) Definitions.--In this section:
                    ``(A) Group practice.--The term `group practice' 
                has the meaning given such term in section 1877(h)(4) 
                of the Social Security Act.
                    ``(B) Unique health identifier.--The term `unique 
                health identifier' has the meaning given such term in 
                section 1173(b) of the Social Security Act.
                    ``(C) PDP sponsor.--The term `PDP sponsor' has the 
                meaning given such term in section 1860D-41(a)(13) of 
                the Social Security Act.''.
    (e) Use of Recovery Audit Contractor Recoveries To Prevent Fraud 
and Waste.--Section 1893(h)(1)(C) of the Social Security Act (42 U.S.C. 
1395ddd(h)(1)(C)) is amended--
            (1) by striking ``the Secretary shall retain'' and 
        inserting ``the Secretary--
                            ``(i) shall retain'';
            (2) in clause (i), as added by paragraph (1)--
                    (A) by inserting ``, in addition to any other funds 
                that may be available,'' after ``available''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following:
                            ``(ii) may retain an additional portion of 
                        the amounts recovered (not to exceed 25 percent 
                        of such amounts recovered) which shall be 
                        available, in addition to any other funds that 
                        may be available, to such program management 
                        account until expended for purposes of carrying 
                        out the amendments made by the Medicare 
                        Prescription Drug Integrity Act of 2013.''.
    (f) Implementation.--The Secretary of Health and Human Services may 
implement the amendments made by subsections (a), (b), and (c)(2) by 
regulations, guidance, or otherwise.
    (g) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Delayed effective date for certain provisions.--The 
        amendments made by subsection (a) shall apply with respect to 
        plan years beginning after the date that is 8 months after the 
        date of the enactment of this Act, except that subparagraph 
        (A)(v) of section 1860D-4(c)(4) of the Social Security Act, as 
        added by subsection (a)(2), shall apply with respect to plan 
        years beginning after the date that is 6 months after the date 
        on which the Secretary of Health and Human Services determines 
        PDP sponsors, as defined in section 1860D-41(a)(13) of the 
        Social Security Act (42 U.S.C. 1395w-151(a)(13)), have access 
        at the point-of-sale to the information necessary to determine 
        valid prescribing and dispensing authority.

Summary: Medicare Prescription Drug Integrity Act of 2013 - Amends part D of title XVIII (Medicare) of the Social Security Act (SSA) to require a prescription drug plan (PDP) sponsor to have in place procedures designed to prevent fraud and abuse in PDPs. Authorizes the Secretary of Health and Human Services (HHS), with respect to establishing special enrollment periods for full-benefit dual eligible individuals, to set coverage limits for individuals who have obtained coverage for a covered Medicare part D drug at a frequency or amount not medically necessary. Amends SSA title IX to allow the Secretary to exclude from participation in any federal health care program any individual or entity that has engaged in the inappropriate prescribing or dispensing of a covered Medicare part D drug. Amends SSA title XVIII part D to allow a PDP or a MedicareAdvantage-PD (MA-PD) plan to exclude from qualified prescription drug coverage, and deny payment for, any covered part D drug: (1) prescribed or dispensed inappropriately to an individual under a PDP or a MA-PD plan that could not have been prescribed or dispensed to the individual on the date of such prescribing or dispensing. Or (2) any drug at a frequency or amount that represents a practice or pattern of abusive prescribing or dispensing, or presents a risk to enrollee health or safety. Amends the Controlled Substances Act to direct the Attorney General to: (1) compile a list of the unique health identifiers of prescribers and dispensers that are members of a group practice registered and authorized to prescribe or dispense controlled substances in schedules II and III, and (2) make the list available to all PDP sponsors. Amends SSA title XVIII with respect to the use of recovery audit contractors under the Medicare Integrity Program to identify underpayments and overpayments and recoup the latter. Authorizes the Secretary to retain an additional portion of up to 25 of the amounts recovered for purposes of carrying out this Act.