A bill to establish a demonstration program requiring the utilization of Value-Based Insurance Design in order to demonstrate that reducing the copayments or coinsurance charged Medicare beneficiaries for selected medications can increase adherence to prescribed medication, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Seniors' Medication Copayment 
Reduction Act of 2009''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) A growing body of evidence demonstrates that patient-
        level financial barriers, including copayments and coinsurance 
        for medications, systematically reduce the use of high value 
        medical services.
            (2) Empirical studies demonstrate that reductions in cost-
        sharing can mitigate the adverse health consequences 
        attributable to cost related decreases in the utilization of 
        prescription medications and reduce aggregate medical 
        expenditures as a result.
            (3) Financial barriers to prescription medications that are 
        of high value should be reduced or eliminated to increase 
        adherence to prescribed medication.
            (4) Value-Based Insurance Design recognizes that medical 
        services and prescription medications differ in the clinical 
        benefit achieved and that patient out-of-pocket costs should be 
        adjusted according to the value of the services provided.
            (5) The current ``one size fits all'' copayment or 
        coinsurance design for medications provided under the Medicare 
        program does not recognize the well-established value 
        differences in health outcomes produced by various medical 
        interventions.
            (6) The establishment by Medicare of copayment and 
        coinsurance requirements for medications using Value-Based 
        Insurance Design will optimize clinical gains for each dollar 
        spent, which would be a benefit to seniors and a fiscally 
        responsible use of taxpayer dollars.

SEC. 3. DEMONSTRATION PROGRAM.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Health and Human Services (in this 
section referred to as the ``Secretary'') shall establish a 
demonstration program to test Value-Based Insurance Design 
methodologies for Medicare beneficiaries with chronic conditions.
    (b) Demonstration Program Design.--
            (1) In general.--The Secretary shall select not less than 2 
        Medicare Advantage plans to participate in this demonstration 
        program under this section initially.
            (2) Requirements.--A plan selected to participate in the 
        demonstration program under paragraph (1) shall meet the 
        following requirements:
                    (A) The plan offers a coordinated Part D drug 
                benefit.
                    (B) The plan and organization offering such plan 
                meet such other criteria as the Secretary determines 
                appropriate.
    (c) Duration.--
            (1) In general.--Subject to subsection (b), the 
        demonstration program under this section shall be conducted for 
        a 5-year period.
            (2) Expansion of demonstration program; implementation of 
        demonstration program results.--
                    (A) Expansion of demonstration program.--If the 
                report under paragraph subsection (e) or (f)(3) 
                contains an evaluation that the demonstration program 
                under this section--
                            (i) reduces expenditures under the Medicare 
                        program; or
                            (ii) does not increase expenditures under 
                        the Medicare program and increases the quality 
                        of health care services provided to Medicare 
                        beneficiaries,
                then the Secretary shall continue the existing 
                demonstration program and may expand the demonstration 
                program.
                    (B) Implementation of demonstration program 
                results.--If the report under subsection (e) or (f)(3) 
                contains an evaluation contained in clause (i) or (ii) 
                of subparagraph (A), the Secretary may issue 
                regulations to implement, on a permanent basis, the 
                components of the demonstration program that are 
                beneficial to the Medicare program.
    (d) Value-Based Insurance Design Methodology.--
            (1) Reduction of copayments and coinsurance.--Utilizing 
        Value-Based Insurance Design methodologies, the Secretary shall 
        identify each medication for which the amount of the copayment 
        or coinsurance payable should be reduced or eliminated.
            (2) Value-based insurance design.--For purposes of this 
        section, ``Value-Based Insurance Design'' is a methodology for 
        identifying specific medications or classes of medications for 
        which copayments or coinsurance should be reduced or eliminated 
        due to the high value and effectiveness of such medications 
        when prescribed for particular clinical conditions.
            (3) Particular medications.--In identifying medications for 
        purposes of paragraph (1), the Secretary shall, at a minimum, 
        consider the medications utilized in the treatment of the 
        following conditions:
                    (A) Asthma.
                    (B) Atrial fibrillation.
                    (C) Deep venous thrombosis.
                    (D) Chronic obstructive pulmonary disease.
                    (E) Chronic renal failure.
                    (F) Congestive heart failure.
                    (G) Coronary artery disease.
                    (H) Myocardial infarction.
                    (I) Depression.
                    (J) Epilepsy.
                    (K) Diabetes mellitus.
                    (L) Hypertension.
                    (M) Hypothyroidism.
                    (N) Schizophrenia.
                    (O) Tobacco abuse disorder.
    (e) Report on Implementation.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on the implementation by the Secretary of the 
        demonstration program under this section.
            (2) Elements.--The report required by paragraph (1) shall 
        include the following:
                    (A) A statement setting forth each medication 
                identified pursuant to subsection (d)(1).
                    (B) For each such medication, a statement of the 
                amount of the copayment or coinsurance required to be 
                paid for such medication and the amount of the 
                reduction from previous levels.
    (f) Review and Assessment of Utilization of Methodologies.--
            (1) In general.--The Secretary shall enter into a contract 
        or agreement with an independent entity having expertise in 
        Value-Based Insurance Design to review and assess the 
        implementation by the Secretary of the demonstration program 
        under this section. The review and assessment shall include the 
        following:
                    (A) An assessment of the utilization by the 
                Secretary of the methodologies referred to in 
                subsection (d).
                    (B) An analysis of whether reducing or eliminating 
                the copayment or coinsurance for each medication 
                identified by the Secretary pursuant to subsection 
                (d)(1) resulted in increased adherence to medication 
                regimens and better health outcomes.
                    (C) An analysis of the cost savings resulting from 
                reducing or eliminating the copayment or coinsurance 
                for each medication so identified.
                    (D) Such other matters as the Secretary considers 
                appropriate.
            (2) Report.--The contract or agreement entered into under 
        paragraph (1) shall require the entity concerned to submit to 
        the Secretary a report on the review and assessment conducted 
        by the entity under that paragraph in time for the inclusion of 
        the results of such report in the report required by paragraph 
        (3).
            (3) Report to congress.--Not later than 3 years after the 
        date of the enactment of this Act, the Secretary shall submit 
        to Congress a report on the review and assessment conducted 
        under this subsection. The report shall include the following:
                    (A) A description of the results of the review and 
                assessment.
                    (B) Such recommendations as the Secretary considers 
                appropriate for enhancing the utilization of the 
                methodologies referred to in subsection (a)(1) so as to 
                reduce copayments and coinsurance paid by Medicare 
                beneficiaries for medications furnished under the 
                Medicare program and to otherwise improve the quality 
                of health care provided under such Medicare program.
    (g) Waiver.--The Secretary may waive such provisions of titles XI 
and XVIII of the Social Security Act as may be necessary to carry out 
the demonstration program under this section.
    (h) Implementation Funding.--For purposes of carrying out the 
demonstration program under this section, the Secretary shall provide 
for the transfer from the Federal Hospital Insurance Trust Fund under 
section 1817 of the Social Security Act (42 U.S.C. 1395i) and the 
Federal Supplementary Insurance Trust Fund under section 1841 of the 
Social Security Act (42 U.S.C. 1395t), including the Medicare 
Prescription Drug Account in such Trust Fund, in such proportion as 
determined appropriate by the Secretary, of such sums as may be 
necessary.

Summary: Seniors' Medication Copayment Reduction Act of 2009 - Directs the Secretary of Health and Human Services to establish a demonstration program to test Value-Based Insurance Design methodologies for Medicare beneficiaries with chronic conditions. Defines Value-Based Insurance Design as a methodology for identifying specific medications or classes of medications for which, because of their high value and effectiveness when prescribed for particular clinical conditions, copayments or coinsurance should be reduced or eliminated.