```

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2238 Introduced in Senate (IS)]

109th CONGRESS
  2d Session
                                S. 2238

  To amend titles XVIII and XIX of the Social Security Act to assure 
    uninterrupted access to necessary medicines under the Medicare 
                       prescription drug program.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 1, 2006

Mr. Bayh (for himself and Mr. Bingaman) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To amend titles XVIII and XIX of the Social Security Act to assure 
    uninterrupted access to necessary medicines under the Medicare 
                       prescription drug program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Prescription Drug Emergency Guarantee Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec.  1. Short title; table of contents.
Sec.  2. Protections to provide for uninterrupted access to medicines.
Sec.  3. Required application of intermediate sanctions to protect 
                            against fraud and abuse.
Sec.  4. Changes of enrollment in prescription drug plans and MA-PD 
                            plans allowed twice during year.
Sec.  5. Prohibiting additional restrictions or limitations on coverage 
                            during year.
Sec.  6. MedPAC study on appropriate enrollment of dual eligible 
                            individuals.
Sec.  7. Prohibition on conditioning Medicaid eligibility on enrollment 
                            in Medicare part D coverage or other 
                            creditable coverage.
Sec.  8. Reimbursement of third parties for 2006 transition costs.

SEC. 2. PROTECTIONS TO PROVIDE FOR UNINTERRUPTED ACCESS TO MEDICINES.

    (a) Minimum Standard Transition Coverage.--
            (1) In general.--Section 1860D-4(b) of the Social Security 
        Act (42 U.S.C. 1395w-104(b)) is amended by adding at the end 
        the following new paragraph:
            ``(4) Uninterrupted access to medicines.--
                    ``(A) Minimum standard transition coverage.--A PDP 
                sponsor offering a prescription drug plan under this 
                part or an MA-PD plan under part C shall provide 
                minimum standard transition coverage in accordance with 
                subparagraph (B).
                    ``(B) Requirements.--The minimum standard 
                transition coverage under this subparagraph, with 
                respect to a part D eligible individual who is enrolled 
                in a prescription drug plan (or an individual who is 
                presumed to be such an individual pursuant to 
                subparagraph (F)) who presents a prescription for a 
                drug at a pharmacy, is the following:
                            ``(i) Guaranteed initial supply, regardless 
                        of coverage limitations or restrictions.--In 
                        the case that the PDP sponsor of such plan uses 
                        a formulary that does not cover the drug or 
                        otherwise imposes a restriction on the coverage 
                        of the drug (such as through the application of 
                        a preferred status, usage restriction, step 
                        therapy, prior authorization or a quantity 
                        limits) and during the period in which such 
                        individual has been enrolled in such plan the 
                        individual has not previously sought coverage 
                        under the plan for such drug the plan shall 
                        provide for the following:
                                    ``(I) Minimum supply of 
                                prescription drug.--The plan must 
                                provide for coverage for at least a 60-
                                day supply (or a 90-day supply in the 
                                case of an individual who is a resident 
                                of a long-term care facility) of the 
                                drug, or, if less, a supply of the drug 
                                that is the full amount of the 
                                prescription.
                                    ``(II) Information on formulary, 
                                prescription drug plans, and appeal 
                                rights.--The plan must provide the 
                                individual with a standard notice 
                                developed by the Secretary that informs 
                                the individual about the limitations 
                                and restrictions of the coverage of the 
                                drug, that describes the rights of the 
                                individual with respect to requesting a 
                                determination under subsection (g)(2) 
                                or an appeal of such a determination 
                                under subsection (h), that describes 
                                any ability of the individual to change 
                                the election of such plan under section 
                                1860D-1(b)(1)(B), and that informs the 
                                individual about sources of information 
                                on prescription drug plans to make such 
                                a change in plans.
                                    ``(III) Refills during pending 
                                appeal.--In the case of such an 
                                individual who brings an appeal under 
                                subsection (h), with respect to the 
                                prescription drug involved, an 
                                additional supply of the drug (for the 
                                amount of days provided to the 
                                individual under subclause (I)) during 
                                the period ending on the date on which 
                                a final determination is made on the 
                                appeal.
                            ``(ii) Guaranteed supply when unable to 
                        verify plan enrollment.--In the case that the 
                        pharmacy is unable to locate or verify the 
                        individual's enrollment in such plan through a 
                        reasonable effort:
                                    ``(I) Minimum supply of 
                                prescription drug.--The plan must 
                                provide for coverage for at least a 60-
                                day supply (or a 90-day supply in the 
                                case of an individual who is a resident 
                                of a long-term care facility) of the 
                                drug, or, if less, a supply of the drug 
                                that is the full amount of the 
                                prescription.
                                    ``(II) Refills.--The plan must 
                                provide an additional 60-day supply (or 
                                a 90-day supply in the case of an 
                                individual who is a resident of a long-
                                term care facility) of the drug, or if 
                                less, a supply of the drug that is the 
                                full amount of the prescription, if the 
                                pharmacy continues to be unable to 
                                locate the individual's enrollment 
                                through such reasonable efforts when a 
                                prescription is presented on or after 
                                the date that a prescription refill is 
                                appropriate.
                    ``(C) Reimbursements.--
                            ``(i) Reimbursements to pharmacies.--
                                    ``(I) In general.--If a pharmacy 
                                provides prescription drugs for which 
                                the minimum standard transition 
                                coverage is required under subparagraph 
                                (B), the Secretary shall reimburse the 
                                pharmacy for the costs incurred in 
                                providing the prescription drugs, 
                                including acquisition costs, dispensing 
                                costs, and other overhead costs. The 
                                Secretary shall provide prompt payment 
                                (consistent with the provisions of 
                                section 1842(c)(2)) of such 
                                reimbursements from the Medicare 
                                Prescription Drug Account under section 
                                1860D-16 of the Social Security Act (42 
                                U.S.C. 1395w-116). Such reimbursements 
                                shall be deemed to be payments from 
                                such Account under subsection (b) of 
                                such section.
                                    ``(II) Sanctions for fraudulent 
                                claims.--In the case of a pharmacy that 
                                knowingly provides to the Secretary 
                                false information in connection with a 
                                claim for reimbursement under subclause 
                                (I), the Secretary may impose a civil 
                                money penalty in an amount not to 
                                exceed $10,000 for each such claim. The 
                                provisions of section 1128A (other than 
                                subsections (a) and (b) and the second 
                                sentence of subsection (f)) shall apply 
                                to a civil money penalty under the 
                                previous sentence in the same manner as 
                                such provisions apply to a penalty or 
                                proceeding under section 1128A(a).
                            ``(ii) Recovery from plans of pharmacy 
                        reimbursements.--The Secretary shall establish 
                        a process for recovering the reimbursements 
                        made to pharmacies under clause (i) from 
                        prescription drug plans and MA-PD plans if the 
                        Secretary determines that such plans should 
                        have incurred such costs. Amounts recovered 
                        pursuant to the preceding sentence shall be 
                        deposited in the Medicare Prescription Drug 
                        Account.
                            ``(iii) Application of intermediate 
                        sanctions.--In the case of a failure of a 
                        prescription drug plan under this part or an 
                        MA-PD plan under part C to provide for the 
                        minimum coverage required under subparagraph 
                        (B), the failure shall be treated as a failure 
                        to provide medically necessary items and 
                        services under section 1857(g)(1)(A), as 
                        applied by section 1860D-12(b)(3)(E), and the 
                        Secretary shall impose intermediate sanctions 
                        under such section 1857(g).
                    ``(D) Cost-sharing.--The cost-sharing for a 
                prescription filled pursuant to subparagraph (B) for an 
                individual shall be in accordance with the prescription 
                drug plan in which the individual attests to be 
                enrolled and the class of individual (such as subsidy-
                eligible individuals) to which the individual so 
                attests.
                    ``(E) Refunds to individuals with inappropriate 
                charges.--If the Secretary determines, in accordance 
                with a method determined by the Secretary, that an 
                individual was inappropriately charged for a 
                prescription drug dispensed to such individual under 
                this part or part C, the Secretary shall--
                            ``(i) reduce payments to the sponsor of the 
                        prescription drug plan under section 1860D-15 
                        or to the organization offering the MA-PD plan 
                        under section 1853 that inappropriately charged 
                        the individual by an amount equal to the amount 
                        the individual was inappropriately charged; and
                            ``(ii) refund such amount to the individual 
                        within 30 days of the date of the determination 
                        that the individual was inappropriately 
                        charged.
                    ``(F) Presumptive eligibility.--
                            ``(i) Subsidy-eligible individuals.--For 
                        purposes of this paragraph, an individual shall 
                        be presumed to be a dual eligible individual or 
                        subsidy-eligible individual if the individual 
                        self attests to being such an individual, 
                        respectively.
                            ``(ii) Plan enrollment.--For purposes of 
                        this paragraph, an individual shall be presumed 
                        to be enrolled in a prescription drug plan 
                        under this part or an MA-PD plan under part C 
                        if the individual self attests to being 
                        enrolled under such plan.
                            ``(iii) Individual liable for costs of 
                        false attestation.--
                                    ``(I) In general.--If the 
                                Secretary, as the result of 
                                verification activities conducted by 
                                the Secretary, determines after a fair 
                                hearing that an individual has 
                                knowingly made a false self-attestation 
                                described in clause (i) or (ii) or in 
                                subparagraph (D), the Secretary may, 
                                subject to subclause (II), seek 
                                recovery from the individual for the 
                                full amount of the cost of benefits 
                                provided to the individual under this 
                                paragraph as a result of such self 
                                attestation.
                                    ``(II) Exception.--The Secretary 
                                shall at its discretion not seek 
                                recovery under subclause (I) if the 
                                Secretary determines that it would not 
                                be cost-effective to do so.
                                    ``(III) Reimbursements to federal 
                                government.--Any amounts recovered by 
                                the Secretary in accordance with this 
                                clause shall be returned to the 
                                prescription drug plan or MA-PD plan if 
                                the Secretary has previously recovered 
                                payment from such plan.
                            ``(iv) Requirements for self attestation.--
                        The Secretary shall promulgate requirements for 
                        self attestations under this subparagraph, but 
                        the failure of the Secretary to promulgate such 
                        requirements shall not preclude the 
                        applications of the previous provisions of this 
                        subparagraph.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of the enactment of this Act, but 
        shall apply to prescription drugs dispensed on and after 
        January 1, 2006.
    (b) Notice for Change in Formulary and Other Restrictions or 
Limitations on Coverage.--
            (1) In general.--Section 1860D-4(a) of such Act (42 U.S.C. 
        1395w-104(a)) is amended by adding at the end the following new 
        paragraph:
            ``(5) Annual notice of changes in formulary and other 
        restrictions or limitations on coverage.--Each PDP sponsor 
        offering a prescription drug plan (and each MA organization 
        offering an MA-PD plan) shall furnish to each enrollee at the 
        time of each annual coordinated election period (referred to in 
        section 1860D-1(b)(1)(B)(iii)) for a plan year a notice of any 
        changes in the formulary or other restrictions or limitations 
        on coverage of a covered part D drug under the plan that will 
        take effect for the plan year.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to annual coordinated election periods beginning 
        after the date of the enactment of this Act.
    (c) Standardized Forms and Procedures for Reconsiderations and 
Appeals.--
            (1) In general.--Section 1860D-4 of such Act (42 U.S.C. 
        1395w-104) is amended by adding at the end the following new 
        subsection:
    ``(l) Standardized Forms and Procedures for Reconsiderations and 
Appeals.--
            ``(1) Standard enrollee notice.--The Secretary shall 
        develop a standard notice to be distributed by a prescription 
        drug plan (or an MA-PD plan) to an enrollee when a covered part 
        D drug prescribed for the enrollee is not covered, or the 
        coverage of such drug is otherwise restricted, by the plan.
            ``(2) Standardized process for reconsiderations and 
        appeals.--The Secretary shall require prescription drug plans 
        and MA-PD plans to follow the same standardized process for 
        reconsiderations and redeterminations under subsections (g) and 
        (h). Such process shall require that determinations regarding 
        medical necessity are based on professional medical judgement, 
        the medical condition of the enrollee, the treating physician's 
        recommendation, and other medical evidence.''.
            (2) Effective date.--The Secretary of Health and Human 
        Services shall provide for the standard notice and the 
        standardized process, and the application of such notice and 
        process, under the amendment made by paragraph (1) by not later 
        than January 1, 2007.

SEC. 3. REQUIRED APPLICATION OF INTERMEDIATE SANCTIONS TO PROTECT 
              AGAINST FRAUD AND ABUSE.

    (a) In General.--Section 1860D-12(b)(3)(E) of the Social Security 
Act (42 U.S.C. 1395w-112(b)(3)(E)) is amended by inserting ``and the 
reference to `may provide' in section 1857(g)(1) is deemed a reference 
to `shall provide''' after ``this part''.
    (b) Application to MA-PD Plans.--Section 1857(g)(1) of such Act (42 
U.S.C. 1395w-27(g)(1)) is amended by inserting ``(or in the case of an 
MA-PD plan or a prescription drug plan under part D, the Secretary 
shall provide)'' after ``may provide''.

SEC. 4. CHANGES OF ENROLLMENT IN PRESCRIPTION DRUG PLANS AND MA-PD 
              PLANS ALLOWED TWICE DURING YEAR.

    (a) Additional Election Permitted Once Each Year Outside of Annual 
Coordinated Election Period.--Section 1851(e)(4) of the Social Security 
Act (42 U.S.C. 1395w-21(e)(4)) is amended by inserting ``once every 
year, and in addition,'' after ``make a new election under this 
section''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as of the date of the enactment of this Act.

SEC. 5. PROHIBITING ADDITIONAL RESTRICTIONS OR LIMITATIONS ON COVERAGE 
              DURING YEAR.

    (a) In General.--Section 1860D-4(b)(4) of the Social Security Act 
(42 U.S.C. 1395w-104(b)(4)) is amended by inserting after subparagraph 
(F) the following new subparagraph:
                    ``(G) Prohibiting additional restrictions or 
                limitations on coverage during year.--A prescription 
                drug plan and an MA-PD plan may only impose a 
                restriction or limitation on the coverage of a covered 
                part D drug (such as through the application of a 
                formulary, preferred status, usage restriction, step 
                therapy, prior authorization, or a quantity limitation) 
                only at the beginning of a plan year, except in the 
                case that the Commissioner of Food and Drugs issues a 
                clinical warning during a year that imposes such a 
                restriction or limitation on the drug.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall apply to 
the removal of a drug or a change in the status of such drug on and 
after such date.

SEC. 6. MEDPAC STUDY ON APPROPRIATE ENROLLMENT OF DUAL ELIGIBLE 
              INDIVIDUALS.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study to determine the extent to which full-benefit dual eligible 
individuals (as defined in section 1935(c)(6) of the Social Security 
Act (42 U.S.C. 1396u5(c)(6)) were enrolled (by assignment or otherwise) 
in the most appropriate prescription drug plans under part D of title 
XVIII of such Act for such individuals.
    (b) Report.--The Commission shall submit a report to Congress on 
the study under subsection (a) not later than February 1, 2007.

SEC. 7. PROHIBITION ON CONDITIONING MEDICAID ELIGIBILITY ON ENROLLMENT 
              IN MEDICARE PART D COVERAGE OR OTHER CREDITABLE COVERAGE.

    (a) In General.--Section 1935 of the Social Security Act (42 U.S.C. 
1396v) is amended by adding at the end the following new subsection:
    ``(f) Prohibition on Conditioning Medicaid Eligibility on 
Enrollment in Medicare Part D Coverage or Other Creditable Coverage.--
            ``(1) In general.--A State shall not condition eligibility 
        for medical assistance under the State plan for a part D 
        eligible individual (as defined in section 1860D-1(a)(3)(A)) 
        who is enrolled in creditable prescription drug coverage 
        described in any of subparagraphs (C) through (H) of section 
        1860D-13(b)(4) on the individual's enrollment in a prescription 
        drug plan under part D of title XVIII or an MA-PD plan under 
        part C of such title.
            ``(2) Coordination of benefits with part d for other 
        individuals.--Nothing in this subsection shall be construed as 
        prohibiting a State from coordinating medical assistance under 
        the State plan with benefits under part D of title XVIII for 
        individuals not described in paragraph (1).''.
    (b) Treatment of State Plan Amendments, Redetermination of 
Eligibility.--In the case of a State that, as of the date of the 
enactment of this Act, has an approved amendment to its State plan 
under title XIX of the Social Security Act with a provision that 
conflicts with section 1935(f) of such Act (as added by subsection 
(a)), such provision is, as of such date of enactment, null and void. 
The State shall redetermine any applications for medical assistance 
that have been denied solely on the basis of such a State plan 
amendment not later than December 31, 2006. Such redetermination shall 
be effective as of the date of the individual's application for medical 
assistance.

SEC. 8. REIMBURSEMENT OF THIRD PARTIES FOR 2006 TRANSITION COSTS.

    (a) Reimbursement.--
            (1) In general.--Notwithstanding section 1935(d) of the 
        Social Security Act (42 U.S.C. 1396u-5(d) or any other 
        provision of law, the Secretary of Health and Human Services 
        shall reimburse covered third parties for 100 percent of the 
        costs incurred by the covered third party during 2006 for 
        covered part D drugs for part D eligible individuals who are 
        enrolled in a prescription drug plan under part D of title 
        XVIII of such Act (or an MA-PD plan under part C of such title) 
        which the individual reasonably expected would have been 
        covered under such part but were not because the individual was 
        unable to access on a timely basis prescription drug benefits 
        to which the individual was entitled under such part. Such 
        payments shall be made from the Medicare Prescription Drug 
        Account under section 1860D-16 of the Social Security Act (42 
        U.S.C. 1395w-116) and shall be deemed to be payments from such 
        Account under subsection (b) of such section. The provisions of 
        clauses (ii) through (iv) of subparagraph (F) of paragraph (4) 
        of section 1860D-4(b) of the Social Security Act, as added by 
        section 2(a), shall apply under this paragraph in the same 
        manner as they apply under such paragraph (4).
            (2) Sanctions for fraudulent claims.--The provisions of 
        subclause (II) of section 1860D-4(b)(4)(C)(i) of the Social 
        Security Act, as added by section 2(a), shall apply to a 
        covered third party with respect to a claim for reimbursement 
        under paragraph (1) in the same manner that such provisions 
        apply to a pharmacy in connection with a claim for 
        reimbursement under subclause (I) of such section 1860D-
        4(b)(4)(C)(i).
            (3) Retroactive application to beginning of 2006.--The 
        costs incurred by a third party which may be reimbursed under 
        paragraph (1) shall include costs incurred during the period 
        beginning on January 1, 2006, and before the date of enactment 
        of this Act.
    (b) Recovery of Costs From Plans by Secretary.--The Secretary of 
Health and Human Services shall establish a process for recovering the 
costs described in subsection (a)(1) from prescription drug plans and 
MA-PD plans if the Secretary determines that such plans should have 
incurred such costs. Amounts recovered pursuant to the preceding 
sentence shall be deposited in the Medicare Prescription Drug Account 
described in subsection (a)(1).
    (c) Definitions.--For purposes of this section:
            (1) Covered part d drug.--The term ``covered part D drug'' 
        has the meaning given such term under section 1860D-2(e) of the 
        Social Security Act (42 U.S.C. 1395w-102(e)).
            (2) Covered third party.--The term ``covered third party'' 
        means any individual or party (such as a State, charity, or 
        family member of the part D eligible individual involved) other 
        than a party that is obligated under part D of title XVIII of 
        the Social Security Act to incur the costs involved. Such term 
        shall not include a pharmaceutical company or an assistance 
        program sponsored or assisted (in whole or in part) by such 
        company.
            (3) MA-PD plan.--The term ``MA-PD plan'' has the meaning 
        given such term under section 1860D-41(a)(14) of the Social 
        Security Act (42 U.S.C. 1395w-151(a)(14)).
            (4) Part d eligible individual.--The term ``part D eligible 
        individual'' has the meaning given such term under section 
        1860D-1(a)(3)(A) of the Social Security Act (42 U.S.C. 1394w-
        101(a)(3)(A)).
            (5) Prescription drug plan.--The term ``prescription drug 
        plan'' has the meaning given such term under section 1860D-
        1(a)(3)(C) of the Social Security Act (42 U.S.C. 1394w-
        101(a)(3)(C)).
            (6) State.--The term ``State'' includes the District of 
        Columbia.
                                 <all>
```