II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Medicare Prescription Drug Emergency Guarantee Act 

6 of 2006’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Protections to provide for uninterrupted access to medicines. 
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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. 

1 SEC. 2. PROTECTIONS TO PROVIDE FOR UNINTERRUPTED 

2 ACCESS TO MEDICINES. 

3 (a) MINIMUM STANDARD TRANSITION COVERAGE.— 

4 (1) IN GENERAL.—Section 1860D–4(b) of the 

5 Social Security Act (42 U.S.C. 1395w–104(b)) is 

6 amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(4) UNINTERRUPTED ACCESS TO MEDI9 CINES.— 

10 ‘‘(A) MINIMUM STANDARD TRANSITION

11 COVERAGE.—A PDP sponsor offering a pre12 scription drug plan under this part or an MA– 

13 PD plan under part C shall provide minimum 

14 standard transition coverage in accordance with 

15 subparagraph (B). 

16 ‘‘(B) REQUIREMENTS.—The minimum 

17 standard transition coverage under this sub18 paragraph, with respect to a part D eligible in19 dividual who is enrolled in a prescription drug 

20 plan (or an individual who is presumed to be 
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1 such an individual pursuant to subparagraph 

2 (F)) who presents a prescription for a drug at 

3 a pharmacy, is the following: 

4 ‘‘(i) GUARANTEED INITIAL SUPPLY, 

5 REGARDLESS OF COVERAGE LIMITATIONS

6 OR RESTRICTIONS.—In the case that the 

7 PDP sponsor of such plan uses a for8 mulary that does not cover the drug or 

9 otherwise imposes a restriction on the cov10 erage of the drug (such as through the ap11 plication of a preferred status, usage re12 striction, step therapy, prior authorization 

13 or a quantity limits) and during the period 

14 in which such individual has been enrolled 

15 in such plan the individual has not pre16 viously sought coverage under the plan for 

17 such drug the plan shall provide for the 

18 following: 

19 ‘‘(I) MINIMUM SUPPLY OF PRE20 SCRIPTION DRUG.—The plan must 

21 provide for coverage for at least a 60- 

22 day supply (or a 90-day supply in the 

23 case of an individual who is a resident 

24 of a long-term care facility) of the 

25 drug, or, if less, a supply of the drug 
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1 that is the full amount of the pre2 scription. 

3 ‘‘(II) INFORMATION ON FOR4 MULARY, PRESCRIPTION DRUG PLANS, 

5 AND APPEAL RIGHTS.—The plan must 

6 provide the individual with a standard 

7 notice developed by the Secretary that 

8 informs the individual about the limi9 tations and restrictions of the cov10 erage of the drug, that describes the 

11 rights of the individual with respect to 

12 requesting a determination under sub13 section (g)(2) or an appeal of such a 

14 determination under subsection (h), 

15 that describes any ability of the indi16 vidual to change the election of such 

17 plan under section 1860D–1(b)(1)(B), 

18 and that informs the individual about 

19 sources of information on prescription 

20 drug plans to make such a change in 

21 plans. 

22 ‘‘(III) REFILLS DURING PENDING

23 APPEAL.—In the case of such an indi24 vidual who brings an appeal under 

25 subsection (h), with respect to the 
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1 prescription drug involved, an addi2 tional supply of the drug (for the 

3 amount of days provided to the indi4 vidual under subclause (I)) during the 

5 period ending on the date on which a 

6 final determination is made on the ap7 peal. 

8 ‘‘(ii) GUARANTEED SUPPLY WHEN UN9 ABLE TO VERIFY PLAN ENROLLMENT.—In 

10 the case that the pharmacy is unable to lo11 cate or verify the individual’s enrollment in 

12 such plan through a reasonable effort: 

13 ‘‘(I) MINIMUM SUPPLY OF PRE14 SCRIPTION DRUG.—The plan must 

15 provide for coverage for at least a 60- 

16 day supply (or a 90-day supply in the 

17 case of an individual who is a resident 

18 of a long-term care facility) of the 

19 drug, or, if less, a supply of the drug 

20 that is the full amount of the pre21 scription. 

22 ‘‘(II) REFILLS.—The plan must 

23 provide an additional 60-day supply 

24 (or a 90-day supply in the case of an 

25 individual who is a resident of a long- 
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1 term care facility) of the drug, or if 

2 less, a supply of the drug that is the 

3 full amount of the prescription, if the 

4 pharmacy continues to be unable to 

5 locate the individual’s enrollment 

6 through such reasonable efforts when 

7 a prescription is presented on or after 

8 the date that a prescription refill is 

9 appropriate. 

10 ‘‘(C) REIMBURSEMENTS.— 

11 ‘‘(i) REIMBURSEMENTS TO PHAR12 MACIES.— 

13 ‘‘(I) IN GENERAL.—If a phar14 macy provides prescription drugs for 

15 which the minimum standard transi16 tion coverage is required under sub17 paragraph (B), the Secretary shall re18 imburse the pharmacy for the costs 

19 incurred in providing the prescription 

20 drugs, including acquisition costs, dis21 pensing costs, and other overhead 

22 costs. The Secretary shall provide 

23 prompt payment (consistent with the 

24 provisions of section 1842(c)(2)) of 

25 such reimbursements from the Medi-
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1 care Prescription Drug Account under 

2 section 1860D–16 of the Social Secu3 rity Act (42 U.S.C. 1395w–116). 

4 Such reimbursements shall be deemed 

5 to be payments from such Account 

6 under subsection (b) of such section. 

7 ‘‘(II) SANCTIONS FOR FRAUDU8 LENT CLAIMS.—In the case of a phar9 macy that knowingly provides to the 

10 Secretary false information in connec11 tion with a claim for reimbursement 

12 under subclause (I), the Secretary 

13 may impose a civil money penalty in 

14 an amount not to exceed $10,000 for 

15 each such claim. The provisions of 

16 section 1128A (other than subsections 

17 (a) and (b) and the second sentence of 

18 subsection (f)) shall apply to a civil 

19 money penalty under the previous sen20 tence in the same manner as such 

21 provisions apply to a penalty or pro22 ceeding under section 1128A(a). 

23 ‘‘(ii) RECOVERY FROM PLANS OF

24 PHARMACY REIMBURSEMENTS.—The Sec25 retary shall establish a process for recov-
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1 ering the reimbursements made to phar2 macies under clause (i) from prescription 

3 drug plans and MA–PD plans if the Sec4 retary determines that such plans should 

5 have incurred such costs. Amounts recov6 ered pursuant to the preceding sentence 

7 shall be deposited in the Medicare Pre8 scription Drug Account. 

9 ‘‘(iii) APPLICATION OF INTERMEDIATE

10 SANCTIONS.—In the case of a failure of a 

11 prescription drug plan under this part or 

12 an MA–PD plan under part C to provide 

13 for the minimum coverage required under 

14 subparagraph (B), the failure shall be 

15 treated as a failure to provide medically 

16 necessary items and services under section 

17 1857(g)(1)(A), as applied by section 

18 1860D–12(b)(3)(E), and the Secretary 

19 shall impose intermediate sanctions under 

20 such section 1857(g). 

21 ‘‘(D) COST-SHARING.—The cost-sharing 

22 for a prescription filled pursuant to subpara23 graph (B) for an individual shall be in accord24 ance with the prescription drug plan in which 

25 the individual attests to be enrolled and the 
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1 class of individual (such as subsidy-eligible indi2 viduals) to which the individual so attests. 

3 ‘‘(E) REFUNDS TO INDIVIDUALS WITH IN4 APPROPRIATE CHARGES.—If the Secretary de5 termines, in accordance with a method deter6 mined by the Secretary, that an individual was 

7 inappropriately charged for a prescription drug 

8 dispensed to such individual under this part or 

9 part C, the Secretary shall— 

10 ‘‘(i) reduce payments to the sponsor 

11 of the prescription drug plan under section 

12 1860D–15 or to the organization offering 

13 the MA–PD plan under section 1853 that 

14 inappropriately charged the individual by 

15 an amount equal to the amount the indi16 vidual was inappropriately charged; and 

17 ‘‘(ii) refund such amount to the indi18 vidual within 30 days of the date of the de19 termination that the individual was inap20 propriately charged. 

21 ‘‘(F) PRESUMPTIVE ELIGIBILITY.— 

22 ‘‘(i) SUBSIDY-ELIGIBLE INDIVID23 UALS.—For purposes of this paragraph, an 

24 individual shall be presumed to be a dual 

25 eligible individual or subsidy-eligible indi-
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1 vidual if the individual self attests to being 

2 such an individual, respectively. 

3 ‘‘(ii) PLAN ENROLLMENT.—For pur4 poses of this paragraph, an individual shall 

5 be presumed to be enrolled in a prescrip6 tion drug plan under this part or an MA– 

7 PD plan under part C if the individual self 

8 attests to being enrolled under such plan. 

9 ‘‘(iii) INDIVIDUAL LIABLE FOR COSTS

10 OF FALSE ATTESTATION.— 

11 ‘‘(I) IN GENERAL.—If the Sec12 retary, as the result of verification ac13 tivities conducted by the Secretary, 

14 determines after a fair hearing that 

15 an individual has knowingly made a 

16 false self-attestation described in 

17 clause (i) or (ii) or in subparagraph 

18 (D), the Secretary may, subject to 

19 subclause (II), seek recovery from the 

20 individual for the full amount of the 

21 cost of benefits provided to the indi22 vidual under this paragraph as a re23 sult of such self attestation. 

24 ‘‘(II) EXCEPTION.—The Sec25 retary shall at its discretion not seek 
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1 recovery under subclause (I) if the 

2 Secretary determines that it would not 

3 be cost-effective to do so. 

4 ‘‘(III) REIMBURSEMENTS TO

5 FEDERAL GOVERNMENT.—Any 

6 amounts recovered by the Secretary in 

7 accordance with this clause shall be 

8 returned to the prescription drug plan 

9 or MA–PD plan if the Secretary has 

10 previously recovered payment from 

11 such plan. 

12 ‘‘(iv) REQUIREMENTS FOR SELF AT13 TESTATION.—The Secretary shall promul14 gate requirements for self attestations 

15 under this subparagraph, but the failure of 

16 the Secretary to promulgate such require17 ments shall not preclude the applications 

18 of the previous provisions of this subpara19 graph.’’. 

20 (2) EFFECTIVE DATE.—The amendment made 

21 by paragraph (1) shall take effect on the date of the 

22 enactment of this Act, but shall apply to prescription 

23 drugs dispensed on and after January 1, 2006. 

24 (b) NOTICE FOR CHANGE IN FORMULARY AND

25 OTHER RESTRICTIONS OR LIMITATIONS ON COVERAGE.— 
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1 (1) IN GENERAL.—Section 1860D–4(a) of such 

2 Act (42 U.S.C. 1395w–104(a)) is amended by add3 ing at the end the following new paragraph: 

4 ‘‘(5) ANNUAL NOTICE OF CHANGES IN FOR5 MULARY AND OTHER RESTRICTIONS OR LIMITATIONS

6 ON COVERAGE.—Each PDP sponsor offering a pre7 scription drug plan (and each MA organization of8 fering an MA–PD plan) shall furnish to each en9 rollee at the time of each annual coordinated election 

10 period (referred to in section 1860D–1(b)(1)(B)(iii)) 

11 for a plan year a notice of any changes in the for12 mulary or other restrictions or limitations on cov13 erage of a covered part D drug under the plan that 

14 will take effect for the plan year.’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

16 by paragraph (1) shall apply to annual coordinated 

17 election periods beginning after the date of the en18 actment of this Act. 

19 (c) STANDARDIZED FORMS AND PROCEDURES FOR

20 RECONSIDERATIONS AND APPEALS.— 

21 (1) IN GENERAL.—Section 1860D–4 of such 

22 Act (42 U.S.C. 1395w–104) is amended by adding 

23 at the end the following new subsection: 

24 ‘‘(l) STANDARDIZED FORMS AND PROCEDURES FOR

25 RECONSIDERATIONS AND APPEALS.— 
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1 ‘‘(1) STANDARD ENROLLEE NOTICE.—The Sec2 retary shall develop a standard notice to be distrib3 uted by a prescription drug plan (or an MA–PD 

4 plan) to an enrollee when a covered part D drug pre5 scribed for the enrollee is not covered, or the cov6 erage of such drug is otherwise restricted, by the 

7 plan. 

8 ‘‘(2) STANDARDIZED PROCESS FOR RECONSID9 ERATIONS AND APPEALS.—The Secretary shall re10 quire prescription drug plans and MA–PD plans to 

11 follow the same standardized process for reconsider12 ations and redeterminations under subsections (g) 

13 and (h). Such process shall require that determina14 tions regarding medical necessity are based on pro15 fessional medical judgement, the medical condition 

16 of the enrollee, the treating physician’s recommenda17 tion, and other medical evidence.’’. 

18 (2) EFFECTIVE DATE.—The Secretary of 

19 Health and Human Services shall provide for the 

20 standard notice and the standardized process, and 

21 the application of such notice and process, under the 

22 amendment made by paragraph (1) by not later 

23 than January 1, 2007. 
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1 SEC. 3. REQUIRED APPLICATION OF INTERMEDIATE SANC2 TIONS TO PROTECT AGAINST FRAUD AND 

3 ABUSE. 

4 (a) IN GENERAL.—Section 1860D–12(b)(3)(E) of 

5 the Social Security Act (42 U.S.C. 1395w–112(b)(3)(E)) 

6 is amended by inserting ‘‘and the reference to ‘may pro7 vide’ in section 1857(g)(1) is deemed a reference to ‘shall 

8 provide’ ’’ after ‘‘this part’’. 

9 (b) APPLICATION TO MA–PD PLANS.—Section 

10 1857(g)(1) of such Act (42 U.S.C. 1395w–27(g)(1)) is 

11 amended by inserting ‘‘(or in the case of an MA–PD plan 

12 or a prescription drug plan under part D, the Secretary 

13 shall provide)’’ after ‘‘may provide’’. 

14 SEC. 4. CHANGES OF ENROLLMENT IN PRESCRIPTION 

15 DRUG PLANS AND MA–PD PLANS ALLOWED 

16 TWICE DURING YEAR. 

17 (a) ADDITIONAL ELECTION PERMITTED ONCE EACH

18 YEAR OUTSIDE OF ANNUAL COORDINATED ELECTION

19 PERIOD.—Section 1851(e)(4) of the Social Security Act 

20 (42 U.S.C. 1395w–21(e)(4)) is amended by inserting 

21 ‘‘once every year, and in addition,’’ after ‘‘make a new 

22 election under this section’’. 

23 (b) EFFECTIVE DATE.—The amendment made by 

24 subsection (a) shall take effect as of the date of the enact25 ment of this Act. 
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1 SEC. 5. PROHIBITING ADDITIONAL RESTRICTIONS OR LIMI2 TATIONS ON COVERAGE DURING YEAR. 

3 (a) IN GENERAL.—Section 1860D–4(b)(4) of the So4 cial Security Act (42 U.S.C. 1395w–104(b)(4)) is amend5 ed by inserting after subparagraph (F) the following new 

6 subparagraph: 

7 ‘‘(G) PROHIBITING ADDITIONAL RESTRIC8 TIONS OR LIMITATIONS ON COVERAGE DURING

9 YEAR.—A prescription drug plan and an MA– 

10 PD plan may only impose a restriction or limi11 tation on the coverage of a covered part D drug 

12 (such as through the application of a formulary, 

13 preferred status, usage restriction, step therapy, 

14 prior authorization, or a quantity limitation) 

15 only at the beginning of a plan year, except in 

16 the case that the Commissioner of Food and 

17 Drugs issues a clinical warning during a year 

18 that imposes such a restriction or limitation on 

19 the drug.’’. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 subsection (a) shall take effect on the date of the enact22 ment of this Act and shall apply to the removal of a drug 

23 or a change in the status of such drug on and after such 

24 date. 
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1 SEC. 6. MEDPAC STUDY ON APPROPRIATE ENROLLMENT 

2 OF DUAL ELIGIBLE INDIVIDUALS. 

3 (a) STUDY.—The Medicare Payment Advisory Com4 mission shall conduct a study to determine the extent to 

5 which full-benefit dual eligible individuals (as defined in 

6 section 1935(c)(6) of the Social Security Act (42 U.S.C. 

7 1396u5(c)(6)) were enrolled (by assignment or otherwise) 

8 in the most appropriate prescription drug plans under 

9 part D of title XVIII of such Act for such individuals. 

10 (b) REPORT.—The Commission shall submit a report 

11 to Congress on the study under subsection (a) not later 

12 than February 1, 2007. 

13 SEC. 7. PROHIBITION ON CONDITIONING MEDICAID ELIGI14 BILITY ON ENROLLMENT IN MEDICARE PART 

15 D COVERAGE OR OTHER CREDITABLE COV16 ERAGE. 

17 (a) IN GENERAL.—Section 1935 of the Social Secu18 rity Act (42 U.S.C. 1396v) is amended by adding at the 

19 end the following new subsection: 

20 ‘‘(f) PROHIBITION ON CONDITIONING MEDICAID ELI21 GIBILITY ON ENROLLMENT IN MEDICARE PART D COV22 ERAGE OR OTHER CREDITABLE COVERAGE.— 

23 ‘‘(1) IN GENERAL.—A State shall not condition 

24 eligibility for medical assistance under the State 

25 plan for a part D eligible individual (as defined in 

26 section 1860D–1(a)(3)(A)) who is enrolled in cred-
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1 itable prescription drug coverage described in any of 

2 subparagraphs (C) through (H) of section 1860D– 

3 13(b)(4) on the individual’s enrollment in a prescrip4 tion drug plan under part D of title XVIII or an 

5 MA–PD plan under part C of such title. 

6 ‘‘(2) COORDINATION OF BENEFITS WITH PART

7 D FOR OTHER INDIVIDUALS.—Nothing in this sub8 section shall be construed as prohibiting a State 

9 from coordinating medical assistance under the 

10 State plan with benefits under part D of title XVIII 

11 for individuals not described in paragraph (1).’’. 

12 (b) TREATMENT OF STATE PLAN AMENDMENTS, RE13 DETERMINATION OF ELIGIBILITY.—In the case of a State 

14 that, as of the date of the enactment of this Act, has an 

15 approved amendment to its State plan under title XIX of 

16 the Social Security Act with a provision that conflicts with 

17 section 1935(f) of such Act (as added by subsection (a)), 

18 such provision is, as of such date of enactment, null and 

19 void. The State shall redetermine any applications for 

20 medical assistance that have been denied solely on the 

21 basis of such a State plan amendment not later than De22 cember 31, 2006. Such redetermination shall be effective 

23 as of the date of the individual’s application for medical 

24 assistance. 
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1 SEC. 8. REIMBURSEMENT OF THIRD PARTIES FOR 2006 

2 TRANSITION COSTS. 

3 (a) REIMBURSEMENT.— 

4 (1) IN GENERAL.—Notwithstanding section 

5 1935(d) of the Social Security Act (42 U.S.C. 

6 1396u–5(d) or any other provision of law, the Sec7 retary of Health and Human Services shall reim8 burse covered third parties for 100 percent of the 

9 costs incurred by the covered third party during 

10 2006 for covered part D drugs for part D eligible in11 dividuals who are enrolled in a prescription drug 

12 plan under part D of title XVIII of such Act (or an 

13 MA–PD plan under part C of such title) which the 

14 individual reasonably expected would have been cov15 ered under such part but were not because the indi16 vidual was unable to access on a timely basis pre17 scription drug benefits to which the individual was 

18 entitled under such part. Such payments shall be 

19 made from the Medicare Prescription Drug Account 

20 under section 1860D–16 of the Social Security Act 

21 (42 U.S.C. 1395w–116) and shall be deemed to be 

22 payments from such Account under subsection (b) of 

23 such section. The provisions of clauses (ii) through 

24 (iv) of subparagraph (F) of paragraph (4) of section 

25 1860D–4(b) of the Social Security Act, as added by 

26 section 2(a), shall apply under this paragraph in the 
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1 same manner as they apply under such paragraph 

2 (4). 

3 (2) SANCTIONS FOR FRAUDULENT CLAIMS.— 

4 The provisions of subclause (II) of section 1860D– 

5 4(b)(4)(C)(i) of the Social Security Act, as added by 

6 section 2(a), shall apply to a covered third party 

7 with respect to a claim for reimbursement under 

8 paragraph (1) in the same manner that such provi9 sions apply to a pharmacy in connection with a 

10 claim for reimbursement under subclause (I) of such 

11 section 1860D–4(b)(4)(C)(i). 

12 (3) RETROACTIVE APPLICATION TO BEGINNING

13 OF 2006.—The costs incurred by a third party which 

14 may be reimbursed under paragraph (1) shall in15 clude costs incurred during the period beginning on 

16 January 1, 2006, and before the date of enactment 

17 of this Act. 

18 (b) RECOVERY OF COSTS FROM PLANS BY SEC19 RETARY.—The Secretary of Health and Human Services 

20 shall establish a process for recovering the costs described 

21 in subsection (a)(1) from prescription drug plans and 

22 MA–PD plans if the Secretary determines that such plans 

23 should have incurred such costs. Amounts recovered pur24 suant to the preceding sentence shall be deposited in the 
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1 Medicare Prescription Drug Account described in sub2 section (a)(1). 

3 (c) DEFINITIONS.—For purposes of this section: 

4 (1) COVERED PART D DRUG.—The term ‘‘cov5 ered part D drug’’ has the meaning given such term 

6 under section 1860D–2(e) of the Social Security Act 

7 (42 U.S.C. 1395w–102(e)). 

8 (2) COVERED THIRD PARTY.—The term ‘‘cov9 ered third party’’ means any individual or party 

10 (such as a State, charity, or family member of the 

11 part D eligible individual involved) other than a 

12 party that is obligated under part D of title XVIII 

13 of the Social Security Act to incur the costs in14 volved. Such term shall not include a pharmaceutical 

15 company or an assistance program sponsored or as16 sisted (in whole or in part) by such company. 

17 (3) MA–PD PLAN.—The term ‘‘MA–PD plan’’ 

18 has the meaning given such term under section 

19 1860D–41(a)(14) of the Social Security Act (42 

20 U.S.C. 1395w–151(a)(14)). 

21 (4) PART D ELIGIBLE INDIVIDUAL.—The term 

22 ‘‘part D eligible individual’’ has the meaning given 

23 such term under section 1860D–1(a)(3)(A) of the 

24 Social Security Act (42 U.S.C. 1394w– 

25 101(a)(3)(A)). 
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1 (5) PRESCRIPTION DRUG PLAN.—The term 

2 ‘‘prescription drug plan’’ has the meaning given 

3 such term under section 1860D–1(a)(3)(C) of the 

4 Social Security Act (42 U.S.C. 1394w– 

5 101(a)(3)(C)). 

6 (6) STATE.—The term ‘‘State’’ includes the 

7 District of Columbia. 

Æ