II 

109TH CONGRESS 

2D SESSION S. 2563 

To amend title XVIII of the Social Security Act to require prompt payment 

to pharmacies under part D, to restrict pharmacy co-branding on prescription drug cards issued under such part, and to provide guidelines 

for Medication Therapy Management Services programs offered by prescription drug plans and MA–PD plans under such part. 

IN THE SENATE OF THE UNITED STATES 

APRIL 6, 2006 

Mr. COCHRAN (for himself, Mr. ENZI, and Mr. TALENT) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to require 

prompt payment to pharmacies under part D, to restrict 

pharmacy co-branding on prescription drug cards issued 

under such part, and to provide guidelines for Medication 

Therapy Management Services programs offered by prescription drug plans and MA–PD plans under such part. 

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. 

4 This Act may be cited as the ‘‘Pharmacist Access and 

5 Recognition in Medicare (PhARM) Act of 2006’’. 


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1 SEC. 2. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS 

2 AND MA–PD PLANS UNDER PART D. 

3 (a) PROMPT PAYMENT BY PRESCRIPTION DRUG

4 PLANS.—Section 1860D–12(b) of the Social Security Act 

5 (42 U.S.C. 1395w–112(b)) is amended by adding at the 

6 end the following new paragraph: 

7 ‘‘(4) PROMPT PAYMENT OF CLEAN CLAIMS.— 

8 ‘‘(A) PROMPT PAYMENT.— 

9 ‘‘(i) IN GENERAL.—Each contract en10 tered into with a PDP sponsor under this 

11 section with respect to a prescription drug 

12 plan offered by such sponsor shall provide 

13 that payment shall be issued, mailed, or 

14 otherwise transmitted with respect to all 

15 clean claims submitted under this part 

16 within the applicable number of calendar 

17 days after the date on which the claim is 

18 received. 

19 ‘‘(ii) CLEAN CLAIM DEFINED.—In this 

20 paragraph, the term ‘clean claim’ means a 

21 claim that has no apparent defect or im22 propriety (including any lack of any re23 quired substantiating documentation) or 

24 particular circumstance requiring special 

25 treatment that prevents timely payment 


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1 from being made on the claim under this 

2 part. 

3 ‘‘(B) APPLICABLE NUMBER OF CALENDAR

4 DAYS DEFINED.—In this paragraph, the term 

5 ‘applicable number of calendar days’ means— 

6 ‘‘(i) with respect to claims submitted 

7 electronically, 14 days; and 

8 ‘‘(ii) with respect to claims submitted 

9 otherwise, 30 days. 

10 ‘‘(C) INTEREST PAYMENT.—If payment is 

11 not issued, mailed, or otherwise transmitted 

12 within the applicable number of calendar days 

13 (as defined in subparagraph (B)) after a clean 

14 claim is received, interest shall be paid at a rate 

15 used for purposes of section 3902(a) of title 31, 

16 United States Code (relating to interest pen17 alties for failure to make prompt payments), for 

18 the period beginning on the day after the re19 quired payment date and ending on the date on 

20 which payment is made. 

21 ‘‘(D) PROCEDURES INVOLVING CLAIMS.— 

22 ‘‘(i) IN GENERAL.—A contract entered 

23 into with a PDP sponsor under this sec24 tion with respect to a prescription drug 

25 plan offered by such sponsor shall provide 


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1 that, not later than 10 days after the date 

2 on which a clean claim is submitted, the 

3 PDP sponsor shall provide the claimant 

4 with a notice that acknowledges receipt of 

5 the claim by such sponsor. Such notice 

6 shall be considered to have been provided 

7 on the date on which the notice is mailed 

8 or electronically transferred. 

9 ‘‘(ii) CLAIM DEEMED TO BE CLEAN.— 

10 A claim is deemed to be a clean claim if 

11 the PDP sponsor involved does not provide 

12 notice to the claimant of any deficiency in 

13 the claim within 10 days of the date on 

14 which the claim is submitted. 

15 ‘‘(iii) CLAIM DETERMINED TO NOT BE

16 A CLEAN CLAIM.— 

17 ‘‘(I) IN GENERAL.—If a PDP 

18 sponsor determines that a submitted 

19 claim is not a clean claim, the PDP 

20 sponsor shall, not later than the end 

21 of the period described in clause (ii), 

22 notify the claimant of such determina23 tion. Such notification shall specify all 

24 defects or improprieties in the claim 

25 and shall list all additional informaVerDate Aug 31 2005 02:21 Apr 08, 2006 Jkt 049196 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2563.IS S2563

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1 tion or documents necessary for the 

2 proper processing and payment of the 

3 claim. 

4 ‘‘(II) DETERMINATION AFTER

5 SUBMISSION OF ADDITIONAL INFOR6 MATION.—A claim is deemed to be a 

7 clean claim under this paragraph if 

8 the PDP sponsor involved does not 

9 provide notice to the claimant of any 

10 defect or impropriety in the claim 

11 within 10 days of the date on which 

12 additional information is received 

13 under subclause (I). 

14 ‘‘(III) PAYMENT OF CLEAN POR15 TION OF A CLAIM.—A PDP sponsor 

16 shall pay any portion of a claim that 

17 would be a clean claim but for a de18 fect or impropriety in a separate por19 tion of the claim in accordance with 

20 subparagraph (A). 

21 ‘‘(iv) OBLIGATION TO PAY.—A claim 

22 submitted to a PDP sponsor that is not 

23 paid or contested by the provider within 

24 the applicable number of days (as defined 

25 in subparagraph (B)) shall be deemed to 


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1 be a clean claim and shall be paid by the 

2 PDP sponsor in accordance with subpara3 graph (A). 

4 ‘‘(v) DATE OF PAYMENT OF CLAIM.— 

5 Payment of a clean claim under such sub6 paragraph is considered to have been made 

7 on the date on which full payment is re8 ceived by the provider. 

9 ‘‘(E) ELECTRONIC TRANSFER OF

10 FUNDS.—A PDP sponsor shall pay all clean 

11 claims submitted electronically by electronic 

12 transfer of funds.’’. 

13 (b) PROMPT PAYMENT BY MA–PD PLANS.—Section 

14 1857(f) of the Social Security Act (42 U.S.C. 1395w– 

15 27(f)) is amended by adding at the end the following new 

16 paragraph: 

17 ‘‘(3) INCORPORATION OF CERTAIN PRESCRIP18 TION DRUG PLAN CONTRACT REQUIREMENTS.—The 

19 provisions of section 1860D–12(b)(4) shall apply to 

20 contracts with a Medicare Advantage organization in 

21 the same manner as they apply to contracts with a 

22 PDP sponsor offering a prescription drug plan 

23 under part D.’’. 

24 (c) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to contracts entered into or reVerDate Aug 31 2005 02:21 Apr 08, 2006 Jkt 049196 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2563.IS S2563

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1 newed on or after the date that is 90 days after the date 

2 of the enactment of this Act. 

3 SEC. 3. RESTRICTION ON PHARMACY CO-BRANDING ON 

4 MEDICARE PRESCRIPTION DRUG CARDS 

5 ISSUED BY PRESCRIPTION DRUG PLANS AND 

6 MA–PD PLANS. 

7 (a) IN GENERAL.—Section 1860D–4 of the Social 

8 Security Act (42 U.S.C. 1395w–104) is amended— 

9 (1) in subsection (b)(2)(A), by striking ‘‘The 

10 PDP sponsor’’ and inserting ‘‘Subject to subsection 

11 (l), the PDP sponsor’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(l) CO-BRANDING PROHIBITED.—A card that is 

15 issued under subsection (b)(2)(A) for use under a pre16 scription drug plan offered by a PDP sponsor shall not 

17 display the name, brand, or trademark of any pharmacy.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to cards distributed on or after 

20 the date that is 90 days after the date of enactment of 

21 this Act. 

22 SEC. 4. PROVISION OF MEDICATION THERAPY MANAGE23 MENT SERVICES UNDER PART D. 

24 (a) PROVISION OF MEDICATION THERAPY MANAGE25 MENT SERVICES UNDER PART D.— 


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1 (1) IN GENERAL.—Section 1860D–4(c)(2) of 

2 the Social Security Act (42 U.S.C.1395w–104(c)(2)) 

3 is amended— 

4 (A) in subparagraph (A)— 

5 (i) in clause (i)— 

6 (I) by inserting ‘‘or other health 

7 care provider with advanced training 

8 in medication management’’ after 

9 ‘‘furnished by a pharmacist’’; and 

10 (II) by striking ‘‘targeted bene11 ficiaries described in clause (ii)’’ and 

12 inserting ‘‘targeted beneficiaries speci13 fied under clause (ii)’’ 

14 (ii) by striking clause (ii) and insert15 ing the following: 

16 ‘‘(ii) TARGETED BENEFICIARIES.— 

17 The Secretary shall specify the population 

18 of part D eligible individuals appropriate 

19 for services under a medication therapy 

20 management program based on the fol21 lowing characteristics: 

22 ‘‘(I) Having a disease state in 

23 which evidence-based medicine has 

24 demonstrated the benefit of medicaVerDate Aug 31 2005 02:21 Apr 08, 2006 Jkt 049196 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2563.IS S2563

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1 tion therapy management intervention 

2 based on objective outcome measures. 

3 ‘‘(II) Taking multiple covered 

4 part D drugs or having a disease state 

5 in which a complex combination medi6 cation regimen is utilized. 

7 ‘‘(III) Being identified as likely 

8 to incur annual costs for covered part 

9 D drugs that exceed a level specified 

10 by the Secretary or where acute or 

11 chronic decompensation of disease 

12 would likely increase expenditures 

13 under the Federal Hospital Insurance 

14 Trust Fund or the Federal Supple15 mentary Medical Insurance Trust 

16 Fund under sections 1817 and 1841, 

17 respectively, such as through the re18 quirement of emergency care or acute 

19 hospitalization.’’; 

20 (B) by striking subparagraph (B) and in21 serting the following: 

22 ‘‘(B) ELEMENTS.— 

23 ‘‘(i) MINIMUM DEFINED PACKAGE OF

24 SERVICES.—The Secretary shall specify a 

25 minimum defined package of medication 


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1 therapy management services that shall be 

2 provided to each enrollee. Such package 

3 shall be based on the following consider4 ations: 

5 ‘‘(I) Performing necessary assess6 ments of the health status of each en7 rollee. 

8 ‘‘(II) Providing medication ther9 apy review to identify, resolve, and 

10 prevent medication-related problems, 

11 including adverse events. 

12 ‘‘(III) Increasing enrollee under13 standing to promote the appropriate 

14 use of medications by enrollees and to 

15 reduce the risk of potential adverse 

16 events associated with medications, 

17 through beneficiary and family edu18 cation, counseling, and other appro19 priate means. 

20 ‘‘(IV) Increasing enrollee adher21 ence with prescription medication 

22 regimens through medication refill re23 minders, special packaging, and other 

24 compliance programs and other appro25 priate means. 


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1 ‘‘(V) Promoting detection of ad2 verse drug events and patterns of 

3 overuse and underuse of prescription 

4 drugs. 

5 ‘‘(VI) Developing a medication 

6 action plan which may alter the medi7 cation regimen, when permitted by the 

8 State licensing authority. This infor9 mation should be provided to, or ac10 cessible by, the primary health care 

11 provider of the enrollee. 

12 ‘‘(VII) Monitoring and evaluating 

13 the response to therapy and evalu14 ating the safety and effectiveness of 

15 the therapy, which may include lab16 oratory assessment. 

17 ‘‘(VIII) Providing disease-specific 

18 medication therapy management serv19 ices when appropriate. 

20 ‘‘(IX) Coordinating and inte21 grating medication therapy manage22 ment services within the broader scope 

23 of health care management services 

24 being provided to each enrollee. 

25 ‘‘(ii) DELIVERY OF SERVICES.— 


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1 ‘‘(I) PERSONAL DELIVERY.—To 

2 the extent feasible, face-to-face inter3 action shall be the preferred method 

4 of delivery of medication therapy man5 agement services. 

6 ‘‘(II) INDIVIDUALIZED.—Such 

7 services shall be patient-specific and 

8 individualized and shall be provided 

9 directly to the patient by a pharmacist 

10 or other health care provider with ad11 vanced training in medication man12 agement. 

13 ‘‘(III) DISTINCT FROM OTHER

14 ACTIVITIES.—Such services shall be 

15 distinct from any activities related to 

16 formulary development and use, gen17 eralized patient education and infor18 mation activities, and any population19 focused quality assurance measures 

20 for medication use. 

21 ‘‘(iii) OPPORTUNITY TO IDENTIFY PA22 TIENTS IN NEED OF MEDICATION THERAPY

23 MANAGEMENT SERVICES.—The program 

24 shall provide opportunities for health care 

25 providers to identify patients who should 


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1 receive medication therapy management 

2 services.’’; 

3 (C) by striking subparagraph (E) and in4 serting the following: 

5 ‘‘(E) PHARMACY FEES.— 

6 ‘‘(i) IN GENERAL.—The PDP sponsor 

7 of a prescription drug plan shall pay phar8 macists and others providing services 

9 under the medication therapy management 

10 program under this paragraph based on 

11 the time and intensity of services provided 

12 to enrollees. 

13 ‘‘(ii) SUBMISSION ALONG WITH PLAN

14 INFORMATION.—Each such sponsor shall 

15 disclose to the Secretary upon request the 

16 amount of any such payments and shall 

17 submit a description of how such payments 

18 are calculated along with the information 

19 submitted under section 1860D–11(b). 

20 Such description shall be submitted at the 

21 same time and in a similar manner to the 

22 manner in which the information described 

23 in paragraph (2) of such section is sub24 mitted.’’; and 


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1 (D) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(F) PHARMACY ACCESS REQUIRE4 MENTS.—The PDP sponsor of a prescription 

5 drug plan shall secure the participation in its 

6 network of a sufficient number of retail phar7 macies to assure that enrollees have the option 

8 of obtaining services under the medication ther9 apy management program under this paragraph 

10 directly from community-based retail phar11 macies.’’. 

12 (2) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply to medication therapy 

14 management services provided on or after January 

15 1, 2008. 

16 (b) MEDICATION THERAPY MANAGEMENT DEM17 ONSTRATION PROGRAM.—Section 1860D–4(c) of the So18 cial Security Act (42 U.S.C.1395w–104(c)) is amended by 

19 adding at the end the following new paragraph: 

20 ‘‘(3) COMMUNITY-BASED MEDICATION THERAPY

21 MANAGEMENT DEMONSTRATION PROGRAM.— 

22 ‘‘(A) ESTABLISHMENT.— 

23 ‘‘(i) IN GENERAL.—By not later than 

24 January 1, 2008, the Secretary shall es25 tablish a 2-year demonstration program, 


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1 based on the recommendations of the Best 

2 Practices Commission established under 

3 subparagraph (B), with both PDP spon4 sors of prescription drug plans and Medi5 care Advantage Organizations offering 

6 MA–PD plans, to examine the impact of 

7 medication therapy management furnished 

8 by a pharmacist in a community-based or 

9 ambulatory-based setting on quality of 

10 care, spending under this part, and patient 

11 health. 

12 ‘‘(ii) SITES.— 

13 ‘‘(I) IN GENERAL.—Subject to 

14 subclause (II), the Secretary shall 

15 designate not less than 10 PDP spon16 sors of prescription drug plans or 

17 Medicare Advantage Organizations of18 fering MA–PD plans, none of which 

19 provide prescription drug coverage 

20 under such plans in the same PDP or 

21 MA region, respectively, to conduct 

22 the demonstration program under this 

23 paragraph. 

24 ‘‘(II) DESIGNATION CONSISTENT

25 WITH RECOMMENDATIONS OF BEST


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1 PRACTICES COMMISSION.—The Sec2 retary shall ensure that the designa3 tion of sites under subclause (I) is 

4 consistent with the recommendations 

5 of the Best Practices Commission 

6 under subparagraph (B)(ii). 

7 ‘‘(B) BEST PRACTICES COMMISSION.— 

8 ‘‘(i) ESTABLISHMENT.—The Secretary 

9 shall establish a Best Practices Commis10 sion composed of representatives from 

11 pharmacy organizations, health care orga12 nizations, beneficiary advocates, chronic 

13 disease groups, and other stakeholders (as 

14 determined appropriate by the Secretary) 

15 for the purpose of developing a best prac16 tices model for medication therapy man17 agement. 

18 ‘‘(ii) RECOMMENDATIONS.—The Com19 mission shall submit to the Secretary rec20 ommendations on the following: 

21 ‘‘(I) The minimum number of en22 rollees that should be included in the 

23 demonstration program, and at each 

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1 apy management furnished by a phar2 macist in a community-based setting 

3 on quality of care, spending under 

4 this part, and patient health. 

5 ‘‘(II) The number of urban and 

6 rural sites that should be included in 

7 the demonstration program to ensure 

8 that prescription drug plans and MA– 

9 PD plans offered in urban and rural 

10 areas are adequately represented. 

11 ‘‘(III) A best practices model for 

12 medication therapy management to be 

13 implemented under the demonstration 

14 program under this paragraph. 

15 ‘‘(C) REPORTS.— 

16 ‘‘(i) INTERIM REPORT.—Not later 

17 than 1 year after the commencement of the 

18 demonstration program, the Secretary 

19 shall submit to Congress an interim report 

20 on such program. 

21 ‘‘(ii) FINAL REPORT.—Not later than 

22 6 months after the completion of the dem23 onstration program, the Secretary shall 

24 submit to Congress a final report on such 

25 program, together with recommendations 


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1 for such legislation and administrative ac2 tion as the Secretary determines appro3 priate. 

4 ‘‘(D) WAIVER AUTHORITY.—The Secretary 

5 may waive such requirements of titles XI and 

6 XVIII as may be necessary for the purpose of 

7 carrying out the demonstration program under 

8 this paragraph.’’. 

Æ 


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