II 

109TH CONGRESS 

2D SESSION S. 2723 

To amend title XVIII of the Social Security Act to require the sponsor 

of a prescription drug plan or an organization offering an MA–PD 

plan to promptly pay claims submitted under part D, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 4, 2006 

Mr. LAUTENBERG (for himself and Mrs. CLINTON) 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 

the sponsor of a prescription drug plan or an organization offering an MA–PD plan to promptly pay claims 

submitted under part D, and for other purposes. 

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 ‘‘Pharmacists Medicare 

5 Relief 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 defect or impropriety 

22 (including any lack of any required sub23 stantiating documentation) or particular 

24 circumstance requiring special treatment 

25 that prevents timely payment from being 

26 made on the claim under this part. 


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1 ‘‘(B) APPLICABLE NUMBER OF CALENDAR

2 DAYS DEFINED.—In this paragraph, the term 

3 ‘applicable number of calendar days’ means— 

4 ‘‘(i) with respect to claims submitted 

5 electronically, 14 days; and 

6 ‘‘(ii) with respect to claims submitted 

7 otherwise, 30 days. 

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

9 not issued, mailed, or otherwise transmitted 

10 within the applicable number of calendar days 

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

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

13 equal to the weighted average of interest on 3- 

14 month marketable Treasury securities deter15 mined for such period, increased by 0.1 percent16 age point for the period beginning on the day 

17 after the required payment date and ending on 

18 the date on which payment is made. 

19 ‘‘(D) PROCEDURES INVOLVING CLAIMS.— 

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

21 into with a PDP sponsor under this sec22 tion with respect to a prescription drug 

23 plan offered by such sponsor shall provide 

24 that, not later than 10 days after the date 

25 on which a clean claim is submitted, the 


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1 PDP sponsor shall provide the claimant 

2 with a notice that acknowledges receipt of 

3 the claim by such sponsor. Such notice 

4 shall be considered to have been provided 

5 on the date on which the notice is mailed 

6 or electronically transferred. 

7 ‘‘(ii) CLAIM DEEMED TO BE CLEAN.— 

8 A claim is deemed to be a clean claim if 

9 the PDP sponsor involved does not provide 

10 notice to the claimant of any deficiency in 

11 the claim within 10 days of the date on 

12 which the claim is submitted. 

13 ‘‘(iii) CLAIM DETERMINED TO NOT BE

14 A CLEAN CLAIM.— 

15 ‘‘(I) IN GENERAL.—If a PDP 

16 sponsor determines that a submitted 

17 claim is not a clean claim, the PDP 

18 sponsor shall, not later than the end 

19 of the period described in clause (ii), 

20 notify the claimant of such determina21 tion. Such notification shall specify all 

22 defects or improprieties in the claim 

23 and shall list all additional informa24 tion or documents necessary for the 


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1 proper processing and payment of the 

2 claim. 

3 ‘‘(II) DETERMINATION AFTER

4 SUBMISSION OF ADDITIONAL INFOR5 MATION.—A claim is deemed to be a 

6 clean claim under this paragraph if 

7 the PDP sponsor involved does not 

8 provide notice to the claimant of any 

9 defect or impropriety in the claim 

10 within 10 days of the date on which 

11 additional information is received 

12 under subclause (I). 

13 ‘‘(III) PAYMENT OF CLEAN POR14 TION OF A CLAIM.—A PDP sponsor 

15 shall, as appropriate, pay any portion 

16 of a claim that would be a clean claim 

17 but for a defect or impropriety in a 

18 separate portion of the claim in ac19 cordance with subparagraph (A). 

20 ‘‘(iv) OBLIGATION TO PAY.—A claim 

21 submitted to a PDP sponsor that is not 

22 paid or contested by the provider within 

23 the applicable number of days (as defined 

24 in subparagraph (B)) shall be deemed to 

25 be a clean claim and shall be paid by the 


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1 PDP sponsor in accordance with subpara2 graph (A). 

3 ‘‘(v) DATE OF PAYMENT OF CLAIM.— 

4 Payment of a clean claim under such sub5 paragraph is considered to have been made 

6 on the date on which full payment is re7 ceived by the provider. 

8 ‘‘(E) PRIVATE RIGHT OF ACTION.— 

9 ‘‘(i) IN GENERAL.—Nothing in this 

10 paragraph shall be construed to prohibit or 

11 limit a claim or action not covered by the 

12 subject matter of this section that any in13 dividual or organization has against a pro14 vider or a PDP sponsor. 

15 ‘‘(ii) ANTI-RETALIATION.—Consistent 

16 with applicable Federal or State law, a 

17 PDP sponsor shall not retaliate against an 

18 individual or provider for exercising a right 

19 of action under this subparagraph.’’. 

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

21 1857(f) of the Social Security Act (42 U.S.C. 1395w–27) 

22 is amended by adding at the end the following new para23 graph: 

24 ‘‘(3) INCORPORATION OF CERTAIN PRESCRIP25 TION DRUG PLAN CONTRACT REQUIREMENTS.—The 


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

2 contracts with a Medicare Advantage organization in 

3 the same manner as they apply to contracts with a 

4 PDP sponsor offering a prescription drug plan 

5 under part D.’’. 

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

7 this section shall apply to contracts entered into or re8 newed on or after the date of the enactment of this Act. 

9 SEC. 3. RESTRICTION ON CO-BRANDING. 

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

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

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

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

14 (l), the PDP sponsor’’; and 

15 (2) by adding at the end the following new sub16 section: 

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

18 issued under subsection (b)(2)(A) for use under a pre19 scription drug plan offered by a PDP sponsor or an MA– 

20 PD plan offered by a Medicare Advantage organization 

21 and any marketing materials distributed with respect to 

22 such a plan shall not display the name or brand of any 

23 pharmacy.’’. 


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1 (b) PENALTY.—Section 1128B of the Social Security 

2 Act (42 U.S.C. 1320a–7b) is amended by adding at the 

3 end the following new subsection: 

4 ‘‘(g) Whoever knowingly and willfully engages in co5 branding prohibited under section 1860D–4(l) with re6 spect to a prescription drug plan offered by a PDP spon7 sor under part D of title XVIII or a Medicare Advantage 

8 plan offered by a Medicare Advantage organization under 

9 part C of such title, shall be guilty of a felony and upon 

10 conviction thereof shall be fined not more than $25,000 

11 or imprisoned for not more than five years, or both.’’. 

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

13 this section shall apply to cards and marketing materials 

14 distributed on or after the date that is 90 days after the 

15 date of the enactment of this Act. 

Æ 


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