I 

118TH CONGRESS 

2D SESSION H. R. 7716 

To amend title XVIII of the Social Security Act to provide for enforcement 

of standards for reasonable and relevant contract terms and conditions 

and essential retail pharmacy protections under the Medicare program. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 19, 2024 

Mr. GALLEGO introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on 

Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for enforcement of standards for reasonable and relevant 

contract terms and conditions and essential retail pharmacy protections under the Medicare program. 

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


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1 SECTION 1. PROVIDING FOR ENFORCEMENT OF STAND2 ARDS FOR REASONABLE AND RELEVANT 

3 CONTRACT TERMS AND CONDITIONS AND ES4 SENTIAL RETAIL PHARMACY PROTECTIONS 

5 UNDER THE MEDICARE PROGRAM. 

6 (a) IN GENERAL.—Section 1860D–4(b)(1) of the So7 cial Security Act (42 U.S.C. 1395w–104(b)(1)) is amend8 ed by adding at the end the following new subparagraph: 

9 ‘‘(F) ENFORCEMENT OF STANDARDS FOR

10 REASONABLE AND RELEVANT CONTRACT TERMS

11 AND CONDITIONS AND ESSENTIAL RETAIL

12 PHARMACY PROTECTIONS.— 

13 ‘‘(i) ALLEGATION SUBMISSION PROC14 ESS.— 

15 ‘‘(I) IN GENERAL.—Not later 

16 than January 1, 2028, the Secretary 

17 shall establish a process through 

18 which a pharmacy may submit an al19 legation of a violation by a PDP spon20 sor offering a prescription drug plan 

21 of— 

22 ‘‘(aa) the standards for rea23 sonable and relevant contract 

24 terms and conditions under sub25 paragraph (A)(ii); or 


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1 ‘‘(bb) the requirements for 

2 total reimbursement for essential 

3 retail pharmacies that are inde4 pendent community pharmacies 

5 under subparagraph (C)(v)(II). 

6 ‘‘(II) FREQUENCY OF SUBMIS7 SION.— 

8 ‘‘(aa) VIOLATIONS OF REA9 SONABLE AND RELEVANT CON10 TRACT TERMS AND CONDI11 TIONS.— 

12 ‘‘(AA) IN GENERAL.— 

13 Except as provided in 

14 subitem (BB), the allegation 

15 submission process under 

16 this clause shall allow phar17 macies to submit any allega18 tions of violations described 

19 in item (aa) of subclause (I) 

20 not more frequently than 

21 once per plan year per con22 tract between a pharmacy 

23 and a PDP sponsor. 

24 ‘‘(BB) ALLEGATIONS

25 RELATING TO CONTRACT


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1 CHANGES.—In the case 

2 where a contract is amended 

3 or otherwise updated fol4 lowing the submission of al5 legations by a pharmacy 

6 with respect to such contract 

7 and plan year, the allegation 

8 submission process under 

9 this clause shall allow such 

10 pharmacy to submit an addi11 tional allegation related to 

12 those changes with respect 

13 to such contract and plan 

14 year. 

15 ‘‘(CC) SUBMISSIONS.— 

16 Submissions of any allega17 tions under this item shall 

18 be separate from any sub19 missions under item (bb) 

20 and may include multiple al21 legations of such violations. 

22 ‘‘(bb) VIOLATIONS OF ES23 SENTIAL RETAIL PHARMACY PRO24 TECTIONS.— 


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1 ‘‘(AA) IN GENERAL.— 

2 The allegation submission 

3 process under this clause 

4 shall allow essential retail 

5 pharmacies that are inde6 pendent community phar7 macies to submit any allega8 tions of violations described 

9 in item (bb) of subclause (I) 

10 once per calendar quarter. 

11 ‘‘(BB) SUBMISSIONS.— 

12 Submissions of any allega13 tions under this item shall 

14 be separate from any sub15 missions under item (aa) 

16 and may include multiple al17 legations of such violations. 

18 ‘‘(III) ACCESS TO RELEVANT

19 DOCUMENTS AND MATERIALS.—A 

20 PDP sponsor subject to an allegation 

21 under this clause— 

22 ‘‘(aa) shall provide docu23 ments or materials, as specified 

24 by the Secretary, including con25 tract offers made by such sponVerDate Sep 11 2014 01:02 Apr 03, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7716.IH H7716

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1 sor to such pharmacy or cor2 respondence related to such of3 fers, to the Secretary at a time 

4 and in a form and manner speci5 fied by the Secretary; and 

6 ‘‘(bb) shall not prohibit or 

7 otherwise limit the ability of a 

8 pharmacy to submit such docu9 ments or materials to the Sec10 retary for the purpose of submit11 ting an allegation or providing 

12 evidence for such an allegation 

13 under this clause. 

14 ‘‘(IV) STANDARDIZED TEM15 PLATE.—The Secretary shall establish 

16 separate standardized templates for 

17 pharmacies to use for the submission 

18 of allegations described in items (aa) 

19 and (bb) of subclause (I). Each such 

20 template shall require that the sub21 mission include a certification by the 

22 pharmacy that the information in23 cluded is accurate, complete, and true 

24 to the best of the knowledge, informa25 tion, and belief of such pharmacy. 


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1 ‘‘(V) PREVENTING FRIVOLOUS

2 ALLEGATIONS.—In the case where the 

3 Secretary determines that a pharmacy 

4 has submitted frivolous allegations 

5 under this clause on a routine basis, 

6 the Secretary may temporarily pro7 hibit such pharmacy from using the 

8 allegation submission process under 

9 this clause, as determined appropriate 

10 by the Secretary. 

11 ‘‘(VI) EXEMPTION FROM FREE12 DOM OF INFORMATION ACT.—Allega13 tions submitted under this clause shall 

14 be exempt from disclosure under sec15 tion 552 of title 5, United States 

16 Code. 

17 ‘‘(ii) INVESTIGATION.—The Secretary 

18 shall investigate, as determined appro19 priate by the Secretary, allegations sub20 mitted pursuant to clause (i). 

21 ‘‘(iii) ENFORCEMENT.— 

22 ‘‘(I) REASONABLE AND REL23 EVANT CONTRACT TERMS AND CONDI24 TIONS.—In the case where the Sec25 retary determines that a PDP sponsor 


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1 offering a prescription drug plan has 

2 violated the standards for reasonable 

3 and relevant contract terms and con4 ditions under subparagraph (A)(ii), 

5 the Secretary shall use existing au6 thorities under sections 1857(g) and 

7 1860D–12(b)(3)(E) to impose civil 

8 monetary penalties or take other en9 forcement actions. 

10 ‘‘(II) ESSENTIAL RETAIL PHAR11 MACY PROTECTIONS.—In the case 

12 where the Secretary determines that a 

13 PDP sponsor offering a prescription 

14 drug plan has violated the require15 ments for total reimbursement for es16 sential retail pharmacies that are 

17 independent community pharmacies 

18 under subparagraph (C)(v)(II), the 

19 Secretary shall— 

20 ‘‘(aa) if the amount of total 

21 reimbursement paid by the spon22 sor to an essential retail phar23 macy that is an independent 

24 community pharmacy for a cov25 ered part D drug was less than 


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1 the amount of total reimburse2 ment required to be paid to the 

3 pharmacy under subparagraph 

4 (C)(v)(II) for such drug, require 

5 the PDP sponsor to pay to the 

6 pharmacy an amount equal to 

7 the difference between such 

8 amounts; and 

9 ‘‘(bb) use existing authori10 ties under section 1857(g) and 

11 1860D–12(b)(3)(E) to impose 

12 civil monetary penalties or take 

13 other enforcement actions. 

14 ‘‘(III) APPLICATION OF CIVIL

15 MONETARY PENALTIES.—The provi16 sions of section 1128A (other than 

17 subsections (a) and (b)) shall apply to 

18 a civil monetary penalty under this 

19 clause in the same manner as such 

20 provisions apply to a penalty or pro21 ceeding under section 1128A(a). 

22 ‘‘(iv) DEFINITIONS.—In this subpara23 graph, the terms ‘essential retail phar24 macy’, ‘independent community pharmacy’, 

25 and ‘total reimbursement’ have the meanVerDate Sep 11 2014 01:02 Apr 03, 2024 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7716.IH H7716

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1 ing given those terms in subparagraph 

2 (C)(v).’’. 

3 (b) CONFORMING AMENDMENT.—Section 1857(g)(1) 

4 of the Social Security Act (42 U.S.C. 1395w–27(g)(1)) is 

5 amended— 

6 (1) in subparagraph (J), by striking ‘‘or’’ after 

7 the semicolon; 

8 (2) by redesignating subparagraph (K) as sub9 paragraph (L); 

10 (3) by inserting after subparagraph (J), the fol11 lowing new subparagraph: 

12 ‘‘(K) fails to comply with— 

13 ‘‘(i) the standards for reasonable and 

14 relevant contract terms and conditions 

15 under subparagraph (A)(ii) of section 

16 1860D–4(b)(1); or 

17 ‘‘(ii) the requirements for total reim18 bursement for essential retail pharmacies 

19 that are independent community phar20 macies under subparagraph (C)(v)(II) of 

21 such section; or’’; 

22 (4) in subparagraph (L), as redesignated by 

23 subparagraph (B), by striking ‘‘through (J)’’ and in24 serting ‘‘through (K)’’; and 


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1 (5) in the flush matter following subparagraph 

2 (L), as so redesignated, by striking ‘‘subparagraphs 

3 (A) through (K)’’ and inserting ‘‘subparagraphs (A) 

4 through (L)’’. 

Æ 


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