I 

110TH CONGRESS 

1ST SESSION H. R. 2056 

To amend part D of title XVIII of the Social Security Act to improve 

the Medicare part D prescription drug program. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 26, 2007 

Mr. COURTNEY (for himself and Mr. MURPHY of Connecticut) 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 part D of title XVIII of the Social Security 

Act to improve the Medicare part D 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. 

4 This Act may be cited as the ‘‘Medicare Part D Im5 provement Act of 2007’’. 

6 SEC. 2. REFORM OF ‘‘DONUT HOLE’’. 

7 (a) COUNTING CERTAIN EXPENDITURES TOWARDS

8 OUT-OF-POCKET LIMITS.— 


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1 (1) IN GENERAL.—Section 1860D–2(b)(4)(C) 

2 of the Social Security Act (42 U.S.C. 1395w– 

3 102(b)(4)(C)) is amended— 

4 (A) in clause (i), by striking ‘‘and’’ at the 

5 end; 

6 (B) in clause (ii)— 

7 (i) by striking ‘‘such costs shall be 

8 treated as incurred only if’’ and inserting 

9 ‘‘subject to clause (iii), such costs shall be 

10 treated as incurred if’’; 

11 (ii) by striking ‘‘, under section 

12 1860D–14, or under a State Pharma13 ceutical Assistance Program’’; 

14 (iii) by striking ‘‘(other than under 

15 such section or such a Program)’’; and 

16 (iv) by striking the period at the end 

17 and inserting ‘‘; and’’; and 

18 (C) by inserting after clause (ii) the fol19 lowing new clause: 

20 ‘‘(iii) such costs shall be treated as in21 curred and shall not be considered to be 

22 reimbursed under clause (ii) if such costs 

23 are borne or paid— 

24 ‘‘(I) under section 1860D–14; 


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1 ‘‘(II) under a State Pharma2 ceutical Assistance Program; 

3 ‘‘(III) by the Indian Health Serv4 ice, an Indian tribe or tribal organiza5 tion, or an urban Indian organization 

6 (as defined in section 4 of the Indian 

7 Health Care Improvement Act); 

8 ‘‘(IV) by a rural health clinic or 

9 Federally qualified health center (as 

10 defined in section 1861(aa)); 

11 ‘‘(V) under an AIDS Drug As12 sistance Program under part B of 

13 title XXVI of the Public Health Serv14 ice Act; 

15 ‘‘(VI) by a pharmaceutical manu16 facturer patient assistance program, 

17 either directly or through the distribu18 tion or donation of covered part D 

19 drugs, which shall be valued at the 

20 negotiated price of such covered part 

21 D drug under the enrollee’s prescrip22 tion drug plan or MA–PD plan as of 

23 the date that the drug was distributed 

24 or donated; or 


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1 ‘‘(VII) by a subsection (d) hos2 pital (as defined in section 

3 1886(d)(1)(B) that meets the require4 ments of clauses (i) and (ii) of the 

5 section 340B(a)(4)(L) of the Public 

6 Health Service Act.’’. 

7 (2) EFFECTIVE DATE.—The amendments made 

8 by paragraph (1) shall apply to costs incurred on or 

9 after January 1, 2008, for plan years beginning on 

10 or after such date. 

11 (b) REPORT ON CLOSING THE GAP.—The Secretary 

12 of Health and Human Services shall conduct a study on 

13 how to eliminate the gap in Medicare part D prescription 

14 drug coverage created through the application of an initial 

15 coverage limit and how to finance such elimination. Not 

16 later than 180 days after the date of the enactment of 

17 this Act, the Secretary shall submit to Congress a report 

18 on such study. 

19 SEC. 3. CONFORMING LATE ENROLLMENT PENALTY TO 

20 MEDICARE PART B PENALTY STRUCTURE. 

21 (a) IN GENERAL.—Section 1860D–13(b)(3) of the 

22 Social Security Act (42 U.S.C. 1395w–113(b)(3)) is 

23 amended by striking ‘‘is the greater of’’ and all that fol24 lows and inserting the following: ‘‘is 10 percent of the base 

25 beneficiary premium (as computed under subsection 


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1 (a)(2)) for each continuous period of 12 consecutive un2 covered months in such period’’. 

3 (b) NOT COUNTING PERIODS OF NON-ENROLLMENT

4 DURING FIRST YEAR OF PROGRAM.—Subparagraph (B) 

5 of such section is amended by inserting ‘‘(after December 

6 2007)’’ after ‘‘any month’’. 

7 (c) PRESUMPTION OF ERRORS IN ENROLLMENT OR

8 NONENROLLMENT DUE TO OFFICIAL ERROR.—Section 

9 1837(h) of such Act (42 U.S.C. 1395p(h)) is amended by 

10 adding at the end the following: ‘‘In applying the previous 

11 sentence, an individual’s unintentional, inadvertent, or er12 roneous enrollment or nonenrollment shall be presumed to 

13 be the result of an error, misrepresentation, or inaction 

14 of an officer, employee, or agent of the Federal Govern15 ment, or its instrumentalities, unless the Secretary dem16 onstrates otherwise.’’. 

17 (d) EFFECTIVE DATES.—The amendments made by 

18 subsections (a) and (b) shall apply to late enrollment pen19 alties for months beginning with January 2008. The 

20 amendment made by subsection (c) shall take effect on 

21 January 1, 2008, and shall apply as of such date to enroll22 ments (and non-enrollments) occurring before, on, or after 

23 such date. 


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1 SEC. 4. MORE FREQUENT CHANGES IN PLANS PERMITTED. 

2 (a) IN GENERAL.—Section 1860D–1(b)(3) of the So3 cial Security Act (42 U.S.C. 1395w–101(b)(3)) is amend4 ed by adding at the end the following new subparagraph: 

5 ‘‘(F) SAME FREQUENCY AS CHANGES IN

6 FORMULARIES.—In the case of an individual 

7 enrolled in a prescription drug plan (or MA–PD 

8 plan), as often as the Secretary permits such 

9 plan to make changes in its formulary.’’. 

10 (b) PERMITTING CHANGE IN ENROLLMENT DURING

11 FIRST 3 MONTHS OF EACH YEAR AS PERMITTED UNDER

12 THE MEDICARE ADVANTAGE PROGRAM.—Section 1860D– 

13 1(b)(1)(B)(iii) of such Act (42 U.S.C. 1395w– 

14 101(b)(1)(B)(iii)) is amended by striking ‘‘, (C),’’. 

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

16 this section shall take effect on January 1, 2008. 

17 SEC. 5. LOW INCOME SUBSIDY IMPROVEMENTS. 

18 (a) REMOVAL OF ASSET TEST.— 

19 (1) IN GENERAL.—Section 1860D–14(a) of the 

20 Social Security Act (42 U.S.C. 1395w–114(a)) is 

21 amended— 

22 (A) in paragraph (1), in the matter before 

23 subparagraph (A), by striking ‘‘and who meets 

24 the resources requirement described in para25 graph (3)(D)’’; and 

26 (B) in paragraph (3)— 


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1 (i) in paragraph (3)(A), by adding 

2 ‘‘and’’ at the end of clause (i), by striking 

3 ‘‘; and’’ at the end of clause (ii) and insert4 ing a period, and by striking clause (iii); 

5 and 

6 (ii) by striking subparagraphs (D) 

7 and (E). 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by paragraph (1) shall apply to benefits for months 

10 beginning with January 2008. 

11 (b) ELIMINATION OF LATE ENROLLMENT PEN12 ALTIES FOR SUBSIDY ELIGIBLE INDIVIDUALS.— 

13 (1) IN GENERAL.—Section 1860D–13(b)(2) of 

14 the Social Security Act (42 U.S.C. 1395w– 

15 113(b)(2)) is amended by inserting ‘‘who is not a 

16 subsidy eligible individual and’’ after ‘‘an indi17 vidual’’. 

18 (2) CONFORMING AMENDMENTS.—Section 

19 1860D–14 of such Act (42 U.S.C. 1395w–114) is 

20 amended— 

21 (A) in subsection (a)(1)(A), by striking 

22 ‘‘equal to’’ and all that follows and inserting 

23 the following: ‘‘100 percent of the amount de24 scribed in subsection (b)(1), but not to exceed 


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1 the premium amount specified in subsection 

2 (b)(2)(B).’’; and 

3 (B) in subsection (b)(2)(B), by striking the 

4 last sentence. 

5 (3) EFFECTIVE DATE.—The amendments made 

6 by this subsection shall apply to late enrollment pen7 alties for months beginning with January 2008. 

Æ 


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