II 

111TH CONGRESS 

1ST SESSION S. 1634 

To amend titles XVIII and XIX of the Social Security Act to protect and 

improve the benefits provided to dual eligible individuals under the Medicare and Medicaid programs. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 6, 2009 

Mr. ROCKEFELLER (for himself, Mr. AKAKA, and Mr. BROWN) 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 protect and improve the benefits provided to dual 

eligible individuals under the Medicare and Medicaid programs. 

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 Coverage Improvement 

6 Act’’. 

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

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—MEDICARE AND MEDICAID IMPROVEMENTS 

Sec. 101. Providing Federal coverage and payment coordination for low-income 

Medicare beneficiaries. 

Sec. 102. Creating a Medicare operated prescription drug plan option. 

Sec. 103. Accreditation requirement for all specialized Medicare Advantage 

plans and revisions relating to specialized Medicare Advantage 

plans for special needs individuals. 

Sec. 104. Providing better care coordination for low-income beneficiaries in 

Medicare part D. 

Sec. 105. Improving transition of new dual eligible individuals to Medicare prescription drug coverage and presumptive eligibility for low-income subsidies. 

Sec. 106. Required information on transition from skilled nursing facilities and 

nursing facilities to part D plans. 

Sec. 107. Streamlined pharmacy compliance packaging. 

Sec. 108. Lowering covered part D drug prices on behalf of Medicare beneficiaries. 

Sec. 109. Correction of flaws in determination of phased-down State contribution for Federal assumption of prescription drug costs for dually eligible individuals. 

Sec. 110. No impact on eligibility for benefits under other programs. 

Sec. 111. Quality indicators for dual eligible individuals. 

TITLE II—ADDITIONAL MEDICARE AND MEDICAID 

IMPROVEMENTS 

Subtitle A—Improving the Financial Assistance Available to Low-Income 

Medicare Beneficiaries 

Sec. 201. Improving assets tests for Medicare Savings Program and low-income 

subsidy program. 

Sec. 202. Eliminating barriers to enrollment. 

Sec. 203. Elimination of part D cost-sharing for certain non-institutionalized 

full-benefit dual eligible individuals. 

Sec. 204. Exemption of balance in any pension or retirement plan from resources for determination of eligibility for low-income subsidy. 

Sec. 205. Cost-sharing protections for low-income subsidy-eligible individuals. 

Subtitle B—Other Improvements 

Sec. 211. Enrollment improvements under Medicare parts C and D. 

Sec. 212. Medicare plan complaint system. 

Sec. 213. Uniform exceptions and appeals process. 

Sec. 214. Prohibition on conditioning Medicaid eligibility for individuals enrolled in certain creditable prescription drug coverage on enrollment in the Medicare part D drug program. 

Sec. 215. Office of the Inspector General annual report on part D formularies’ 

inclusion of drugs commonly used by dual eligibles. 

Sec. 216. HHS ongoing study and annual reports on coverage for dual eligibles. 

Sec. 217. Authority to obtain information. 


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1 TITLE I—MEDICARE AND 

2 MEDICAID IMPROVEMENTS 

3 SEC. 101. PROVIDING FEDERAL COVERAGE AND PAYMENT 

4 COORDINATION FOR LOW-INCOME MEDICARE 

5 BENEFICIARIES. 

6 (a) ESTABLISHMENT OF FEDERAL COORDINATED

7 HEALTH CARE OFFICE.— 

8 (1) ESTABLISHMENT.— 

9 (A) IN GENERAL.—Not later than October 

10 1, 2009, the Secretary of Health and Human 

11 Services (in this section referred to as the ‘‘Sec12 retary’’) shall establish a Federal Coordinated 

13 Health Care Office. 

14 (B) ESTABLISHMENT AND REPORTING TO

15 CMS ADMINISTRATOR.—The Federal Coordi16 nated Health Care Office shall— 

17 (i) be established within the Centers 

18 for Medicare & Medicaid Services; and 

19 (ii) report directly to the Adminis20 trator of the Centers for Medicare & Med21 icaid Services. 

22 (2) PURPOSE.—The purpose of the Federal Co23 ordinated Health Care Office is to bring together of24 ficials of the Medicare and Medicaid programs at the 


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1 Centers for Medicare & Medicaid Services in order 

2 to— 

3 (A) more effectively integrate benefits 

4 under the Medicare program under title XVIII 

5 of the Social Security Act and the Medicaid 

6 program under title XIX of such Act; and 

7 (B) improve the coordination between the 

8 Federal Government and States for individuals 

9 eligible for benefits under both such programs 

10 in order to ensure that such individuals get full 

11 access to the items and services to which they 

12 are entitled under titles XVIII and XIX of the 

13 Social Security Act. 

14 (3) GOALS.—The goals of the Federal Coordi15 nated Health Care Office are as follows: 

16 (A) Providing dual eligible individuals full 

17 access to the benefits to which such individuals 

18 are entitled under the Medicare and Medicaid 

19 programs. 

20 (B) Simplifying the processes for dual eli21 gible individuals to access the items and serv22 ices they are entitled to under the Medicare and 

23 Medicaid programs. 


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1 (C) Improving the quality of health care 

2 and long-term services for dual eligible individ3 uals. 

4 (D) Increasing beneficiary understanding 

5 of and satisfaction with coverage under the 

6 Medicare and Medicaid programs. 

7 (E) Eliminating regulatory conflicts be8 tween rules under the Medicare and Medicaid 

9 programs. 

10 (F) Improving care continuity and ensur11 ing safe and effective care transitions. 

12 (G) Eliminating cost-shifting between the 

13 Medicare and Medicaid program and among re14 lated health care providers. 

15 (H) Improving the quality of performance 

16 of providers of services and suppliers under the 

17 Medicare and Medicaid programs. 

18 (4) SPECIFIC RESPONSIBILITIES.—The specific 

19 responsibilities of the Federal Coordinated Health 

20 Care Office are as follows: 

21 (A) Providing States, specialized MA plans 

22 for special needs individuals (as defined in sec23 tion 1859(b)(6) of the Social Security Act (42 

24 U.S.C. 1395w–28(b)(6))), physicians and other 

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1 cation and tools necessary for developing pro2 grams that align benefits under the Medicare 

3 and Medicaid programs for dual eligible individ4 uals. 

5 (B) Working with the Director of the Con6 gressional Budget Office and the Director of 

7 the Office of Management and Budget, and in 

8 consultation with the Medicare Payment Advi9 sory Commission and the Medicaid and CHIP 

10 Payment and Access Commission, to, not later 

11 than January 1, 2011, establish dynamic scor12 ing for benefits for dual eligible individuals to 

13 account for total spending and savings for com14 parable risk groups under the Medicare pro15 gram. 

16 (C) Supporting State efforts to coordinate 

17 and align acute care and long-term care serv18 ices for dual eligible individuals with other 

19 items and services furnished under the Medi20 care program. 

21 (D) Providing support for coordination of 

22 contracting and oversight by States and the 

23 Centers for Medicare & Medicaid Services with 

24 respect to the integration of the Medicare and 


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1 Medicaid programs in a manner that is sup2 portive of the goals described in paragraph (3). 

3 (5) REPORT.—The Secretary shall, as part of 

4 the budget transmitted under section 1105(a) of 

5 title 31, United States Code, submit to Congress an 

6 annual report containing recommendations for legis7 lation that would improve care coordination and ben8 efits for dual eligible individuals. 

9 (b) ADDITION OF MEDICAID REPRESENTATIVES TO

10 MEDICARE PAYMENT ADVISORY COMMISSION AND CON11 SULTATION WITH MEDICAID AND CHIP PAYMENT AND

12 ACCESS COMMISSION.— 

13 (1) ADDITION OF MEDICAID REPRESENTATIVE

14 TO MEDICARE PAYMENT ADVISORY COMMISSION.— 

15 Section 1805(c)(2)(B) of the Social Security Act (42 

16 U.S.C. 1395b–6(c)(2)(B)) is amended by adding at 

17 the end the following sentence: ‘‘Such membership 

18 shall also include at least 2 individuals who are na19 tionally recognized for their expertise in financing, 

20 benefits, and provider payment policies under the 

21 program under title XIX.’’. 

22 (2) CONSULTATION WITH MEDICAID AND CHIP

23 PAYMENT AND ACCESS COMMISSION.—Section 

24 1805(b) of the Social Security Act (42 U.S.C. 


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1 1395b–6(b)) is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(9) CONSULTATION WITH MEDICAID AND CHIP

4 PAYMENT AND ACCESS COMMISSION.—In carrying 

5 out the duties of the Commission under this sub6 section, the Commission shall consult with the Med7 icaid and CHIP Payment and Access Commission 

8 established under section 506 of the Children’s 

9 Health Insurance Program Reauthorization Act of 

10 2009 (Public Law 111–3) on an ongoing basis.’’. 

11 (c) MACPAC FUNDING AND TECHNICAL AMEND12 MENTS.— 

13 (1) FUNDING.—Section 1900(f) of the Social 

14 Security Act (42 U.S.C. 1396(f)) is amended— 

15 (A) in the subsection heading, by striking 

16 ‘‘AUTHORIZATION OF APPROPRIATIONS’’ and 

17 inserting ‘‘FUNDING’’; 

18 (B) in paragraph (1), by inserting ‘‘(other 

19 than for fiscal year 2009)’’ before ‘‘in the same 

20 manner’’; and 

21 (C) by striking paragraph (2) and insert22 ing the following: 

23 ‘‘(2) APPROPRIATION.—Out of any funds in the 

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1 priated to MACPAC $11,403,000 for fiscal year 

2 2009 to carry out the provisions of this section. 

3 ‘‘(3) AUTHORIZATION.—In addition to amounts 

4 made available under paragraph (2), there are au5 thorized to be appropriated for fiscal years begin6 ning with fiscal year 2010, such sums as may be 

7 necessary to carry out the provisions of this section. 

8 ‘‘(4) AVAILABILITY.—Amounts made available 

9 under paragraphs (2) and (3) to carry out the provi10 sions of this section shall remain available until ex11 pended.’’. 

12 (2) TECHNICAL AMENDMENTS.—Section 

13 1900(b) of such Act (42 U.S.C. 1396) is amended— 

14 (A) in paragraph (1)(D), by striking 

15 ‘‘June 1’’ and inserting ‘‘June 15’’; and 

16 (B) by adding at the end the following: 

17 ‘‘(10) CONSULTATION WITH MEDPAC.— 

18 ‘‘(A) IN GENERAL.—MACPAC shall regu19 larly consult with the Medicare Payment Advi20 sory Commission (in this paragraph referred to 

21 as ‘MedPAC’) established under section 1805 in 

22 carrying out its duties under this section. 

23 ‘‘(B) DATA SHARING.—MACPAC and 

24 MedPAC shall have unrestricted access to all 

25 deliberations, records, and nonproprietary data 


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1 of the other such entity, respectively, imme2 diately upon the request of the either such enti3 ty.’’. 

4 (d) RULE OF CONSTRUCTION.—Nothing in this sec5 tion— 

6 (1) requires mandatory integrated care under 

7 the Medicare or Medicaid programs under titles 

8 XVIII and XIX, respectively, of the Social Security 

9 Act; 

10 (2) promotes enrollment in specialized MA 

11 plans for special needs individuals (as defined in sec12 tion 1859(b)(6) of the Social Security Act (42 

13 U.S.C. 1395w–28(b)(6))); 

14 (3) promotes the development of Medicaid man15 aged care for dual eligible individuals; or 

16 (4) prevents dual eligible individuals from elect17 ing to remain in the original Medicare fee-for-service 

18 option, or the right to make such election being pro19 tected. 

20 SEC. 102. CREATING A MEDICARE OPERATED PRESCRIP21 TION DRUG PLAN OPTION. 

22 (a) MEDICARE OPERATED PRESCRIPTION DRUG

23 PLAN OPTION.— 

24 (1) IN GENERAL.—Subpart 2 of part D of the 

25 Social Security Act is amended by inserting after 


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1 section 1860D–11 (42 U.S.C. 1395w–111) the fol2 lowing new section: 

3 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN

4 OPTION

5 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith6 standing any other provision of this part, for each year 

7 (beginning with 2011), in addition to any plans offered 

8 under section 1860D–11, the Secretary shall offer one or 

9 more Medicare operated prescription drug plans (as de10 fined in subsection (b)) with a service area that consists 

11 of the entire United States and shall enter into negotia12 tions in accordance with section 1860D–11A(i) with phar13 maceutical manufacturers to reduce the purchase cost of 

14 covered part D drugs for eligible part D individuals who 

15 enroll in such a plan. 

16 ‘‘(b) MEDICARE OPERATED PRESCRIPTION DRUG

17 PLAN DEFINED.—For purposes of this part, the term 

18 ‘Medicare operated prescription drug plan’ means a pre19 scription drug plan that offers qualified prescription drug 

20 coverage and access to negotiated prices described in sec21 tion 1860D–2(a)(1)(A). 

22 ‘‘(c) MONTHLY BENEFICIARY PREMIUM.— 

23 ‘‘(1) QUALIFIED PRESCRIPTION DRUG COV24 ERAGE.—The monthly beneficiary premium for 

25 qualified prescription drug coverage and access to 

26 negotiated prices described in section 1860D– 


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1 2(a)(1)(A) to be charged under a Medicare operated 

2 prescription drug plan shall be uniform nationally. 

3 Such premium for months in 2010 and each suc4 ceeding year shall be equal to the product of— 

5 ‘‘(A) the beneficiary premium percentage 

6 (as specified in section 1860D–13(a)(3)); and 

7 ‘‘(B) the average monthly per capita actu8 arial cost of offering the Medicare operated pre9 scription drug plan for the year involved, in10 cluding administrative expenses. 

11 ‘‘(2) PREMIUM SUBSIDY FOR APPLICABLE SUB12 SIDY ELIGIBLE INDIVIDUALS.— 

13 ‘‘(A) FULL SUBSIDY ELIGIBLE INDIVID14 UALS.—In the case of an applicable subsidy eli15 gible individual described in paragraph (4)(A), 

16 the individual is entitled under this section to 

17 an income-related premium subsidy equal to 

18 100 percent of the monthly beneficiary pre19 mium of the Medicare operated prescription 

20 drug plan. 

21 ‘‘(B) OTHER SUBSIDY ELIGIBLE INDIVID22 UALS.—In the case of an applicable subsidy eli23 gible individual described in paragraph (4)(B), 

24 the individual is entitled under this section to 


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1 an income-related premium subsidy determined 

2 on a linear sliding scale as follows: 

3 ‘‘(i) One hundred percent of the 

4 amount described in subparagraph (A) for 

5 individuals with incomes at or below 135 

6 percent of such level. 

7 ‘‘(ii) Seventy-five percent of such 

8 amount for individuals with incomes above 

9 135 percent of such level and at or below 

10 140 percent of such level. 

11 ‘‘(iii) Fifty percent of such amount for 

12 individuals with incomes above 140 percent 

13 of such level and at or below 145 percent 

14 of such level. 

15 ‘‘(iv) Twenty-five percent of such 

16 amount for individuals with incomes above 

17 145 percent of such level and below 150 

18 percent of such level. 

19 ‘‘(v) Zero percent of such amount for 

20 individuals with incomes at 150 percent of 

21 such level. 

22 ‘‘(3) COST-SHARING FOR APPLICABLE SUBSIDY

23 ELIGIBLE INDIVIDUALS.— 

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1 gible individual described in paragraph (4)(A), 

2 the provisions of section 1860D–14(a)(1) shall 

3 apply, except the premium subsidy under para4 graph (2)(A) shall be substituted for the pre5 mium subsidy under subparagraph (A) of such 

6 section 1860D–14(a)(1). 

7 ‘‘(B) OTHER SUBSIDY ELIGIBLE INDIVID8 UALS.—In the case of an applicable subsidy eli9 gible individual described in paragraph (4)(B), 

10 the provisions of section 1860D–14(a)(2) shall 

11 apply, except the premium subsidy under para12 graph (2)(B) shall be substituted for the pre13 mium subsidy under subparagraph (A) of such 

14 section 1860D–14(a)(2). 

15 ‘‘(4) DEFINITION OF APPLICABLE SUBSIDY ELI16 GIBLE INDIVIDUALS.—For purposes of paragraphs 

17 (2) and (3), the term ‘applicable subsidy eligible in18 dividual’ means the following: 

19 ‘‘(A) FULL-SUBSIDY ELIGIBLE INDIVID20 UALS.— 

21 ‘‘(i) INDIVIDUALS WITH INCOME

22 BELOW 135 PERCENT OF POVERTY LINE.— 

23 Any individual who— 

24 ‘‘(I) is enrolled in a Medicare op25 erated prescription drug plan; 


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1 ‘‘(II) is determined to have in2 come that is below 135 percent of the 

3 poverty line applicable to a family of 

4 the size involved; and 

5 ‘‘(III) meets the resources re6 quirement described in section 

7 1860D–14(a)(3)(E), as amended by 

8 section 201 of the Medicare Prescrip9 tion Drug Coverage Improvement Act. 

10 ‘‘(ii) CERTAIN OTHER INDIVIDUALS.— 

11 Any individual who is enrolled in a Medi12 care operated prescription drug plan 

13 who— 

14 ‘‘(I) is a full-benefit dual eligible 

15 individual (as defined in section 

16 1935(c)(6)); 

17 ‘‘(II) receives benefits under the 

18 supplemental security income program 

19 under title XVI; or 

20 ‘‘(III) is eligible for medical as21 sistance under clause (i), (iii), or (iv) 

22 of section 1902(a)(10)(E). 

23 ‘‘(B) OTHER SUBSIDY ELIGIBLE INDIVID24 UALS.—Any individual who— 

25 ‘‘(i) is not described in paragraph (1); 


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1 ‘‘(ii) is enrolled in a Medicare oper2 ated prescription drug plan; 

3 ‘‘(iii) is determined to have income 

4 that is below 150 percent of the poverty 

5 line applicable to a family of the size in6 volved; and 

7 ‘‘(iv) meets the resources requirement 

8 described in section 1860D–14(a)(3)(E), 

9 as amended by section 201 of the Medicare 

10 Prescription Drug Coverage Improvement 

11 Act. 

12 ‘‘(d) USE OF A FORMULARY AND FORMULARY IN13 CENTIVES.— 

14 ‘‘(1) USE OF A FORMULARY.— 

15 ‘‘(A) IN GENERAL.—With respect to the 

16 operation of a Medicare operated prescription 

17 drug plan, the Secretary shall establish and 

18 apply a formulary (and may include formulary 

19 incentives described in paragraph (5)(C)(ii)) in 

20 accordance with this subsection in order to— 

21 ‘‘(i) increase patient safety; 

22 ‘‘(ii) increase appropriate use and re23 duce inappropriate use of drugs; and 

24 ‘‘(iii) reward value. 


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1 ‘‘(B) DEFAULT INITIAL FORMULARY.— 

2 Until such time as the Secretary establishes 

3 and applies the initial formulary under para4 graph (5), a Medicare operated prescription 

5 drug plan shall be required to include all drugs 

6 approved for safety and effectiveness as a pre7 scription drug under the Federal Food, Drug, 

8 and Cosmetic Act that are covered part D 

9 drugs (and may include formulary incentives 

10 described in paragraph (5)(C)(ii)). 

11 ‘‘(2) REQUIREMENTS FOR FORMULARIES.—The 

12 Secretary shall establish a formulary that meets the 

13 following requirements: 

14 ‘‘(A) Except as provided in subparagraph 

15 (B), the formulary includes the covered out16 patient drugs of any manufacturer which has 

17 entered into and complies with an agreement 

18 with the Secretary under this section. 

19 ‘‘(B) A covered outpatient drug may be ex20 cluded with respect to the treatment of a spe21 cific disease or condition for an identified popu22 lation (if any) only if, based on the drug’s label23 ing (or, in the case of a drug the prescribed use 

24 of which is not approved under the Federal 

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1 cally accepted indication (as defined in section 

2 1860D–2(e)(4))), the excluded drug does not 

3 have a significant, clinically meaningful thera4 peutic advantage in terms of safety, effective5 ness, or clinical outcome of such treatment for 

6 such population over other drugs included in 

7 the formulary and there is a written expla8 nation (available to the public) of the basis for 

9 the exclusion. 

10 ‘‘(C) The Secretary permits coverage of a 

11 drug excluded from the formulary pursuant to 

12 a prior authorization program that is consistent 

13 with paragraph (3). 

14 ‘‘(D) The formulary meets such other re15 quirements as the Secretary may impose in 

16 order to achieve program savings consistent 

17 with protecting the health of program bene18 ficiaries. 

19 A prior authorization program established under 

20 paragraph (3) is not a formulary subject to the re21 quirements of this paragraph. 

22 ‘‘(3) REQUIREMENTS OF PRIOR AUTHORIZATION

23 PROGRAMS.—The Secretary may require, with re24 spect to drugs dispensed on or after July 1, 1991, 

25 the approval of the drug before its dispensing for 


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1 any medically accepted indication (as defined in sec2 tion 1860D–2(e)(4)) only if the system providing for 

3 such approval— 

4 ‘‘(A) provides response by telephone or 

5 other telecommunication device within 24 hours 

6 of a request for prior authorization; and 

7 ‘‘(B) provides for the dispensing of at least 

8 a 72-hour supply of a covered outpatient pre9 scription drug in an emergency situation (as de10 fined by the Secretary). 

11 ‘‘(4) OTHER PERMISSIBLE RESTRICTIONS.—The 

12 Secretary may impose limitations, with respect to all 

13 such drugs in a therapeutic class, on the minimum 

14 or maximum quantities per prescription or on the 

15 number of refills, if such limitations are necessary to 

16 improve patient safety, discourage waste, or address 

17 instances of fraud or abuse by individuals in any 

18 manner authorized under this Act. 

19 ‘‘(5) DEVELOPMENT OF INITIAL FORMULARY.— 

20 ‘‘(A) IN GENERAL.—In selecting covered 

21 part D drugs for inclusion in a formulary, the 

22 Secretary shall consider clinical benefit and 

23 price. 

24 ‘‘(B) ROLE OF AHRQ.—The Director of the 

25 Agency for Healthcare Research and Quality 


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1 shall be responsible for assessing the clinical 

2 benefit of covered part D drugs and making 

3 recommendations to the Secretary regarding 

4 which drugs should be included in the for5 mulary. In conducting such assessments and 

6 making such recommendations, the Director 

7 shall— 

8 ‘‘(i) consider safety concerns including 

9 those identified by the Federal Food and 

10 Drug Administration; 

11 ‘‘(ii) use available data and evalua12 tions, with priority given to randomized 

13 controlled trials, to examine clinical effec14 tiveness, comparative effectiveness, safety, 

15 and enhanced compliance with a drug regi16 men; 

17 ‘‘(iii) use the same classes of drugs 

18 developed by United States Pharmacopeia 

19 for this part; 

20 ‘‘(iv) consider evaluations made by— 

21 ‘‘(I) the Director under section 

22 1013 of Medicare Prescription Drug, 

23 Improvement, and Modernization Act 

24 of 2003; 


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1 ‘‘(II) other Federal entities, such 

2 as the Secretary of Veterans Affairs; 

3 and 

4 ‘‘(III) other private and public 

5 entities, such as the Drug Effective6 ness Review Project and Medicaid 

7 programs; and 

8 ‘‘(v) recommend to the Secretary— 

9 ‘‘(I) those drugs in a class that 

10 provide a greater clinical benefit, in11 cluding fewer safety concerns or less 

12 risk of side-effects, than another drug 

13 in the same class that should be in14 cluded in the formulary; 

15 ‘‘(II) those drugs in a class that 

16 provide less clinical benefit, including 

17 greater safety concerns or a greater 

18 risk of side-effects, than another drug 

19 in the same class that should be ex20 cluded from the formulary; and 

21 ‘‘(III) drugs in a class with same 

22 or similar clinical benefit for which it 

23 would be appropriate for the Sec24 retary to competitively bid (or nego25 tiate) for placement on the formulary. 


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1 ‘‘(C) CONSIDERATION OF AHRQ REC2 OMMENDATIONS.— 

3 ‘‘(i) IN GENERAL.—Not later than 

4 January 1, 2011, the Secretary, after tak5 ing into consideration the recommenda6 tions under subparagraph (B)(v), shall es7 tablish a formulary, and formulary incen8 tives, to encourage use of covered part D 

9 drugs that— 

10 ‘‘(I) have a lower cost and pro11 vide a greater clinical benefit than 

12 other drugs; 

13 ‘‘(II) have a lower cost than 

14 other drugs with same or similar clin15 ical benefit; and 

16 ‘‘(III) drugs that have the same 

17 cost but provide greater clinical ben18 efit than other drugs. 

19 ‘‘(ii) FORMULARY INCENTIVES.—The 

20 formulary incentives under clause (i) may 

21 be in the form of one or more of the fol22 lowing: 

23 ‘‘(I) Tiered copayments. 

24 ‘‘(II) Prior authorization. 

25 ‘‘(III) Step therapy. 


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1 ‘‘(IV) Medication therapy man2 agement. 

3 ‘‘(V) Generic drug substitution. 

4 ‘‘(iii) FLEXIBILITY.—In applying such 

5 formulary incentives the Secretary may de6 cide not to impose any cost-sharing for a 

7 covered part D drug for which— 

8 ‘‘(I) the elimination of cost shar9 ing would be expected to increase 

10 compliance with a drug regimen; and 

11 ‘‘(II) compliance would be ex12 pected to produce savings under part 

13 A or B or both. 

14 ‘‘(iv) DEVELOPMENT OF TRANS15 PARENT PROCESS TO EXPLAIN FORMULARY

16 INCENTIVES.—Not later than January 1, 

17 2011, the Secretary shall develop and im18 plement a transparent process to identify 

19 and explain to beneficiaries formulary in20 centives under clause (i). Such process 

21 shall be designed to assist beneficiaries in 

22 understanding how prior authorization re23 quests and other formulary incentives will 

24 be evaluated. 


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1 ‘‘(6) LIMITATIONS ON FORMULARY.—In any 

2 formulary established under this subsection, the for3 mulary may not be changed during a year, except— 

4 ‘‘(A) to add a generic version of a covered 

5 part D drug that entered the market; 

6 ‘‘(B) to remove such a drug for which a 

7 safety problem is found; and 

8 ‘‘(C) to add a drug that the Secretary 

9 identifies as a drug which treats a condition for 

10 which there has not previously been a treatment 

11 option or for which a clear and significant ben12 efit has been demonstrated over other covered 

13 part D drugs. 

14 ‘‘(7) ADDING DRUGS TO THE INITIAL FOR15 MULARY.— 

16 ‘‘(A) USE OF ADVISORY COMMITTEE.—The 

17 Secretary shall establish and appoint an advi18 sory committee (in this paragraph referred to 

19 as the ‘advisory committee’)— 

20 ‘‘(i) to review petitions from drug 

21 manufacturers, health care provider orga22 nizations, patient groups, and other enti23 ties for inclusion of a drug in, or other 

24 changes to, such formulary; and 


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1 ‘‘(ii) to recommend any changes to the 

2 formulary established under this sub3 section. 

4 ‘‘(B) COMPOSITION.—The advisory com5 mittee shall be composed of 9 members and 

6 shall include representatives of physicians, 

7 pharmacists, and consumers and others with ex8 pertise in evaluating prescription drugs. The 

9 Secretary shall select members based on their 

10 knowledge of pharmaceuticals and the Medicare 

11 and Medicaid populations. Members shall be 

12 deemed to be special Government employees for 

13 purposes of applying the conflict of interest pro14 visions under section 208 of title 18, United 

15 States Code, and no waiver of such provisions 

16 for such a member shall be permitted. 

17 ‘‘(C) CONSULTATION.—The advisory com18 mittee shall consult, as necessary, with physi19 cians who are specialists in treating the disease 

20 for which a drug is being considered. 

21 ‘‘(D) REQUEST FOR STUDIES.—The advi22 sory committee may request the Agency for 

23 Healthcare Research and Quality or an aca24 demic or research institution to study and make 


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1 a report on a petition described in subpara2 graph (A)(ii) in order to assess— 

3 ‘‘(i) clinical effectiveness; 

4 ‘‘(ii) comparative effectiveness; 

5 ‘‘(iii) safety; and 

6 ‘‘(iv) enhanced compliance with a 

7 drug regimen. 

8 ‘‘(E) RECOMMENDATIONS.—The advisory 

9 committee shall make recommendations to the 

10 Secretary regarding— 

11 ‘‘(i) whether a covered part D drug is 

12 found to provide a greater clinical benefit, 

13 including fewer safety concerns or less risk 

14 of side-effects, than another drug in the 

15 same class that is currently included in the 

16 formulary and should be included in the 

17 formulary; 

18 ‘‘(ii) whether a covered part D drug is 

19 found to provide less clinical benefit, in20 cluding greater safety concerns or a great21 er risk of side-effects, than another drug in 

22 the same class that is currently included in 

23 the formulary and should not be included 

24 in the formulary; and 


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1 ‘‘(iii) whether a covered part D drug 

2 has the same or similar clinical benefit to 

3 a drug in the same class that is currently 

4 included in the formulary and whether the 

5 drug should be included in the formulary. 

6 ‘‘(F) LIMITATIONS ON REVIEW OF MANU7 FACTURER PETITIONS.—The advisory com8 mittee shall not review a petition of a drug 

9 manufacturer under subparagraph (A)(ii) with 

10 respect to a covered part D drug unless the pe11 tition is accompanied by the following: 

12 ‘‘(i) Raw data from clinical trials on 

13 the safety and effectiveness of the drug. 

14 ‘‘(ii) Any data from clinical trials con15 ducted using active controls on the drug or 

16 drugs that are the current standard of 

17 care. 

18 ‘‘(iii) Any available data on compara19 tive effectiveness of the drug. 

20 ‘‘(iv) Any other information the Sec21 retary requires for the advisory committee 

22 to complete its review. 

23 ‘‘(G) RESPONSE TO RECOMMENDATIONS.— 

24 The Secretary shall review the recommenda25 tions of the advisory committee and if the SecVerDate Nov 24 2008 03:43 Aug 08, 2009 Jkt 079200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1634.IS S1634

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1 retary accepts such recommendations the Sec2 retary shall modify the formulary established 

3 under this subsection accordingly. Nothing in 

4 this section shall preclude the Secretary from 

5 adding to the formulary a drug for which the 

6 Director of the Agency for Healthcare Research 

7 and Quality or the advisory committee has not 

8 made a recommendation. 

9 ‘‘(H) NOTICE OF CHANGES.—The Sec10 retary shall provide timely notice to bene11 ficiaries and health professionals about changes 

12 to the formulary or formulary incentives. 

13 ‘‘(I) STABILITY OF BENEFIT.—Once a cov14 ered part D drug has been added to the for15 mulary established under this subsection, the 

16 drug may not be removed from the formulary 

17 for at least a 3-year period, unless the Sec18 retary determines there are safety or efficacy 

19 concerns with respect to the drug. 

20 ‘‘(8) NON-EXCLUDABLE DRUGS.—The following 

21 drugs or classes of drugs shall not be excluded from 

22 the default initial formulary (as described in para23 graph (1)(B)) or the initial formulary established by 

24 the Secretary (as described in paragraph (5)): 

25 ‘‘(A) Barbiturates. 


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1 ‘‘(B) Benzodiazepines. 

2 ‘‘(e) INFORMING BENEFICIARIES.— 

3 ‘‘(1) IN GENERAL.—The Secretary shall take 

4 steps to inform beneficiaries about the availability of 

5 a Medicare operated prescription drug plan or plans 

6 including providing information in the annual hand7 book distributed to all beneficiaries and adding in8 formation to the official public Medicare website re9 lated to prescription drug coverage available through 

10 this part. 

11 ‘‘(2) SOLE RESPONSIBILITY FOR MARKETING BY

12 THE SECRETARY.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 have sole responsibility for marketing Medicare 

15 operated prescription drug plans. 

16 ‘‘(B) AUTHORIZATION.—There is author17 ized to be appropriated to the Secretary such 

18 sums as are necessary to carry out such mar19 keting. 

20 ‘‘(f) APPLICATION OF ALL OTHER REQUIREMENTS

21 FOR PRESCRIPTION DRUG PLANS.—Except as specifically 

22 provided in this section, any Medicare operated drug plan 

23 shall meet the same requirements as apply to any other 

24 prescription drug plan, including the requirements of sec25 tion 1860D–4(b)(1) relating to assuring pharmacy access. 


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1 ‘‘(g) AUTOMATIC ENROLLMENT.—The Secretary 

2 shall establish procedures to provide for the automatic en3 rollment of subsidy eligible individuals (as defined in sec4 tion 1860D–14(a)(3)) in a Medicare operated prescription 

5 drug plan in the case where such individuals lose their 

6 current prescription drug coverage, become part D eligible 

7 individuals, or in instances where the amount of the 

8 monthly beneficiary premium under the prescription drug 

9 plan the individual is enrolled in is greater than the pre10 mium subsidy amount described in section 1860D–14(b). 

11 ‘‘(h) RULE OF CONSTRUCTION REGARDING ELIGI12 BILITY FOR MEDICAL ASSISTANCE.—In no case may en13 rollment in a Medicare operated prescription drug plan af14 fect the eligibility of an individual to receive medical as15 sistance under a State plan under title XIX.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by this subsection shall take effect as if included in 

18 the enactment of section 101 of the Medicare Pre19 scription Drug, Improvement, and Modernization 

20 Act of 2003. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) IN GENERAL.— 

23 (A) Section 1860D–3(a) of the Social Se24 curity Act (42 U.S.C. 1395w–103(a)) is amendVerDate Nov 24 2008 03:43 Aug 08, 2009 Jkt 079200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S1634.IS S1634

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1 ed by adding at the end the following new para2 graph: 

3 ‘‘(4) AVAILABILITY OF THE MEDICARE OPER4 ATED PRESCRIPTION DRUG PLAN.—A Medicare op5 erated prescription drug plan (as defined in section 

6 1860D–11A(c)) shall be offered nationally in accord7 ance with section 1860D–11A.’’. 

8 (B)(i) Section 1860D–3 of the Social Secu9 rity Act (42 U.S.C. 1395w–103) is amended by 

10 adding at the end the following new subsection: 

11 ‘‘(c) PROVISIONS ONLY APPLICABLE IN 2006, 2007, 

12 2008, AND 2009.—The provisions of this section shall only 

13 apply with respect to 2006, 2007, 2008, and 2009.’’. 

14 (C) Section 1860D–11(g) of such Act (42 

15 U.S.C. 1395w–111(g)) is amended by adding at 

16 the end the following new paragraph: 

17 ‘‘(8) NO AUTHORITY FOR FALLBACK PLANS

18 AFTER 2009.—A fallback prescription drug plan shall 

19 not be available after December 31, 2009.’’. 

20 (D) Section 1860D–13(c)(3) of such Act 

21 (42 U.S.C. 1395w–113(c)(3)) is amended— 

22 (i) in the heading, by inserting ‘‘AND

23 MEDICARE OPERATED PRESCRIPTION DRUG

24 PLANS’’ after ‘‘FALLBACK PLANS’’; and 


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1 (ii) by inserting ‘‘or a Medicare oper2 ated prescription drug plan’’ after ‘‘a fall3 back prescription drug plan’’. 

4 (E) Section 1860D–14(a) of the Social Se5 curity Act (42 U.S.C. 1395w–114(a)) is amend6 ed— 

7 (i) in paragraph (1), by striking ‘‘In 

8 the’’ and inserting ‘‘Subject to section 

9 1860D–11A(c)(2)(A), in the’’; and 

10 (ii) in paragraph (2), by striking ‘‘In 

11 the’’ and inserting ‘‘Subject to section 

12 1860D–11A(c)(2)(B), in the’’. 

13 (F) Section 1860D–16(b)(1) of such Act 

14 (42 U.S.C.1395w–116(b)(1)) is amended— 

15 (i) in subparagraph (C), by striking 

16 ‘‘and’’ after the semicolon at the end; 

17 (ii) in subparagraph (D), by striking 

18 the period at the end and inserting ‘‘; 

19 and’’; and 

20 (G) by adding at the end the following new 

21 subparagraph: 

22 ‘‘(E) payments for expenses incurred with 

23 respect to the operation of Medicare operated 

24 prescription drug plans under section 1860D– 

25 11A.’’. 


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1 (H) Section 1860D–41(a) of such Act (42 

2 U.S.C. 1395w–151(a)) is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(19) MEDICARE OPERATED PRESCRIPTION

5 DRUG PLAN.—The term ‘Medicare operated prescrip6 tion drug plan’ has the meaning given such term in 

7 section 1860D–11A(c).’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this subsection shall take effect as if included in 

10 the enactment of section 101 of the Medicare Pre11 scription Drug, Improvement, and Modernization 

12 Act of 2003. 

13 SEC. 103. ACCREDITATION REQUIREMENT FOR ALL SPE14 CIALIZED MEDICARE ADVANTAGE PLANS 

15 AND REVISIONS RELATING TO SPECIALIZED 

16 MEDICARE ADVANTAGE PLANS FOR SPECIAL 

17 NEEDS INDIVIDUALS. 

18 (a) ACCREDITATION REQUIREMENT.—Section 

19 1859(f) of the Social Security Act (42 U.S.C. 1395w– 

20 28(f)) is amended— 

21 (1) in paragraphs (2)(B), (3)(B), and (4)(B), 

22 by striking ‘‘paragraph (5)’’ and inserting ‘‘para23 graphs (5) and (6)(B)’’ each place it appears; and 

24 (2) by adding at the end the following new 

25 paragraph: 


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1 ‘‘(6) ACCREDITATION REQUIREMENT FOR ALL

2 SNPS.— 

3 ‘‘(A) ESTABLISHMENT OF ACCREDITATION

4 PROGRAM.—Not later than January 1, 2011, 

5 the Secretary, acting through the Director of 

6 the Agency for Healthcare Research and Qual7 ity and the Administrator of the Centers for 

8 Medicare & Medicaid Services, shall enter into 

9 a contract with the National Committee for 

10 Quality Assurance under which the National 

11 Committee for Quality Assurance shall develop 

12 an accreditation (and reaccreditation) program 

13 for all specialized MA plans for special needs 

14 individuals (as defined in subsection (b)(6)), in15 cluding specialized MA plans for special needs 

16 individuals described in subsection (b)(6)(B)(ii). 

17 ‘‘(B) REQUIREMENT.—The requirement 

18 described in this subparagraph is that, effective 

19 for plan years beginning on or after January 1, 

20 2012, a specialized MA plan for special needs 

21 individuals (as so defined) meet the accredita22 tion standards developed by the National Com23 mittee for Quality Assurance under the contract 

24 under subparagraph (A).’’. 


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1 (b) REVISIONS RELATING TO SPECIALIZED MEDI2 CARE ADVANTAGE PLANS FOR SPECIAL NEEDS INDIVID3 UALS.—Section 1859 of the Social Security Act (42 

4 U.S.C. 1395w–28) is amended— 

5 (1) in subsection (f)(3)— 

6 (A) in subparagraph (D), in the first sen7 tence, by inserting ‘‘and the plan provides for 

8 the coordination of coverage for benefits under 

9 this title (including this part) and such medical 

10 assistance’’ before the period at the end; and 

11 (B) by adding at the end the following new 

12 subparagraph: 

13 ‘‘(E) The plan meets the requirements de14 scribed in subsection (g).’’; and 

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

17 ‘‘(g) ADDITIONAL REQUIREMENTS FOR DUAL

18 SNPS.—The following requirements are described in this 

19 subsection: 

20 ‘‘(1) PROVISION OF INFORMATION.—The plan 

21 provides special needs individuals described in sub22 section (b)(6)(B)(ii) up-front information about 

23 formularies and utilization management strategies 

24 under the plan as part of the information disclosed 

25 under section 1852(c)(1). 


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1 ‘‘(2) PREMIUM.—The premium under the plan 

2 does not exceed the premium subsidy amount de3 scribed in section 1860D–14(b). 

4 ‘‘(3) FORMULARY.— 

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), the plan has a formulary that, based 

7 on the most recent data available, covers at 

8 least— 

9 ‘‘(i) 95 percent of the 200 most com10 monly prescribed non-duplicative generic 

11 covered part D drugs for the population of 

12 individuals entitled to (or enrolled for) ben13 efits under part A or enrolled under part 

14 B; and 

15 ‘‘(ii) 95 percent of the 200 most com16 monly prescribed non-duplicative brand 

17 name covered part D drugs for such popu18 lation. 

19 ‘‘(B) INCLUSION OF DRUGS IN CERTAIN

20 CATEGORIES AND CLASSES.—The plan for21 mulary shall include all covered part D drugs in 

22 the categories and classes identified by the Sec23 retary under section 1860D–4(b)(3)(G)(i). 

24 ‘‘(4) PHARMACY ACCESS.—The plan secures 

25 participation in its network of a sufficient number of 


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1 pharmacies that dispense (other than by mail order) 

2 drugs directly to patients to ensure convenient ac3 cess by at least 90 percent of enrollees who are re4 siding in long-term care facilities within the region. 

5 ‘‘(5) OPERATION OF A DEDICATED CUSTOMER

6 ASSISTANCE PHONE LINE.—The plan shall maintain 

7 a toll-free number or numbers for inquiries con8 cerning the plan that is solely for the use of such 

9 individuals, the designated representatives of such 

10 individuals (including designated family members), 

11 advocates of such individuals, providers of services, 

12 and suppliers. 

13 ‘‘(6) E-PRESCRIBING.—The plan adopts elec14 tronic prescribing for enrollees, in accordance with 

15 section 1860D–4(e), to coordinate care. 

16 ‘‘(7) DEMONSTRATE EXPERIENCE AND EXPER17 TISE.—The plan demonstrates, to the satisfaction of 

18 the Secretary, with input from the States, sufficient 

19 experience and expertise in serving low-income, pub20 licly insured, or previously uninsured populations. 

21 ‘‘(8) REDUCING HEALTH DISPARITIES.—The 

22 plan has established and implemented systems and 

23 processes which have been approved by the Secretary 

24 to address and reduce health disparities based on 


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1 race, ethnicity, gender, age, and socio-economic sta2 tus. 

3 ‘‘(9) PROFICIENCY IN CARE COORDINATION.— 

4 The plan demonstrates, to the satisfaction of the 

5 Secretary, proficiency in care coordination for the 

6 purpose of providing, or arranging for the provision 

7 of, services to assist individuals enrolled in the plan 

8 in obtaining access to other public and private bene9 fits, including services to address non-medical and 

10 psycho-social needs.’’. 

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

12 this section shall apply to plan year beginning on or after 

13 January 1, 2011. 

14 SEC. 104. PROVIDING BETTER CARE COORDINATION FOR 

15 LOW-INCOME BENEFICIARIES IN MEDICARE 

16 PART D. 

17 (a) CONTINUOUS UPDATING OF ELIGIBILITY AND

18 ENROLLMENT DATA FOR DUAL ELIGIBLE INDIVID19 UALS.— 

20 (1) STATE REQUIREMENT.—Section 1935(a) of 

21 the Social Security Act (42 U.S.C. 1396u–5(a)) is 

22 amended by adding at the end the following new 

23 paragraph: 

24 ‘‘(4) UPDATING OF ELIGIBILITY AND ENROLL25 MENT INFORMATION ON A ROLLING BASIS.—BeginVerDate Nov 24 2008 03:43 Aug 08, 2009 Jkt 079200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S1634.IS S1634

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1 ning not later than October 1, 2011, the State shall 

2 update information with respect to the eligibility and 

3 enrollment of individuals receiving any kind of med4 ical assistance under the State plan, including med5 ical assistance for payment of Medicare cost-sharing 

6 described in section 1905(p)(3), in MA plans and 

7 prescription drug plans under parts C and D, re8 spectively, of title XVIII (including eligibility deter9 minations under paragraph (2) and screening and 

10 enrollment under paragraph (3)) not less frequently 

11 than on a weekly basis.’’. 

12 (2) SECRETARIAL REQUIREMENTS.—Section 

13 1935(d) of the Social Security Act (42 U.S.C. 

14 1396u–5(d)) is amended by adding at the end the 

15 following new paragraph: 

16 ‘‘(3) UPDATING OF ELIGIBILITY AND ENROLL17 MENT INFORMATION ON A ROLLING BASIS.—The 

18 Secretary shall update information with respect to 

19 the eligibility and enrollment of individuals receiving 

20 any kind of medical assistance under this title, in21 cluding medical assistance for payment of Medicare 

22 cost-sharing described in section 1905(p)(3), in MA 

23 plans and prescription drug plans under parts C and 

24 D, respectively, of title XVIII as it is received, but 

25 not less frequently than on a weekly basis.’’. 


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1 (b) IDENTIFYING DUAL ELIGIBLE INDIVIDUALS IN

2 DATA RECORDS.— 

3 (1) IN GENERAL.—Section 1859 of the Social 

4 Security Act (42 U.S.C. 1305w–28), as amended by 

5 section 103, is amended by adding at the end the 

6 following new subsection: 

7 ‘‘(h) IDENTIFYING DUAL ELIGIBLE INDIVIDUALS IN

8 DATA RECORDS.— 

9 ‘‘(1) IDENTIFICATION BY THE SECRETARY.— 

10 Beginning on January 1, 2010, the Secretary shall 

11 clearly identify all dual eligible individuals that are 

12 enrolled in MA plans and prescription drug plans for 

13 the current plan year and reflect the low-income 

14 subsidy status of such individuals for each plan year 

15 in every data record file maintained in the Medicare 

16 electronic database and every such file that is used 

17 to enroll or adjudicate claims for such individuals. 

18 ‘‘(2) IDENTIFICATION BY MA PLANS AND PRE19 SCRIPTION DRUG PLANS.—Beginning on January 1, 

20 2010, each MA plan and prescription drug plan shall 

21 clearly identify all dual eligible individuals that are 

22 enrolled in the plan for the current plan year and re23 flect the low-income subsidy status of such individ24 uals for the plan year in every data record file mainVerDate Nov 24 2008 03:43 Aug 08, 2009 Jkt 079200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S1634.IS S1634

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1 tained by the plan that is used to enroll or adju2 dicate claims for such individuals under the plan. 

3 ‘‘(3) REGULATIONS.—The Secretary shall es4 tablish regulations to carry out this subsection. Such 

5 regulations shall require that— 

6 ‘‘(A) for each plan year and each dual eli7 gible individual, the Secretary identify on the 

8 Medicare enrollment database dual eligible sta9 tus that has been verified with a State or the 

10 District of Columbia; 

11 ‘‘(B) for each plan year and each dual eli12 gible individual, the Secretary identify on the 

13 Medicare enrollment database the low-income 

14 subsidy level of the individual; and 

15 ‘‘(C) each data file that is necessary to en16 sure that such dual eligible status is trans17 mitted to an MA plan or a prescription drug 

18 plan, at the time the Secretary certifies the en19 rollment of the dual eligible individual in the 

20 plan. 

21 ‘‘(4) DEFINITION OF DUAL ELIGIBLE INDI22 VIDUAL.—The term ‘dual eligible individual’ means 

23 a special needs individual described in subsection 

24 (b)(6)(B)(ii).’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 1860D–42 of the Social Security Act (42 U.S.C. 

3 1395w–152) is amended by adding at the end the 

4 following new subsection: 

5 ‘‘(c) IDENTIFYING DUAL ELIGIBLE INDIVIDUALS IN

6 DATA RECORDS.—For provisions regarding the identifica7 tion by prescription drug plans of dual eligible individuals 

8 in data records, see section 1859(h).’’. 

9 (c) ASSURING CONTINUITY OF PRESCRIPTION DRUG

10 COVERAGE FOR DUAL ELIGIBLES.— 

11 (1) IN GENERAL.—Section 1935(d)(1) of the 

12 Social Security Act (42 U.S.C. 1396u–5(d)(1)) is 

13 amended— 

14 (A) by inserting ‘‘on and after the date de15 scribed in subparagraph (B),’’ after ‘‘notwith16 standing any other provision of this title,’’; 

17 (B) by striking ‘‘In the case of’’ and in18 serting the following: 

19 ‘‘(A) IN GENERAL.—In the case of’’; and 

20 (C) by adding at the end the following: 

21 ‘‘(B) DATE DESCRIBED.—For purposes of 

22 subparagraph (A), the date described in this 

23 subparagraph is the date on which the State 

24 confirms with a Medicare Advantage plan under 

25 part C of title XVIII or a prescription drug 


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1 plan under part D of such title (including a 

2 Medicare operated prescription drug plan under 

3 section 1860D–11A), as applicable— 

4 ‘‘(i) that the part D eligible individual 

5 (as so defined) who is described in sub6 section (c)(6)(A)(ii) is enrolled with such 

7 plan; and 

8 ‘‘(ii) the cost-sharing and premiums 

9 applicable for the individual for such 

10 plan.’’. 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) take effect on January 1, 2011. 

13 (d) COLLECTION AND SHARING OF DRUG UTILIZA14 TION DATA AND FORMULARY INFORMATION FOR FULL15 BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 

16 (1) IN GENERAL.—Section 1860D–42 of the 

17 Social Security Act, as amended by subsection (b), 

18 is amended by adding at the end the following new 

19 subsection: 

20 ‘‘(d) COLLECTION AND SHARING OF DRUG UTILIZA21 TION DATA AND FORMULARY INFORMATION FOR FULL22 BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 

23 ‘‘(1) PLAN REQUIREMENT.—A PDP sponsor of 

24 a prescription drug plan (including a Medicare oper25 ated prescription drug plan under section 1860D– 


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1 11A) and an MA organization offering an MA–PD 

2 plan shall submit to the Secretary such information 

3 regarding the drug utilization of enrollees in such 

4 plans who are full-benefit dual eligible individuals 

5 (as defined in section 1935(c)(6)) and any 

6 formularies under the plans such individuals are en7 rolled in as the Secretary determines appropriate to 

8 carry out paragraph (2). Such information shall be 

9 submitted— 

10 ‘‘(A) on a rolling basis (as determined ap11 propriate by the Secretary); and 

12 ‘‘(B) using a single, uniform reporting 

13 process. 

14 ‘‘(2) COLLECTION AND SHARING OF DATA.— 

15 The Secretary shall collect data on the drug utiliza16 tion of full-benefit dual eligible individuals (as so de17 fined) and on any formularies under the plans such 

18 individuals are enrolled in. The Secretary shall share 

19 such data with the States and the District of Colum20 bia on as close to a real-time basis as possible.’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by paragraph (1) shall take effect on January 1, 

23 2010. 


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1 SEC. 105. IMPROVING TRANSITION OF NEW DUAL ELIGIBLE 

2 INDIVIDUALS TO MEDICARE PRESCRIPTION 

3 DRUG COVERAGE AND PRESUMPTIVE ELIGI4 BILITY FOR LOW-INCOME SUBSIDIES. 

5 (a) UPDATING THE POINT OF SALE FACILITATED

6 ENROLLMENT PROCESS.— 

7 (1) PROVIDING BETTER INITIAL PROTECTION

8 FOR DUAL ELIGIBLE INDIVIDUALS.—Beginning Jan9 uary 1, 2011, each contractor under the Point of 

10 Sale Facilitated Enrollment process of the Depart11 ment of Health and Human Services shall enroll 

12 full-benefit dual eligible individuals (as defined in 

13 section 1935(c)(6)) into a Medicare operated pre14 scription drug plan under section 1860D–11A of the 

15 Social Security Act, as added by section 102. 

16 (2) COMPETITIVE BIDDING OF POINT OF SALE

17 CONTRACT.—The Secretary of Health and Human 

18 Services shall establish procedures to ensure that 

19 each contract entered into under such process on or 

20 after January 1, 2010, under the Medicare program 

21 under title XVIII of the Social Security Act is rebid 

22 every 3 years through a competitive bidding process. 

23 (3) REQUIRING BETTER EDUCATION ABOUT

24 POINT OF SALE FACILITATED ENROLLMENT PROC25 ESS.—Not later than January 1, 2010, the Sec26 retary of Health and Human Services shall have a 


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1 comprehensive plan in place for proactively edu2 cating beneficiaries under the Medicare prescription 

3 drug program under part D of title XVIII of the So4 cial Security Act, pharmacists, skilled nursing facili5 ties (as defined in section 1819(a) of such Act (42 

6 U.S.C. 1395i–3(a))), nursing facilities (as defined in 

7 section 1919(a) of such Act (42 U.S.C. 1396r(a))), 

8 counselors under State health insurance assistance 

9 programs (SHIPs), and other advocacy organiza10 tions (including disability organizations) about the 

11 Point of Sale Facilitated Enrollment process. Under 

12 such plan— 

13 (A) information about the Point of Sale 

14 Facilitated Enrollment process shall be included 

15 in all mailers to the entities and individuals de16 scribed in the preceding sentence prior to the 

17 annual, coordinated election period described in 

18 section 1851(e)(3) of the Social Security Act 

19 (42 U.S.C. 1395w–21(e)(3)); and 

20 (B) a description of such process and other 

21 relevant information shall be prominently dis22 played on the Medicare Internet website 

23 throughout the year. 

24 (4) MANDATORY USE OF POINT OF SALE FA25 CILITATED ENROLLMENT PROCESS.—Section 


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1 1860D–4(b)(1) of the Social Security Act (42 

2 U.S.C. 1395w–104(b)(1)) is amended by adding at 

3 the end the following new subparagraph: 

4 ‘‘(F) MANDATORY USE OF POINT OF SALE

5 FACILITATED ENROLLMENT PROCESS.—Not6 withstanding any other provision of law, begin7 ning January 1, 2011, the terms and conditions 

8 under subparagraph (A) shall require partici9 pating pharmacies to use the Point of Sale Fa10 cilitated Enrollment process of the Department 

11 of Health and Human Services.’’. 

12 (b) PRESUMPTIVE ELIGIBILITY AND MANDATORY

13 TRANSITION PERIOD FOR SUBSIDY ELIGIBLE INDIVID14 UALS.—Section 1860D–14 of the Social Security Act (42 

15 U.S.C. 1395w–104) is amended— 

16 (1) by redesignating subsection (d) as sub17 section (e); and 

18 (2) by inserting after subsection (c) the fol19 lowing new subsection: 

20 ‘‘(d) PRESUMPTIVE ELIGIBILITY AND MANDATORY

21 TRANSITION PERIOD.— 

22 ‘‘(1) PRESUMPTIVE ELIGIBILITY.—An indi23 vidual shall be presumed to be a subsidy eligible in24 dividual (as defined in section 1860D–14(a)(3)) if 

25 the individual presents at the pharmacy with— 


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1 ‘‘(A) reliable evidence of— 

2 ‘‘(i) Medicaid enrollment, such as a 

3 Medicaid card, recent history of Medicaid 

4 billing in the pharmacy patient profile, a 

5 copy of a current Medicaid award letter, or 

6 confirmation from a Medicaid enrollment 

7 database; or 

8 ‘‘(ii) eligibility for an income-related 

9 subsidy under section 1860D–14, such as 

10 a low-income subsidy notice from the Sec11 retary or the Commissioner of Social Secu12 rity, or confirmation from a Social Security 

13 enrollment database; and 

14 ‘‘(B) reliable evidence of Medicare enroll15 ment, such as a Medicare identification card, a 

16 Medicare enrollment approval letter, a Medicare 

17 Summary Notice, or confirmation from an offi18 cial Medicare hotline or Medicare database. 

19 ‘‘(2) MAKING SUBSIDY ELIGIBLE INDIVIDUALS

20 WHOLE.— 

21 ‘‘(A) IN GENERAL.—In the case of a sub22 sidy eligible individual (as so defined) who, be23 tween November 15, 2005, and December 31, 

24 2009, has wrongly been forced to pay higher co25 payments, premiums, and deductibles than 


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1 those applicable under this part and part C for 

2 such individual, the subsidy eligible individual 

3 shall be eligible for compensation under the pro4 gram under this title. 

5 ‘‘(B) ESTABLISHMENT OF PROCESS FOR

6 REFUND OF AMOUNT INCORRECTLY PAID.—The 

7 Secretary shall establish a process under 

8 which— 

9 ‘‘(i) prescription drug plans and MA– 

10 PD plans are billed for copayments and 

11 deductibles inappropriately charged to sub12 sidy eligible individuals during retroactive 

13 coverage periods; 

14 ‘‘(ii) the amounts incorrectly paid by 

15 the subsidy eligible individual as a result of 

16 those inappropriate charges are refunded 

17 directly to the individual, either through a 

18 rebate on future payments of premiums 

19 under part B or through a direct payment 

20 to the individual; and 

21 ‘‘(iii) prescription drug plans and 

22 MA–PD plans are required to provide de23 tailed accounting to the Secretary of the 

24 basis for any rebate or payment to a sub25 sidy eligible individual under this subparaVerDate Nov 24 2008 03:43 Aug 08, 2009 Jkt 079200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S1634.IS S1634

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1 graph, including the applicable period of 

2 retroactive coverage for the subsidy eligible 

3 individual and whether the rebate or credit 

4 is with respect to an inappropriately 

5 charged copayment or deductible. 

6 ‘‘(C) NOTIFICATION.—Subsidy eligible in7 dividuals shall be notified of the requirements 

8 of this subsection in their 2010 plan year mate9 rials. 

10 ‘‘(D) NO EFFECT ON ELIGIBILITY FOR

11 OTHER BENEFITS.—Amounts refunded to a 

12 subsidy eligible individual under this subsection 

13 shall be disregarded for purposes of deter14 mining or continuing the beneficiary’s eligibility 

15 for receipt of benefits under any other Federal, 

16 State, or locally funded assistance program, in17 cluding benefits paid under titles II, XVI, 

18 XVIII, XIX, or XXI.’’. 

19 SEC. 106. REQUIRED INFORMATION ON TRANSITION FROM 

20 SKILLED NURSING FACILITIES AND NURSING 

21 FACILITIES TO PART D PLANS. 

22 (a) SKILLED NURSING FACILITIES.—Section 

23 1819(b) of the Social Security Act (42 U.S.C. 1395i–3(b)) 

24 is amended by adding at the end the following new para25 graph: 


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1 ‘‘(9) INFORMATION ON TRANSITION TO PRE2 SCRIPTION DRUG COVERAGE.—A skilled nursing fa3 cility must provide information to residents and the 

4 families of residents on how to transition to pre5 scription drug coverage under MA–PD plans under 

6 part C and prescription drug plans under part D 

7 upon discharge from the facility.’’. 

8 (b) NURSING FACILITIES.—Section 1919(b) of the 

9 Social Security Act (42 U.S.C. 1395i–3(b)) is amended 

10 by adding at the end the following new paragraph: 

11 ‘‘(9) INFORMATION ON TRANSITIONING TO PRE12 SCRIPTION DRUG COVERAGE.—A nursing facility 

13 must provide information to residents and the fami14 lies of residents on how to transition to prescription 

15 drug coverage under MA–PD plans under part C 

16 and prescription drug plans under part D upon dis17 charge from the facility.’’. 

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

19 this section shall take effect on January 1, 2011. 

20 SEC. 107. STREAMLINED PHARMACY COMPLIANCE PACK21 AGING. 

22 (a) IN GENERAL.—Section 1860D–4(b)(3) of the So23 cial Security Act (42 U.S.C. 1395w–104(b)(3)) is amend24 ed by adding at the end the following new subparagraph: 


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1 ‘‘(G) STREAMLINED PHARMACY COMPLI2 ANCE PACKAGING FOR DUAL ELIGIBLE INDIVID3 UALS.—A PDP sponsor of a prescription drug 

4 plan shall streamline pharmacy compliance 

5 packaging for individuals enrolled in the plan 

6 who— 

7 ‘‘(i) are entitled to medical assistance 

8 under a State plan under title XVIII; and 

9 ‘‘(ii) reside in a nursing home.’’. 

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

11 subsection (a) shall apply to drugs dispensed on or after 

12 January 1, 2010. 

13 SEC. 108. LOWERING COVERED PART D DRUG PRICES ON 

14 BEHALF OF MEDICARE BENEFICIARIES. 

15 (a) REPEAL OF PROHIBITION.—Section 1860D–11 of 

16 the Social Security Act (42 U.S.C. 1395w–111) is amend17 ed by striking subsection (i) and inserting the following: 

18 ‘‘(i) LOWERING COVERED PART D DRUG PRICES.— 

19 ‘‘(1) IN GENERAL.—The Secretary shall reduce 

20 the purchase cost of covered part D drugs by imple21 menting 2 or more of the following strategies on an 

22 annual basis (beginning with 2011): 

23 ‘‘(A) Negotiating directly with pharma24 ceutical manufacturers for additional discounts, 

25 rebates, and other price concessions that may 


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1 be made available to Medicare operated pre2 scription drug plans under section 1860D–11A 

3 for covered part D drugs. 

4 ‘‘(B) Entering into rebate agreements with 

5 manufacturers to provide to the Secretary a re6 bate for any covered outpatient drug of a man7 ufacturer dispensed during a rebate period 

8 specified in the agreement to a subsidy eligible 

9 individual described (or treated as described) in 

10 section 1860D–14(a)(1) for which payment was 

11 made by a PDP sponsor under part D of title 

12 XVIII or an MA organization under part C of 

13 such title for such period in an amount deter14 mined in the same manner as the rebate 

15 amount for such drug would have been deter16 mined under subsection (c) of section 1927 if 

17 the dispensing of the drug to such individual 

18 was paid for by a State and subject to a rebate 

19 agreement entered into under such section (and 

20 allocating any such rebates received among the 

21 prescription drug plans of such PDP sponsors 

22 and MA–PD plans offered by such organiza23 tions based on the enrollment of such individ24 uals in such plans). 


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1 ‘‘(C) In consultation with the Director of 

2 the Agency for Healthcare Research and Qual3 ity, using data from relevant and unbiased 

4 studies on the comparative clinical effectiveness 

5 of covered part D drugs to— 

6 ‘‘(i) educate physicians and phar7 macists; and 

8 ‘‘(ii) provide information to PDP 

9 sponsors of prescription drug plans and 

10 MA organizations offering MA–PD plans 

11 for use in making decisions regarding plan 

12 formularies. 

13 ‘‘(D) Instituting prescription drug prices 

14 negotiated under the Federal Supply Schedule 

15 of the General Services Administration for the 

16 reimbursement of covered part D drugs. 

17 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

18 this subsection shall be construed as preventing the 

19 PDP sponsor of a prescription drug plan or an MA 

20 organization offering an MA–PD plan from obtain21 ing a discount or reduction of the price for a covered 

22 part D drug below the price negotiated by the Sec23 retary for a Medicare-operated plan under para24 graph (1)(A). 


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1 ‘‘(3) ANNUAL REPORTS TO CONGRESS.—Not 

2 later than January 1, 2012, and annually thereafter, 

3 the Secretary shall submit to the Committee on Fi4 nance of the Senate and to the Committee on Ways 

5 and Means, the Committee on Energy and Com6 merce, and the Committee on Oversight and Govern7 ment Reform of the House of Representatives a re8 port on the strategies implemented by the Secretary 

9 under paragraph (1) to achieve lower prices on cov10 ered part D drugs for beneficiaries, including the 

11 prices of such covered part D drugs and any price 

12 concessions achieved by the Secretary as a result of 

13 such implementation.’’. 

14 SEC. 109. CORRECTION OF FLAWS IN DETERMINATION OF 

15 PHASED-DOWN STATE CONTRIBUTION FOR 

16 FEDERAL ASSUMPTION OF PRESCRIPTION 

17 DRUG COSTS FOR DUALLY ELIGIBLE INDIVID18 UALS. 

19 Section 1935(c) of the Social Security Act (42 U.S.C. 

20 1396u–5(c)) is amended— 

21 (1) in paragraph (1), in the matter preceding 

22 subparagraph (A), by striking ‘‘Each’’ and inserting 

23 ‘‘Subject to paragraph (7), each’’; and 

24 (2) by adding at the end the following new 

25 paragraph: 


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1 ‘‘(7) MODIFICATION OF DETERMINATION OF

2 AMOUNT OF STATE CONTRIBUTION.—Not later than 

3 January 1, 2011, the Secretary of Health and 

4 Human Services (in this section referred to as the 

5 ‘Secretary’), acting through the Director of the Fed6 eral Coordinated Health Care Office established 

7 under section 101 of the Medicare Prescription Drug 

8 Reform Act of 2009, shall promulgate regulations 

9 for modifying the factors used to determine the 

10 product under paragraph (1)(A) for each State and 

11 month that take into account the following with re12 spect to each State: 

13 ‘‘(A) Factoring into the determination of 

14 base year State Medicaid per capita expendi15 tures for covered part D drugs for full-benefit 

16 dual eligible individuals under paragraph (3) all 

17 payments collected by a State under agreements 

18 under section 1927 for outpatient prescription 

19 drugs purchased in 2003 (not just for such pay20 ments that were collected by the State in 

21 2003). 

22 ‘‘(B) Pharmacy cost savings measures im23 plemented by the State during the period that 

24 begins with 2003 and ends with 2006. 


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1 ‘‘(C) Substituting under paragraph (4) a 

2 State-specific growth factor in lieu of the na3 tional applicable growth factor for 2004 and 

4 succeeding years based on the annual percent5 age increase in the State’s average per capita 

6 aggregate expenditures for covered outpatient 

7 drugs. 

8 Such regulations shall include procedures for adjust9 ing payments to States under section 1903(a) to 

10 take into account any overpayments or underpay11 ments which the Secretary determines on the basis 

12 of such modifications were made by States under 

13 this subsection for 2004 and succeeding years.’’. 

14 SEC. 110. NO IMPACT ON ELIGIBILITY FOR BENEFITS 

15 UNDER OTHER PROGRAMS. 

16 (a) IN GENERAL.—Section 1860D–14(a)(3) of the 

17 Social Security Act (42 U.S.C. 1395w–114(a)(3)), is 

18 amended— 

19 (1) in subparagraph (A), in the matter pre20 ceding clause (i), by striking ‘‘subparagraph (F)’’ 

21 and inserting ‘‘subparagraphs (F) and (H)’’; and 

22 (2) by adding at the end the following new sub23 paragraph: 

24 ‘‘(H) NO IMPACT ON ELIGIBILITY FOR

25 BENEFITS UNDER OTHER PROGRAMS.—The 


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1 availability of premium and cost-sharing sub2 sidies under this section shall not be treated as 

3 benefits or otherwise taken into account in de4 termining an individual’s eligibility for, or the 

5 amount of benefits under, any other Federal 

6 program.’’. 

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

8 this section shall take effect on the date of enactment of 

9 this Act. 

10 SEC. 111. QUALITY INDICATORS FOR DUAL ELIGIBLE INDI11 VIDUALS. 

12 Section 1154(a) of the Social Security Act (42 U.S.C. 

13 1320c–3(a)) is amended by inserting after paragraph (11) 

14 the following new paragraph: 

15 ‘‘(12) For all contracts entered into on or after 

16 August 1, 2011, the organization shall produce a 

17 statistically valid subsample of quality indicators ap18 plicable to dual eligible beneficiaries under titles 

19 XVIII and XIX.’’. 


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1 TITLE II—ADDITIONAL MEDI2 CARE AND MEDICAID IM3 PROVEMENTS 

4 Subtitle A—Improving the Finan5 cial Assistance Available to 

6 Low-Income Medicare Bene7 ficiaries 

8 SEC. 201. IMPROVING ASSETS TESTS FOR MEDICARE SAV9 INGS PROGRAM AND LOW-INCOME SUBSIDY 

10 PROGRAM. 

11 (a) APPLICATION OF HIGHEST LEVEL PERMITTED

12 UNDER LIS.— 

13 (1) TO FULL-PREMIUM SUBSIDY ELIGIBLE INDI14 VIDUALS.—Section 1860D–14(a) of the Social Secu15 rity Act (42 U.S.C. 1395w–114(a)) is amended— 

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

17 subparagraph (A), by inserting ‘‘(or, beginning 

18 with 2010, paragraph (3)(E))’’ after ‘‘para19 graph (3)(D)’’; and 

20 (B) in paragraph (3)(A)(iii), by striking 

21 ‘‘(D) or’’. 

22 (2) ANNUAL INCREASE IN LIS RESOURCE

23 TEST.—Section 1860D–14(a)(3)(E)(i) of the Social 

24 Security Act (42 U.S.C. 1395w–114(a)(3)(E)(i)) is 

25 amended— 


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1 (A) by striking ‘‘and’’ at the end of sub2 clause (I); 

3 (B) in subclause (II), by inserting ‘‘(before 

4 2010)’’ after ‘‘subsequent year’’; 

5 (C) by striking the period at the end of 

6 subclause (II) and inserting a semicolon; 

7 (D) by inserting after subclause (II) the 

8 following new subclauses: 

9 ‘‘(III) for 2010, $27,500 (or 

10 $55,000 in the case of the combined 

11 value of the individual’s assets or re12 sources and the assets or resources of 

13 the individual’s spouse); and 

14 ‘‘(IV) for a subsequent year, the 

15 dollar amounts specified in this sub16 clause (or subclause (III)) for the pre17 vious year increased by the annual 

18 percentage increase in the consumer 

19 price index (all items; U.S. city aver20 age) as of September of such previous 

21 year.’’; and 

22 (E) in the last sentence, by inserting ‘‘or 

23 (IV)’’ after ‘‘subclause (II)’’. 

24 (3) APPLICATION OF LIS TEST UNDER MEDI25 CARE SAVINGS PROGRAM.—Section 1905(p)(1)(C) of 


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1 the Social Security Act (42 U.S.C. 1396d(p)(1)(C)) 

2 is amended by striking ‘‘subparagraph (D)’’ and all 

3 that follows through the period at the end and in4 serting the following: ‘‘section 1860D–14(a)(3)(E) 

5 applicable to an individual or to the individual and 

6 the individual’s spouse (as the case may be)’’. 

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

8 subsection (a) shall apply to eligibility determinations for 

9 income-related subsidies and Medicare cost-sharing fur10 nished for periods beginning on or after January 1, 2010. 

11 SEC. 202. ELIMINATING BARRIERS TO ENROLLMENT. 

12 (a) ENCOURAGING APPLICATION OF PROCEDURES

13 UNDER MEDICARE SAVINGS PROGRAM.—Section 1905(p) 

14 of the Social Security Act (42 U.S.C. 1396d(p)) is amend15 ed by adding at the end the following new paragraph: 

16 ‘‘(7) The Secretary shall take all reasonable steps to 

17 encourage States to provide for administrative verification 

18 of income and automatic reenrollment (as provided under 

19 subparagraphs (C)(iii) and (G) of section 1860D–14(a)(3) 

20 in the case of the low-income subsidy program).’’. 

21 (b) ENSURING THAT SSA AND STATES CAN ELEC22 TRONICALLY PROCESS ALL LOW-INCOME SUBSIDY PRO23 GRAM APPLICATIONS.—Section 1860D–14(a)(3)(B)(i) of 

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

25 114(a)(3)(B)(i)) is amended by inserting after the first 


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1 sentence the following new sentence: ‘‘Not later than Jan2 uary 1, 2012, the State plan and the Commissioner shall 

3 have in place procedures to ensure the capacity to process 

4 all applications for determinations (including all applica5 tions that are not in English) electronically.’’. 

6 SEC. 203. ELIMINATION OF PART D COST-SHARING FOR 

7 CERTAIN NON-INSTITUTIONALIZED FULL8 BENEFIT DUAL ELIGIBLE INDIVIDUALS. 

9 (a) IN GENERAL.—Section 1860D–14(a)(1)(D)(i) of 

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

11 114(a)(1)(D)(i)) is amended— 

12 (1) in the heading, by striking ‘‘INSTITU13 TIONALIZED INDIVIDUALS.—In’’ and inserting 

14 ‘‘ELIMINATION OF COST-SHARING FOR CERTAIN

15 FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 

16 ‘‘(I) INSTITUTIONALIZED INDI17 VIDUALS.—In’’; and 

18 (2) by adding at the end the following new sub19 clauses: 

20 ‘‘(II) CERTAIN OTHER INDIVID21 UALS.—In the case of an individual 

22 who is a full-benefit dual eligible indi23 vidual and who is being provided med24 ical assistance for home and commu25 nity-based services under subsection 


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1 (c), (d), (e), (i), or (j) of section 1915 

2 or pursuant to section 1115, the 

3 elimination of any beneficiary coinsur4 ance described in section 1860D– 

5 2(b)(2) (for all amounts through the 

6 total amount of expenditures at which 

7 benefits are available under section 

8 1860D–2(b)(4)).’’. 

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

10 subsection (a) shall apply to drugs dispensed on or after 

11 January 1, 2010. 

12 SEC. 204. EXEMPTION OF BALANCE IN ANY PENSION OR RE13 TIREMENT PLAN FROM RESOURCES FOR DE14 TERMINATION OF ELIGIBILITY FOR LOW-IN15 COME SUBSIDY. 

16 (a) IN GENERAL.—Section 1860D–14(a)(3) of the 

17 Social Security Act (42 U.S.C. 1395w–114(a)(3)) is 

18 amended— 

19 (1) in subparagraph (D), in the matter before 

20 clause (i), by striking ‘‘life insurance policy exclusion 

21 provided under subparagraph (G)’’ and inserting 

22 ‘‘additional exclusions provided under subparagraphs 

23 (G) and (H)’’; 

24 (2) in subparagraph (E)(i), in the matter before 

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1 clusion provided under subparagraph (G)’’ and in2 serting ‘‘additional exclusions provided under sub3 paragraphs (G) and (H)’’; and 

4 (3) by adding at the end the following new sub5 paragraph: 

6 ‘‘(H) PENSION OR RETIREMENT PLAN EX7 CLUSION.—In determining the resources of an 

8 individual (and the eligible spouse of the indi9 vidual, if any) under section 1613 for purposes 

10 of subparagraphs (D) and (E), no balance in 

11 any pension or retirement plan shall be taken 

12 into account.’’. 

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

14 this section shall take effect on January 1, 2010, and shall 

15 apply to determinations of eligibility for months beginning 

16 with January 2010. 

17 SEC. 205. COST-SHARING PROTECTIONS FOR LOW-INCOME 

18 SUBSIDY-ELIGIBLE INDIVIDUALS. 

19 (a) IN GENERAL.—Section 1860D–14(a) of the So20 cial Security Act (42 U.S.C. 1395w–114(a)) is amended— 

21 (1) in paragraph (1)(D), by adding at the end 

22 the following new clause: 

23 ‘‘(iv) OVERALL LIMITATION ON COST24 SHARING.—In the case of all such individ25 uals, a limitation on aggregate cost-sharing 


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1 under this part for a year not to exceed 

2 2.5 percent of income.’’; and 

3 (2) in paragraph (2), by adding at the end the 

4 following new subparagraph: 

5 ‘‘(F) OVERALL LIMITATION ON COST-SHAR6 ING.—A limitation on aggregate cost-sharing 

7 under this part for a year not to exceed 2.5 per8 cent of income.’’. 

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

10 subsection (a) shall apply as of January 1, 2010. 

11 Subtitle B—Other Improvements 

12 SEC. 211. ENROLLMENT IMPROVEMENTS UNDER MEDI13 CARE PARTS C AND D. 

14 (a) SPECIAL ELECTION PERIOD DURING FIRST 60 

15 DAYS OF ENROLLMENT IN A NEW PLAN.— 

16 (1) IN GENERAL.—Section 1851(e)(4) of the 

17 Social Security Act (42 U.S.C. 1395w(e)(4)) is 

18 amended— 

19 (A) in subparagraph (C), by striking ‘‘or’’ 

20 at the end; 

21 (B) by redesignating subparagraph (D) as 

22 subparagraph (E); and 

23 (C) by inserting after subparagraph (C) 

24 the following new subparagraph: 


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1 ‘‘(D) the individual has been enrolled in 

2 such plan for fewer than 60 days; or’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by paragraph (1) shall take effect on the date that 

5 is 90 days after the date of enactment of this Act. 

6 (b) EXTENSION OF THE ANNUAL, COORDINATED

7 ELECTION PERIOD.— 

8 (1) IN GENERAL.—Section 1851(e)(3)(B)(iv) of 

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

10 1(e)(3)(B)(iv)) is amended by striking ‘‘November 

11 15’’ and inserting ‘‘October 1’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by paragraph (1) shall apply to annual, coordinated 

14 election periods beginning after the date of enact15 ment of this Act. 

16 (c) COORDINATION UNDER PARTS C AND D OF THE

17 CONTINUOUS OPEN ENROLLMENT AND DISENROLLMENT

18 PERIOD FOR THE FIRST 3 MONTHS OF THE YEAR.— 

19 (1) IN GENERAL.—Section 1860D– 

20 1(b)(1)(B)(iii) of the Social Security Act (42 U.S.C. 

21 1395w–101(b)(1)(B)(iii)) is amended by striking ‘‘, 

22 (C),’’. 

23 (2) EFFECTIVE DATE.—The amendment made 

24 by paragraph (1) shall take effect on January 1, 

25 2010. 


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1 SEC. 212. MEDICARE PLAN COMPLAINT SYSTEM. 

2 (a) SYSTEM.—Section 1808 of the Social Security 

3 Act (42 U.S.C. 1395b–9) is amended— 

4 (1) in subsection (c)(2)— 

5 (A) in subparagraph (B)(iii), by striking 

6 ‘‘adjustment; and’’ and inserting ‘‘adjust7 ment);’’; 

8 (B) in subparagraph (C), by striking the 

9 period at the end and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following new 

11 subparagraph: 

12 ‘‘(D) develop and maintain the plan com13 plaint system under subsection (d).’’; and 

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(d) PLAN COMPLAINT SYSTEM.— 

17 ‘‘(1) SYSTEM.— 

18 ‘‘(A) IN GENERAL.—The Secretary shall 

19 develop and maintain a plan complaint system, 

20 (in this subsection referred to as the ‘system’) 

21 to— 

22 ‘‘(i) collect and maintain information 

23 on plan complaints; 

24 ‘‘(ii) track plan complaints from the 

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1 tem through the date the complaint is re2 solved; and 

3 ‘‘(iii) otherwise improve the process 

4 for reporting plan complaints. 

5 ‘‘(B) TIMEFRAME.—The Secretary shall 

6 have the system in place by not later than the 

7 date that is 6 months after the date of enact8 ment of this subsection. 

9 ‘‘(C) PLAN COMPLAINT DEFINED.—In this 

10 subsection, the term ‘plan complaint’ means a 

11 complaint that is received (including by tele12 phone, letter, e-mail, or any other means) by 

13 the Secretary (including by a regional office, 

14 the Medicare Beneficiary Ombudsman, a sub15 contractor, a carrier, a fiscal intermediary, and 

16 a Medicare administrative contractor) from a 

17 Medicare Advantage eligible individual or a part 

18 D eligible individual (or an individual rep19 resenting such an individual) regarding a Medi20 care Advantage organization, a Medicare Ad21 vantage plan, a prescription drug plan sponsor, 

22 or a prescription drug plan, including, but not 

23 limited to, complaints relating to marketing, en24 rollment, covered drugs, premiums and cost25 sharing, and plan customer service, grievances 


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1 and appeals, participating providers. Such term 

2 also includes plan complaints that are received 

3 by the Secretary directly from the organization 

4 offering the plan relating to complaints by such 

5 individuals. 

6 ‘‘(2) PROCESS CRITERIA.—In developing the 

7 system, the Secretary shall establish a process for 

8 reporting plan complaints. Such process shall meet 

9 the following criteria: 

10 ‘‘(A) ACCESSIBLE.—The process is widely 

11 known and easy to use. 

12 ‘‘(B) INVESTIGATIVE CAPACITY.—The 

13 process involves the appropriate experts, re14 sources, and methods to assess complaints and 

15 determine whether they reflect an underlying 

16 pattern. 

17 ‘‘(C) INTERVENTION AND FOLLOW18 THROUGH.—The process triggers appropriate 

19 interventions and monitoring based on substan20 tiated complaints. 

21 ‘‘(D) QUALITY IMPROVEMENT ORIENTA22 TION.—The process guides quality improve23 ment. 


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1 ‘‘(E) RESPONSIVENESS.—The process rou2 tinely provides consistent, clear, and substantive 

3 responses to complaints. 

4 ‘‘(F) TIMELINES.—Each process step is 

5 completed within a reasonable, established time6 frame, and mechanisms exist to deal quickly 

7 with complaints of an emergency nature requir8 ing immediate attention. 

9 ‘‘(G) OBJECTIVE.—The process is unbi10 ased, balancing the rights of each party. 

11 ‘‘(H) PUBLIC ACCOUNTABILITY.—The 

12 process makes complaint information available 

13 to the public. 

14 ‘‘(3) STANDARD DATA REPORTING REQUIRE15 MENTS.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 establish standard data reporting requirements 

18 for reporting plan complaints under the system. 

19 ‘‘(B) MODEL ELECTRONIC COMPLAINT

20 FORM.—The Secretary shall develop a model 

21 electronic complaint form to be used for report22 ing plan complaints under the system. Such 

23 form shall be prominently displayed on the 

24 front page of the Medicare.gov Internet website 


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1 and on the Internet website of the Medicare 

2 Beneficiary Ombudsman. 

3 ‘‘(4) ALL COMPLAINTS REQUIRED TO BE

4 LOGGED INTO THE SYSTEM.—Every plan complaint 

5 shall be logged into the system. 

6 ‘‘(5) CASEWORK NOTATIONS.—The system shall 

7 provide for the inclusion of any casework notations 

8 throughout the complaint process on the record of a 

9 plan complaint. 

10 ‘‘(6) MEDICARE BENEFICIARY OMBUDSMAN.— 

11 The Secretary shall carry out this subsection acting 

12 through the Medicare Beneficiary Ombudsman.’’. 

13 (b) FUNDING.—There are authorized to be appro14 priated such sums as may be necessary for the costs of 

15 carrying out section 1808(d) of the Social Security Act, 

16 as added by subsection (a). 

17 (c) REPORTS.— 

18 (1) SECRETARY.— 

19 (A) ONGOING STUDY.—The Medicare Ben20 eficiary Ombudsman (under subsection (c) of 

21 section 1808) of the Social Security Act (42 

22 U.S.C. 1395b–9) shall conduct an ongoing 

23 study of the plan complaint system established 

24 under subsection (d) of such section (as added 

25 by subsection (a)), in this subsection referred to 


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1 as the ‘‘system’’. Such study shall include an 

2 analysis of— 

3 (i) the numbers and types of com4 plaints reported under the system; 

5 (ii) geographic variations in such com6 plaints; 

7 (iii) the timeliness of agency or plan 

8 responses to such complaints; and 

9 (iv) the resolution of such complaints. 

10 (B) QUARTERLY REPORTS.—Not later 

11 than 6 months after the implementation of the 

12 system, and every 3 months thereafter, the Sec13 retary of Health and Human Services shall sub14 mit to Congress a report on the study con15 ducted under subparagraph (A), together with 

16 recommendations for such legislation and ad17 ministrative actions as the Secretary determines 

18 appropriate. 

19 (2) INSPECTOR GENERAL.—The Inspector Gen20 eral of the Department of Health and Human Serv21 ices shall conduct an evaluation of the system. Not 

22 later than 1 year after the implementation of the 

23 system, the Inspector General shall submit to Con24 gress a report on such evaluation, together with rec25 ommendations for such legislation and administraVerDate Nov 24 2008 03:43 Aug 08, 2009 Jkt 079200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S1634.IS S1634

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1 tive actions as the Inspector General determines ap2 propriate. 

3 SEC. 213. UNIFORM EXCEPTIONS AND APPEALS PROCESS. 

4 (a) IN GENERAL.—Section 1860D–4(b)(3) of the So5 cial Security Act (42 U.S.C. 1395w–104(b)(3)), as amend6 ed by section 107, is amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(G) USE OF SINGLE, UNIFORM EXCEP9 TIONS AND APPEALS PROCESS.—Notwith10 standing any other provision of this part, a 

11 PDP sponsor of a prescription drug plan or an 

12 MA organization offering an MA–PD plan 

13 shall— 

14 ‘‘(i) use a single, uniform exceptions 

15 and appeals process with respect to the de16 termination of prescription drug coverage 

17 for an enrollee under the plan; and 

18 ‘‘(ii) provide instant access to such 

19 process by enrollees through a toll-free 

20 telephone number and an Internet 

21 website.’’. 

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

23 subsection (a) shall apply to exceptions and appeals on 

24 or after January 1, 2011. 


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1 SEC. 214. PROHIBITION ON CONDITIONING MEDICAID ELI2 GIBILITY FOR INDIVIDUALS ENROLLED IN 

3 CERTAIN CREDITABLE PRESCRIPTION DRUG 

4 COVERAGE ON ENROLLMENT IN THE MEDI5 CARE PART D DRUG PROGRAM. 

6 (a) IN GENERAL.—Section 1935 of the Social Secu7 rity Act (42 U.S.C. 1396v) is amended by adding at the 

8 end the following: 

9 ‘‘(f) PROHIBITION ON CONDITIONING ELIGIBILITY

10 FOR MEDICAL ASSISTANCE FOR INDIVIDUALS ENROLLED

11 IN CERTAIN CREDITABLE PRESCRIPTION DRUG COV12 ERAGE ON ENROLLMENT IN MEDICARE PRESCRIPTION

13 DRUG BENEFIT.— 

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

15 eligibility for medical assistance under the State 

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

17 section 1860D–1(a)(3)(A)) who is enrolled in cred18 itable prescription drug coverage described in any of 

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

20 13(b)(4) on the individual’s enrollment in a prescrip21 tion drug plan under part D of title XVIII or an 

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

23 ‘‘(2) COORDINATION OF BENEFITS WITH PART

24 D FOR OTHER INDIVIDUALS.—Nothing in this sub25 section shall be construed as prohibiting a State 

26 from coordinating medical assistance under the 


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1 State plan with benefits under part D of title XVIII 

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

3 SEC. 215. OFFICE OF THE INSPECTOR GENERAL ANNUAL 

4 REPORT ON PART D FORMULARIES’ INCLU5 SION OF DRUGS COMMONLY USED BY DUAL 

6 ELIGIBLES. 

7 (a) ONGOING STUDY.—The Inspector General of the 

8 Department of Health and Human Services shall conduct 

9 an ongoing study of the extent to which formularies used 

10 by prescription drug plans and MA–PD plans under part 

11 D include drugs commonly used by full-benefit dual eligi12 ble individuals (as defined in section 1935(c)(6) of the So13 cial Security Act (42 U.S.C. 1396u–5(c)(6))). 

14 (b) ANNUAL REPORTS.—Not later than July 1 of 

15 each year (beginning with 2010), the Inspector General 

16 shall submit to Congress a report on the study conducted 

17 under paragraph (1), together with such recommendations 

18 as the Inspector General determines appropriate. 

19 SEC. 216. HHS ONGOING STUDY AND ANNUAL REPORTS ON 

20 COVERAGE FOR DUAL ELIGIBLES. 

21 (a) ONGOING STUDY.— 

22 (1) IN GENERAL.—The Secretary of Health and 

23 Human Services (in this section referred to as the 

24 ‘‘Secretary’’) shall conduct an ongoing study to 

25 track— 


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1 (A) how many of the new full benefit dual 

2 eligible individuals (as defined in section 

3 1935(c)(6) of the Social Security Act (42 

4 U.S.C. 1395u–5(c)(6))) enroll in a plan under 

5 part D of title XVIII of such Act and receive 

6 retroactive prescription drug coverage under the 

7 plan; and 

8 (B) if such retroactive coverage is provided 

9 to such individuals— 

10 (i) the number of months of coverage 

11 provided; and 

12 (ii) the amount of reimbursements to 

13 individuals and to individuals that made 

14 payments for prescription drugs on their 

15 behalf for costs incurred during retroactive 

16 coverage periods. 

17 (2) DATA TO USE.—In conducting the study 

18 with respect to the requirements under paragraph 

19 (1)(B), the Secretary shall examine prescription 

20 drug utilization data reported by Medicare part D 

21 plans. 

22 (b) ANNUAL REPORTS ON ONGOING STUDY.—Not 

23 later than March 1 of each year (beginning with 2010), 

24 the Secretary shall submit a report to Congress containing 

25 the results of the study conducted under subsection (a), 


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1 together with recommendations for such legislation and 

2 administrative action as the Secretary determines appro3 priate. 

4 (c) ANNUAL REPORTS ON SPENDING AND OUT5 COMES.—Not later than January 1 of each year (begin6 ning with 2013), the Secretary shall collect data and sub7 mit a report to Congress that includes the following infor8 mation: 

9 (1) Annual total expenditures (disaggregated by 

10 Federal and State expenditures) for dually eligible 

11 beneficiaries under title XVIII and under State 

12 plans and waivers under title XIX. 

13 (2) An analysis of health outcomes for dually 

14 eligible beneficiaries, disaggregated by subtypes of 

15 beneficiaries (as determined by the Secretary). 

16 (3) An analysis of the extent to which dually el17 igible beneficiaries are able to access benefits under 

18 title XVIII and under State plans and waivers under 

19 title XIX. 

20 SEC. 217. AUTHORITY TO OBTAIN INFORMATION. 

21 Title XVIII of the Social Security Act (42 U.S.C. 

22 1395 et seq.) is amended by adding at the end the fol23 lowing new section: 


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1 ‘‘AUTHORITY OF THE COMPTROLLER GENERAL TO

2 OBTAIN INFORMATION

3 ‘‘SEC. 1899. No provision in this Act in effect on the 

4 date of enactment of this section or enacted after such 

5 date shall be construed to limit, amend, or supersede the 

6 authority of the Comptroller General of the United States 

7 to obtain agency records pursuant to section 716 of title 

8 31, United States Code, including any information ob9 tained by, or disclosed to, the Secretary under part C or 

10 D of this title, except to the extent that such provision 

11 expressly and specifically refers to this section and pro12 vides for such limitation, amendment, or supersession.’’. 

Æ 


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