II

Calendar No. 609

106TH CONGRESS

2D SESSION S. 2753

To amend title XVIII of the Social Security Act to provide a prescription

drug benefit for the aged and disabled under the medicare program,

to enhance the preventive benefits covered under such program, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 19, 2000

Mr. DASCHLE (for himself, Mr. MOYNIHAN, Mr. KENNEDY, Mr. AKAKA, Mr.

BAUCUS, Mr. BIDEN, Mr. BINGAMAN, Mrs. BOXER, Mr. BRYAN, Mr.

BYRD, Mr. CLELAND, Mr. DODD, Mr. DORGAN, Mr. DURBIN, Mrs. FEINSTEIN, Mr. GRAHAM, Mr. HARKIN, Mr. HOLLINGS, Mr. INOUYE, Mr.

JOHNSON, Mr. KERRY, Mr. LAUTENBERG, Mr. LEAHY, Mr. LEVIN, Mrs.

LINCOLN, Ms. MIKULSKI, Mrs. MURRAY, Mr. REED, Mr. REID, Mr.

ROBB, Mr. ROCKEFELLER, Mr. SARBANES, Mr. SCHUMER, and Mr.

WELLSTONE) introduced the following bill; which was read twice and ordered placed on the calendar

A BILL

To amend title XVIII of the Social Security Act to provide

a prescription drug benefit for the aged and disabled

under the medicare program, to enhance the preventive

benefits covered under such program, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

S 2753 PCS

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Medicare Expansion for Needed Drugs (MEND) Act of

4 2000’’.

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

6 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

TITLE I—PRESCRIPTION DRUG BENEFIT PROGRAM

Sec. 101. Prescription drug benefit program.

‘‘PART D—PRESCRIPTION DRUG BENEFIT FOR THE AGED AND DISABLED

‘‘Sec. 1860. Establishment of prescription drug benefit program for the

aged and disabled.

‘‘Sec. 1860A. Scope of benefits.

‘‘Sec. 1860B. Payment of benefits; benefit limits.

‘‘Sec. 1860C. Eligibility and enrollment.

‘‘Sec. 1860D. Premiums.

‘‘Sec. 1860F. Prescription Drug Insurance Account.

‘‘Sec. 1860G. Administration of benefits.

‘‘Sec. 1860H. Employer incentive program for employment-based retiree

drug coverage.

‘‘Sec. 1860I. Appropriations to cover Government contributions.

‘‘Sec. 1860J. Prescription drug defined.’’.

Sec. 102. Medicaid buy-in of medicare prescription drug coverage for certain

low-income individuals.

‘‘Sec. 1860E. Special eligibility, enrollment, and copayment rules for lowincome individuals.’’.

Sec. 103. Catastrophic prescription drug coverage benefit.

Sec. 104. Comprehensive immunosuppressive drug coverage for transplant patients.

Sec. 105. GAO study and biennial reports on competition and savings.

Sec. 106. MedPAC study and annual reports on the pharmaceutical market,

pharmacies, and beneficiary access.

TITLE II—ENHANCED MEDICARE PREVENTION PROGRAM

Sec. 201. MedPAC biennial report.

Sec. 202. National Institute on Aging study and report.

Sec. 203. Institute of Medicine 5-year medicare prevention benefit study and

report.

Sec. 204. Fast-track consideration of prevention benefit legislation.

7 SEC. 2. FINDINGS.

8 Congress makes the following findings:
3

S 2753 PCS

1 (1) Prescription drug coverage was not a stand2 ard part of health insurance when the medicare pro3 gram under title XVIII of the Social Security Act

4 was enacted in 1965. Since 1965, however, drug cov5 erage has become a key component of most private

6 and public health insurance coverage, except for the

7 medicare program.

(2) At least 2 8 ⁄3 of medicare beneficiaries have

9 unreliable, inadequate, or no drug coverage at all.

10 (3) Seniors who do not have drug coverage typi11 cally pay, at a minimum, 15 percent more than peo12 ple with coverage.

13 (4) Medicare beneficiaries at all income levels

lack prescription drug coverage, with more than 1 14 ⁄2

15 of such beneficiaries having incomes greater than

16 150 percent of the poverty line.

17 (5) The number of private firms offering retiree

18 health coverage is declining.

19 (6) Medigap premiums for drugs are too expen20 sive for most beneficiaries and are highest for older

21 senior citizens, who need prescription drug coverage

22 the most and typically have the lowest incomes.

23 (7) The management of a medicare prescription

24 drug benefit should mirror the practices employed by
4

S 2753 PCS

1 private entities in delivering prescription drugs. Dis2 counts should be achieved through competition.

3 (8) All medicare beneficiaries should have ac4 cess to a voluntary, reliable, affordable outpatient

5 drug benefit as part of the medicare program that

6 assists with the high cost of prescription drugs and

7 protects them against excessive out-of-pocket costs.

8 (9) The addition of a medicare drug benefit

9 should be consistent with an overall plan to

10 strengthen and modernize the medicare program.

11 TITLE I—PRESCRIPTION DRUG

12 BENEFIT PROGRAM

13 SEC. 101. PRESCRIPTION DRUG BENEFIT PROGRAM.

14 (a) IN GENERAL.—Title XVIII of the Social Security

15 Act (42 U.S.C. 1395 et seq.) is amended—

16 (1) by redesignating part D as part E; and

17 (2) by inserting after part C the following new

18 part:

19 ‘‘PART D—PRESCRIPTION DRUG BENEFIT FOR THE

20 AGED AND DISABLED

21 ‘‘ESTABLISHMENT OF PRESCRIPTION DRUG BENEFIT

22 PROGRAM FOR THE AGED AND DISABLED

23 ‘‘SEC. 1860. (a) IN GENERAL.—There is established

24 a voluntary insurance program to provide prescription

25 drug benefits in accordance with the provisions of this part
5

S 2753 PCS

1 for individuals who are aged or disabled or have end-stage

2 renal disease and who elect to enroll under such program,

3 to be financed from premium payments by enrollees to4 gether with contributions from funds appropriated by the

5 Federal Government.

6 ‘‘(b) NONINTERFERENCE.—In administering the pre7 scription drug benefit program established under this

8 part, the Secretary may not—

9 ‘‘(1) require a particular formulary or institute

10 a price structure for benefits;

11 ‘‘(2) interfere in any way with negotiations be12 tween private entities and drug manufacturers, or

13 wholesalers; or

14 ‘‘(3) otherwise interfere with the competitive

15 nature of providing a prescription drug benefit

16 through private entities.

17 ‘‘SCOPE OF BENEFITS

18 ‘‘SEC. 1860A. (a) IN GENERAL.—The benefits pro19 vided to an individual enrolled in the insurance program

20 under this part shall consist of—

21 ‘‘(1) payments made, in accordance with the

22 provisions of this part, for covered prescription

23 drugs (as specified in subsection (b)) dispensed by

24 any pharmacy participating in the program under

25 this part (and, in circumstances designated by the

26 private entity, by a nonparticipating pharmacy), in-
6

S 2753 PCS

1 cluding any specifically named drug prescribed for

2 the individual by a qualified health care professional

3 regardless of whether the drug is included in a for4 mulary established by the private entity if such drug

5 is certified as medically necessary by such health

6 care professional, up to the benefit limits specified in

7 section 1860B; and

8 ‘‘(2) charging by pharmacies of the negotiated

9 price—

10 ‘‘(A) for all covered prescription drugs,

11 without regard to such benefit limit; and

12 ‘‘(B) established with respect to any drugs

13 or classes of drugs described in subparagraphs

14 (A) through (D) or (F) of section 1927(d)(2)

15 that are available to individuals receiving bene16 fits under this title.

17 ‘‘(b) COVERED PRESCRIPTION DRUGS.—

18 ‘‘(1) IN GENERAL.—Covered prescription drugs,

19 for purposes of this part, include all prescription

20 drugs (as defined in section 1860J(1)), including

21 smoking cessation agents, except as otherwise pro22 vided in this subsection.

23 ‘‘(2) EXCLUSIONS FROM COVERAGE.—Covered

24 prescription drugs shall not include drugs or classes

25 of drugs described in subparagraphs (A) through
7

S 2753 PCS

1 (D) and (F) through (H) of section 1927(d)(2)

2 unless—

3 ‘‘(A) specifically provided otherwise by the

4 Secretary with respect to a drug in any of such

5 classes; or

6 ‘‘(B) a drug in any of such classes is cer7 tified to be medically necessary by a health care

8 professional.

9 ‘‘(3) EXCLUSION OF PRESCRIPTION DRUGS TO

10 THE EXTENT COVERED UNDER PART A OR B.—A

11 drug prescribed for an individual that would other12 wise be a covered prescription drug under this part

13 shall not be so considered to the extent that pay14 ment for such drug is available under part A or B,

15 including all injectable drugs and biologicals for

16 which payment was made or should have been made

17 by a carrier under section 1861(s)(2) (A) or (B) as

18 of the date of enactment of the Medicare Expansion

19 for Needed Drugs (MEND) Act of 2000. Drugs oth20 erwise covered under part A or B shall be covered

21 under this part to the extent that benefits under

22 part A or B are exhausted.

23 ‘‘PAYMENT OF BENEFITS; BENEFIT LIMITS

24 ‘‘SEC. 1860B. (a) PAYMENT OF BENEFITS.—There

25 shall be paid from the Prescription Drug Insurance Ac26 count within the Supplementary Medical Insurance Trust
8

S 2753 PCS

1 Fund, in the case of each individual who is enrolled in

2 the insurance program under this part and who purchases

3 covered prescription drugs in a calendar year, an amount,

4 not to exceed 50 percent of the applicable limit under sub5 section (b), equal to 50 percent of the negotiated price

6 for each such covered prescription drug or such higher

7 percentage as is proposed by a private entity pursuant to

8 section 1860G(d)(7), if the Secretary finds that such per9 centage will not increase aggregate costs to the Prescrip10 tion Drug Insurance Account.

11 ‘‘(b) BENEFIT LIMITS.—

12 ‘‘(1) CALENDAR YEARS 2002 THROUGH 2009.—

13 For purposes of subsection (a), the limit under this

14 subsection is—

15 ‘‘(A) for each of calendar years 2002,

16 2003, and 2004, $2,000;

17 ‘‘(B) for each of calendar years 2005,

18 2006, and 2007, $3,000;

19 ‘‘(C) for calendar year 2008, $4,000; and

20 ‘‘(D) for calendar year 2009, $5,000.

21 ‘‘(2) CALENDAR YEAR 2010 AND SUBSEQUENT

22 YEARS.—For purposes of subsection (a), the limit

23 under this subsection for calendar year 2010 and

24 each subsequent calendar year is equal to the great25 er of—
9

S 2753 PCS

1 ‘‘(A) the limit for the preceding year ad2 justed by the percentage change in the Con3 sumer Price Index for all urban consumers

4 (U.S. urban average) for the 12-month period

5 ending with June of the preceding year; or

6 ‘‘(B) the limit for the preceding year.

7 ‘‘ELIGIBILITY AND ENROLLMENT

8 ‘‘SEC. 1860C. (a) ELIGIBILITY.—Every individual

9 who, in or after 2002, is entitled to hospital insurance ben10 efits under part A or enrolled in the medical insurance

11 program under part B is eligible to enroll, in accordance

12 with the provisions of this section, in the insurance pro13 gram under this part, during an enrollment period pre14 scribed in or under this section, in such manner and form

15 as may be prescribed by regulations.

16 ‘‘(b) ENROLLMENT.—

17 ‘‘(1) IN GENERAL.—Each individual who satis18 fies subsection (a) shall be enrolled (or eligible to en19 roll) in the program under this part in accordance

20 with the provisions of section 1837, as if that section

21 applied to this part, except as otherwise explicitly

22 provided in this part.

23 ‘‘(2) SINGLE ENROLLMENT PERIOD.—Except as

24 provided in section 1837(i) (as such section applies

25 to this part), 1860E, or 1860H, or as otherwise ex26 plicitly provided, no individual shall be entitled to
10

S 2753 PCS

1 enroll in the program under this part at any time

2 after the initial enrollment period.

3 ‘‘(3) SPECIAL ENROLLMENT PERIOD FOR

4 2002.—

5 ‘‘(A) IN GENERAL.—An individual who

6 first satisfies subsection (a) in 2002 may, at

7 any time on or before December 31, 2002—

8 ‘‘(i) enroll in the program under this

9 part; and

10 ‘‘(ii) enroll or reenroll in such pro11 gram after having previously declined or

12 terminated enrollment in such program.

13 ‘‘(B) EFFECTIVE DATE OF COVERAGE.—

14 An individual who enrolls under the program

15 under this part pursuant to subparagraph (A)

16 shall be entitled to benefits under this part be17 ginning on the first day of the month following

18 the month in which such enrollment occurs.

19 ‘‘(c) PERIOD OF COVERAGE.—

20 ‘‘(1) IN GENERAL.—Except as otherwise pro21 vided in this part, an individual’s coverage under the

22 program under this part shall be effective for the pe23 riod provided in section 1838, as if that section ap24 plied to the program under this part.
11

S 2753 PCS

1 ‘‘(2) PART D COVERAGE TERMINATED BY TER2 MINATION OF COVERAGE UNDER PARTS A AND B.—

3 In addition to the causes of termination specified in

4 section 1838, an individual’s coverage under this

5 part shall be terminated when the individual retains

6 coverage under neither the program under part A

7 nor the program under part B, effective on the effec8 tive date of termination of coverage under part A or

9 (if later) under part B.

10 ‘‘PREMIUMS

11 ‘‘SEC. 1860D. (a) ANNUAL ESTABLISHMENT OF

12 MONTHLY PREMIUM RATES.—

13 ‘‘(1) IN GENERAL.—The Secretary shall, during

14 September of 2001 and of each succeeding year, de15 termine and promulgate a monthly premium rate for

16 the succeeding year in accordance with the provi17 sions of this subsection.

18 ‘‘(2) ACTUARIAL DETERMINATIONS.—

19 ‘‘(A) DETERMINATION OF ANNUAL BEN20 EFIT COSTS.—The Secretary shall estimate an21 nually for the succeeding year the amount equal

22 to the total of the benefits that will be payable

23 from the Prescription Drug Insurance Account

24 for prescription drugs dispensed in such cal25 endar year with respect to enrollees in the pro26 gram under this part. In calculating such
12

S 2753 PCS

1 amount, the Secretary shall include an appro2 priate amount for a contingency margin.

3 ‘‘(B) DETERMINATION OF MONTHLY PRE4 MIUM RATES.—

5 ‘‘(i) IN GENERAL.—The Secretary

6 shall determine the monthly premium rate

7 with respect to such enrollees for such succeeding year, which shall be 1 8 ⁄12 of the

9 share specified in clause (ii) of the amount

10 determined under subparagraph (A), di11 vided by the total number of such enroll12 ees, and rounded (if such rate is not a

13 multiple of 10 cents) to the nearest mul14 tiple of 10 cents.

15 ‘‘(ii) ENROLLEE AND EMPLOYER PER16 CENTAGE SHARES.—The share specified in

17 this clause, for purposes of clause (i), shall

18 be—

19 ‘‘(I) one-half, in the case of pre20 miums paid by an individual enrolled

21 in the program under this part; and

22 ‘‘(II) two-thirds, in the case of

23 premiums paid for such an individual

24 by a former employer (as defined in

25 section 1860H(f)(2)).
13

S 2753 PCS

1 ‘‘(3) PUBLICATION OF ASSUMPTIONS.—The

2 Secretary shall publish, together with the promulga3 tion of the monthly premium rates for the suc4 ceeding year, a statement setting forth the actuarial

5 assumptions and bases employed in arriving at the

6 amounts and rates determined under paragraphs (1)

7 and (2).

8 ‘‘(b) PAYMENT OF PREMIUMS.—

9 ‘‘(1) PAYMENTS BY DEDUCTION FROM SOCIAL

10 SECURITY, RAILROAD RETIREMENT BENEFITS, OR

11 BENEFITS ADMINISTERED BY OPM.—

12 ‘‘(A) DEDUCTION FROM BENEFITS.—In

13 the case of an individual who is entitled to or

14 receiving benefits as described in subsection (a),

15 (b), or (d) of section 1840, premiums payable

16 under this part shall be collected by deduction

17 from such benefits at the same time and in the

18 same manner as premiums payable under part

19 B are collected pursuant to section 1840.

20 ‘‘(B) TRANSFERS TO PRESCRIPTION DRUG

21 INSURANCE ACCOUNT.—The Secretary of the

22 Treasury shall, from time to time, but not less

23 often than quarterly, transfer premiums col24 lected pursuant to subparagraph (A) to the

25 Prescription Drug Insurance Account from the
14

S 2753 PCS

1 appropriate funds and accounts described in

2 subsections (a)(2), (b)(2), and (d)(2) of section

3 1840, on the basis of the certifications de4 scribed in such subsections. The amounts of

5 such transfers shall be appropriately adjusted

6 to the extent that prior transfers were too great

7 or too small.

8 ‘‘(2) DIRECT PAYMENTS TO SECRETARY.—

9 ‘‘(A) ADDITIONAL PAYMENT BY EN10 ROLLEE.—An individual to whom paragraph

11 (1) applies (other than an individual receiving

12 benefits as described in section 1840(d)) and

13 who estimates that the amount that will be

14 available for deduction under such paragraph

15 for any premium payment period will be less

16 than the amount of the monthly premiums for

17 such period may (under regulations) pay to the

18 Secretary the estimated balance, or such great19 er portion of the monthly premium as the indi20 vidual chooses.

21 ‘‘(B) PAYMENTS BY OTHER ENROLLEES.—

22 An individual enrolled in the insurance program

23 under this part with respect to whom none of

24 the preceding provisions of this subsection ap25 plies (or to whom section 1840(c) applies) shall
15

S 2753 PCS

1 pay premiums to the Secretary at such times

2 and in such manner as the Secretary shall by

3 regulations prescribe.

4 ‘‘(C) DEPOSIT OF PREMIUMS.—Amounts

5 paid to the Secretary under this paragraph

6 shall be deposited in the Treasury to the credit

7 of the Prescription Drug Insurance Account in

8 the Supplementary Medical Insurance Trust

9 Fund.

10 ‘‘(c) CERTAIN LOW-INCOME INDIVIDUALS.—For

11 rules concerning premiums for certain low-income individ12 uals, see section 1860E.

13 ‘‘PRESCRIPTION DRUG INSURANCE ACCOUNT

14 ‘‘SEC. 1860F. (a) ESTABLISHMENT.—There is cre15 ated within the Federal Supplemental Medical Insurance

16 Trust Fund established by section 1841 an account to be

17 known as the ‘Prescription Drug Insurance Account’ (in

18 this section referred to as the ‘Account’).

19 ‘‘(b) AMOUNTS IN ACCOUNT.—

20 ‘‘(1) IN GENERAL.—The Account shall consist

21 of—

22 ‘‘(A) such amounts as may be deposited in,

23 or appropriated to, such fund as provided in

24 this part; and

25 ‘‘(B) such gifts and bequests as may be

26 made as provided in section 201(i)(1).
16

S 2753 PCS

1 ‘‘(2) SEPARATION OF FUNDS.—Funds provided

2 under this part to the Account shall be kept sepa3 rate from all other funds within the Federal Supple4 mental Medical Insurance Trust Fund.

5 ‘‘(c) PAYMENTS FROM ACCOUNT.—The Managing

6 Trustee shall pay from time to time from the Account such

7 amounts as the Secretary certifies are necessary to make

8 the payments provided for by this part, and the payments

9 with respect to administrative expenses in accordance with

10 section 201(g).

11 ‘‘ADMINISTRATION OF BENEFITS

12 ‘‘SEC. 1860G. (a) IN GENERAL.—The Secretary shall

13 provide for administration of the benefits under this part

14 through a contract with a private entity designated in ac15 cordance with subsection (c), for enrolled individuals resid16 ing in each service area designated pursuant to subsection

17 (b) (other than such individuals enrolled in a

18 Medicare+Choice program under part C), in accordance

19 with the provisions of this section.

20 ‘‘(b) DESIGNATION OF SERVICE AREAS.—

21 ‘‘(1) IN GENERAL.—The Secretary shall divide

22 the total geographic area served by the programs

23 under this title into at least 15 service areas for pur24 poses of administration of benefits under this part.

25 ‘‘(2) CONSIDERATIONS.—In determining or ad26 justing the number and boundaries of service areas
17

S 2753 PCS

1 under this subsection, the Secretary shall seek to en2 sure that—

3 ‘‘(A) there is a reasonable level of competi4 tion among entities eligible to contract to ad5 minister the benefit program under this section

6 for each area;

7 ‘‘(B) the designation of areas is consistent

8 with the goal of securing contracts under this

9 section with respect to the maximum feasible

10 number of areas so designated; and

11 ‘‘(C) the designation of areas will foster

12 the existence of a sufficient number of entities

13 that are eligible and willing to administer the

14 benefits under this part.

15 ‘‘(c) DESIGNATION OF PRIVATE ENTITY.—

16 ‘‘(1) AWARD AND DURATION OF CONTRACT.—

17 ‘‘(A) COMPETITIVE AWARD.—Each con18 tract for a service area shall be awarded com19 petitively in accordance with section 5 of title

20 41, United States Code, for a period (subject to

21 subparagraph (B)) of not less than 2 nor more

22 than 5 years.

23 ‘‘(B) REVIEW.—A contract for a service

24 area shall be subject to an evaluation after 2

25 years.
18

S 2753 PCS

1 ‘‘(2) ELIGIBLE PRIVATE ENTITIES.—A private

2 entity eligible for consideration as a private entity

3 responsible for administering the prescription drug

4 benefit program under this part in a service area

5 shall meet at least the following criteria:

6 ‘‘(A) TYPE.—The private entity shall be

7 capable of administering a prescription drug

8 benefit program, and may be a prescription

9 drug vendor, wholesale and retail pharmacist

10 delivery system, health care provider or insurer,

11 any other type of entity as the Secretary may

12 specify, or a consortium of such entities.

13 ‘‘(B) PERFORMANCE CAPABILITY.—The

14 entity shall have sufficient expertise, personnel,

15 and resources to perform effectively the benefit

16 administration functions for such area.

17 ‘‘(C) FINANCIAL INTEGRITY.—The entity

18 and its officers, directors, agents, and man19 aging employees shall have a satisfactory record

20 of professional competence and professional and

21 financial integrity, and the entity shall have

22 adequate financial resources to perform services

23 under the contract without risk of insolvency.

24 ‘‘(3) PROPOSAL REQUIREMENTS.—
19

S 2753 PCS

1 ‘‘(A) IN GENERAL.—An entity’s proposal

2 for award or renewal of a contract under this

3 section shall include such material and informa4 tion as the Secretary may require.

5 ‘‘(B) SPECIFIC INFORMATION.—A proposal

6 described in subparagraph (A) shall include a

7 detailed description of—

8 ‘‘(i) the schedule of negotiated prices

9 that will be charged to enrollees;

10 ‘‘(ii) how the entity will deter medical

11 errors that are related to prescription

12 drugs; and

13 ‘‘(iii) proposed contracts with local

14 pharmacy providers designed to ensure ac15 cess, including compensation for local

16 pharmacists’ services.

17 ‘‘(4) EXCEPTIONS TO CONFLICT OF INTEREST

18 RULES.—In awarding contracts under this sub19 section, the Secretary may waive conflict of interest

20 rules generally applicable to Federal acquisitions

21 (subject to such safeguards as the Secretary may

22 find necessary to impose) in circumstances where the

23 Secretary finds that such waiver—
20

S 2753 PCS

1 ‘‘(A) is not inconsistent with the purposes

2 of the programs under this title and the best in3 terests of enrolled individuals; and

4 ‘‘(B) will permit a sufficient level of com5 petition for such contracts, promote efficiency

6 of benefits administration, or otherwise serve

7 the objectives of the program under this part.

8 ‘‘(5) MAXIMIZING COMPETITION.—In awarding

9 contracts under this section, the Secretary shall give

10 consideration to the need to maintain sufficient

11 numbers of entities eligible and willing to administer

12 benefits under this part to ensure vigorous competi13 tion for such contracts.

14 ‘‘(d) FUNCTIONS OF PRIVATE ENTITY.—The private

15 entity for a service area shall (or in the case of the func16 tion described in paragraph (7), may) perform the fol17 lowing functions:

18 ‘‘(1) PARTICIPATION AGREEMENTS, PRICES,

19 AND FEES.—

20 ‘‘(A) PRIVATELY NEGOTIATED PRICES.—

21 Each private entity shall establish, through ne22 gotiations with drug manufacturers and whole23 salers and pharmacies, a schedule of prices for

24 covered prescription drugs.
21

S 2753 PCS

1 ‘‘(B) AGREEMENTS WITH PHARMACIES.—

2 Each private entity shall enter into participa3 tion agreements under subsection (e) with phar4 macies, that include terms that—

5 ‘‘(i) secure the participation of suffi6 cient numbers of pharmacies to ensure

7 convenient access (including adequate

8 emergency access); and

9 ‘‘(ii) permit the participation of any

10 pharmacy in the service area that meets

11 the participation requirements described in

12 subsection (e).

13 ‘‘(C) LISTS OF PRICES AND PARTICIPATING

14 PHARMACIES.—Each private entity shall ensure

15 that the negotiated prices established under

16 subparagraph (A) and the list of pharmacies

17 with agreements under subsection (e) are regu18 larly updated and readily available in the serv19 ice area to health care professionals authorized

20 to prescribe drugs, participating pharmacies,

21 and enrolled individuals.

22 ‘‘(2) PAYMENT AND COORDINATION OF BENE23 FITS.—

24 ‘‘(A) PAYMENT.—Each private entity

25 shall—
22

S 2753 PCS

1 ‘‘(i) administer claims for payment of

2 benefits under this part;

3 ‘‘(ii) determine amounts of benefit

4 payments to be made; and

5 ‘‘(iii) receive, disburse, and account

6 for funds used in making such payments,

7 including through the activities specified in

8 the provisions of this paragraph.

9 ‘‘(B) COORDINATION.—Each private entity

10 shall coordinate with the Secretary, other pri11 vate entities, pharmacies, and other relevant en12 tities as necessary to ensure appropriate coordi13 nation of benefits with respect to enrolled indi14 viduals, including coordination of access to and

15 payment for covered prescription drugs accord16 ing to an individual’s in-service area plan provi17 sions, when such individual is traveling outside

18 the home service area, and under such other

19 circumstances as the Secretary may specify.

20 ‘‘(C) EXPLANATION OF BENEFITS.—Each

21 private entity shall furnish to enrolled individ22 uals an explanation of benefits in accordance

23 with section 1806(a), and a notice of the bal24 ance of benefits remaining for the current year,

25 whenever prescription drug benefits are pro-
23

S 2753 PCS

1 vided under this part (except that such notice

2 need not be provided more often than monthly).

3 ‘‘(3) COST AND UTILIZATION MANAGEMENT;

4 QUALITY ASSURANCE.—Each private entity shall

5 have in place effective cost and utilization manage6 ment, quality assurance measures, and systems to

7 reduce medical errors, including at least the fol8 lowing, together with such additional measures as

9 the Secretary may specify:

10 ‘‘(A) DRUG UTILIZATION REVIEW.—A drug

11 utilization review program conforming to the

12 standards provided in section 1927(g)(2) (with

13 such modifications as the Secretary finds ap14 propriate).

15 ‘‘(B) FRAUD AND ABUSE CONTROL.—Ac16 tivities to control fraud, abuse, and waste.

17 ‘‘(4) EDUCATION AND INFORMATION ACTIVI18 TIES.—Each private entity shall have in place mech19 anisms for disseminating educational and informa20 tional materials to enrolled individuals and health

21 care providers designed to encourage effective and

22 cost-effective use of prescription drug benefits and to

23 ensure that enrolled individuals understand their

24 rights and obligations under the program.

25 ‘‘(5) BENEFICIARY PROTECTIONS.—
24

S 2753 PCS

1 ‘‘(A) CONFIDENTIALITY OF HEALTH IN2 FORMATION.—Each private entity shall have in

3 effect systems to safeguard the confidentiality

4 of health care information on enrolled individ5 uals, which comply with section 1106 and with

6 section 552a of title 5, United States Code, and

7 meet such additional standards as the Secretary

8 may prescribe.

9 ‘‘(B) GRIEVANCE AND APPEAL PROCE10 DURES.—Each private entity have in place such

11 procedures as the Secretary may specify for

12 hearing and resolving grievances and appeals

13 brought by enrolled individuals against the pri14 vate entity or a pharmacy concerning benefits

15 under this part, which shall, to the extent the

16 Secretary finds necessary and appropriate, in17 clude procedures equivalent to those specified in

18 subsections (f) and (g) of section 1852.

19 ‘‘(6) RECORDS, REPORTS, AND AUDITS OF PRI20 VATE ENTITIES.—

21 ‘‘(A) RECORDS AND AUDITS.—Each pri22 vate entity shall maintain adequate records, and

23 afford the Secretary access to such records (in24 cluding for audit purposes).
25

S 2753 PCS

1 ‘‘(B) REPORTS.—Each private entity shall

2 make such reports and submissions of financial

3 and utilization data as the Secretary may re4 quire taking into account standard commercial

5 practices.

6 ‘‘(7) PROPOSAL FOR ALTERNATIVE COINSUR7 ANCE AMOUNT.—

8 ‘‘(A) SUBMISSION.—Each private entity

9 may submit a proposal for increased Govern10 ment cost-sharing for generic prescription

11 drugs, prescription drugs on the private entity’s

12 formulary, or prescription drugs obtained

13 through mail order pharmacies.

14 ‘‘(B) CONTENTS.—The proposal submitted

15 under subparagraph (A) shall contain evidence

16 that such increased cost-sharing would not re17 sult in an increase in aggregate costs to the Ac18 count, including an analysis of differences in

19 projected drug utilization patterns by bene20 ficiaries whose cost-sharing would be reduced

21 under the proposal and those making the cost22 sharing payments that would otherwise apply.

23 ‘‘(8) OTHER REQUIREMENTS.—Each private en24 tity shall meet such other requirements as the Sec25 retary may specify.
26

S 2753 PCS

1 ‘‘(e) PHARMACY PARTICIPATION AGREEMENTS.—

2 ‘‘(1) IN GENERAL.—A pharmacy that meets the

3 requirements of this subsection shall be eligible to

4 enter an agreement with a private entity to furnish

5 covered prescription drugs and pharmacists’ services

6 to enrolled individuals residing in the service area.

7 ‘‘(2) TERMS OF AGREEMENT.—An agreement

8 under this subsection shall include the following

9 terms and requirements:

10 ‘‘(A) LICENSING.—The pharmacy and

11 pharmacists shall meet (and throughout the

12 contract period will continue to meet) all appli13 cable State and local licensing requirements.

14 ‘‘(B) LIMITATION ON CHARGES.—Phar15 macies participating under this part shall not

16 charge an enrolled individual more than the ne17 gotiated price for an individual drug as estab18 lished under subsection (d)(1), regardless of

19 whether such individual has attained the benefit

20 limit under section 1860B(b), and shall not

21 charge an enrolled individual more than the in22 dividual’s share of the negotiated price as deter23 mined under the provisions of this part.
27

S 2753 PCS

1 ‘‘(C) PERFORMANCE STANDARDS.—The

2 pharmacy shall comply with performance stand3 ards relating to—

4 ‘‘(i) measures for quality assurance,

5 reduction of medical errors, and participa6 tion in the drug utilization review program

7 described in subsection (d)(3)(A);

8 ‘‘(ii) systems to ensure compliance

9 with the confidentiality standards applica10 ble under subsection (d)(5)(A); and

11 ‘‘(iii) other requirements as the Sec12 retary may impose to ensure integrity, effi13 ciency, and the quality of the program.

14 ‘‘(f) FLEXIBILITY IN ASSIGNING WORKLOAD AMONG

15 PRIVATE ENTITIES.—During the period after the Sec16 retary has given notice of intent to terminate a contract

17 with a private entity, the Secretary may transfer respon18 sibilities of the private entity under such contract to an19 other private entity.

20 ‘‘(g) SPECIAL ATTENTION TO RURAL AND HARD-TO21 SERVE AREAS.—

22 ‘‘(1) IN GENERAL.—The Secretary shall ensure

23 that all beneficiaries have access to the full range of

24 pharmaceuticals under this part, and shall give spe25 cial attention to access, pharmacist counseling, and
28

S 2753 PCS

1 delivery in rural and hard-to-serve areas (as the Sec2 retary may define by regulation).

3 ‘‘(2) SPECIAL ATTENTION DEFINED.—For pur4 poses of paragraph (1), the term ‘special attention’

5 may include bonus payments to retail pharmacists in

6 rural areas, extra payments to the private entity for

7 the cost of rapid delivery of pharmaceuticals, and

8 any other actions the Secretary determines are nec9 essary to ensure full access to rural and hard-to10 serve beneficiaries.

11 ‘‘(3) GAO REPORT.—Not later than 2 years

12 after the implementation of this part the Comp13 troller General of the United States shall submit to

14 Congress a report on the access of medicare bene15 ficiaries to pharmaceuticals and pharmacists’ serv16 ices in rural and hard-to-serve areas under this part

17 together with any recommendations of the Comp18 troller General regarding any additional steps the

19 Secretary may need to take to ensure the access of

20 medicare beneficiaries to pharmaceuticals and phar21 macists’ services in such areas under this part.

22 ‘‘(h) INCENTIVES FOR COST AND UTILIZATION MAN23 AGEMENT AND QUALITY IMPROVEMENT.—The Secretary

24 is authorized to include in a contract awarded under sub25 section (c) such incentives for cost and utilization manage-
29

S 2753 PCS

1 ment and quality improvement as the Secretary may deem

2 appropriate, including—

3 ‘‘(1) bonus and penalty incentives to encourage

4 administrative efficiency;

5 ‘‘(2) incentives under which private entities

6 share in any benefit savings achieved;

7 ‘‘(3) risk-sharing arrangements related to ben8 efit payments; and

9 ‘‘(4) any other incentive that the Secretary

10 deems appropriate and likely to be effective in man11 aging costs or utilization.

12 ‘‘EMPLOYER INCENTIVE PROGRAM FOR EMPLOYMENT13 BASED RETIREE DRUG COVERAGE

14 ‘‘SEC. 1860H. (a) PROGRAM AUTHORITY.—The Sec15 retary is authorized to develop and implement a program

16 under this section called the ‘Employer Incentive Pro17 gram’ that encourages employers and other sponsors of

18 employment-based health care coverage to provide ade19 quate prescription drug benefits to retired individuals and

20 to maintain such existing benefit programs, by sub21 sidizing, in part, the sponsor’s cost of providing coverage

22 under qualifying plans.

23 ‘‘(b) SPONSOR REQUIREMENTS.—In order to be eligi24 ble to receive an incentive payment under this section with

25 respect to coverage of an individual under a qualified re-
30

S 2753 PCS

1 tiree prescription drug plan (as defined in subsection

2 (f)(3)), a sponsor shall meet the following requirements:

3 ‘‘(1) ASSURANCES.—The sponsor shall—

4 ‘‘(A) annually attest, and provide such as5 surances as the Secretary may require, that the

6 coverage offered by the sponsor is a qualified

7 retiree prescription drug plan, and will remain

8 such a plan for the duration of the sponsor’s

9 participation in the program under this section;

10 and

11 ‘‘(B) guarantee that it will give notice to

12 the Secretary and covered retirees—

13 ‘‘(i) at least 120 days before termi14 nating its plan; and

15 ‘‘(ii) immediately upon determining

16 that the actuarial value of the prescription

17 drug benefit under the plan falls below the

18 actuarial value of the insurance benefit

19 under this part.

20 ‘‘(2) OTHER REQUIREMENTS.—The sponsor

21 shall provide such information, and comply with

22 such requirements, including information require23 ments to ensure the integrity of the program, as the

24 Secretary may find necessary to administer the pro25 gram under this section.
31

S 2753 PCS

1 ‘‘(c) INCENTIVE PAYMENT.—

2 ‘‘(1) IN GENERAL.—A sponsor that meets the

3 requirements of subsection (b) with respect to a

4 quarter in a calendar year shall have payment made

5 by the Secretary on a quarterly basis (to the sponsor

6 or, at the sponsor’s direction, to the appropriate em7 ployment-based health plan) of an incentive pay8 ment, in the amount determined as described in

9 paragraph (2), for each retired individual (or

10 spouse) who—

11 ‘‘(A) was covered under the sponsor’s

12 qualified retiree prescription drug plan during

13 such quarter; and

14 ‘‘(B) was eligible for but was not enrolled

15 in the insurance program under this part.

16 ‘‘(2) AMOUNT OF INCENTIVE.—The payment

17 under this section with respect to each individual de18 scribed in paragraph (1) for a month shall be equal

to 2 19 ⁄3 of the monthly premium amount payable by an

20 enrolled individual, as set for the calendar year pur21 suant to section 1860D(a)(2).

22 ‘‘(3) PAYMENT DATE.—The incentive under

23 this section with respect to a calendar quarter shall

24 be payable as of the end of the next succeeding cal25 endar quarter.
32

S 2753 PCS

1 ‘‘(d) CIVIL MONEY PENALTIES.—A sponsor, health

2 plan, or other entity that the Secretary determines has,

3 directly or through its agent, provided information in con4 nection with a request for an incentive payment under this

5 section that the entity knew or should have known to be

6 false shall be subject to a civil monetary penalty in an

7 amount up to 3 times the total incentive amounts under

8 subsection (c) that were paid (or would have been payable)

9 on the basis of such information.

10 ‘‘(e) PART D ENROLLMENT FOR CERTAIN INDIVID11 UALS COVERED BY EMPLOYMENT-BASED RETIREE

12 HEALTH COVERAGE PLANS.—

13 ‘‘(1) ELIGIBLE INDIVIDUALS.—An individual

14 shall be given the opportunity to enroll in the pro15 gram under this part during the period specified in

16 paragraph (2) if—

17 ‘‘(A) the individual declined enrollment in

18 the program under this part at the time the in19 dividual first satisfied section 1860C(a);

20 ‘‘(B) at that time, the individual was cov21 ered under a qualified retiree prescription drug

22 plan for which an incentive payment was paid

23 under this section; and

24 ‘‘(C)(i) the sponsor subsequently ceased to

25 offer such plan; or
33

S 2753 PCS

1 ‘‘(ii) the value of prescription drug cov2 erage under such plan became less than the

3 value of the coverage under the program under

4 this part.

5 ‘‘(2) SPECIAL ENROLLMENT PERIOD.—An indi6 vidual described in paragraph (1) shall be eligible to

7 enroll in the program under this part during the 6-

8 month period beginning on the first day of the

9 month in which—

10 ‘‘(A) the individual receives a notice that

11 coverage under such plan has terminated (in

12 the circumstance described in paragraph

13 (1)(C)(i)) or notice that a claim has been de14 nied because of such a termination; or

15 ‘‘(B) the individual received notice of the

16 change in benefits (in the circumstance de17 scribed in paragraph (1)(C)(ii)).

18 ‘‘(f) DEFINITIONS.—In this section:

19 ‘‘(1) EMPLOYMENT-BASED RETIREE HEALTH

20 COVERAGE.—The term ‘employment-based retiree

21 health coverage’ means health insurance or other

22 coverage of health care costs for retired individuals

23 (or for such individuals and their spouses and de24 pendents) based on their status as former employees

25 or labor union members.
34

S 2753 PCS

1 ‘‘(2) EMPLOYER.—The term ‘employer’ has the

2 meaning given to such term by section 3(5) of the

3 Employee Retirement Income Security Act of 1974

4 (except that such term shall include only employers

5 of 2 or more employees).

6 ‘‘(3) QUALIFIED RETIREE PRESCRIPTION DRUG

7 PLAN.—The term ‘qualified retiree prescription drug

8 plan’ means health insurance coverage included in

9 employment-based retiree health coverage that—

10 ‘‘(A) provides coverage of the cost of pre11 scription drugs whose actuarial value to each

12 retired beneficiary equals or exceeds the actu13 arial value of the benefits provided to an indi14 vidual enrolled in the program under this part;

15 and

16 ‘‘(B) does not deny, limit, or condition the

17 coverage or provision of prescription drug bene18 fits for retired individuals based on age or any

19 health status-related factor described in section

20 2702(a)(1) of the Public Health Service Act.

21 ‘‘(4) SPONSOR.—The term ‘sponsor’ has the

22 meaning given the term ‘plan sponsor’ by section

23 3(16)(B) of the Employee Retirement Income Secu24 rity Act of 1974.
35

S 2753 PCS

1 ‘‘APPROPRIATIONS TO COVER GOVERNMENT

2 CONTRIBUTIONS

3 ‘‘SEC. 1860I. (a) IN GENERAL.—There are author4 ized to be appropriated from time to time, out of any mon5 eys in the Treasury not otherwise appropriated, to the

6 Prescription Drug Insurance Account, a Government con7 tribution equal to—

8 ‘‘(1) the aggregate premiums payable for a

9 month pursuant to section 1860D(a)(2) by individ10 uals enrolled in the program under this part; plus

11 ‘‘(2) one-half the aggregate premiums payable

12 for a month pursuant to such section for such indi13 viduals by former employers.

14 ‘‘(b) APPROPRIATIONS TO COVER INCENTIVES FOR

15 EMPLOYMENT-BASED RETIREE DRUG COVERAGE.—

16 There are authorized to be appropriated to the Prescrip17 tion Drug Insurance Account from time to time, out of

18 any moneys in the Treasury not otherwise appropriated

19 such sums as may be necessary for payment of incentive

20 payments under section 1860H(c).

21 ‘‘PRESCRIPTION DRUG DEFINED

22 ‘‘SEC. 1860J. As used in this part, the term ‘pre23 scription drug’ means—

24 ‘‘(1) a drug that may be dispensed only upon

25 a prescription, and that is described in subpara-
36

S 2753 PCS

1 graph (A)(i), (A)(ii), or (B) of section 1927(k)(2);

2 and

3 ‘‘(2) insulin certified under section 506 of the

4 Federal Food, Drug, and Cosmetic Act, and needles,

5 syringes, and disposable pumps for the administra6 tion of such insulin.’’.

7 (b) STUDY OF ANNUAL OPEN ENROLLMENT.—

8 (1) STUDY.—During 2002 and 2003, the Sec9 retary shall conduct a study on the feasibility and

10 advisability of establishing an annual open enroll11 ment period for the program under part D (as added

12 by subsection (a)). Such study shall reflect data re13 ported by private entities administering benefits

14 under such part and shall include—

15 (A) a review of the costs, effectiveness, and

16 administrative feasibility of an annual open en17 rollment period for beneficiaries who—

18 (i) previously declined enrollment; or

19 (ii) who previously disenrolled and de20 sire to reenroll;

21 (B) an evaluation of a premium penalty for

22 late enrollment based on actuarially determined

23 costs to the program of late enrollment; and

24 (C) a projection of the costs if open enroll25 ment was allowed without a penalty.
37

S 2753 PCS

1 (2) REPORT.—The Secretary shall prepare a re2 port setting forth the outcome of the study and may

3 include in the report a recommendation as to wheth4 er an annual open enrollment period should be im5 plemented under such part.

6 (c) CONFORMING AMENDMENTS.—

7 (1) AMENDMENTS TO FEDERAL SUPPLE8 MENTARY HEALTH INSURANCE TRUST FUND.—Sec9 tion 1841 of the Social Security Act (42 U.S.C.

10 1395t) is amended—

11 (A) in the last sentence of subsection (a)—

12 (i) by striking ‘‘and’’ after ‘‘section

13 201(i)(1)’’; and

14 (ii) by inserting before the period the

15 following: ‘‘, and such amounts as may be

16 deposited in, or appropriated to, the Pre17 scription Drug Insurance Account estab18 lished by section 1860F’’;

19 (B) in subsection (g), by inserting after

20 ‘‘by this part,’’ the following: ‘‘the payments

21 provided for under part D (in which case the

22 payments shall come from the Prescription

23 Drug Insurance Account in the Supplementary

24 Medical Insurance Trust Fund),’’;
38

S 2753 PCS

1 (C) in the first sentence of subsection (h),

2 by inserting before the period the following:

3 ‘‘and section 1860D(b)(4) (in which case the

4 payments shall come from the Prescription

5 Drug Insurance Account in the Supplementary

6 Medical Insurance Trust Fund)’’; and

7 (D) in the first sentence of subsection

8 (i)—

9 (i) by striking ‘‘and’’ after ‘‘section

10 1840(b)(1)’’; and

11 (ii) by inserting before the period the

12 following: ‘‘, section 1860D(b)(2) (in which

13 case the payments shall come from the

14 Prescription Drug Insurance Account in

15 the Supplementary Medical Insurance

16 Trust Fund)’’.

17 (2) PRESCRIPTION DRUG OPTION UNDER

18 MEDICARE+CHOICE PLANS.—

19 (A) ELIGIBILITY, ELECTION, AND ENROLL20 MENT.—Section 1851 of the Social Security Act

21 (42 U.S.C. 1395w–21) is amended—

22 (i) in subsection (a)(1)(A), by striking

23 ‘‘parts A and B’’ inserting ‘‘parts A, B,

24 and D’’; and
39

S 2753 PCS

1 (ii) in subsection (i)(1), by striking

2 ‘‘parts A and B’’ and inserting ‘‘parts A,

3 B, and D’’.

4 (B) VOLUNTARY BENEFICIARY ENROLL5 MENT FOR DRUG COVERAGE.—Section

6 1852(a)(1)(A) of such Act (42 U.S.C. 1395w–

7 22(a)(1)(A)) is amended by inserting ‘‘(and

8 under part D to individuals also enrolled under

9 that part)’’ after ‘‘parts A and B’’.

10 (C) ACCESS TO SERVICES.—Section

11 1852(d)(1) of such Act (42 U.S.C. 1395w–

12 22(d)(1)) is amended—

13 (i) in subparagraph (D), by striking

14 ‘‘and’’ at the end;

15 (ii) in subparagraph (E), by striking

16 the period at the end and inserting ‘‘;

17 and’’; and

18 (iii) by adding at the end the fol19 lowing new subparagraph:

20 ‘‘(F) the plan for prescription drug bene21 fits under part D guarantees coverage of any

22 specifically named covered prescription drug for

23 an enrollee, when prescribed by a physician in

24 accordance with the provisions of such part, re25 gardless of whether such drug would otherwise
40

S 2753 PCS

1 be covered under an applicable formulary or

2 discount arrangement.’’.

3 (D) PAYMENTS TO ORGANIZATIONS.—Sec4 tion 1853(a)(1)(A) of such Act (42 U.S.C.

5 1395w–23(a)(1)(A)) is amended—

6 (i) by inserting ‘‘determined sepa7 rately for benefits under parts A and B

8 and under part D (for individuals enrolled

9 under that part)’’ after ‘‘as calculated

10 under subsection (c)’’;

11 (ii) by striking ‘‘that area, adjusted

12 for such risk factors’’ and inserting ‘‘that

13 area. In the case of payment for benefits

14 under parts A and B, such payment shall

15 be adjusted for such risk factors as’’; and

16 (iii) by inserting before the last sen17 tence the following: ‘‘In the case of the

18 payments for benefits under part D, such

19 payment shall initially be adjusted for the

20 risk factors of each enrollee as the Sec21 retary determines to be feasible and appro22 priate. By 2006, the adjustments would be

23 for the same risk factors applicable for

24 benefits under parts A and B.’’.
41

S 2753 PCS

1 (E) CALCULATION OF ANNUAL MEDICARE

2 +CHOICE CAPITATION RATES.—Section 1853(c)

3 of such Act (42 U.S.C. 1395w–23(c)) is

4 amended—

5 (i) in paragraph (1), in the matter

6 preceding subparagraph (A), by inserting

7 ‘‘for benefits under parts A and B’’ after

8 ‘‘capitation rate’’;

9 (ii) in paragraph (6)(A), by striking

10 ‘‘rate of growth in expenditures under this

11 title’’ and inserting ‘‘rate of growth in ex12 penditures for benefits available under

13 parts A and B’’; and

14 (iii) by adding at the end the fol15 lowing new paragraph:

16 ‘‘(8) PAYMENT FOR PRESCRIPTION DRUGS.—

17 The Secretary shall determine a capitation rate for

18 prescription drugs—

19 ‘‘(A) dispensed in 2002, which is based on

20 the projected national per capita costs for pre21 scription drug benefits under part D and asso22 ciated claims processing costs for beneficiaries

23 under the original medicare fee-for-service pro24 gram; and
42

S 2753 PCS

1 ‘‘(B) dispensed in each subsequent year,

2 which shall be equal to the rate for the previous

3 year updated by the Secretary’s estimate of the

4 projected per capita rate of growth in expendi5 tures under this title for an individual enrolled

6 under part D.’’.

7 (F) LIMITATION ON ENROLLEE LIABIL8 ITY.—Section 1854(e) of such Act (42 U.S.C.

9 1395w–24(e)) is amended by adding at the end

10 the following new paragraph:

11 ‘‘(5) SPECIAL RULE FOR PROVISION OF PART D

12 BENEFITS.—In no event may a Medicare+Choice or13 ganization include as part of a plan for prescription

14 drug benefits under part D a requirement that an

15 enrollee pay a deductible, or a coinsurance percent16 age that exceeds 50 percent.’’.

17 (G) REQUIREMENT FOR ADDITIONAL BEN18 EFITS.—Section 1854(f)(1) of such Act (42

19 U.S.C. 1395w–24(f)(1)) is amended by adding

20 at the end the following new sentence: ‘‘Such

21 determination shall be made separately for ben22 efits under parts A and B and for prescription

23 drug benefits under part D.’’.

24 (H) PROTECTIONS AGAINST FRAUD AND

25 BENEFICIARY PROTECTIONS.—Section 1857(d)
43

S 2753 PCS

1 is amended by adding at the end the following

2 new paragraph:

3 ‘‘(6) AVAILABILITY OF NEGOTIATED PRICES.—

4 Each contract under this section shall provide that

5 enrollees who exhaust prescription drug benefits

6 under the plan will continue to have access to pre7 scription drugs at negotiated prices equivalent to the

8 total combined cost of such drugs to the plan and

9 the enrollee prior to such exhaustion of benefits.’’.

10 (3) EXCLUSIONS FROM COVERAGE.—

11 (A) APPLICATION TO PART D.—Section

12 1862(a) of the Social Security Act (42 U.S.C.

13 1395y(a)) is amended in the matter preceding

14 paragraph (1) by striking ‘‘part A or part B’’

15 and inserting ‘‘part A, B, or D’’.

16 (B) PRESCRIPTION DRUGS NOT EXCLUDED

17 FROM COVERAGE IF APPROPRIATELY PRE18 SCRIBED.—Section 1862(a)(1) of such Act (42

19 U.S.C. 1395y(a)(1)) is amended—

20 (i) in subparagraph (H), by striking

21 ‘‘and’’ at the end;

22 (ii) in subparagraph (I), by striking

23 the semicolon at the end and inserting ‘‘,

24 and’’; and
44

S 2753 PCS

1 (iii) by adding at the end the fol2 lowing new subparagraph:

3 ‘‘(J) in the case of prescription drugs cov4 ered under part D, which are not prescribed in

5 accordance with such part;’’.

6 SEC. 102. MEDICAID BUY-IN OF MEDICARE PRESCRIPTION

7 DRUG COVERAGE FOR CERTAIN LOW-INCOME

8 INDIVIDUALS.

9 (a) STATE OPTION TO BUY-IN DUALLY ELIGIBLE

10 INDIVIDUALS.—

11 (1) COVERAGE OF PREMIUMS AS MEDICAL AS12 SISTANCE.—Section 1905(a) of the Social Security

13 Act (42 U.S.C. 1396d) is amended in the second

14 sentence of the flush matter at the end by striking

15 ‘‘premiums under part B’’ the first place it appears

16 and inserting ‘‘premiums under parts B and D’’.

17 (2) STATE COMMITMENT TO CONTINUE PAR18 TICIPATION IN PART D AFTER BENEFIT LIMIT

19 REACHED.—Section 1902(a) of such Act (42 U.S.C.

20 1396a) is amended—

21 (A) by striking ‘‘and’’ at the end of para22 graph (64);

23 (B) by striking the period at the end of

24 paragraph (65)(B) and inserting ‘‘; and’’; and
45

S 2753 PCS

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

2 paragraph:

3 ‘‘(66) provide that in the case of any individual

4 whose eligibility for medical assistance is not limited

5 to medicare or medicare drug cost-sharing and for

6 whom the State elects to pay premiums under part

7 D of title XVIII pursuant to section 1860E, the

8 State will purchase all prescription drugs for such

9 individual in accordance with the provisions of such

10 part D, without regard to whether the benefit limit

11 for such individual under section 1860B(b) has been

12 reached.’’.

13 (b) MEDICARE COST-SHARING REQUIRED FOR

14 QUALIFIED MEDICARE BENEFICIARIES.—Section

15 1905(p)(3) of the Social Security Act (42 U.S.C.

16 1396d(p)(3)) is amended—

17 (1) in subparagraph (A)—

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

19 end;

20 (B) in clause (ii), by inserting ‘‘and’’ at

21 the end; and

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

23 clause:

24 ‘‘(iii) premiums under section

25 1860D.’’; and
46

S 2753 PCS

1 (2) in subparagraph (D)—

2 (A) by inserting ‘‘(i)’’ after ‘‘(D)’’; and

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

4 ‘‘(ii) The difference between the amount

5 that is paid under section 1860B and the

6 amount that would be paid under such section

7 if any reference to ‘50 percent’ therein were

8 deemed a reference to ‘100 percent’ (or, if the

9 Secretary approves a higher percentage under

10 such section, if such percentage were deemed to

11 be 100 percent).’’.

12 (c) MEDICARE DRUG COST-SHARING REQUIRED FOR

13 MEDICARE-ELIGIBLE INDIVIDUALS WITH INCOMES BE14 TWEEN 100 AND 150 PERCENT OF POVERTY LINE.—

15 (1) DEFINITIONS OF ELIGIBLE BENEFICIARIES

16 AND COVERAGE.—Section 1905 of the Social Secu17 rity Act (42 U.S.C. 1396d) is amended by adding at

18 the end the following new subsection:

19 ‘‘(x)(1) The term ‘qualified medicare drug bene20 ficiary’ means an individual—

21 ‘‘(A) who is entitled to hospital insurance bene22 fits under part A of title XVIII (including an indi23 vidual entitled to such benefits pursuant to an en24 rollment under section 1818, but not including an
47

S 2753 PCS

1 individual entitled to such benefits only pursuant to

2 an enrollment under section 1818A);

3 ‘‘(B) whose income (as determined under sec4 tion 1612 for purposes of the supplemental security

5 income program, except as provided in subsection

6 (p)(2)(D)) is above 100 percent but below 150 per7 cent of the official poverty line (as defined by the

8 Office of Management and Budget, and revised an9 nually in accordance with section 673(2) of the Om10 nibus Budget Reconciliation Act of 1981) applicable

11 to a family of the size involved; and

12 ‘‘(C) whose resources (as determined under sec13 tion 1613 for purposes of the supplemental security

14 income program) do not exceed twice the maximum

15 amount of resources that an individual may have

16 and obtain benefits under that program.

17 ‘‘(2) The term ‘medicare drug cost-sharing’ means

18 the following costs incurred with respect to a qualified

19 medicare drug beneficiary, without regard to whether the

20 costs incurred were for items and services for which med21 ical assistance is otherwise available under the plan:

22 ‘‘(A) In the case of a qualified medicare drug

23 beneficiary whose income (as determined under

24 paragraph (1)) is less than 135 percent of the offi25 cial poverty line—
48

S 2753 PCS

1 ‘‘(i) premiums under section 1860D; and

2 ‘‘(ii) the difference between the amount

3 that is paid under section 1860B and the

4 amount that would be paid under such section

5 if any reference to ‘50 percent’ therein were

6 deemed a reference to ‘100 percent’ (or, if the

7 Secretary approves a higher percentage under

8 such section, if such percentage were deemed to

9 be 100 percent).

10 ‘‘(B) In the case of a qualified medicare drug

11 beneficiary whose income (as determined under

12 paragraph (1)) is at least 135 percent but less than

13 150 percent of the official poverty line, a percentage

14 of premiums under section 1860D, determined on a

15 linear sliding scale ranging from 100 percent for in16 dividuals with incomes at 135 percent of such line

17 to 0 percent for individuals with incomes at 150 per18 cent of such line.

19 ‘‘(3) In the case of any State which is providing med20 ical assistance to its residents under a waiver granted

21 under section 1115, the Secretary shall require the State

22 to meet the requirement of section 1902(a)(10)(E) in the

23 same manner as the State would be required to meet such

24 requirement if the State had in effect a plan approved

25 under this title.’’.
49

S 2753 PCS

1 (2) STATE PLAN REQUIREMENT.—Section

2 1902(a)(10)(E) of the Social Security Act (42

3 U.S.C. 1396a(a)(10)(E)) is amended—

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

5 end; and

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

7 clause:

8 ‘‘(v) for making medical assistance avail9 able for medicare drug cost-sharing (as defined

10 in section 1905(x)(2)) for qualified medicare

11 drug beneficiaries described in section

12 1905(x)(1); and’’.

13 (3) 100 PERCENT FEDERAL MATCHING OF

14 STATE MEDICAL ASSISTANCE COSTS FOR MEDICARE

15 DRUG COST-SHARING.—Section 1903(a) of the Social

16 Security Act (42 U.S.C. 1396b(a)) is amended—

17 (A) by redesignating paragraph (7) as

18 paragraph (8); and

19 (B) by inserting after paragraph (6) the

20 following new paragraph:

21 ‘‘(7) except in the case of amounts expended for

22 an individual whose eligibility for medical assistance

23 is not limited to medicare or medicare drug cost24 sharing, an amount equal to 100 percent of amounts

25 as expended as medicare drug cost-sharing for quali-
50

S 2753 PCS

1 fied medicare drug beneficiaries (as defined in sec2 tion 1905(x)); plus’’.

3 (d) MEDICAID DRUG PRICE REBATES UNAVAILABLE

4 WITH RESPECT TO DRUGS PURCHASED THROUGH MEDI5 CARE BUY-IN.—Section 1927 of the Social Security Act

6 (42 U.S.C. 1396r–8) is amended by adding at the end the

7 following new subsection:

8 ‘‘(l) DRUGS PURCHASED THROUGH MEDICARE BUY9 IN.—The provisions of this section shall not apply to pre10 scription drugs purchased under part D of title XVIII pur11 suant to an agreement with the Secretary under section

12 1860E (including any drugs so purchased after the limit

13 under section 1860B(b) has been exceeded).’’.

14 (e) AMENDMENTS TO MEDICARE PART D.—Part D

15 of title XVIII of the Social Security Act (as added by sec16 tion 2) is amended by inserting after section 1860D the

17 following new section:

18 ‘‘SPECIAL ELIGIBILITY, ENROLLMENT, AND COPAYMENT

19 RULES FOR LOW-INCOME INDIVIDUALS

20 ‘‘SEC. 1860E. (a) STATE AGREEMENTS FOR COV21 ERAGE.—

22 ‘‘(1) IN GENERAL.—The Secretary shall, at the

23 request of a State, enter into an agreement with the

24 State under which all individuals described in para25 graph (2) are enrolled in the program under this

26 part, without regard to whether any such individual
51

S 2753 PCS

1 has previously declined the opportunity to enroll in

2 such program.

3 ‘‘(2) ELIGIBILITY GROUPS.—The individuals de4 scribed in this paragraph, for purposes of paragraph

5 (1), are individuals who satisfy section 1860C(a)

6 and who are—

7 ‘‘(A)(i) eligible individuals within the

8 meaning of section 1843; and

9 ‘‘(ii) in a coverage group or groups per10 mitted under section 1843 (as selected by the

11 State and specified in the agreement); or

12 ‘‘(B) qualified medicare drug beneficiaries

13 (as defined in section 1905(v)(1)).

14 ‘‘(3) COVERAGE PERIOD.—The period of cov15 erage under this part of an individual enrolled under

16 an agreement under this subsection shall be as fol17 lows:

18 ‘‘(A) INDIVIDUALS ELIGIBLE (AT STATE

19 OPTION) FOR PART B BUY-IN.—In the case of

20 an individual described in subsection (a)(2)(A),

21 the coverage period shall be the same period

22 that applies (or would apply) pursuant to sec23 tion 1843(d).
52

S 2753 PCS

1 ‘‘(B) QUALIFIED MEDICARE DRUG BENE2 FICIARIES.—In the case of an individual de3 scribed in subsection (a)(2)(B)—

4 ‘‘(i) the coverage period shall begin on

5 the latest of—

6 ‘‘(I) January 1, 2002;

7 ‘‘(II) the first day of the third

8 month following the month in which

9 the State agreement is entered into;

10 or

11 ‘‘(III) the first day of the first

12 month following the month in which

13 the individual satisfies section

14 1860C(a); and

15 ‘‘(ii) the coverage period shall end on

16 the last day of the month in which the in17 dividual is determined by the State to have

18 become ineligible for medicare drug cost19 sharing.

20 ‘‘(b) SPECIAL PART D ENROLLMENT OPPORTUNITY

21 FOR INDIVIDUALS LOSING MEDICAID ELIGIBILITY.—In

22 the case of an individual who—

23 ‘‘(1) satisfies section 1860C(a); and

24 ‘‘(2) loses eligibility for benefits under the State

25 plan under title XIX after having been enrolled
53

S 2753 PCS

1 under such plan or having been determined eligible

2 for such benefits;

3 the Secretary shall provide an opportunity for enrollment

4 under the program under this part during the period that

5 begins on the date that such individual loses such eligi6 bility and ends on the date specified by the Secretary.

7 ‘‘(c) DEFINITION.—For purposes of this section, the

8 term ‘State’ has the meaning given such term under sec9 tion 1101(a) for purposes of title XIX.’’.

10 (f) REMOVAL OF SUNSET DATE FOR COST-SHARING

11 IN MEDICARE PART B PREMIUMS FOR CERTAIN QUALI12 FYING INDIVIDUALS.—

13 (1) IN GENERAL.—Section 1902(a)(10)(E)(iv)

14 of the Social Security Act (42 U.S.C.

15 1396a(a)(10)(E)(iv))is amended to read as follows—

16 ‘‘(iv) subject to section 1905(p)(4),

17 for making medical assistance available for

18 medicare cost-sharing described in section

19 1905(p)(3)(A)(ii) for individuals who

20 would be qualified medicare beneficiaries

21 described in section 1905(p)(1) but for the

22 fact that their income exceeds the income

23 level established by the State under section

24 1905(p)(2) and is at least 120 percent, but

25 less than 135 percent, of the official pov-
54

S 2753 PCS

1 erty line (referred to in such section) for a

2 family of the size involved and who are not

3 otherwise eligible for medical assistance

4 under the State plan;’’.

5 (2) RELOCATION OF PROVISION REQUIRING 100

6 PERCENT FEDERAL MATCHING OF STATE MEDICAL

7 ASSISTANCE COSTS FOR CERTAIN QUALIFYING INDI8 VIDUALS.—Section 1903(a) of the Social Security

9 Act (42 U.S.C. 1396b(a)), as amended by subsection

10 (c)(3), is amended—

11 (A) by redesignating paragraph (8) as

12 paragraph (9); and

13 (B) by inserting after paragraph (7) the

14 following new paragraph:

15 ‘‘(8) an amount equal to 100 percent of

16 amounts as expended as medicare drug cost-sharing

17 for individuals described in section

18 1903(a)(10)(E)(iv); plus’’.

19 (3) REPEAL OF SECTION 1933.—Section 1933 is

20 repealed.

21 (4) EFFECTIVE DATE.—The amendments made

22 by this subsection shall take effect on January 1,

23 2002.
55

S 2753 PCS

1 SEC. 103. CATASTROPHIC PRESCRIPTION DRUG COVERAGE

2 BENEFIT.

3 (a) RECOMMENDATIONS WITH RESPECT TO A MEDI4 CARE CATASTROPHIC DRUG BENEFIT.—

5 (1) IN GENERAL.—Not later than 6 months

6 after the date of enactment of this Act, the Sec7 retary of Health and Human Services (in this sec8 tion referred to as the ‘‘Secretary’’) shall submit to

9 the Committee on Finance of the Senate and the

10 Committee on Ways and Means and the Committee

11 on Commerce of the House of Representatives de12 tailed recommendations on structuring a cata13 strophic drug benefit for medicare beneficiaries.

14 (2) RECOMMENDATIONS DESCRIBED.—The rec15 ommendations under paragraph (1) shall—

16 (A) ensure coverage of the costs of pre17 scription drugs above a specified level of out-of18 pocket expenditures;

19 (B) conform to the administrative struc20 ture established in this Act;

21 (C) have a projected cost that does not ex22 ceed the amounts described in subsection

23 (b)(3)(A); and

24 (D) take effect no later than January 1,

25 2003.

26 (3) FINAL REGULATIONS.—
56

S 2753 PCS

1 (A) IN GENERAL.—If legislation of a medi2 care catastrophic drug benefit is not enacted

3 that meets the requirements of paragraph (2)

4 by June 1, 2001, the Secretary of Health and

5 Human Services shall promulgate final regula6 tions containing such standards no later than

7 January 1, 2002.

8 (B) CERTIFICATION BY OMB AND HCFA.—

9 A final regulation promulgated by the Secretary

10 under subparagraph (A) shall not take effect

11 unless the Director of the Office of Manage12 ment and Budget and the Chief Actuary of the

13 Health Care Financing Administration certify

14 that aggregate Federal expenses incurred in

15 providing the catastrophic drug benefit under

16 this section will not exceed $50,000,000,000 be17 tween fiscal years 2003 and 2010. If either cer18 tification is not provided, the Secretary shall

19 submit a revised recommendation on struc20 turing a catastrophic drug benefit to the appro21 priate committees of Congress under paragraph

22 (1) no later than 30 days after the Secretary

23 receives a notification that such certification

24 will not be provided.
57

S 2753 PCS

1 (b) CATASTROPHIC PRESCRIPTION DRUG COVERAGE

2 RESERVE FUND.—

3 (1) ESTABLISHMENT OF RESERVE FUND.—

4 There is established a reserve fund which shall be

5 known as the ‘‘Catastrophic Prescription Drug Cov6 erage Reserve Fund’’ (in this subsection referred to

7 as the ‘‘Reserve Fund’’).

8 (2) AMOUNTS IN RESERVE FUND.—Subject to

9 subparagraph (B), the Reserve Fund shall consist of

10 such amounts as are appropriated to the Reserve

11 Fund under paragraph (3).

12 (3) APPROPRIATION TO RESERVE FUND.—

13 (A) IN GENERAL.—

14 (i) FISCAL YEARS 2003 THROUGH

15 2010.—There are appropriated to the Re16 serve Fund for the period beginning with

17 fiscal year 2003 and ending with fiscal

18 year 2010, $50,000,000,000.

19 (ii) SUBSEQUENT FISCAL YEARS.—

20 There are authorized to be appropriated to

21 the Reserve Fund for each subsequent fis22 cal year, such sums as may be necessary to

23 carry out the provisions of this section.

24 (B) AVAILABILITY.—Sums appropriated

25 under subparagraph (A)(i) shall remain avail-
58

S 2753 PCS

1 able, without fiscal year limitation, until ex2 pended.

3 SEC. 104. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG

4 COVERAGE FOR TRANSPLANT PATIENTS.

5 (a) REVISION OF MEDICARE COVERAGE FOR IM6 MUNOSUPPRESSIVE DRUGS.—

7 (1) IN GENERAL.—Section 1861(s)(2)(J) of the

8 Social Security Act (42 U.S.C. 1395x(s)(2)(J)) (as

9 amended by section 227(a) of the Medicare, Med10 icaid, and SCHIP Balanced Budget Refinement Act

11 of 1999 (113 Stat. 1501A–354), as enacted into law

12 by section 1000(a)(6) of Public Law 106–113) is

13 amended by striking ‘‘, to an individual who re14 ceives’’ and all that follows before the semicolon at

15 the end and inserting ‘‘to an individual who has re16 ceived an organ transplant’’.

17 (2) CONFORMING AMENDMENTS.—

18 (A) Section 1832 of the Social Security

19 Act (42 U.S.C. 1395k) (as amended by section

20 227(b) of the Medicare, Medicaid, and SCHIP

21 Balanced Budget Refinement Act of 1999 (113

22 Stat. 1501A–354), as enacted into law by sec23 tion 1000(a)(6) of Public Law 106–113) is

24 amended—

25 (i) by striking subsection (b); and
59

S 2753 PCS

1 (ii) by redesignating subsection (c) as

2 subsection (b).

3 (B) Subsections (c) and (d) of section 227

4 of the Medicare, Medicaid, and SCHIP Bal5 anced Budget Refinement Act of 1999 (113

6 Stat. 1501A–355), as enacted into law by sec7 tion 1000(a)(6) of Public Law 106–113, are re8 pealed.

9 (3) EFFECTIVE DATE.—The amendments made

10 by this subsection shall apply to drugs furnished on

11 or after the date of enactment of this Act.

12 (b) EXTENSION OF CERTAIN SECONDARY PAYER RE13 QUIREMENTS.—Section 1862(b)(1)(C) of the Social Secu14 rity Act (42 U.S.C. 1395y(b)(1)(C)) is amended by adding

15 at the end the following: ‘‘With regard to immuno16 suppressive drugs furnished on or after the date of enact17 ment of the Medicare Expansion for Needed Drugs

18 (MEND) Act of 2000, this subparagraph shall be applied

19 without regard to any time limitation.’’.

20 SEC. 105. GAO STUDY AND BIENNIAL REPORTS ON COM21 PETITION AND SAVINGS.

22 (a) ONGOING STUDY.—The Comptroller General of

23 the United States shall conduct an ongoing study and

24 analysis of the prescription drug benefit program under

25 part D of the medicare program under title XVIII of the
60

S 2753 PCS

1 Social Security Act (as added by this title), including an

2 analysis of—

3 (1) the extent to which the competitive bidding

4 process under such program fosters maximum com5 petition and efficiency; and

6 (2) the savings to the medicare program result7 ing from such prescription drug benefit program, in8 cluding the reduction in the number or length of

9 hospital visits.

10 (b) INITIAL REPORT.—Not later than September 1,

11 2001, the Comptroller General shall submit to Congress

12 a report on the extent to which the competitive bidding

13 process under the prescription drug benefit program under

14 part D of the medicare program under title XVIII of the

15 Social Security Act (as added by this title) is expected to

16 foster maximum competition and efficiency.

17 (c) BIENNIAL REPORTS.—Not later than January 1,

18 2004, and biennially thereafter, the Comptroller General

19 of the United States shall submit to Congress a report

20 on the results of the study conducted under this section,

21 together with any recommendations for legislation that the

22 Comptroller General determines to be appropriate as a re23 sult of such study.
61

S 2753 PCS

1 SEC. 106. MEDPAC STUDY AND ANNUAL REPORTS ON THE

2 PHARMACEUTICAL MARKET, PHARMACIES,

3 AND BENEFICIARY ACCESS.

4 (a) ONGOING STUDY.—The Medicare Payment Advi5 sory Commission established under section 1805 of the So6 cial Security Act (42 U.S.C. 1395b–6) shall conduct an

7 ongoing study and analysis of the prescription drug ben8 efit program under part D of the Social Security Act (as

9 added by this title), including an analysis of the impact

10 of the prescription drug benefit program on—

11 (1) the pharmaceutical market, including costs

12 and pricing of pharmaceuticals, beneficiary access to

13 such pharmaceuticals, and trends in research and

14 development;

15 (2) franchise, independent, and rural phar16 macies; and

17 (3) beneficiary access to prescription drugs, in18 cluding an assessment of—

19 (A) out-of-pocket spending;

20 (B) generic and brand-name utilization;

21 and

22 (C) pharmacists’ services.

23 (b) REPORT.—Not later than January 1, 2004, and

24 annually thereafter, the Medicare Payment Advisory Com25 mission shall submit to Congress a report on the results

26 of the study conducted under this section, together with
62

S 2753 PCS

1 any recommendations for legislation that such Commis2 sion determines to be appropriate as a result of such

3 study.

4 TITLE II—ENHANCED MEDICARE

5 PREVENTION PROGRAM

6 SEC. 201. MEDPAC BIENNIAL REPORT.

7 (a) IN GENERAL.—Section 1805(b) of the Social Se8 curity Act (42 U.S.C. 1395b–6(b)) is amended—

9 (1) in paragraph (1)—

10 (A) in subparagraph (C), by striking

11 ‘‘and’’ at the end;

12 (B) in subparagraph (D), by striking the

13 period and inserting ‘‘; and’’; and

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

15 subparagraph:

16 ‘‘(E) by not later than January 1, 2002,

17 and biennially thereafter, submit the report to

18 Congress described in paragraph (7).’’; and

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

20 paragraph:

21 ‘‘(7) EVALUATION OF ACTUARIAL EQUIVALENCE

22 OF MEDICARE AND PRIVATE SECTOR BENEFIT PACK23 AGES.—

24 ‘‘(A) EVALUATION.—The Commission

25 shall—
63

S 2753 PCS

1 ‘‘(i) evaluate the benefit package of2 fered under the medicare program under

3 this title; and

4 ‘‘(ii) determine the degree to which

5 such benefit package is actuarially equiva6 lent to that offered by health benefit pro7 grams available in the private sector to in8 dividuals over age 65.

9 ‘‘(B) REPORT.—The Commission shall

10 submit a report to Congress that shall

11 contain—

12 ‘‘(i) a detailed statement of the find13 ings and conclusions of the Commission re14 garding the evaluation conducted under

15 subparagraph (A);

16 ‘‘(ii) the recommendations of the

17 Commission regarding changes in the ben18 efit package offered under the medicare

19 program under this title that would keep

20 the program modern and competitive in re21 lation to health benefit programs available

22 in the private sector; and

23 ‘‘(iii) the recommendations of the

24 Commission for such legislation and ad-
64

S 2753 PCS

1 ministrative actions as it considers appro2 priate.’’.

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

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

5 this Act.

6 SEC. 202. NATIONAL INSTITUTE ON AGING STUDY AND RE7 PORT.

8 (a) STUDIES.—The Director of the National Institute

9 on Aging shall conduct 1 or more studies focusing on ways

10 to—

11 (1) improve quality of life for the elderly;

12 (2) develop better ways to prevent or delay the

13 onset of age-related functional decline and disease

14 and disability among the elderly; and

15 (3) develop means of assessing the long-term

16 development of cost-effective benefits and cost-sav17 ings benefits for health promotion and disease pre18 vention among the elderly.

19 (b) REPORT.—Not later than January 1, 2006, the

20 Director of the National Institute on Aging shall submit

21 a report to the Secretary regarding each study conducted

22 under subsection (a) and containing a detailed statement

23 of research findings and conclusions that are scientifically

24 valid and are demonstrated to prevent or delay the onset

25 of chronic illness or disability among the elderly.
65

S 2753 PCS

1 (c) TRANSMISSION TO INSTITUTE OF MEDICINE.—

2 Upon receipt of each report described in subsection (b),

3 the Secretary shall transmit such report to the Institute

4 of Medicine of the National Academy of Sciences for con5 sideration in its effort to conduct the comprehensive study

6 of current literature and best practices in the field of

7 health promotion and disease prevention among the medi8 care beneficiaries described in section 204.

9 (d) AUTHORIZATION OF APPROPRIATIONS.—

10 (1) IN GENERAL.—There are authorized to be

11 appropriated $100,000,000 for fiscal years 2001

12 through 2006 to carry out the purposes of this sec13 tion.

14 (2) AVAILABILITY.—Any sums appropriated

15 under the authorization contained in this subsection

16 shall remain available, without fiscal year limitation,

17 until September 30, 2005.

18 SEC. 203. INSTITUTE OF MEDICINE 5-YEAR MEDICARE PRE19 VENTION BENEFIT STUDY AND REPORT.

20 (a) STUDY.—

21 (1) IN GENERAL.—The Secretary shall contract

22 with the Institute of Medicine of the National Acad23 emy of Sciences to conduct a comprehensive study of

24 current literature and best practices in the field of

25 health promotion and disease prevention among
66

S 2753 PCS

1 medicare beneficiaries including the issues described

2 in paragraph (2) and to submit the report described

3 in subsection (b).

4 (2) ISSUES STUDIED.—The study required

5 under paragraph (1) shall include an assessment

6 of—

7 (A) whether each covered benefit is—

8 (i) medically effective; and

9 (ii) a cost-effective benefit or a cost10 saving benefit;

11 (B) utilization of covered benefits (includ12 ing any barriers to or incentives to increase uti13 lization); and

14 (C) quality of life issues associated with

15 both health promotion and disease prevention

16 benefits covered under the medicare program

17 and those that are not covered under such pro18 gram that would affect all medicare bene19 ficiaries.

20 (b) REPORT.—

21 (1) IN GENERAL.—Not later than 5 years after

22 the date of enactment of this section, and every fifth

23 year thereafter, the Institute of Medicine of the Na24 tional Academy of Sciences shall submit to the

25 President a report that contains a detailed state-
67

S 2753 PCS

1 ment of the findings and conclusions of the study

2 conducted under subsection (a) and the rec3 ommendations for legislation described in paragraph

4 (2).

5 (2) RECOMMENDATIONS FOR LEGISLATION.—

6 The Institute of Medicine of the National Academy

7 of Sciences, in consultation with the Partnership for

8 Prevention, shall develop recommendations in legis9 lative form that—

10 (A) prioritize the preventive benefits under

11 the medicare program; and

12 (B) modify preventive benefits offered

13 under the medicare program based on the study

14 conducted under subsection (a).

15 (c) TRANSMISSION TO CONGRESS.—

16 (1) IN GENERAL.—On the day on which the re17 port described in subsection (b) is submitted to the

18 President, the President shall transmit the report

19 and recommendations in legislative form described in

20 subsection (b)(2) to Congress.

21 (2) DELIVERY.—Copies of the report and rec22 ommendations in legislative form required to be

23 transmitted to Congress under paragraph (1) shall

24 be delivered—
68

S 2753 PCS

1 (A) to both Houses of Congress on the

2 same day;

3 (B) to the Clerk of the House of Rep4 resentatives if the House of Representatives is

5 not in session; and

6 (C) to the Secretary of the Senate if the

7 Senate is not in session.

8 SEC. 204. FAST-TRACK CONSIDERATION OF PREVENTION

9 BENEFIT LEGISLATION.

10 (a) RULES OF HOUSE OF REPRESENTATIVES AND

11 SENATE.—This section is enacted by Congress—

12 (1) as an exercise of the rulemaking power of

13 the House of Representatives and the Senate, re14 spectively, and is deemed a part of the rules of each

15 House of Congress, but—

16 (A) is applicable only with respect to the

17 procedure to be followed in that House of Con18 gress in the case of an implementing bill (as de19 fined in subsection (d)); and

20 (B) supersedes other rules only to the ex21 tent that such rules are inconsistent with this

22 section; and

23 (2) with full recognition of the constitutional

24 right of either House of Congress to change the

25 rules (so far as relating to the procedure of that
69

S 2753 PCS

1 House of Congress) at any time, in the same man2 ner and to the same extent as in the case of any

3 other rule of that House of Congress.

4 (b) INTRODUCTION AND REFERRAL.—

5 (1) INTRODUCTION.—

6 (A) IN GENERAL.—Subject to paragraph

7 (2), on the day on which the President trans8 mits the report pursuant to section 203(c) to

9 the House of Representatives and the Senate,

10 the recommendations in legislative form trans11 mitted by the President with respect to such re12 port shall be introduced as a bill (by request)

13 in the following manner:

14 (i) HOUSE OF REPRESENTATIVES.—In

15 the House of Representatives, by the Ma16 jority Leader, for himself and the Minority

17 Leader, or by Members of the House of

18 Representatives designated by the Majority

19 Leader and Minority Leader.

20 (ii) SENATE.—In the Senate, by the

21 Majority Leader, for himself and the Mi22 nority Leader, or by Members of the Sen23 ate designated by the Majority Leader and

24 Minority Leader.
70

S 2753 PCS

1 (B) SPECIAL RULE.—If either House of

2 Congress is not in session on the day on which

3 such recommendations in legislative form are

4 transmitted, the recommendations in legislative

5 form shall be introduced as a bill in that House

6 of Congress, as provided in subparagraph (A),

7 on the first day thereafter on which that House

8 of Congress is in session.

9 (2) REFERRAL.—Such bills shall be referred by

10 the presiding officers of the respective Houses to the

11 appropriate committee, or, in the case of a bill con12 taining provisions within the jurisdiction of 2 or

13 more committees, jointly to such committees for con14 sideration of those provisions within their respective

15 jurisdictions.

16 (c) CONSIDERATION.—After the recommendations in

17 legislative form have been introduced as a bill and referred

18 under subsection (b), such implementing bill shall be con19 sidered in the same manner as an implementing bill is con20 sidered under subsections (d), (e), (f), and (g) of section

21 151 of the Trade Act of 1974 (19 U.S.C. 2191).

22 (d) IMPLEMENTING BILL DEFINED.—In this section,

23 the term ‘‘implementing bill’’ means only the recommenda24 tions in legislative form of the Institute of Medicine of the

25 National Academy of Sciences described in section
71

S 2753 PCS

1 203(b)(2), transmitted by the President to the House of

2 Representatives and the Senate under section 203(c), and

3 introduced and referred as provided in subsection (b) as

4 a bill of either House of Congress.

5 (e) COUNTING OF DAYS.—For purposes of this sec6 tion, any period of days referred to in section 151 of the

7 Trade Act of 1974 shall be computed by excluding—

8 (1) the days on which either House of Congress

9 is not in session because of an adjournment of more

10 than 3 days to a day certain or an adjournment of

11 Congress sine die; and

12 (2) any Saturday and Sunday, not excluded

13 under paragraph (1), when either House is not in

14 session.
Calendar No. 609

106TH CONGRESS

2D SESSION S. 2753

A BILL

To amend title XVIII of the Social Security Act to

provide a prescription drug benefit for the agedand disabled under the medicare program, to enhance the preventive benefits covered under suchprogram, and for other purposes.

JUNE 19, 2000

Read twice and ordered placed on the calendar