II

106TH CONGRESS

1ST SESSION S. 841

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

of outpatient prescription drugs under the medicare program.

IN THE SENATE OF THE UNITED STATES

APRIL 20, 1999

Mr. KENNEDY (for himself, Mr. ROCKEFELLER, and Mr. WELLSTONE) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to provide

for coverage of outpatient prescription drugs under the

medicare program.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Access to Rx Medications in Medicare Act of 1999’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Medicare coverage of outpatient prescription drugs.

Sec. 3. Selection of entities to provide outpatient drug benefit.

Sec. 4. Optional coverage for certain beneficiaries.
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Sec. 5. Medigap revisions.

Sec. 6. Improved medicaid assistance for low-income individuals.

Sec. 7. Waiver of additional portion of part B premium for certain medicare

beneficiaries having actuarially equivalent coverage.

Sec. 8. Elimination of time limitation on medicare benefits for immunosuppressive drugs.

Sec. 9. Expansion of membership of MEDPAC to 19.

Sec. 10. GAO study and report to Congress.

Sec. 11. Effective date.

1 SEC. 2. MEDICARE COVERAGE OF OUTPATIENT PRESCRIP2 TION DRUGS.

3 (a) COVERAGE.—Section 1861(s)(2) of the Social Se4 curity Act (42 U.S.C. 1395x(s)(2)) is amended—

5 (1) by striking ‘‘and’’ at the end of subpara6 graph (S);

7 (2) by striking the period at the end of sub8 paragraph (T) and inserting ‘‘; and’’; and

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

10 ‘‘(U) covered outpatient drugs (as defined in

11 subsection (i)(1) of section 1849) pursuant to the

12 procedures established under such section;’’.

13 (b) PAYMENT.—Section 1833(a)(1) of the Social Se14 curity Act (42 U.S.C. 1395l(a)(1)) is amended—

15 (1) by striking ‘‘and (S)’’ and inserting ‘‘(S)’’;

16 and

17 (2) by striking the semicolon at the end and in18 serting the following: ‘‘, and (T) with respect to cov19 ered outpatient drugs (as defined in subsection (i)(1)

20 of section 1849), the amounts paid shall be the
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1 amounts established by the Secretary pursuant to

2 such section;’’.

3 SEC. 3. SELECTION OF ENTITIES TO PROVIDE OUTPATIENT

4 DRUG BENEFIT.

5 Part B of title XVIII of the Social Security Act (42

6 U.S.C. 1395j et seq.) is amended by adding at the end

7 the following:

8 ‘‘SEC. 1849. SELECTION OF ENTITIES TO PROVIDE OUT9 PATIENT DRUG BENEFIT.

10 ‘‘(a) ESTABLISHMENT OF BIDDING PROCESS.—

11 ‘‘(1) IN GENERAL.—The Secretary shall estab12 lish procedures under which the Secretary accepts

13 bids from eligible entities and awards contracts to

14 such entities in order to provide covered outpatient

15 drugs to eligible beneficiaries in an area. Such con16 tracts may be awarded based on shared risk, capita17 tion, or performance.

18 ‘‘(2) AREA.—

19 ‘‘(A) REGIONAL BASIS.—The contract en20 tered into between the Secretary and an eligible

21 entity shall require the eligible entity to provide

22 covered outpatient drugs on a regional basis.

23 ‘‘(B) DETERMINATION.—In determining

24 coverage areas under this section, the Secretary

25 shall take into account the number of eligible
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1 beneficiaries in an area in order to encourage

2 participation by eligible entities.

3 ‘‘(3) SUBMISSION OF BIDS.—Each eligible enti4 ty desiring to provide covered outpatient drugs

5 under this section shall submit a bid to the Sec6 retary at such time, in such manner, and accom7 panied by such information as the Secretary may

8 reasonably require. Such bids shall include the

9 amount the eligible entity will charge enrollees under

10 subsection (e)(2) for covered outpatient drugs under

11 the contract.

12 ‘‘(4) ACCESS.—The Secretary shall ensure

13 that—

14 ‘‘(A) an eligible entity complies with the

15 access requirements described in subsection

16 (f)(5);

17 ‘‘(B) if an eligible entity employs

18 formularies pursuant to subsection (f)(6)(A),

19 such entity complies with the requirements of

20 subsection (f)(6)(B); and

21 ‘‘(C) an eligible entity makes available to

22 each beneficiary covered under the contract the

23 full scope of benefits required under paragraph

24 (5).
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1 ‘‘(5) SCOPE OF BENEFITS.—The Secretary shall

2 ensure that all covered outpatient drugs that are

3 reasonable and necessary to prevent or slow the de4 terioration of, and improve or maintain, the health

5 of eligible beneficiaries are offered under a contract

6 entered into under this section.

7 ‘‘(6) NUMBER OF CONTRACTS.—The Secretary

8 shall, consistent with the requirements of this sec9 tion and the goal of containing medicare program

10 costs, award at least 2 contracts in an area, unless

11 only 1 bidding entity meets the minimum standards

12 specified under this section and by the Secretary.

13 ‘‘(7) DURATION OF CONTRACTS.—Each con14 tract under this section shall be for a term of at

15 least 2 years but not more than 5 years, as deter16 mined by the Secretary.

17 ‘‘(8) BENCHMARK FOR CONTRACTS.—The Sec18 retary shall not enter into a contract with an eligible

19 entity under this section unless the Secretary deter20 mines that the average cost (excluding any cost21 sharing) for all covered outpatient drugs provided to

22 beneficiaries under the contract is comparable to the

23 average cost charged (exclusive of any cost-sharing)

24 by large private sector purchasers for such drugs.

25 ‘‘(b) ENROLLMENT.—
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1 ‘‘(1) IN GENERAL.—The Secretary shall estab2 lish a process through which an eligible beneficiary

3 shall make an election to enroll with any eligible en4 tity that has been awarded a contract under this sec5 tion and serves the geographic area in which the

6 beneficiary resides. In establishing such process, the

7 Secretary shall use rules similar to the rules for en8 rollment and disenrollment with a Medicare+Choice

9 plan under section 1851.

10 ‘‘(2) REQUIREMENT OF ENROLLMENT.—Ex11 cluding an eligible beneficiary enrolled in a group

12 health plan described in section 4 of the Access to

13 Rx Medications in Medicare Act of 1999, an eligible

14 beneficiary not enrolled in a Medicare+Choice plan

15 under part C must enroll with an eligible entity

16 under this section in order to be eligible to receive

17 covered outpatient drugs under this title.

18 ‘‘(3) ENROLLMENT IN ABSENCE OF ELECTION

19 BY ELIGIBLE BENEFICIARY.—In the case of an eligi20 ble beneficiary that fails to make an election pursu21 ant to paragraph (1), the Secretary shall provide,

22 pursuant to procedures developed by the Secretary,

23 for the enrollment of such beneficiary with an eligi24 ble entity that has a contract under this section that

25 covers the area in which such beneficiary resides.
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1 ‘‘(4) AREAS NOT COVERED BY CONTRACTS.—

2 The Secretary shall develop procedures for the provi3 sion of covered outpatient drugs under this title to

4 eligible beneficiaries that reside in an area that is

5 not covered by any contract under this section.

6 ‘‘(5) BENEFICIARIES RESIDING IN DIFFERENT

7 LOCATIONS.—The Secretary shall develop procedures

8 to ensure that an eligible beneficiary that resides in

9 different regions in a year is provided benefits under

10 this section throughout the entire year.

11 ‘‘(c) PROVIDING INFORMATION TO BENE12 FICIARIES.—The Secretary shall provide for activities

13 under this section to broadly disseminate information to

14 medicare beneficiaries on the coverage provided under this

15 section. Such activities shall be similar to the activities

16 performed by the Secretary under section 1851(d).

17 ‘‘(d) PAYMENTS TO ELIGIBLE ENTITIES.—The Sec18 retary shall establish procedures for making payments to

19 an eligible entity under a contract.

20 ‘‘(e) COST-SHARING.—

21 ‘‘(1) DEDUCTIBLE.—Benefits under this section

22 shall not begin until the eligible beneficiary has met

23 a $200 deductible.

24 ‘‘(2) COPAYMENT.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), the eligible beneficiary shall be re3 sponsible for making payments in an amount

4 not greater than 20 percent of the cost (as stat5 ed in the contract) of any covered outpatient

6 drug that is provided to the beneficiary. Pursu7 ant to subsection (a)(4)(B), an eligible entity

8 may reduce the payment amount that an eligi9 ble beneficiary is responsible for making to the

10 entity.

11 ‘‘(B) BASIC BENEFIT.—Subject to sub12 paragraph (C), if the aggregate amount of cov13 ered outpatient drugs provided to an eligible

14 beneficiary under this section for any calendar

15 year (based on the cost of covered outpatient

16 drugs stated in the contract) exceeds $1,700—

17 ‘‘(i) the beneficiary may continue to

18 purchase covered outpatient drugs under

19 the contract based on the contract price,

20 but

21 ‘‘(ii) the copayment under subpara22 graph (A) shall be 100 percent.

23 ‘‘(C) STOP-LOSS PROTECTION.—The co24 payment amount under subparagraph (A) shall

25 be 0 percent once an eligible beneficiary’s out-
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1 of-pocket expenses for covered outpatient drugs

2 under this section reach $3,000.

3 ‘‘(D) INFLATION ADJUSTMENT.—

4 ‘‘(i) IN GENERAL.—In the case of any

5 calendar year beginning after 2000, each

6 of the dollar amounts in subparagraphs

7 (B) and (C) shall be increased by an

8 amount equal to—

9 ‘‘(I) such dollar amount, multi10 plied by

11 ‘‘(II) an adjustment, as deter12 mined by the Secretary, for changes

13 in the per capita cost of prescription

14 drugs for beneficiaries under this title.

15 ‘‘(ii) ROUNDING.—If any dollar

16 amount after being increased under clause

17 (i) is not a multiple of $10, such dollar

18 amount shall be rounded to the nearest

19 multiple of $10.

20 ‘‘(f) CONDITIONS FOR AWARDING CONTRACT.—The

21 Secretary shall not award a contract to an eligible entity

22 under subsection (a) unless the Secretary finds that the

23 eligible entity is in compliance with such terms and condi24 tions as the Secretary shall specify, including the fol25 lowing:
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1 ‘‘(1) QUALITY AND FINANCIAL STANDARDS.—

2 The eligible entity meets quality and financial stand3 ards specified by the Secretary.

4 ‘‘(2) INFORMATION.—The eligible entity pro5 vides the Secretary with information that the Sec6 retary determines is necessary in order to carry out

7 the bidding process under this section, including

8 data needed to implement subsection (a)(8) and data

9 regarding utilization, expenditures, and costs.

10 ‘‘(3) EDUCATION.—The eligible entity estab11 lishes educational programs that meet the criteria

12 established by the Secretary pursuant to subsection

13 (g)(1).

14 ‘‘(4) PROCEDURES TO ENSURE PROPER UTILI15 ZATION AND TO AVOID ADVERSE DRUG REAC16 TIONS.—The eligible entity has in place procedures

17 to ensure the—

18 ‘‘(A) appropriate utilization by eligible

19 beneficiaries of the benefits to be provided

20 under the contract; and

21 ‘‘(B) avoidance of adverse drug reactions

22 among eligible beneficiaries enrolled with the

23 entity.

24 ‘‘(5) ACCESS.—The eligible entity ensures that

25 the covered outpatient drugs are accessible and con-
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1 venient to eligible beneficiaries covered under the

2 contract, including by offering the services in the fol3 lowing manner:

4 ‘‘(A) SERVICES DURING EMERGENCIES.—

5 The offering of services 24 hours a day and 7

6 days a week for emergencies.

7 ‘‘(B) CONTRACTS WITH RETAIL PHAR8 MACIES.—The offering of services—

9 ‘‘(i) at a sufficient (as determined by

10 the Secretary) number of retail phar11 macies; and

12 ‘‘(ii) to the extent feasible, at retail

13 pharmacies located throughout the eligible

14 entity’s service area.

15 ‘‘(6) RULES RELATING TO PROVISION OF BENE16 FITS.—

17 ‘‘(A) PROVISION OF BENEFITS.—In pro18 viding benefits under a contract under this sec19 tion, an eligible entity may—

20 ‘‘(i) employ mechanisms to provide

21 benefits economically, including the use

22 of—

23 ‘‘(I) formularies (pursuant to

24 subparagraph (B));
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1 ‘‘(II) alternative methods of dis2 tribution; and

3 ‘‘(III) generic drug substitution;

4 and

5 ‘‘(ii) use incentives to encourage eligi6 ble beneficiaries to select cost-effective

7 drugs or less costly means of receiving

8 drugs.

9 ‘‘(B) FORMULARIES.—If an eligible entity

10 uses a formulary to contain costs under this

11 Act—

12 ‘‘(i) the eligible entity shall—

13 ‘‘(I) ensure participation of prac14 ticing physicians and pharmacists in

15 the development of the formulary;

16 ‘‘(II) include in the formulary at

17 least 1 drug from each therapeutic

18 class;

19 ‘‘(III) provide for coverage of

20 otherwise covered non-formulary

21 drugs when recommended by pre22 scribing providers; and

23 ‘‘(IV) disclose to current and

24 prospective beneficiaries and to pro25 viders in the service area the nature
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1 of the formulary restrictions, includ2 ing information regarding the drugs

3 included in the formulary, copayment

4 amounts, and any difference in the

5 cost-sharing for different types of

6 drugs; but

7 ‘‘(ii) nothing shall preclude an entity

8 from—

9 ‘‘(I) requiring higher cost-sharing

10 for drugs provided under clause

11 (i)(III), subject to limits established

12 in subsection (e)(2)(A), except that an

13 entity shall provide for coverage of a

14 nonformulary drug on the same basis

15 as a drug within the formulary if such

16 nonformulary drug is determined by

17 the prescribing provider to be medi18 cally indicated;

19 ‘‘(II) educating prescribing pro20 viders, pharmacists, and beneficiaries

21 about medical and cost benefits of for22 mulary products; and

23 ‘‘(III) requesting prescribing pro24 viders to consider a formulary product

25 prior to dispensing of a nonformulary
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1 drug, as long as such request does not

2 unduly delay the provision of the

3 drug.

4 ‘‘(7) PROCEDURES TO COMPENSATE PHAR5 MACISTS FOR COUNSELING.—The eligible entity shall

6 compensate pharmacists for providing the counseling

7 described in subsection (g)(2)(B).

8 ‘‘(8) CLINICAL OUTCOMES.—

9 ‘‘(A) REQUIREMENT.—The eligible entity

10 shall comply with clinical quality standards as

11 determined by the Secretary.

12 ‘‘(B) DEVELOPMENT OF STANDARDS.—

13 The Secretary, in consultation with appropriate

14 medical specialty societies, shall develop clinical

15 quality standards that are applicable to eligible

16 entities. Such standards shall be based on cur17 rent standards of care.

18 ‘‘(9) PROCEDURES REGARDING DENIALS OF

19 CARE.—The eligible entity has in place procedures to

20 ensure—

21 ‘‘(A) the timely review and resolution of

22 denials of care and complaints (including those

23 regarding the use of formularies under para24 graph (6)) by enrollees, or providers, phar25 macists, and other individuals acting on behalf
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1 of such individual (with the individual’s con2 sent) in accordance with requirements (as es3 tablished by the Secretary) that are comparable

4 to such requirements for Medicare+Choice or5 ganizations under part C; and

6 ‘‘(B) that beneficiaries are provided with

7 information regarding the appeals procedures

8 under this section at the time of enrollment.

9 ‘‘(g) EDUCATIONAL REQUIREMENTS TO ENSURE AP10 PROPRIATE UTILIZATION.—

11 ‘‘(1) ESTABLISHMENT OF PROGRAM CRI12 TERIA.—The Secretary shall establish a model for

13 comprehensive educational programs in order to as14 sure the appropriate—

15 ‘‘(A) prescribing and dispensing of covered

16 outpatient drugs under this section; and

17 ‘‘(B) use of such drugs by eligible bene18 ficiaries.

19 ‘‘(2) ELEMENTS OF MODEL.—The model estab20 lished under paragraph (1) shall include the fol21 lowing elements:

22 ‘‘(A) On-line prospective review available

23 24 hours a day and 7 days a week in order to

24 evaluate each prescription for drug therapy
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1 problems due to duplication, interaction, or in2 correct dosage or duration of therapy.

3 ‘‘(B) Consistent with State law, guidelines

4 for counseling eligible beneficiaries enrolled

5 under a contract under this section regarding—

6 ‘‘(i) the proper use of prescribed cov7 ered outpatient drugs; and

8 ‘‘(ii) interactions and contra-indica9 tions.

10 ‘‘(C) Methods to identify and educate pro11 viders, pharmacists, and eligible beneficiaries

12 regarding—

13 ‘‘(i) instances or patterns concerning

14 the unnecessary or inappropriate pre15 scribing or dispensing of covered out16 patient drugs;

17 ‘‘(ii) instances or patterns of sub18 standard care;

19 ‘‘(iii) potential adverse reactions to

20 covered outpatient drugs;

21 ‘‘(iv) inappropriate use of antibiotics;

22 ‘‘(v) appropriate use of generic prod23 ucts; and
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1 ‘‘(vi) the importance of using covered

2 outpatient drugs in accordance with the in3 struction of prescribing providers.

4 ‘‘(h) PROTECTION OF PATIENT CONFIDENTIALITY.—

5 Insofar as an eligible organization maintains individually

6 identifiable medical records or other health information re7 garding enrollees under a contract entered into under this

8 section, the organization shall—

9 ‘‘(1) safeguard the privacy of any individually

10 identifiable enrollee information;

11 ‘‘(2) maintain such records and information in

12 a manner that is accurate and timely; and

13 ‘‘(3) assure timely access of such enrollees to

14 such records and information.

15 ‘‘(i) DEFINITIONS.—In this section:

16 ‘‘(1) COVERED OUTPATIENT DRUG.—

17 ‘‘(A) IN GENERAL.—Except as provided in

18 subparagraph (B), the term ‘covered outpatient

19 drug’ means any of the following products:

20 ‘‘(i) A drug which may be dispensed

21 only upon prescription, and—

22 ‘‘(I) which is approved for safety

23 and effectiveness as a prescription

24 drug under section 505 of the Federal

25 Food, Drug, and Cosmetic Act;
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1 ‘‘(II)(aa) which was commercially

2 used or sold in the United States be3 fore the date of enactment of the

4 Drug Amendments of 1962 or which

5 is identical, similar, or related (within

6 the meaning of section 310.6(b)(1) of

7 title 21 of the Code of Federal Regu8 lations) to such a drug, and (bb)

9 which has not been the subject of a

10 final determination by the Secretary

11 that it is a ‘new drug’ (within the

12 meaning of section 201(p) of the Fed13 eral Food, Drug, and Cosmetic Act)

14 or an action brought by the Secretary

15 under section 301, 302(a), or 304(a)

16 of such Act to enforce section 502(f)

17 or 505(a) of such Act; or

18 ‘‘(III)(aa) which is described in

19 section 107(c)(3) of the Drug Amend20 ments of 1962 and for which the Sec21 retary has determined there is a com22 pelling justification for its medical

23 need, or is identical, similar, or re24 lated (within the meaning of section

25 310.6(b)(1) of title 21 of the Code of
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1 Federal Regulations) to such a drug,

2 and (bb) for which the Secretary has

3 not issued a notice of an opportunity

4 for a hearing under section 505(e) of

5 the Federal Food, Drug, and Cos6 metic Act on a proposed order of the

7 Secretary to withdraw approval of an

8 application for such drug under such

9 section because the Secretary has de10 termined that the drug is less than ef11 fective for all conditions of use pre12 scribed, recommended, or suggested in

13 its labeling.

14 ‘‘(ii) A biological product which—

15 ‘‘(I) may only be dispensed upon

16 prescription;

17 ‘‘(II) is licensed under section

18 351 of the Public Health Service Act;

19 and

20 ‘‘(III) is produced at an estab21 lishment licensed under such section

22 to produce such product.

23 ‘‘(iii) Insulin approved under appro24 priate Federal law.
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1 ‘‘(iv) A prescribed drug or biological

2 product that would meet the requirements

3 of clause (i) or (ii) but that is available

4 over-the-counter in addition to being avail5 able upon prescription.

6 ‘‘(B) EXCLUSION.—The term ‘covered out7 patient drug’ does not include any product—

8 ‘‘(i) except as provided in subpara9 graph (A)(iv), which may be distributed to

10 individuals without a prescription;

11 ‘‘(ii) when furnished as part of, or as

12 incident to, a diagnostic service or any

13 other item or service for which payment

14 may be made under this title;

15 ‘‘(iii) that was covered under this title

16 on the day before the date of enactment of

17 the Access to Rx Medications in Medicare

18 Act of 1999; or

19 ‘‘(iv) that is a therapeutically equiva20 lent replacement for a product described in

21 clause (ii) or (iii), as determined by the

22 Secretary.

23 ‘‘(2) ELIGIBLE BENEFICIARY.—The term ‘eligi24 ble beneficiary’ means an individual that is enrolled

25 under part B of this title.
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1 ‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible en2 tity’ means any entity that the Secretary determines

3 to be appropriate, including—

4 ‘‘(A) pharmaceutical benefit management

5 companies;

6 ‘‘(B) wholesale and retail pharmacist deliv7 ery systems;

8 ‘‘(C) insurers;

9 ‘‘(D) other entities; or

10 ‘‘(E) any combination of the entities de11 scribed in subparagraphs (A) through (D).’’.

12 SEC. 4. OPTIONAL COVERAGE FOR CERTAIN BENE13 FICIARIES.

14 (a) IN GENERAL.—If drug coverage under a group

15 health plan that provides health insurance coverage for re16 tirees is equivalent to or greater than the coverage pro17 vided under section 1849 of the Social Security Act (as

18 added by section 3), beneficiaries receiving coverage

19 through the group health plan may continue to receive

20 such coverage from the plan and the Secretary may make

21 payments to such plans, subject to the requirements of

22 this section.

23 (b) REQUIREMENTS.—To receive payment under this

24 section, group health plans shall—
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1 (1) comply with certain requirements of this

2 Act and other reasonable, necessary, and related re3 quirements that are needed to administer this sec4 tion, as determined by the Secretary;

5 (2) to the extent that there is a contractual ob6 ligation to provide drug coverage to retirees that is

7 equal to or greater than the drug coverage provided

8 under this Act, reimburse or otherwise arrange to

9 compensate beneficiaries during the life of the con10 tract for the portion of the part B premium under

11 section 1839 of the Social Security Act that is iden12 tified by the Secretary of Health and Human Serv13 ices as attributable to the drug coverage provided

14 under section 1849 of that Act (as added by section

15 3); or

16 (3) for group health plans that are in existence

17 prior to enactment of this section and provide drug

18 coverage to retirees that is equal to or greater than

19 the drug coverage provided under section 1849 of

20 the Social Security Act (as added by section 3), re21 imburse or otherwise arrange to compensate bene22 ficiaries for the portion of the part B premium

23 under section 1839 of the Social Security Act that

24 is identified by the Secretary of Health and Human

25 Services as attributable to the drug coverage pro-
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1 vided under section 1849 of that Act (as added by

2 section 3) for at least 1 year from the date that the

3 group health plan begins participation under this

4 section.

5 (c) PAYMENTS.—The Secretary shall establish a

6 process to provide payments to eligible group health plans

7 under this section on behalf of enrolled beneficiaries. Such

8 payments shall not exceed the amount that would other9 wise be paid to a private entity serving similar bene10 ficiaries in the same service area under section 1849 of

11 the Social Security Act (as added by section 3).

12 SEC. 5. MEDIGAP REVISIONS.

13 (a) COVERAGE OF OUTPATIENT DRUGS.—Section

14 1882(p)(2)(B) of the Social Security Act (42 U.S.C.

15 1395ss(p)(2)(B)) is amended by inserting before ‘‘and’’ at

16 the end the following: ‘‘including a requirement that an

17 appropriate number of policies provide coverage of drugs

18 which compliments but does not duplicate the drug bene19 fits that beneficiaries are otherwise entitled to under this

20 title (with the Secretary and the National Association of

21 Insurance Commissioners determining the appropriate

22 level of drug benefits that each benefit package must pro23 vide and ensuring that policies providing such coverage re24 main affordable for beneficiaries);’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect on July 1, 2000.

3 (c) TRANSITION PROVISIONS.—

4 (1) IN GENERAL.—If the Secretary of Health

5 and Human Services identifies a State as requiring

6 a change to its statutes or regulations to conform its

7 regulatory program to the amendments made by this

8 section, the State regulatory program shall not be

9 considered to be out of compliance with the require10 ments of section 1882 of the Social Security Act due

11 solely to failure to make such change until the date

12 specified in paragraph (4).

13 (2) NAIC STANDARDS.—If, within 9 months

14 after the date of enactment of this Act, the National

15 Association of Insurance Commissioners (in this

16 subsection referred to as the ‘‘NAIC’’) modifies its

17 NAIC Model Regulation relating to section 1882 of

18 the Social Security Act (referred to in such section

19 as the 1991 NAIC Model Regulation, as subse20 quently modified) to conform to the amendments

21 made by this section, such revised regulation incor22 porating the modifications shall be considered to be

23 the applicable NAIC model regulation (including the

24 revised NAIC model regulation and the 1991 NAIC

25 Model Regulation) for the purposes of such section.
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1 (3) SECRETARY STANDARDS.—If the NAIC

2 does not make the modifications described in para3 graph (2) within the period specified in such para4 graph, the Secretary of Health and Human Services

5 shall make the modifications described in such para6 graph and such revised regulation incorporating the

7 modifications shall be considered to be the appro8 priate regulation for the purposes of such section.

9 (4) DATE SPECIFIED.—

10 (A) IN GENERAL.—Subject to subpara11 graph (B), the date specified in this paragraph

12 for a State is the earlier of—

13 (i) the date the State changes its stat14 utes or regulations to conform its regu15 latory program to the changes made by

16 this section; or

17 (ii) 1 year after the date the NAIC or

18 the Secretary first makes the modifications

19 under paragraph (2) or (3), respectively.

20 (B) ADDITIONAL LEGISLATIVE ACTION RE21 QUIRED.—In the case of a State which the Sec22 retary identifies as—

23 (i) requiring State legislation (other

24 than legislation appropriating funds) to
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1 conform its regulatory program to the

2 changes made in this section; but

3 (ii) having a legislature which is not

4 scheduled to meet in 2000 in a legislative

5 session in which such legislation may be

6 considered;

7 the date specified in this paragraph is the first

8 day of the first calendar quarter beginning after

9 the close of the first legislative session of the

10 State legislature that begins on or after July 1,

11 2000. For purposes of the previous sentence, in

12 the case of a State that has a 2-year legislative

13 session, each year of such session shall be

14 deemed to be a separate regular session of the

15 State legislature.

16 SEC. 6. IMPROVED MEDICAID ASSISTANCE FOR LOW-IN17 COME INDIVIDUALS.

18 (a) INCREASE IN SLMB ELIGIBILITY TO 135 PER19 CENT OF POVERTY LEVEL.—.

20 (1) IN GENERAL.—Section 1902(a)(10)(E) of

21 the Social Security Act (42 U.S.C. 1396a(a)(10)(E))

22 is amended—

23 (A) in clause (iii), by striking ‘‘and 120

24 percent in 1995 and years thereafter’’ and in25 serting ‘‘, 120 percent in 1995 and through
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1 July 1, 2000, and 135 percent for subsequent

2 periods’’; and

3 (B) in clause (iv)—

4 (i) by striking the dash and all that

5 follows through ‘‘(II)’’, and

6 (ii) by striking ‘‘who would be de7 scribed in subclause (I) if ‘135 percent’

8 and ‘175 percent’ were substituted for

9 ‘120 percent’ and ‘135 percent’ respec10 tively’’ and inserting ‘‘who would be de11 scribed in clause (iii) but for the fact that

12 their income exceeds 135 percent, but is

13 less than 175 percent, of the official pov14 erty line (referred to in such clause) for a

15 family of the size involved’’.

16 (2) CONFORMING AMENDMENT.—Section

17 1933(c)(2)(A) of such Act (42 U.S.C.

18 1396v(c)(2)(A)) is amended by striking ‘‘the sum’’

19 and all that follows and inserting ‘‘the total number

20 of individuals described in section

21 1902(a)(10)(E)(iv) in the State; to’’.

22 (b) PROVISION OF MEDICAID PRESCRIPTION DRUG

23 BENEFITS FOR QMBS AND SLMBS AS WRAP-AROUND

24 BENEFIT.—
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1 (1) IN GENERAL.—Section 1902(a)(10) of such

2 Act (42 U.S.C. 1396a(a)(10)) is amended—

3 (A) in subparagraph (E)(i), by inserting

4 ‘‘and for prescribed drugs (in the same amount,

5 duration, and scope as for individuals described

6 in subparagraph (A)(i))’’ after ‘‘1905(p)(3))’’;

7 (B) in subparagraph (E)(iii), by inserting

8 ‘‘and for prescribed drugs (in the same amount,

9 duration, and scope as for individuals described

10 in subparagraph (A)(i))’’ after ‘‘section

11 1905(p)(3)(A)(ii)’’; and

12 (C) in the clause (VIII) following subpara13 graph (F), by inserting ‘‘and to medical assist14 ance for prescribed drugs described in subpara15 graph (E)(i)’’ after ‘‘1905(p)(3))’’.

16 (2) CONFORMING AMENDMENT.—Section

17 1916(a) of such Act (42 U.S.C. 1396o(a)) is amend18 ed, in the matter before paragraph (1), by striking

19 ‘‘(E)(i)’’ and inserting ‘‘(E)’’.

20 (c) EFFECTIVE DATES.—

21 (1) The amendments made by subsections

22 (a)(1) and (b) take effect on July 1, 2000, and

23 apply to prescribed drugs furnished on or after such

24 date.
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1 (2) The amendment made by subsection (a)(2)

2 applies to the allocation for the portion of fiscal year

3 2000 that occurs on or after July 1, 2000, and to

4 the allocation for subsequent fiscal years.

5 (3) The amendments made by this section apply

6 without regard to whether or not regulations to im7 plement such amendments are promulgated by July

8 1, 2000.

9 SEC. 7. WAIVER OF ADDITIONAL PORTION OF PART B PRE10 MIUM FOR CERTAIN MEDICARE BENE11 FICIARIES HAVING ACTUARIALLY EQUIVA12 LENT COVERAGE.

13 (a) IN GENERAL.—The Secretary of Health and

14 Human Services shall establish a method under which the

15 portion of the part B premium under section 1839 of the

16 Social Security Act that is identified by the Secretary of

17 Health and Human Services as attributable to the drug

18 coverage provided under section 1849 of that Act (as

19 added by section 3) is waived (and not collected) for any

20 individual enrolled under part B of title XVIII of the So21 cial Security Act who demonstrates that the individual has

22 drug coverage that is actuarially equivalent to the cov23 erage provided under that part.

24 (b) LIMITATION.—Subsection (a) shall not apply to

25 an individual with coverage through a group health plan
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1 if the group health plan receives payments for such indi2 vidual pursuant to section 4.

3 SEC. 8. ELIMINATION OF TIME LIMITATION ON MEDICARE

4 BENEFITS FOR IMMUNOSUPPRESSIVE

5 DRUGS.

6 (a) REVISION.—

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

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

9 amended by striking ‘‘, but only’’ and all that fol10 lows up to the semicolon at the end.

11 (2) EFFECTIVE DATE.—The amendment made

12 by paragraph (1) shall apply to drugs furnished on

13 or after the date of enactment of this Act.

14 (b) EXTENSION OF CERTAIN SECONDARY PAYER RE15 QUIREMENTS.—Section 1862(b)(1)(C) of the Social Secu16 rity Act (42 U.S.C. 1395y(b)(1)(C)) is amended by adding

17 at the end the following: ‘‘With regard to immuno18 suppressive drugs furnished on or after the date of enact19 ment of the Access to Rx Medications in Medicare Act

20 of 1999, this subparagraph shall be applied without regard

21 to any time limitation.’’.

22 SEC. 9. EXPANSION OF MEMBERSHIP OF MEDPAC TO 19.

23 (a) IN GENERAL.—Section 1805(c) of the Social Se24 curity Act (42 U.S.C. 1395b–6(c)), as amended by section

25 5202 of the Tax and Trade Relief Extension Act of 1998
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1 (contained in division J of Public Law 105–277), is

2 amended—

3 (1) in paragraph (1), by striking ‘‘17’’ and in4 serting ‘‘19’’; and

5 (2) in paragraph (2)(B), by inserting ‘‘experts

6 in the area of pharmacology and prescription drug

7 benefit programs,’’ after ‘‘other health profes8 sionals,’’.

9 (b) INITIAL TERMS OF ADDITIONAL MEMBERS.—

10 (1) IN GENERAL.—For purposes of staggering

11 the initial terms of members of the Medicare Pay12 ment Advisory Commission under section 1805(c)(3)

13 of the Social Security Act (42 U.S.C. 1395b–

14 6(c)(3)), the initial terms of the 2 additional mem15 bers of the Commission provided for by the amend16 ment under subsection (a)(1) are as follows:

17 (A) One member shall be appointed for 1

18 year.

19 (B) One member shall be appointed for 2

20 years.

21 (2) COMMENCEMENT OF TERMS.—Such terms

22 shall begin on January 1, 2000.

23 SEC. 10. GAO STUDY AND REPORT TO CONGRESS.

24 (a) STUDY.—The Comptroller General of the United

25 States shall conduct a study and analysis of the implemen-
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1 tation of the competitive bidding process for covered out2 patient drugs under section 1849 of the Social Security

3 Act (as added by section 3), including an analysis of—

4 (1) the reduction of hospital visits (or lengths

5 of such visits) by beneficiaries as a result of pro6 viding coverage of covered outpatient drugs under

7 such section;

8 (2) prices paid by the medicare program rel9 ative to comparable private and public sector pro10 grams; and

11 (3) any other savings to the medicare program

12 as a result of—

13 (A) such coverage; and

14 (B) the education and counseling provi15 sions of section 1849(g).

16 (b) REPORT.—Not later than January 1, 2001, and

17 annually thereafter, the Comptroller General of the United

18 States shall submit a report to Congress on the study and

19 analysis conducted pursuant to subsection (a), and shall

20 include in the report such recommendations regarding the

21 coverage of covered outpatient drugs under the medicare

22 program as the Comptroller General determines to be ap23 propriate.
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1 SEC. 11. EFFECTIVE DATE.

2 Except as otherwise provided, the amendments made

3 by this Act apply to items and services furnished on or

4 after July 1, 2000.

Æ