I 

115TH CONGRESS 

1ST SESSION H. R. 1122 

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

and rationalization of Medicare prescription drug plan recovery rules 

for certain claims. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 16, 2017 

Mr. MURPHY of Pennsylvania (for himself and Mr. KIND) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for clarification and rationalization of Medicare prescription drug plan recovery rules for certain claims. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Secondary Payer Ad5 vancement, Rationalization, and Clarification Act’’ or the 

6 ‘‘SPARC Act’’. 


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1 SEC. 2. CLARIFICATION AND RATIONALIZATION OF MEDI2 CARE PRESCRIPTION DRUG SECONDARY 

3 CLAIMS RESPONSIBILITY. 

4 (a) IN GENERAL.—Section 1860D–2(a)(4) of the So5 cial Security Act (42 U.S.C. 1395w–102(a)(4)) is amend6 ed to read as follows: 

7 ‘‘(4) SECONDARY PAYOR AND RECOVERY

8 RIGHTS.— 

9 ‘‘(A) IN GENERAL.— 

10 ‘‘(i) APPLICATION OF SECONDARY

11 PAYOR.—A prescription drug plan shall be 

12 secondary payor to any valid and collectible 

13 payment from a primary drug plan (as de14 fined in clause (iv)) until such time as such 

15 primary drug plan pays a final settlement, 

16 judgment, or award to an individual en17 rolled under the prescription drug plan 

18 with regard to an injury or illness involved 

19 or otherwise terminates its ongoing respon20 sibility for medical payments with respect 

21 to the individual. 

22 ‘‘(ii) LIMITATION ON PARTIES MAKING

23 PRESCRIPTION DRUG PLANS PRIMARY.—A 

24 primary drug plan (as defined in clause 

25 (iv), other than a group health plan or 

26 multiemployer or multiple employer plan 


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1 of, or contributed to by, an employer that 

2 has 20 or fewer employees for each work3 ing day in each of 20 or more calendar 

4 weeks in the calendar year involved or the 

5 preceding calendar year), a self-insured 

6 plan, a service benefit plan, a managed 

7 care organization, a pharmacy benefit 

8 manager, or other party that, by statute, 

9 contract, or agreement, is legally respon10 sible for payment of a claim for a covered 

11 outpatient drug, in enrolling an individual 

12 or in making any payments for benefits to 

13 the individual or on the individual’s behalf, 

14 may not take into account that the indi15 vidual is enrolled under a prescription drug 

16 plan under this part or is eligible for or is 

17 provided coverage for covered part D drugs 

18 under this part. 

19 ‘‘(iii) LIMITATION ON SECRETARIAL

20 CLAIMS THROUGH SUBROGATION.—The 

21 Secretary shall not assert any claim on be22 half or against a prescription drug plan, 

23 other than through the recovery from such 

24 a plan of amounts paid related to a cov25 ered part D drug event that has been reVerDate Sep 11 2014 20:40 Feb 24, 2017 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1122.IH H1122

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1 paid to the plan through a subrogation ac2 tion or otherwise. 

3 ‘‘(iv) PRIMARY DRUG PLAN DE4 FINED.—In this paragraph, the term ‘pri5 mary drug plan’ means, with respect to 

6 benefits for covered part D drugs, a group 

7 health plan or large group health plan 

8 (other than a group health plan or multi9 employer or multiple employer plan of, or 

10 contributed to by, an employer that has 20 

11 or fewer employees for each working day in 

12 each of 20 or more calendar weeks in the 

13 calendar year involved or the preceding cal14 endar year), a workers’ compensation law 

15 or plan, an automobile or liability insur16 ance policy or plan (including a self-in17 sured plan) or no-fault insurance insofar 

18 as such a plan, law, policy, or insurance 

19 provides such benefits, insofar as, under 

20 the provisions of section 1862(b)(2), such 

21 coverage would be treated as a primary 

22 plan if benefits for covered part D drugs 

23 were treated as benefits under parts A and 

24 B. For purposes of this clause, an entity 

25 that engages in a business, trade, or proVerDate Sep 11 2014 20:40 Feb 24, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1122.IH H1122

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1 fession shall be deemed to have a self-in2 sured plan if it carries its own risk (wheth3 er by a failure to obtain insurance, or oth4 erwise) in whole or in part. 

5 ‘‘(B) WAIVER.—A prescription drug plan 

6 may waive (in whole or in part) the provisions 

7 of this paragraph in the case of an individual 

8 claim if the plan determines that the waiver is 

9 in the best interests of the program established 

10 under this part. 

11 ‘‘(C) RECOVERY.—A prescription drug 

12 plan shall be subrogated (to the extent of pay13 ment made under this part by the plan for any 

14 covered part D drug before the date the plan 

15 received notice pursuant to subparagraph (D)) 

16 to any right of an individual or any other entity 

17 to payment, with respect to such covered part 

18 D drug, under a primary drug plan. A subroga19 tion claim may not be asserted pursuant to this 

20 subparagraph by a prescription drug plan with 

21 respect to a payment for a covered part D drug 

22 after the date that is 3 years after the date 

23 such plan receives notice of a payment, with re24 spect to such covered part D drug, pursuant to 

25 subparagraph (D). Any such subrogation claim 


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1 shall be the exclusive legal remedy of the PDP 

2 sponsor of the plan and shall be reduced to take 

3 into account the cost of procuring the judgment 

4 or settlement with respect to such claim if an 

5 individual’s liability, workers’ compensation, or 

6 no-fault claim is disputed. Any costs or expense 

7 incurred by a prescription drug plan related to 

8 recoveries pursuant to this subparagraph shall 

9 not be considered an administrative cost or ex10 pense, as those terms are used in this part. 

11 ‘‘(D) COORDINATION OF BENEFITS INFOR12 MATION.—Not later than 15 days after the date 

13 the Secretary receives information under para14 graph (7) or (8) of section 1862(b) relating to 

15 an individual enrolled in a prescription drug 

16 plan during an applicable time, the Secretary 

17 shall provide such information to such prescrip18 tion drug plan in a format convenient and ac19 cessible to such plans. The Secretary shall 

20 waive any requirements under this part that a 

21 prescription drug plan establish procedures for 

22 determining whether costs for part D eligible 

23 individuals are being reimbursed through insur24 ance or otherwise or identify payers that are 

25 primary to the program under subparagraph 


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1 (A)(ii) other than as required under this para2 graph. 

3 ‘‘(E) COORDINATION OF BENEFITS.—A 

4 prescription drug plan shall, in the case of re5 ceipt of a notice pursuant to subparagraph (D) 

6 related to an enrollee for whom a primary drug 

7 plan has reported on ongoing responsibility for 

8 medical costs pursuant to paragraph (7) or (8) 

9 of section 1862(b), authorize the provider of 

10 such covered part D drug to charge, in accord11 ance with the charges allowed under the pre12 scription drug plan, such primary drug plan for 

13 such covered part D drug related to or arising 

14 out of the treatment accident or injury subject 

15 to such notice (other than payments subject to 

16 a claim under subparagraph (B) or (F)) for the 

17 period in which the enrollee remains enrolled in 

18 such plan through the date upon which such 

19 primary drug plan has terminated such ongoing 

20 responsibility for medical payments. 

21 ‘‘(F) USE OF WEB SITE TO DETERMINE

22 FINAL REIMBURSEMENT AMOUNT.— 

23 ‘‘(i) NOTIFICATION OF PLANS.—Not 

24 later than 10 days after the date the Sec25 retary receives a notice under section 


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1 1862(b)(2)(B)(vii)(I) relating to an indi2 vidual during the period the individual is 

3 enrolled in a prescription drug plan, the 

4 Secretary shall provide such notice to the 

5 plan. 

6 ‘‘(ii) STATEMENT BY PLAN.— 

7 ‘‘(I) IN GENERAL.—Not later 

8 than 30 days after the date a plan re9 ceives a notice under clause (i), the 

10 plan may provide the Secretary with a 

11 statement of any covered part D drug 

12 for which the plan seeks reimburse13 ment, including the amount of such 

14 reimbursement. 

15 ‘‘(II) FAILURE TO PROVIDE

16 STATEMENT.—The prescription drug 

17 plan shall be deemed to have waived 

18 its rights under subparagraph (B)— 

19 ‘‘(aa) in the case that the 

20 prescription drug plan does not 

21 provide such statement by such 

22 date, with respect to any covered 

23 part D drug provided to such in24 dividual with respect to such no25 tice; and 


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1 ‘‘(bb) in the case that the 

2 prescription drug plan provides 

3 such statement by such date, 

4 with respect to any covered part 

5 D drug provided to such indi6 vidual which was not identified in 

7 the notice. 

8 ‘‘(iii) INCLUSION OF INFORMATION ON

9 WEB SITE.—The Secretary shall include 

10 any covered part D drug identified by a 

11 prescription drug plan pursuant to clause 

12 (ii) within the Secretary’s statement of re13 imbursement amount on the Web site as 

14 described in section 1862(b)(2)(B)(vii). 

15 ‘‘(iv) COLLECTION.—The Secretary 

16 may collect (on behalf of a prescription 

17 drug plan) the reimbursement amount for 

18 covered part D drugs, as identified pursu19 ant to clause (ii), from the individual in20 volved or the primary drug plan pursuant 

21 to the procedures set forth under section 

22 1862(b)(2)(B)(vii). Any such amounts col23 lected by the Secretary for covered part D 

24 drugs directly paid by the plan shall be re25 mitted directly by the Secretary to the apVerDate Sep 11 2014 20:40 Feb 24, 2017 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1122.IH H1122

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1 propriate prescription drug plan that en2 rolled the individual related to the notice 

3 during the applicable time period for which 

4 such individual was enrolled, and the Sec5 retary shall retain such amounts as were 

6 paid to the plan in subsidy for such 

7 drugs.’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 subsection (a) shall apply to drugs dispensed in years be10 ginning more than 6 months after the date of the enact11 ment of this Act. 

Æ 


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