I

106TH CONGRESS

1ST SESSION H. R. 1495

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

of outpatient prescription drugs under the Medicare Program.

IN THE HOUSE OF REPRESENTATIVES

APRIL 20, 1999

Mr. STARK (for himself, Mr. DINGELL, Mr. WAXMAN, Mr. RANGEL, Mr.

BROWN of Ohio, Mr. MCDERMOTT, Mr. LEWIS of Georgia, Mr.

BALDACCI, Mr. FROST, Mr. FILNER, Mr. ALLEN, Mr. MOAKLEY, Mr.

DEFAZIO, Ms. KAPTUR, Mr. FRANK of Massachusetts, Mr. MEEHAN, Mr.

BOUCHER, Ms. SCHAKOWSKY, Ms. PELOSI, Mr. TIERNEY, Mr.

DELAHUNT, Mrs. THURMAN, Mr. CAPUANO, and Mr. MARKEY) introduced the following bill; which was referred to the Committee on 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 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,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Access to Prescription Medications in Medicare Act of

4 1999’’.

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

6 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.

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.

7 SEC. 2. MEDICARE COVERAGE OF OUTPATIENT PRESCRIP8 TION DRUGS.

9 (a) COVERAGE.—Section 1861(s)(2) of the Social Se10 curity Act (42 U.S.C. 1395x(s)(2)) is amended—

11 (1) by striking ‘‘and’’ at the end of subpara12 graph (S);

13 (2) by striking the period at the end of sub14 paragraph (T) and inserting ‘‘; and’’; and

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

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

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

18 procedures established under such section;’’.
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1 (b) PAYMENT.—Section 1833(a)(1) of the Social Se2 curity Act (42 U.S.C. 1395l(a)(1)) is amended—

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

4 and

5 (2) by striking the semicolon at the end and in6 serting the following: ‘‘, and (T) with respect to cov7 ered outpatient drugs (as defined in subsection (i)(1)

8 of section 1849), the amounts paid shall be the

9 amounts established by the Secretary pursuant to

10 such section;’’.

11 SEC. 3. SELECTION OF ENTITIES TO PROVIDE OUTPATIENT

12 DRUG BENEFIT.

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

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

15 the following:

16 ‘‘SEC. 1849. SELECTION OF ENTITIES TO PROVIDE OUT17 PATIENT DRUG BENEFIT.

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

19 ‘‘(1) IN GENERAL.—The Secretary shall estab20 lish procedures under which the Secretary accepts

21 bids from eligible entities and awards contracts to

22 such entities in order to provide covered outpatient

23 drugs to eligible beneficiaries in an area. Such con24 tracts may be awarded based on shared risk, capita25 tion, or performance.
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1 ‘‘(2) AREA.—

2 ‘‘(A) REGIONAL BASIS.—The contract en3 tered into between the Secretary and an eligible

4 entity shall require the eligible entity to provide

5 covered outpatient drugs on a regional basis.

6 ‘‘(B) DETERMINATION.—In determining

7 coverage areas under this section, the Secretary

8 shall take into account the number of eligible

9 beneficiaries in an area in order to encourage

10 participation by eligible entities.

11 ‘‘(3) SUBMISSION OF BIDS.—Each eligible enti12 ty desiring to provide covered outpatient drugs

13 under this section shall submit a bid to the Sec14 retary at such time, in such manner, and accom15 panied by such information as the Secretary may

16 reasonably require. Such bids shall include the

17 amount the eligible entity will charge enrollees under

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

19 the contract.

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

21 that—

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

23 access requirements described in subsection

24 (f)(5);
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1 ‘‘(B) if an eligible entity employs

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

3 such entity complies with the requirements of

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

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

6 each beneficiary covered under the contract the

7 full scope of benefits required under paragraph

8 (5).

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

10 ensure that all covered outpatient drugs that are

11 reasonable and necessary to prevent or slow the de12 terioration of, and improve or maintain, the health

13 of eligible beneficiaries are offered under a contract

14 entered into under this section.

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

16 shall, consistent with the requirements of this sec17 tion and the goal of containing Medicare Program

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

19 only 1 bidding entity meets the minimum standards

20 specified under this section and by the Secretary.

21 ‘‘(7) DURATION OF CONTRACTS.—Each con22 tract under this section shall be for a term of at

23 least 2 years but not more than 5 years, as deter24 mined by the Secretary.
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1 ‘‘(8) BENCHMARK FOR CONTRACTS.—The Sec2 retary shall not enter into a contract with an eligible

3 entity under this section unless the Secretary deter4 mines that the average cost (excluding any cost5 sharing) for all covered outpatient drugs provided to

6 beneficiaries under the contract is comparable to the

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

8 by large private sector purchasers for such drugs.

9 ‘‘(b) ENROLLMENT.—

10 ‘‘(1) IN GENERAL.—The Secretary shall estab11 lish a process through which an eligible beneficiary

12 shall make an election to enroll with any eligible en13 tity that has been awarded a contract under this sec14 tion and serves the geographic area in which the

15 beneficiary resides. In establishing such process, the

16 Secretary shall use rules similar to the rules for en17 rollment and disenrollment with a Medicare+Choice

18 plan under section 1851.

19 ‘‘(2) REQUIREMENT OF ENROLLMENT.—Ex20 cluding an eligible beneficiary enrolled in a group

21 health plan described in section 4 of the Access to

22 Prescription Medications in Medicare Act of 1999,

23 an eligible beneficiary not enrolled in a

24 Medicare+Choice plan under part C must enroll

25 with an eligible entity under this section in order to
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1 be eligible to receive covered outpatient drugs under

2 this title.

3 ‘‘(3) ENROLLMENT IN ABSENCE OF ELECTION

4 BY ELIGIBLE BENEFICIARY.—In the case of an eligi5 ble beneficiary that fails to make an election pursu6 ant to paragraph (1), the Secretary shall provide,

7 pursuant to procedures developed by the Secretary,

8 for the enrollment of such beneficiary with an eligi9 ble entity that has a contract under this section that

10 covers the area in which such beneficiary resides.

11 ‘‘(4) AREAS NOT COVERED BY CONTRACTS.—

12 The Secretary shall develop procedures for the provi13 sion of covered outpatient drugs under this title to

14 eligible beneficiaries that reside in an area that is

15 not covered by any contract under this section.

16 ‘‘(5) BENEFICIARIES RESIDING IN DIFFERENT

17 LOCATIONS.—The Secretary shall develop procedures

18 to ensure that an eligible beneficiary that resides in

19 different regions in a year is provided benefits under

20 this section throughout the entire year.

21 ‘‘(c) PROVIDING INFORMATION TO BENE22 FICIARIES.—The Secretary shall provide for activities

23 under this section to broadly disseminate information to

24 Medicare beneficiaries on the coverage provided under this
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1 section. Such activities shall be similar to the activities

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

3 ‘‘(d) PAYMENTS TO ELIGIBLE ENTITIES.—The Sec4 retary shall establish procedures for making payments to

5 an eligible entity under a contract.

6 ‘‘(e) COST-SHARING.—

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

8 shall not begin until the eligible beneficiary has met

9 a $200 deductible.

10 ‘‘(2) COPAYMENT.—

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (B), the eligible beneficiary shall be re13 sponsible for making payments in an amount

14 not greater than 20 percent of the cost (as stat15 ed in the contract) of any covered outpatient

16 drug that is provided to the beneficiary. Pursu17 ant to subsection (a)(4)(B), an eligible entity

18 may reduce the payment amount that an eligi19 ble beneficiary is responsible for making to the

20 entity.

21 ‘‘(B) BASIC BENEFIT.—Subject to sub22 paragraph (C), if the aggregate amount of cov23 ered outpatient drugs provided to an eligible

24 beneficiary under this section for any calendar
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1 year (based on the cost of covered outpatient

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

3 ‘‘(i) the beneficiary may continue to

4 purchase covered outpatient drugs under

5 the contract based on the contract price,

6 but

7 ‘‘(ii) the copayment under subpara8 graph (A) shall be 100 percent.

9 ‘‘(C) STOP-LOSS PROTECTION.—The co10 payment amount under subparagraph (A) shall

11 be 0 percent once an eligible beneficiary’s out12 of-pocket expenses for covered outpatient drugs

13 under this section reach $3,000.

14 ‘‘(D) INFLATION ADJUSTMENT.—

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

16 calendar year beginning after 2000, each

17 of the dollar amounts in subparagraphs

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

19 amount equal to—

20 ‘‘(I) such dollar amount, multi21 plied by

22 ‘‘(II) an adjustment, as deter23 mined by the Secretary, for changes

24 in the per capita cost of prescription

25 drugs for beneficiaries under this title.
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1 ‘‘(ii) ROUNDING.—If any dollar

2 amount after being increased under clause

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

4 amount shall be rounded to the nearest

5 multiple of $10.

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

7 Secretary shall not award a contract to an eligible entity

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

9 eligible entity is in compliance with such terms and condi10 tions as the Secretary shall specify, including the fol11 lowing:

12 ‘‘(1) QUALITY AND FINANCIAL STANDARDS.—

13 The eligible entity meets quality and financial stand14 ards specified by the Secretary.

15 ‘‘(2) INFORMATION.—The eligible entity pro16 vides the Secretary with information that the Sec17 retary determines is necessary in order to carry out

18 the bidding process under this section, including

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

20 regarding utilization, expenditures, and costs.

21 ‘‘(3) EDUCATION.—The eligible entity estab22 lishes educational programs that meet the criteria

23 established by the Secretary pursuant to subsection

24 (g)(1).
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1 ‘‘(4) PROCEDURES TO ENSURE PROPER UTILI2 ZATION AND TO AVOID ADVERSE DRUG REAC3 TIONS.—The eligible entity has in place procedures

4 to ensure the—

5 ‘‘(A) appropriate utilization by eligible

6 beneficiaries of the benefits to be provided

7 under the contract; and

8 ‘‘(B) avoidance of adverse drug reactions

9 among eligible beneficiaries enrolled with the

10 entity.

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

12 the covered outpatient drugs are accessible and con13 venient to eligible beneficiaries covered under the

14 contract, including by offering the services in the fol15 lowing manner:

16 ‘‘(A) SERVICES DURING EMERGENCIES.—

17 The offering of services 24 hours a day and 7

18 days a week for emergencies.

19 ‘‘(B) CONTRACTS WITH RETAIL PHAR20 MACIES.—The offering of services—

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

22 the Secretary) number of retail phar23 macies; and
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1 ‘‘(ii) to the extent feasible, at retail

2 pharmacies located throughout the eligible

3 entity’s service area.

4 ‘‘(6) RULES RELATING TO PROVISION OF BENE5 FITS.—

6 ‘‘(A) PROVISION OF BENEFITS.—In pro7 viding benefits under a contract under this sec8 tion, an eligible entity may—

9 ‘‘(i) employ mechanisms to provide

10 benefits economically, including the use

11 of—

12 ‘‘(I) formularies (pursuant to

13 subparagraph (B));

14 ‘‘(II) alternative methods of dis15 tribution; and

16 ‘‘(III) generic drug substitution;

17 and

18 ‘‘(ii) use incentives to encourage eligi19 ble beneficiaries to select cost-effective

20 drugs or less costly means of receiving

21 drugs.

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

23 uses a formulary to contain costs under this

24 Act—

25 ‘‘(i) the eligible entity shall—
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1 ‘‘(I) ensure participation of prac2 ticing physicians and pharmacists in

3 the development of the formulary;

4 ‘‘(II) include in the formulary at

5 least 1 drug from each therapeutic

6 class;

7 ‘‘(III) provide for coverage of

8 otherwise covered non-formulary

9 drugs when recommended by pre10 scribing providers; and

11 ‘‘(IV) disclose to current and

12 prospective beneficiaries and to pro13 viders in the service area the nature

14 of the formulary restrictions, includ15 ing information regarding the drugs

16 included in the formulary, copayment

17 amounts, and any difference in the

18 cost-sharing for different types of

19 drugs; but

20 ‘‘(ii) nothing shall preclude an entity

21 from—

22 ‘‘(I) requiring higher cost-sharing

23 for drugs provided under clause

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

25 in subsection (e)(2)(A), except that an
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1 entity shall provide for coverage of a

2 nonformulary drug on the same basis

3 as a drug within the formulary if such

4 nonformulary drug is determined by

5 the prescribing provider to be medi6 cally indicated;

7 ‘‘(II) educating prescribing pro8 viders, pharmacists, and beneficiaries

9 about medical and cost benefits of for10 mulary products; and

11 ‘‘(III) requesting prescribing pro12 viders to consider a formulary product

13 prior to dispensing of a nonformulary

14 drug, as long as such request does not

15 unduly delay the provision of the

16 drug.

17 ‘‘(7) PROCEDURES TO COMPENSATE PHAR18 MACISTS FOR COUNSELING.—The eligible entity shall

19 compensate pharmacists for providing the counseling

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

21 ‘‘(8) CLINICAL OUTCOMES.—

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

23 shall comply with clinical quality standards as

24 determined by the Secretary.
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1 ‘‘(B) DEVELOPMENT OF STANDARDS.—

2 The Secretary, in consultation with appropriate

3 medical specialty societies, shall develop clinical

4 quality standards that are applicable to eligible

5 entities. Such standards shall be based on cur6 rent standards of care.

7 ‘‘(9) PROCEDURES REGARDING DENIALS OF

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

9 ensure—

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

11 denials of care and complaints (including those

12 regarding the use of formularies under para13 graph (6)) by enrollees, or providers, phar14 macists, and other individuals acting on behalf

15 of such individual (with the individual’s con16 sent) in accordance with requirements (as es17 tablished by the Secretary) that are comparable

18 to such requirements for Medicare+Choice or19 ganizations under part C; and

20 ‘‘(B) that beneficiaries are provided with

21 information regarding the appeals procedures

22 under this section at the time of enrollment.

23 ‘‘(g) EDUCATIONAL REQUIREMENTS TO ENSURE AP24 PROPRIATE UTILIZATION.—
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1 ‘‘(1) ESTABLISHMENT OF PROGRAM CRI2 TERIA.—The Secretary shall establish a model for

3 comprehensive educational programs in order to as4 sure the appropriate—

5 ‘‘(A) prescribing and dispensing of covered

6 outpatient drugs under this section; and

7 ‘‘(B) use of such drugs by eligible bene8 ficiaries.

9 ‘‘(2) ELEMENTS OF MODEL.—The model estab10 lished under paragraph (1) shall include the fol11 lowing elements:

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

13 24 hours a day and 7 days a week in order to

14 evaluate each prescription for drug therapy

15 problems due to duplication, interaction, or in16 correct dosage or duration of therapy.

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

18 for counseling eligible beneficiaries enrolled

19 under a contract under this section regarding—

20 ‘‘(i) the proper use of prescribed cov21 ered outpatient drugs; and

22 ‘‘(ii) interactions and contra-indica23 tions.
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1 ‘‘(C) Methods to identify and educate pro2 viders, pharmacists, and eligible beneficiaries

3 regarding—

4 ‘‘(i) instances or patterns concerning

5 the unnecessary or inappropriate pre6 scribing or dispensing of covered out7 patient drugs;

8 ‘‘(ii) instances or patterns of sub9 standard care;

10 ‘‘(iii) potential adverse reactions to

11 covered outpatient drugs;

12 ‘‘(iv) inappropriate use of antibiotics;

13 ‘‘(v) appropriate use of generic prod14 ucts; and

15 ‘‘(vi) the importance of using covered

16 outpatient drugs in accordance with the in17 struction of prescribing providers.

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

19 Insofar as an eligible organization maintains individually

20 identifiable medical records or other health information re21 garding enrollees under a contract entered into under this

22 section, the organization shall—

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

24 identifiable enrollee information;
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1 ‘‘(2) maintain such records and information in

2 a manner that is accurate and timely; and

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

4 such records and information.

5 ‘‘(i) DEFINITIONS.—In this section:

6 ‘‘(1) COVERED OUTPATIENT DRUG.—

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

8 subparagraph (B), the term ‘covered outpatient

9 drug’ means any of the following products:

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

11 only upon prescription, and—

12 ‘‘(I) which is approved for safety

13 and effectiveness as a prescription

14 drug under section 505 of the Federal

15 Food, Drug, and Cosmetic Act;

16 ‘‘(II)(aa) which was commercially

17 used or sold in the United States be18 fore the date of enactment of the

19 Drug Amendments of 1962 or which

20 is identical, similar, or related (within

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

22 title 21 of the Code of Federal Regu23 lations) to such a drug, and (bb)

24 which has not been the subject of a

25 final determination by the Secretary
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1 that it is a ‘new drug’ (within the

2 meaning of section 201(p) of the Fed3 eral Food, Drug, and Cosmetic Act)

4 or an action brought by the Secretary

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

6 of such Act to enforce section 502(f)

7 or 505(a) of such Act; or

8 ‘‘(III)(aa) which is described in

9 section 107(c)(3) of the Drug Amend10 ments of 1962 and for which the Sec11 retary has determined there is a com12 pelling justification for its medical

13 need, or is identical, similar, or re14 lated (within the meaning of section

15 310.6(b)(1) of title 21 of the Code of

16 Federal Regulations) to such a drug,

17 and (bb) for which the Secretary has

18 not issued a notice of an opportunity

19 for a hearing under section 505(e) of

20 the Federal Food, Drug, and Cos21 metic Act on a proposed order of the

22 Secretary to withdraw approval of an

23 application for such drug under such

24 section because the Secretary has de25 termined that the drug is less than ef-
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1 fective for all conditions of use pre2 scribed, recommended, or suggested in

3 its labeling.

4 ‘‘(ii) A biological product which—

5 ‘‘(I) may only be dispensed upon

6 prescription;

7 ‘‘(II) is licensed under section

8 351 of the Public Health Service Act;

9 and

10 ‘‘(III) is produced at an estab11 lishment licensed under such section

12 to produce such product.

13 ‘‘(iii) Insulin approved under appro14 priate Federal law.

15 ‘‘(iv) A prescribed drug or biological

16 product that would meet the requirements

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

18 over-the-counter in addition to being avail19 able upon prescription.

20 ‘‘(B) EXCLUSION.—The term ‘covered out21 patient drug’ does not include any product—

22 ‘‘(i) except as provided in subpara23 graph (A)(iv), which may be distributed to

24 individuals without a prescription;
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1 ‘‘(ii) when furnished as part of, or as

2 incident to, a diagnostic service or any

3 other item or service for which payment

4 may be made under this title;

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

6 on the day before the date of enactment of

7 the Access to Prescription Medications in

8 Medicare Act of 1999; or

9 ‘‘(iv) that is a therapeutically equiva10 lent replacement for a product described in

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

12 Secretary.

13 ‘‘(2) ELIGIBLE BENEFICIARY.—The term ‘eligi14 ble beneficiary’ means an individual that is enrolled

15 under part B of this title.

16 ‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible en17 tity’ means any entity that the Secretary determines

18 to be appropriate, including—

19 ‘‘(A) pharmaceutical benefit management

20 companies;

21 ‘‘(B) wholesale and retail pharmacist deliv22 ery systems;

23 ‘‘(C) insurers;

24 ‘‘(D) other entities; or
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1 ‘‘(E) any combination of the entities de2 scribed in subparagraphs (A) through (D).’’.

3 SEC. 4. OPTIONAL COVERAGE FOR CERTAIN BENE4 FICIARIES.

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

6 health plan that provides health insurance coverage for re7 tirees is equivalent to or greater than the coverage pro8 vided under section 1849 of the Social Security Act (as

9 added by section 3), beneficiaries receiving coverage

10 through the group health plan may continue to receive

11 such coverage from the plan and the Secretary may make

12 payments to such plans, subject to the requirements of

13 this section.

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

15 section, group health plans shall—

16 (1) comply with certain requirements of this

17 Act and other reasonable, necessary, and related re18 quirements that are needed to administer this sec19 tion, as determined by the Secretary;

20 (2) to the extent that there is a contractual ob21 ligation to provide drug coverage to retirees that is

22 equal to or greater than the drug coverage provided

23 under this Act, reimburse or otherwise arrange to

24 compensate beneficiaries during the life of the con25 tract for the portion of the part B premium under
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1 section 1839 of the Social Security Act that is iden2 tified by the Secretary of Health and Human Serv3 ices as attributable to the drug coverage provided

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

5 3); or

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

7 prior to enactment of this section and provide drug

8 coverage to retirees that is equal to or greater than

9 the drug coverage provided under section 1849 of

10 the Social Security Act (as added by section 3), re11 imburse or otherwise arrange to compensate bene12 ficiaries for the portion of the part B premium

13 under section 1839 of the Social Security Act that

14 is identified by the Secretary of Health and Human

15 Services as attributable to the drug coverage pro16 vided under section 1849 of that Act (as added by

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

18 group health plan begins participation under this

19 section.

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

21 process to provide payments to eligible group health plans

22 under this section on behalf of enrolled beneficiaries. Such

23 payments shall not exceed the amount that would other24 wise be paid to a private entity serving similar bene-
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1 ficiaries in the same service area under section 1849 of

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

3 SEC. 5. MEDIGAP REVISIONS.

4 (a) REQUIRED COVERAGE OF COVERED OUTPATIENT

5 DRUGS.—Section 1882(p)(2)(B) of the Social Security

6 Act (42 U.S.C. 1395ss(p)(2)(B)) is amended by inserting

7 before ‘‘and’’ at the end the following: ‘‘including a re8 quirement that an appropriate number of policies provide

9 coverage of drugs which compliments but does not dupli10 cate the drug benefits that beneficiaries are otherwise enti11 tled to under this title (with the Secretary and the Na12 tional Association of Insurance Commissioners deter13 mining the appropriate level of drug benefits that each

14 benefit package must provide and ensuring that policies

15 providing such coverage remain affordable for bene16 ficiaries);’’.

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

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

19 (c) TRANSITION PROVISIONS.—

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

21 and Human Services identifies a State as requiring

22 a change to its statutes or regulations to conform its

23 regulatory program to the amendments made by this

24 section, the State regulatory program shall not be

25 considered to be out of compliance with the require-
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1 ments of section 1882 of the Social Security Act due

2 solely to failure to make such change until the date

3 specified in paragraph (4).

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

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

6 Association of Insurance Commissioners (in this

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

8 NAIC Model Regulation relating to section 1882 of

9 the Social Security Act (referred to in such section

10 as the 1991 NAIC Model Regulation, as subse11 quently modified) to conform to the amendments

12 made by this section, such revised regulation incor13 porating the modifications shall be considered to be

14 the applicable NAIC model regulation (including the

15 revised NAIC model regulation and the 1991 NAIC

16 Model Regulation) for the purposes of such section.

17 (3) SECRETARY STANDARDS.—If the NAIC

18 does not make the modifications described in para19 graph (2) within the period specified in such para20 graph, the Secretary of Health and Human Services

21 shall make the modifications described in such para22 graph and such revised regulation incorporating the

23 modifications shall be considered to be the appro24 priate regulation for the purposes of such section.

25 (4) DATE SPECIFIED.—
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1 (A) IN GENERAL.—Subject to subpara2 graph (B), the date specified in this paragraph

3 for a State is the earlier of—

4 (i) the date the State changes its stat5 utes or regulations to conform its regu6 latory program to the changes made by

7 this section; or

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

9 the Secretary first makes the modifications

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

11 (B) ADDITIONAL LEGISLATIVE ACTION RE12 QUIRED.—In the case of a State which the Sec13 retary identifies as—

14 (i) requiring State legislation (other

15 than legislation appropriating funds) to

16 conform its regulatory program to the

17 changes made in this section; but

18 (ii) having a legislature which is not

19 scheduled to meet in 2000 in a legislative

20 session in which such legislation may be

21 considered;

22 the date specified in this paragraph is the first

23 day of the first calendar quarter beginning after

24 the close of the first legislative session of the

25 State legislature that begins on or after July 1,
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1 2000. For purposes of the previous sentence, in

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

3 session, each year of such session shall be

4 deemed to be a separate regular session of the

5 State legislature.

6 SEC. 6. IMPROVED MEDICAID ASSISTANCE FOR LOW-IN7 COME INDIVIDUALS.

8 (a) INCREASE IN SLMB ELIGIBILITY TO 135 PER9 CENT OF POVERTY LEVEL.—.

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

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

12 is amended—

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

14 percent in 1995 and years thereafter’’ and in15 serting ‘‘, 120 percent in 1995 and through

16 July 1, 2000, and 135 percent for subsequent

17 periods’’; and

18 (B) in clause (iv)—

19 (i) by striking the dash and all that

20 follows through ‘‘(II)’’, and

21 (ii) by striking ‘‘who would be de22 scribed in subclause (I) if ‘135 percent’

23 and ‘175 percent’ were substituted for

24 ‘120 percent’ and ‘135 percent’ respec25 tively’’ and inserting ‘‘who would be de-
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1 scribed in clause (iii) but for the fact that

2 their income exceeds 135 percent, but is

3 less than 175 percent, of the official pov4 erty line (referred to in such clause) for a

5 family of the size involved’’.

6 (2) CONFORMING AMENDMENT.—Section

7 1933(c)(2)(A) of such Act (42 U.S.C.

8 1396v(c)(2)(A)) is amended by striking ‘‘the sum’’

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

10 of individuals described in section

11 1902(a)(10)(E)(iv) in the State; to’’.

12 (b) PROVISION OF MEDICAID PRESCRIPTION DRUG

13 BENEFITS FOR QMBS AND SLMBS AS WRAP-AROUND

14 BENEFIT.—

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

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

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

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

19 duration, and scope as for individuals described

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

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

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

23 duration, and scope as for individuals described

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

25 1905(p)(3)(A)(ii)’’; and
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1 (C) in the clause (VIII) following subpara2 graph (F), by inserting ‘‘and to medical assist3 ance for prescribed drugs described in subpara4 graph (E)(i)’’ after ‘‘1905(p)(3))’’.

5 (2) CONFORMING AMENDMENT.—Section

6 1916(a) of such Act (42 U.S.C. 1396o(a)) is amend7 ed, in the matter before paragraph (1), by striking

8 ‘‘(E)(i)’’ and inserting ‘‘(E)’’.

9 (c) EFFECTIVE DATES.—

10 (1) The amendments made by subsections

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

12 apply to prescribed drugs furnished on or after such

13 date.

14 (2) The amendment made by subsection (a)(2)

15 applies to the allocation for the portion of fiscal year

16 2000 that occurs on or after July 1, 2000, and to

17 the allocation for subsequent fiscal years.

18 (3) The amendments made by this section apply

19 without regard to whether or not regulations to im20 plement such amendments are promulgated by July

21 1, 2000.
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1 SEC. 7. WAIVER OF ADDITIONAL PORTION OF PART B PRE2 MIUM FOR CERTAIN MEDICARE BENE3 FICIARIES HAVING ACTUARIALLY EQUIVA4 LENT COVERAGE.

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

6 Human Services shall establish a method under which the

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

8 Social Security Act that is identified by the Secretary of

9 Health and Human Services as attributable to the drug

10 coverage provided under section 1849 of that Act (as

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

12 individual enrolled under part B of title XVIII of the So13 cial Security Act who demonstrates that the individual has

14 drug coverage that is actuarially equivalent to the cov15 erage provided under that part.

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

17 an individual with coverage through a group health plan

18 if the group health plan receives payments for such indi19 vidual pursuant to section 4.

20 SEC. 8. ELIMINATION OF TIME LIMITATION ON MEDICARE

21 BENEFITS FOR IMMUNOSUPPRESSIVE

22 DRUGS.

23 (a) REVISION.—

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

25 Social Security Act (42 U.S.C. 1395x(s)(2)(J)) is
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1 amended by striking ‘‘, but only’’ and all that fol2 lows up to the semicolon at the end.

3 (2) EFFECTIVE DATE.—The amendment made

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

5 or after the date of enactment of this Act.

6 (b) EXTENSION OF CERTAIN SECONDARY PAYER RE7 QUIREMENTS.—Section 1862(b)(1)(C) of the Social Secu8 rity Act (42 U.S.C. 1395y(b)(1)(C)) is amended by adding

9 at the end the following: ‘‘With regard to immuno10 suppressive drugs furnished on or after the date of enact11 ment of the Access to Prescription Medications in Medi12 care Act of 1999, this subparagraph shall be applied with13 out regard to any time limitation.’’.

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

15 (a) IN GENERAL.—Section 1805(c) of the Social Se16 curity Act (42 U.S.C. 1395b–6(c)), as amended by section

17 5202 of the Tax and Trade Relief Extension Act of 1998

18 (contained in division J of Public Law 105–277), is

19 amended—

20 (1) in paragraph (1), by striking ‘‘17’’ and in21 serting ‘‘19’’; and

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

23 in the area of pharmacology and prescription drug

24 benefit programs,’’ after ‘‘other health profes25 sionals,’’.
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1 (b) INITIAL TERMS OF ADDITIONAL MEMBERS.—

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

3 the initial terms of members of the Medicare Pay4 ment Advisory Commission under section 1805(c)(3)

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

6 6(c)(3)), the initial terms of the 2 additional mem7 bers of the Commission provided for by the amend8 ment under subsection (a)(1) are as follows:

9 (A) One member shall be appointed for 1

10 year.

11 (B) One member shall be appointed for 2

12 years.

13 (2) COMMENCEMENT OF TERMS.—Such terms

14 shall begin on January 1, 2000.

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

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

17 States shall conduct a study and analysis of the implemen18 tation of the competitive bidding process for covered out19 patient drugs under section 1849 of the Social Security

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

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

22 of such visits) by beneficiaries as a result of pro23 viding coverage of covered outpatient drugs under

24 such section;
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1 (2) prices paid by the Medicare Program rel2 ative to comparable private and public sector pro3 grams; and

4 (3) any other savings to the medicare program

5 as a result of—

6 (A) such coverage; and

7 (B) the education and counseling provi8 sions of section 1849(g).

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

10 annually thereafter, the Comptroller General of the United

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

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

13 include in the report such recommendations regarding the

14 coverage of covered outpatient drugs under the medicare

15 program as the Comptroller General determines to be ap16 propriate.

17 SEC. 11. EFFECTIVE DATE.

18 Except as otherwise provided, the amendments made

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

20 after July 1, 2000.

Æ