I

106TH CONGRESS

1ST SESSION H. R. 1796

To amend part B of title XVIII of the Social Security Act to provide

for a chronic disease prescription drug benefit under the Medicare Program.

IN THE HOUSE OF REPRESENTATIVES

MAY 13, 1999

Mr. CARDIN (for himself, Mr. COYNE, Mr. LEVIN, Mr. STARK, and Mrs.

THURMAN) 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 part B of title XVIII of the Social Security

Act to provide for a chronic disease prescription drug

benefit 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.

4 This Act may be cited as the ‘‘Medicare Chronic Dis5 ease Prescription Drug Benefit Act of 1999’’.

6 SEC. 2. MEDICARE CHRONIC DISEASE PRESCRIPTION

7 DRUG BENEFIT.

8 (a) COVERAGE.—
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1 (1) IN GENERAL.—Section 1832(a)(2) of the

2 Social Security Act (42 U.S.C. 1395k(a)(2)) is

3 amended—

4 (A) by striking ‘‘and’’ at the end of sub5 paragraph (I);

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

7 subparagraph (J) and inserting ‘‘; and’’; and

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

9 subparagraph:

10 ‘‘(K) subject to subsection (b), prescription

11 drugs for treatment of certain chronic condi12 tions (as defined in section 1861(uu)(1)).’’.

13 (2) PROVISION OF BENEFITS THROUGH EXIST14 ING NON-MEDICAID STATE PRESCRIPTION DRUG

15 BENEFIT PROGRAMS.—Section 1832 of such Act (42

16 U.S.C. 1395k) is further amended—

17 (1) by redesignating subsection (b) as sub18 section (c); and

19 (2) by inserting after subsection (a) the

20 following new subsection:

21 ‘‘(b)(1) Prescription drug benefits shall not be avail22 able under subsection (a)(2)(K) to an individual to the ex23 tent that the individual receives benefits for the prescrip24 tion drugs under a State non-medicaid prescription drug

25 benefit program if the following requirements are met:
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1 ‘‘(A) The program is sponsored or financially

2 underwritten by a State, but Federal financial as3 sistance under title XIX is not available for expendi4 tures under the program.

5 ‘‘(B) The program is in operation as of May 1,

6 1999.

7 ‘‘(C) The State elects to receive payment (de8 scribed in paragraph (2)) for providing benefits

9 under this subsection.

10 ‘‘(D) The deductible and coinsurance applicable

11 does not exceed the deductible and coinsurance oth12 erwise applicable to the prescription drug benefit de13 scribed in subsection (a)(2)(K).

14 ‘‘(2) The Secretary shall provide for payment to a

15 State that operates a program that meets the require16 ments of paragraph (1) of an amount (agreed to by the

17 State) that does not exceed the Secretary’s estimate of the

18 amount of payment that would have been made under this

19 part (taking into account the application of a deductible

20 and coinsurance) for prescription drugs for which coverage

21 is provided under such program, if this subsection did not

22 apply.’’.

23 (b) DEFINITION OF BENEFIT.—
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1 (1) IN GENERAL.—Section 1861 of such Act

2 (42 U.S.C. 1395x) is amended by adding at the end

3 the following new subsection:

4 ‘‘Prescription Drugs for Treatment of Certain Chronic

5 Conditions

6 ‘‘(uu)(1) The term ‘prescription drugs for treatment

7 of certain chronic conditions’ means, subject to paragraph

8 (3), prescription drugs described in paragraph (2) that

9 have been shown to have a demonstrable effect in treating

10 any of the following conditions (in the case of an individual

11 who has been diagnosed by a physician as having that con12 dition):

13 ‘‘(A) Hypertension.

14 ‘‘(B) Diabetes.

15 ‘‘(C) Congestive or ischemic heart disease.

16 ‘‘(D) Major depression.

17 ‘‘(E) Rheumatoid arthritis.

18 ‘‘(2) Prescription drugs described in this paragraph

19 are—

20 ‘‘(A) a prescription drug that meets the require21 ment of clause (i), (ii), or (iii) of section

22 1927(k)(2)(A);

23 ‘‘(B) a biological product described in section

24 1927(k)(2)(B); or

25 ‘‘(C) insulin described in section 1927(k)(2)(C).
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1 ‘‘(3) The term ‘prescription drugs for treatment of

2 certain chronic conditions’ does not include any product—

3 ‘‘(A) which may be distributed to individuals

4 without a prescription;

5 ‘‘(B) when furnished as part of, or as incident

6 to, a diagnostic service or any other item or service

7 for which payment may be made under this title;

8 ‘‘(C) that was covered under this title on the

9 day before the date of enactment of the Medicare

10 Chronic Disease Prescription Drug Benefit Act of

11 1999; or

12 ‘‘(D) that is a therapeutically equivalent re13 placement for a product described in subparagraph

14 (B) or (C), as determined by the Secretary.’’.

15 (2) PROCESS FOR IDENTIFICATION OF COVERED

16 DRUGS.—The Secretary of Health and Human Serv17 ices shall implement a process for the timely identi18 fication of prescription drugs for treatment of cer19 tain chronic conditions that should be covered under

20 section 1861(uu) of the Social Security Act, as

21 added by paragraph (1). Under such process—

22 (A) within 60 days after the date of the

23 enactment of this Act, the Agency for Health

24 Care Policy and Research shall complete an ini25 tial review of the available data on the preva-
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1 lence of conditions described in such section in

2 the population of medicare beneficiaries, the

3 adequacy of data demonstrating the effective4 ness of different prescription drugs in treating

5 such conditions, and the severity of potential

6 complications in using such drugs;

7 (B) within 6 months after the date of the

8 enactment of this Act, the Secretary shall speci9 fy by rule the initial prescription drugs that

10 shall be covered under such section;

11 (C) thereafter the Secretary, taking into

12 consideration recommendations made under

13 subsection (e), may by rule change the prescrip14 tion drugs that are so covered; and

15 (D) the Secretary may, on an emergency

16 basis, provide for the replacement of a prescrip17 tion drug on the list if another drug (for the

18 treatment of the same condition) is recalled.

19 (3) CONSTRUCTION.—Nothing in this section

20 (or the amendments made by this section) shall be

21 construed—

22 (A) as preventing medicare beneficiaries

23 from purchasing prescription drugs not identi24 fied under paragraph (2), including through
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1 coverage under a group health plan or medicare

2 supplemental policy; and

3 (B) the coverage under a medicare supple4 mental policy of prescription drugs for condi5 tions not specified on the list complied under

6 paragraph (2) shall not be considered to dupli7 cate benefits under title XVIII of such Act, for

8 purposes of applying section 1882(d)(3) of such

9 Act (42 U.S.C. 1395ss(d)(3)).

10 (c) SELECTION OF ENTITY TO PROVIDE DRUG BEN11 EFIT; PAYMENT.—Part B of title XVIII of the Social Se12 curity Act is amended by adding at the end the following

13 new section:

14 ‘‘SEC. 1849. SELECTION OF ENTITIES TO PROVIDE OUT15 PATIENT DRUG BENEFIT; PAYMENT.

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

17 ‘‘(1) IN GENERAL.—The Secretary shall estab18 lish procedures under which the Secretary accepts

19 bids from eligible entities and awards contracts to

20 such entities in order to provide covered outpatient

21 drugs to eligible beneficiaries in an area. Such con22 tracts may be awarded based on shared risk, capita23 tion, or performance.

24 ‘‘(2) AREA.—
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1 ‘‘(A) REGIONAL BASIS.—The contract en2 tered into between the Secretary and an eligible

3 entity shall require the eligible entity to provide

4 covered outpatient drugs on a regional basis.

5 ‘‘(B) DETERMINATION.—In determining

6 coverage areas under this section, the Secretary

7 shall take into account the number of eligible

8 beneficiaries in an area in order to encourage

9 participation by eligible entities.

10 ‘‘(3) SUBMISSION OF BIDS.—Each eligible enti11 ty desiring to provide covered outpatient drugs

12 under this section shall submit a bid to the Sec13 retary at such time, in such manner, and accom14 panied by such information as the Secretary may

15 reasonably require. Such bids shall include the

16 amount the eligible entity will charge enrollees under

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

18 the contract.

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

20 that—

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

22 access requirements described in subsection

23 (f)(5);

24 ‘‘(B) if an eligible entity employs

25 formularies pursuant to subsection (f)(6)(A),
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1 such entity complies with the requirements of

2 subsection (f)(6)(B);

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

4 each beneficiary covered under the contract at

5 least one drug in each therapeutic class from

6 those approved by the Secretary for the treat7 ment of certain chronic conditions and at least

8 one generic equivalent for each drug, if avail9 able; and

10 ‘‘(D) an eligible entity makes available to

11 each such beneficiary alternative prescription

12 drugs for the treatment of certain chronic con13 ditions when a physician certifies that, because

14 of a drug allergy or other documented medical

15 condition, that none of the drugs approved by

16 the Secretary for the treatment of these condi17 tions can adequately treat the patient and that

18 these drugs are medically necessary.

19 ‘‘(5) DURATION OF CONTRACTS.—Each con20 tract under this section shall be for a term of at

21 least 2 years but not more than 5 years, as deter22 mined by the Secretary.

23 ‘‘(b) ENROLLMENT.—

24 ‘‘(1) IN GENERAL.—The Secretary shall estab25 lish a process through which an eligible beneficiary
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1 shall make an election to enroll with any eligible en2 tity that has been awarded a contract under this sec3 tion and serves the geographic area in which the

4 beneficiary resides. In establishing such process, the

5 Secretary shall use rules similar to the rules for en6 rollment and disenrollment with a Medicare+Choice

7 plan under section 1851.

8 ‘‘(2) REQUIREMENT OF ENROLLMENT.—An eli9 gible beneficiary not enrolled in a Medicare+Choice

10 plan under part C must enroll with an eligible entity

11 under this section in order to be eligible to receive

12 covered outpatient drugs under this title.

13 ‘‘(3) ENROLLMENT IN ABSENCE OF ELECTION

14 BY ELIGIBLE BENEFICIARY.—In the case of an eligi15 ble beneficiary that fails to make an election pursu16 ant to paragraph (1), the Secretary shall provide,

17 pursuant to procedures developed by the Secretary,

18 for the enrollment of such beneficiary with an eligi19 ble entity that has a contract under this section that

20 covers the area in which such beneficiary resides.

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

22 The Secretary shall develop procedures for the provi23 sion of covered outpatient drugs under this title to

24 eligible beneficiaries that reside in an area that is

25 not covered by any contract under this section.
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1 ‘‘(5) BENEFICIARIES RESIDING IN DIFFERENT

2 LOCATIONS.—The Secretary shall develop procedures

3 to ensure that an eligible beneficiary that resides in

4 different regions in a year is provided benefits under

5 this section throughout the entire year.

6 ‘‘(c) PROVIDING INFORMATION TO BENE7 FICIARIES.—The Secretary shall provide for activities

8 under this section to broadly disseminate information to

9 medicare beneficiaries on the coverage provided under this

10 section. Such activities shall be similar to the activities

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

12 ‘‘(d) PAYMENTS TO ELIGIBLE ENTITIES.—The Sec13 retary shall establish procedures for making payments to

14 an eligible entity under a contract.

15 ‘‘(e) COST-SHARING.—

16 ‘‘(1) ANNUAL DEDUCTIBLE.—Benefits under

17 this section shall not begin in a year until the eligi18 ble beneficiary has met a $250 deductible.

19 ‘‘(2) COPAYMENT.—

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), the eligible beneficiary shall be re22 sponsible for making payments in an amount

23 not greater than 20 percent of the cost (as stat24 ed in the contract) of any covered outpatient

25 drug that is provided to the beneficiary. Pursu-
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1 ant to subsection (a)(4)(B), an eligible entity

2 may reduce the payment amount that an eligi3 ble beneficiary is responsible for making to the

4 entity.

5 ‘‘(B) NO COPAYMENT FOR GENERICS.—

6 The copayment amount under subparagraph

7 (A) shall be zero in the case of a covered out8 patient drug that is a drug approved under sec9 tion 505(j) of the Federal Food Drug and Cos10 metic Act.

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

12 Secretary shall not award a contract to an eligible entity

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

14 eligible entity is in compliance with such terms and condi15 tions as the Secretary shall specify, including the fol16 lowing:

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

18 The eligible entity meets quality and financial stand19 ards specified by the Secretary.

20 ‘‘(2) INFORMATION.—The eligible entity pro21 vides the Secretary with information that the Sec22 retary determines is necessary in order to carry out

23 the bidding process under this section, including

24 data needed to implement subsection (a)(6) and data

25 regarding utilization, expenditures, and costs.
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1 ‘‘(3) EDUCATION.—The eligible entity estab2 lishes educational programs that meet the criteria

3 established by the Secretary pursuant to subsection

4 (g)(1).

5 ‘‘(4) PROCEDURES TO ENSURE PROPER UTILI6 ZATION AND TO AVOID ADVERSE DRUG REAC7 TIONS.—The eligible entity has in place procedures

8 to ensure the—

9 ‘‘(A) appropriate utilization by eligible

10 beneficiaries of the benefits to be provided

11 under the contract; and

12 ‘‘(B) avoidance of adverse drug reactions

13 among eligible beneficiaries enrolled with the

14 entity.

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

16 the covered outpatient drugs are accessible and con17 venient to eligible beneficiaries covered under the

18 contract, including by offering the services in the fol19 lowing manner:

20 ‘‘(A) SERVICES DURING EMERGENCIES.—

21 The offering of services 24 hours a day and 7

22 days a week for emergencies.

23 ‘‘(B) CONTRACTS WITH RETAIL PHAR24 MACIES.—The offering of services—
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1 ‘‘(i) at a sufficient (as determined by

2 the Secretary) number of retail phar3 macies; and

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

5 pharmacies located throughout the eligible

6 entity’s service area.

7 ‘‘(6) RULES RELATING TO PROVISION OF BENE8 FITS.—

9 ‘‘(A) PROVISION OF BENEFITS.—In pro10 viding benefits under a contract under this sec11 tion, an eligible entity may—

12 ‘‘(i) employ mechanisms to provide

13 benefits economically, including the use

14 of—

15 ‘‘(I) formularies (pursuant to

16 subparagraph (B));

17 ‘‘(II) alternative methods of dis18 tribution; and

19 ‘‘(III) generic drug substitution;

20 and

21 ‘‘(ii) use incentives to encourage eligi22 ble beneficiaries to select less costly means

23 of receiving drugs.
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1 ‘‘(B) FORMULARIES.—If an eligible entity

2 uses a formulary to contain costs under this

3 Act—

4 ‘‘(i) the eligible entity shall—

5 ‘‘(I) ensure participation of prac6 ticing physicians and pharmacists in

7 the development of the formulary;

8 ‘‘(II) include in the formulary at

9 least 1 drug from each therapeutic

10 class from the drugs identified under

11 section 2(b)(2) of the Medicare

12 Chronic Disease Prescription Drug

13 Benefit Act of 1999 and provide at

14 least 1 generic equivalent, if available;

15 ‘‘(III) provide for coverage of

16 otherwise covered non-formulary

17 drugs when recommended by pre18 scribing providers; and

19 ‘‘(IV) disclose to current and

20 prospective beneficiaries and to pro21 viders in the service area the nature

22 of the formulary restrictions, includ23 ing information regarding the drugs

24 included in the formulary, copayment

25 amounts, and any difference in the
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1 cost-sharing for different types of

2 drugs; but

3 ‘‘(ii) nothing shall preclude an entity

4 from—

5 ‘‘(I) requiring higher cost-sharing

6 for drugs provided under clause

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

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

9 entity shall provide for coverage of a

10 nonformulary drug on the same basis

11 as a drug within the formulary if such

12 nonformulary drug is determined by

13 the prescribing provider to be medi14 cally indicated;

15 ‘‘(II) educating prescribing pro16 viders, pharmacists, and beneficiaries

17 about medical and cost benefits of for18 mulary products; and

19 ‘‘(III) requesting prescribing pro20 viders to consider a formulary product

21 prior to dispensing of a nonformulary

22 drug, as long as such request does not

23 unduly delay the provision of the

24 drug.
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1 ‘‘(7) PROCEDURES TO COMPENSATE PHAR2 MACISTS FOR COUNSELING.—The eligible entity shall

3 compensate pharmacists for providing the counseling

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

5 ‘‘(8) CLINICAL OUTCOMES.—

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

7 shall comply with clinical quality standards as

8 determined by the Secretary.

9 ‘‘(B) DEVELOPMENT OF STANDARDS.—

10 The Secretary, in consultation with appropriate

11 medical specialty societies, shall develop clinical

12 quality standards that are applicable to eligible

13 entities. Such standards shall be based on cur14 rent standards of care.

15 ‘‘(9) PROCEDURES REGARDING DENIALS OF

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

17 ensure—

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

19 denials of care and complaints (including those

20 regarding the use of formularies under para21 graph (6)) by enrollees, or providers, phar22 macists, and other individuals acting on behalf

23 of such individual (with the individual’s con24 sent) in accordance with requirements (as es25 tablished by the Secretary) that are comparable
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1 to such requirements for Medicare+Choice or2 ganizations under part C;

3 ‘‘(B) that beneficiaries are provided with

4 information regarding the appeals procedures

5 under this section at the time of enrollment;

6 and

7 ‘‘(C) that providers receive information on

8 the entity’s procedures for coverage of otherwise

9 covered non-formulary and alternative prescrip10 tion drugs for treatment of certain chronic con11 ditions.

12 ‘‘(g) EDUCATIONAL REQUIREMENTS TO ENSURE AP13 PROPRIATE UTILIZATION.—

14 ‘‘(1) ESTABLISHMENT OF PROGRAM CRI15 TERIA.—The Secretary shall establish a model for

16 comprehensive educational programs in order to as17 sure the appropriate—

18 ‘‘(A) prescribing and dispensing of covered

19 outpatient drugs under this section; and

20 ‘‘(B) use of such drugs by eligible bene21 ficiaries.

22 ‘‘(2) ELEMENTS OF MODEL.—The model estab23 lished under paragraph (1) shall include the fol24 lowing elements:
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1 ‘‘(A) On-line prospective review available

2 24 hours a day and 7 days a week in order to

3 evaluate each prescription for drug therapy

4 problems due to duplication, interaction, or in5 correct dosage or duration of therapy.

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

7 for counseling eligible beneficiaries enrolled

8 under a contract under this section regarding—

9 ‘‘(i) the proper use of prescribed cov10 ered outpatient drugs; and

11 ‘‘(ii) interactions and contra-indica12 tions.

13 ‘‘(C) Methods to identify and educate pro14 viders, pharmacists, and eligible beneficiaries

15 regarding—

16 ‘‘(i) instances or patterns concerning

17 the unnecessary or inappropriate pre18 scribing or dispensing of covered out19 patient drugs;

20 ‘‘(ii) instances or patterns of sub21 standard care;

22 ‘‘(iii) potential adverse reactions to

23 covered outpatient drugs;

24 ‘‘(iv) inappropriate use of antibiotics;
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1 ‘‘(v) appropriate use of generic prod2 ucts; and

3 ‘‘(vi) the importance of using covered

4 outpatient drugs in accordance with the in5 struction of prescribing providers.

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

7 Insofar as an eligible organization maintains individually

8 identifiable medical records or other health information re9 garding enrollees under a contract entered into under this

10 section, the organization shall—

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

12 identifiable enrollee information;

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

14 a manner that is accurate and timely; and

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

16 such records and information.

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

18 ‘‘(1) COVERED OUTPATIENT DRUG.—

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

20 subparagraph (B), the term ‘covered outpatient

21 drug’ means prescription drugs for treatment of

22 certain chronic conditions (as defined in section

23 1861(uu)(1)).

24 ‘‘(B) EXCLUSION.—The term ‘covered out25 patient drug’ does not include any product—
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1 ‘‘(i) which may be distributed to indi2 viduals without a prescription;

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

4 incident to, a diagnostic service or any

5 other item or service for which payment

6 may be made under this title;

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

8 on the day before the date of enactment of

9 the Medicare Chronic Disease Prescription

10 Drug Benefit Act of 1999; or

11 ‘‘(iv) that is a therapeutically equiva12 lent replacement for a product described in

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

14 Secretary.

15 ‘‘(2) ELIGIBLE BENEFICIARY.—The term ‘eligi16 ble beneficiary’ means an individual that is enrolled

17 under part B of this title.

18 ‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible en19 tity’ means any entity that the Secretary determines

20 to be appropriate, including—

21 ‘‘(A) pharmaceutical benefit management

22 companies;

23 ‘‘(B) wholesale and retail pharmacist deliv24 ery systems;

25 ‘‘(C) insurers;
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1 ‘‘(D) other entities; or

2 ‘‘(E) any combination of the entities de3 scribed in subparagraphs (A) through (D).’’.

4 (2) NO APPLICATION TO REGULAR PART B DE5 DUCTIBLE.—Section 1833(b) of such Act (42 U.S.C.

6 1395l(b)) is amended—

7 (A) in paragraph (1), by inserting ‘‘or for

8 prescription drugs for treatment of certain

9 chronic conditions’’ after ‘‘section

10 1861(s)(10)(A)’’; and

11 (B) in paragraph (2), by inserting ‘‘and

12 shall not apply with respect to prescription

13 drugs for treatment of certain chronic condi14 tions’ after ‘‘section 1861(kk)))’’.

15 (3) PAYMENT CONFORMING AMENDMENT.—Sec16 tion 1832(a) of such Act (42 U.S.C. 1395k(a)) is

17 amended—

18 (A) in paragraph (2)(A), by striking ‘‘and

19 (I)’’ and inserting ‘‘(I), and (K)’’;

20 (B) by striking ‘‘and’’ at the end of para21 graph (8);

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

23 subparagraph (9) and inserting ‘‘; and’’; and

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

25 paragraph:
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1 ‘‘(10) with respect to prescription drugs for

2 treatment of certain chronic conditions, the amounts

3 provided under section 1849;’’.

4 (d) ANALYSIS OF BENEFIT.—

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

6 Human Services shall enter into an arrangement

7 with the Institute of Medicine of the National Acad8 emy of Sciences under which the Institute on an on9 going basis collects and analyzes data, and submits

10 annual reports to the Secretary and Congress, on—

11 (A) the effectiveness of the benefits pro12 vided under the amendments made by this sec13 tion in reducing demand for acute medical serv14 ices;

15 (B) the annual cost of the benefits and the

16 annual savings in acute medical services; and

17 (C) additional diagnoses, and additional

18 prescription drugs, for which such benefits

19 should be provided, using the criteria described

20 in section 2(b)(2)(A) of this Act.

21 (2) CONSULTATION.—In carrying out para22 graph (1)(C), the Secretary shall establish a process

23 through which health care providers, advocacy

24 groups, and other interested parties may submit evi-
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1 dence to the Institute of Medicine and the Institute

2 shall consider such evidence.

3 (3) CONSIDERATIONS.—Analyses under this

4 subsection shall consider both the short term and

5 long term benefits, and costs to the medicare pro6 gram of any change in benefits.

7 (4) SECRETARIAL RECOMMENDATIONS.—The

8 Secretary, taking into account the annual reports

9 submitted under this subsection, may submit to Con10 gress recommendations regarding changes in the

11 chronic conditions for which prescription drug cov12 erage is available under the medicare program.

13 (5) HEARINGS.—The Committee on Ways and

14 Means and the Committee on Commerce of the

15 House of Representatives and the Committee on Fi16 nance of the Senate shall conduct hearings to con17 sider the reports and recommendations submitted

18 under this subsection before making any change in

19 covered prescription drug benefits under the medi20 care program.

21 (6) FUNDING.—From funds appropriated to the

22 Department of Health and Human Services for each

23 fiscal year (beginning with fiscal year 2000), the

24 Secretary shall provide for such funding as the Sec-
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1 retary determines necessary for the conduct of the

2 analyses conducted under this subsection.

3 (e) EFFECTIVE DATE.—Benefits shall first be made

4 available under the amendments made by this section for

5 prescription drugs furnished on or after January 1, 2001.

6 SEC. 3. MEDICAID COVERAGE OF MEDICARE PRESCRIP7 TION DRUG COST SHARING FOR SLMBS.

8 Section 1902(a)(10)(E)(iii) of the Social Security Act

9 (42 U.S.C. 1396a(a)(10)(E)(iii)) by inserting ‘‘and medi10 care cost-sharing described in subparagraphs (B) and (C)

11 of section 1905(p)(3) with respect to the deductible and

12 copayment described in section 1849(e)’’ after ‘‘section

13 1905(p)(4),’’.

Æ