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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2012 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 2012

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

                              June 7, 1999

Mr. Deutsch (for himself and Mr. Wexler) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addition 
     to the Committee on Commerce, 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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Prescription Drug Benefit Act of 1999''.
    (b) Table of Contents.--The table of contents of 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.

SEC. 2. MEDICARE COVERAGE OF OUTPATIENT PRESCRIPTION DRUGS.

    (a) Coverage.--Section 1861(s)(2) of the Social Security Act (42 
U.S.C. 1395x(s)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (S);
            (2) by striking the period at the end of subparagraph (T) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(U) covered outpatient drugs (as defined in subsection 
        (i)(1) of section 1849) pursuant to the procedures established 
        under such section;''.
    (b) Payment.--Section 1833(a)(1) of the Social Security Act (42 
U.S.C. 1395l(a)(1)) is amended--
            (1) by striking ``and (S)'' and inserting ``(S)''; and
            (2) by striking the semicolon at the end and inserting the 
        following: ``, and (T) with respect to covered outpatient drugs 
        (as defined in subsection (i)(1) of section 1849), the amounts 
        paid shall be the amounts established by the Secretary pursuant 
        to such section;''.

SEC. 3. SELECTION OF ENTITIES TO PROVIDE OUTPATIENT DRUG BENEFIT.

    Part B of title XVIII of the Social Security Act (42 U.S.C. 1395j 
et seq.) is amended by adding at the end the following:

``SEC. 1849. SELECTION OF ENTITIES TO PROVIDE OUTPATIENT DRUG BENEFIT.

    ``(a) Establishment of Bidding Process.--
            ``(1) In general.--The Secretary shall establish procedures 
        under which the Secretary accepts bids from eligible entities 
        and awards contracts to such entities in order to provide 
        covered outpatient drugs to eligible beneficiaries in an area. 
        Such contracts may be awarded based on shared risk, capitation, 
        or performance.
            ``(2) Area.--
                    ``(A) Regional basis.--The contract entered into 
                between the Secretary and an eligible entity shall 
                require the eligible entity to provide covered 
                outpatient drugs on a regional basis.
                    ``(B) Determination.--In determining coverage areas 
                under this section, the Secretary shall take into 
                account the number of eligible beneficiaries in an area 
                in order to encourage participation by eligible 
                entities.
            ``(3) Submission of bids.--Each eligible entity desiring to 
        provide covered outpatient drugs under this section shall 
        submit a bid to the Secretary at such time, in such manner, and 
        accompanied by such information as the Secretary may reasonably 
        require. Such bids shall include the amount the eligible entity 
        will charge enrollees under subsection (e)(2) for covered 
        outpatient drugs under the contract.
            ``(4) Access.--The Secretary shall ensure that--
                    ``(A) an eligible entity complies with the access 
                requirements described in subsection (f)(5);
                    ``(B) if an eligible entity employs formularies 
                pursuant to subsection (f)(6)(A), such entity complies 
                with the requirements of subsection (f)(6)(B); and
                    ``(C) an eligible entity makes available to each 
                beneficiary covered under the contract the full scope 
                of benefits required under paragraph (5).
            ``(5) Scope of benefits.--The Secretary shall ensure that 
        all covered outpatient drugs that are reasonable and necessary 
        to prevent or slow the deterioration of, and improve or 
        maintain, the health of eligible beneficiaries are offered 
        under a contract entered into under this section.
            ``(6) Number of contracts.--The Secretary shall, consistent 
        with the requirements of this section and the goal of 
        containing medicare program costs, award at least 2 contracts 
        in an area, unless only 1 bidding entity meets the minimum 
        standards specified under this section and by the Secretary.
            ``(7) Duration of contracts.--Each contract under this 
        section shall be for a term of at least 2 years but not more 
        than 5 years, as determined by the Secretary.
            ``(8) Benchmark for contracts.--The Secretary shall not 
        enter into a contract with an eligible entity under this 
        section unless the Secretary determines that the average cost 
        (excluding any cost-sharing) for all covered outpatient drugs 
        provided to beneficiaries under the contract is comparable to 
        the average cost charged (exclusive of any cost-sharing) by 
        large private sector purchasers for such drugs.
    ``(b) Enrollment.--
            ``(1) In general.--The Secretary shall establish a process 
        through which an eligible beneficiary shall make an election to 
        enroll with any eligible entity that has been awarded a 
        contract under this section and serves the geographic area in 
        which the beneficiary resides. In establishing such process, 
        the Secretary shall use rules similar to the rules for 
        enrollment and disenrollment with a Medicare+Choice plan under 
        section 1851.
            ``(2) Requirement of enrollment.--Excluding an eligible 
        beneficiary enrolled in a group health plan described in 
        section 4 of the Medicare Prescription Drug Benefit Act of 
        1999, an eligible beneficiary not enrolled in a Medicare+Choice 
        plan under part C must enroll with an eligible entity under 
        this section in order to be eligible to receive covered 
        outpatient drugs under this title.
            ``(3) Enrollment in absence of election by eligible 
        beneficiary.--In the case of an eligible beneficiary that fails 
        to make an election pursuant to paragraph (1), the Secretary 
        shall provide, pursuant to procedures developed by the 
        Secretary, for the enrollment of such beneficiary with an 
        eligible entity that has a contract under this section that 
        covers the area in which such beneficiary resides.
            ``(4) Areas not covered by contracts.--The Secretary shall 
        develop procedures for the provision of covered outpatient 
        drugs under this title to eligible beneficiaries that reside in 
        an area that is not covered by any contract under this section.
            ``(5) Beneficiaries residing in different locations.--The 
        Secretary shall develop procedures to ensure that an eligible 
        beneficiary that resides in different regions in a year is 
        provided benefits under this section throughout the entire 
        year.
    ``(c) Providing Information to Beneficiaries.--The Secretary shall 
provide for activities under this section to broadly disseminate 
information to medicare beneficiaries on the coverage provided under 
this section. Such activities shall be similar to the activities 
performed by the Secretary under section 1851(d).
    ``(d) Payments to Eligible Entities.--The Secretary shall establish 
procedures for making payments to an eligible entity under a contract.
    ``(e) Cost-Sharing.--
            ``(1) Deductible.--Benefits under this section shall not 
        begin until the eligible beneficiary has met a deductible equal 
        to--
                    ``(A) $200 for 2000; or
                    ``(B) for a subsequent year the amount of the 
                deductible under subparagraph (A) or this subparagraph 
                for the previous year increased by a factor that 
                reflects the annual rate of change in the per capita 
                cost of prescription drugs for beneficiaries under this 
                title.
        If any dollar amount determined under subparagraph (B) for a 
        year is not a multiple of $5, such dollar amount shall be 
        rounded to the nearest multiple of $5.
            ``(2) Copayment.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                eligible beneficiary shall be responsible for making 
                payments in an amount not greater than 20 percent of 
                the cost (as stated in the contract) of any covered 
                outpatient drug that is provided to the beneficiary. 
                Pursuant to subsection (a)(4)(B), an eligible entity 
                may reduce the payment amount that an eligible 
                beneficiary is responsible for making to the entity.
                    ``(B) Basic benefit.--If the aggregate amount of 
                covered outpatient drugs provided to an eligible 
                beneficiary under this section for any calendar year 
                (based on the cost of covered outpatient drugs stated 
                in the contract) exceeds $5,200--
                            ``(i) the beneficiary may continue to 
                        purchase covered outpatient drugs under the 
                        contract based on the contract price, but
                            ``(ii) the copayment under subparagraph (A) 
                        shall be 100 percent.
                    ``(C) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        calendar year beginning after 2000, each of the 
                        dollar amounts in subparagraph (B) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) an adjustment, as determined 
                                by the Secretary, for changes in the 
                                per capita cost of prescription drugs 
                                for beneficiaries under this title.
                            ``(ii) Rounding.--If any dollar amount 
                        after being increased under clause (i) is not a 
multiple of $10, such dollar amount shall be rounded to the nearest 
multiple of $10.
    ``(f) Conditions for Awarding Contract.--The Secretary shall not 
award a contract to an eligible entity under subsection (a) unless the 
Secretary finds that the eligible entity is in compliance with such 
terms and conditions as the Secretary shall specify, including the 
following:
            ``(1) Quality and financial standards.--The eligible entity 
        meets quality and financial standards specified by the 
        Secretary.
            ``(2) Information.--The eligible entity provides the 
        Secretary with information that the Secretary determines is 
        necessary in order to carry out the bidding process under this 
        section, including data needed to implement subsection (a)(8) 
        and data regarding utilization, expenditures, and costs.
            ``(3) Education.--The eligible entity establishes 
        educational programs that meet the criteria established by the 
        Secretary pursuant to subsection (g)(1).
            ``(4) Procedures to ensure proper utilization and to avoid 
        adverse drug reactions.--The eligible entity has in place 
        procedures to ensure the--
                    ``(A) appropriate utilization by eligible 
                beneficiaries of the benefits to be provided under the 
                contract; and
                    ``(B) avoidance of adverse drug reactions among 
                eligible beneficiaries enrolled with the entity.
            ``(5) Access.--The eligible entity ensures that the covered 
        outpatient drugs are accessible and convenient to eligible 
        beneficiaries covered under the contract, including by offering 
        the services in the following manner:
                    ``(A) Services during emergencies.--The offering of 
                services 24 hours a day and 7 days a week for 
                emergencies.
                    ``(B) Contracts with retail pharmacies.--The 
                offering of services--
                            ``(i) at a sufficient (as determined by the 
                        Secretary) number of retail pharmacies; and
                            ``(ii) to the extent feasible, at retail 
                        pharmacies located throughout the eligible 
                        entity's service area.
            ``(6) Rules relating to provision of benefits.--
                    ``(A) Provision of benefits.--In providing benefits 
                under a contract under this section, an eligible entity 
                may--
                            ``(i) employ mechanisms to provide benefits 
                        economically, including the use of--
                                    ``(I) formularies (pursuant to 
                                subparagraph (B));
                                    ``(II) alternative methods of 
                                distribution; and
                                    ``(III) generic drug substitution; 
                                and
                            ``(ii) use incentives to encourage eligible 
                        beneficiaries to select cost-effective drugs or 
                        less costly means of receiving drugs.
                    ``(B) Formularies.--If an eligible entity uses a 
                formulary to contain costs under this Act--
                            ``(i) the eligible entity shall--
                                    ``(I) ensure participation of 
                                practicing physicians and pharmacists 
                                in the development of the formulary;
                                    ``(II) include in the formulary at 
                                least 1 drug from each therapeutic 
                                class;
                                    ``(III) provide for coverage of 
                                otherwise covered non-formulary drugs 
                                when recommended by prescribing 
                                providers; and
                                    ``(IV) disclose to current and 
                                prospective beneficiaries and to 
                                providers in the service area the 
                                nature of the formulary restrictions, 
                                including information regarding the 
                                drugs included in the formulary, 
                                copayment amounts, and any difference 
                                in the cost-sharing for different types 
                                of drugs; but
                            ``(ii) nothing shall preclude an entity 
                        from--
                                    ``(I) requiring higher cost-sharing 
                                for drugs provided under clause 
                                (i)(III), subject to limits established 
                                in subsection (e)(2)(A), except that an 
                                entity shall provide for coverage of a 
                                nonformulary drug on the same basis as 
                                a drug within the formulary if such 
                                nonformulary drug is determined by the 
                                prescribing provider to be medically 
                                indicated;
                                    ``(II) educating prescribing 
                                providers, pharmacists, and 
                                beneficiaries about medical and cost 
                                benefits of formulary products; and
                                    ``(III) requesting prescribing 
                                providers to consider a formulary 
                                product prior to dispensing of a 
                                nonformulary drug, as long as such 
                                request does not unduly delay the 
                                provision of the drug.
            ``(7) Clinical quality standards.--
                    ``(A) Requirement.--The eligible entity shall 
                comply with clinical quality standards as determined by 
                the Secretary.
                    ``(B) Development of standards.--The Secretary, in 
                consultation with appropriate medical specialty 
                societies, shall develop clinical quality standards 
                that are applicable to eligible entities. Such 
                standards shall be based on current standards of care.
            ``(8) Procedures regarding denials of care.--The eligible 
        entity has in place procedures to ensure--
                    ``(A) the timely review and resolution of denials 
                of care and complaints (including those regarding the 
                use of formularies under paragraph (6)) by enrollees, 
                or providers, pharmacists, and other individuals acting 
                on behalf of such individual (with the individual's 
                consent) in accordance with requirements (as 
                established by the Secretary) that are comparable to 
                such requirements for Medicare+Choice organizations 
                under part C; and
                    ``(B) that beneficiaries are provided with 
                information regarding the appeals procedures under this 
                section at the time of enrollment.
    ``(g) Educational Requirements To Ensure Appropriate Utilization.--
            ``(1) Establishment of program criteria.--The Secretary 
        shall establish a model for comprehensive educational programs 
        in order to assure the appropriate--
                    ``(A) prescribing and dispensing of covered 
                outpatient drugs under this section; and
                    ``(B) use of such drugs by eligible beneficiaries.
            ``(2) Elements of model.--The model established under 
        paragraph (1) shall include the following elements:
                    ``(A) On-line prospective review available 24 hours 
                a day and 7 days a week in order to evaluate each 
                prescription for drug therapy problems due to 
                duplication, interaction, or incorrect dosage or 
                duration of therapy.
                    ``(B) Consistent with State law, guidelines for 
                counseling eligible beneficiaries enrolled under a 
                contract under this section regarding--
                            ``(i) the proper use of prescribed covered 
                        outpatient drugs; and
                            ``(ii) interactions and contra-indications.
                    ``(C) Where appropriate and non-duplicative, 
                methods to identify and educate providers, pharmacists, 
                and eligible beneficiaries regarding--
                            ``(i) instances or patterns concerning the 
                        unnecessary or inappropriate prescribing or 
                        dispensing of covered outpatient drugs;
                            ``(ii) instances or patterns of substandard 
                        care;
                            ``(iii) potential adverse reactions to 
                        covered outpatient drugs;
                            ``(iv) inappropriate use of antibiotics;
                            ``(v) appropriate use of generic products; 
                        and
                            ``(vi) the importance of using covered 
                        outpatient drugs in accordance with the 
                        instruction of prescribing providers.
    ``(h) Protection of Patient Confidentiality.--Insofar as an 
eligible organization maintains individually identifiable medical 
records or other health information regarding enrollees under a 
contract entered into under this section, the organization shall--
            ``(1) safeguard the privacy of any individually 
        identifiable enrollee information;
            ``(2) maintain such records and information in a manner 
        that is accurate and timely; and
            ``(3) assure timely access of such enrollees to such 
        records and information.
    ``(i) Definitions.--In this section:
            ``(1) Covered outpatient drug.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered outpatient drug' 
                means any of the following products:
                            ``(i) A drug which may be dispensed only 
                        upon prescription, and--
                                    ``(I) which is approved for safety 
                                and effectiveness as a prescription 
                                drug under section 505 of the Federal 
                                Food, Drug, and Cosmetic Act;
                                    ``(II)(aa) which was commercially 
                                used or sold in the United States 
                                before the date of enactment of the 
                                Drug Amendments of 1962 or which is 
                                identical, similar, or related (within 
                                the meaning of section 310.6(b)(1) of 
                                title 21 of the Code of Federal 
                                Regulations) to such a drug, and (bb) 
                                which has not been the subject of a 
                                final determination by the Secretary 
                                that it is a `new drug' (within the 
                                meaning of section 201(p) of the 
                                Federal Food, Drug, and Cosmetic Act) 
                                or an action brought by the Secretary 
                                under section 301, 302(a), or 304(a) of 
                                such Act to enforce section 502(f) or 
                                505(a) of such Act; or
                                    ``(III)(aa) which is described in 
                                section 107(c)(3) of the Drug 
                                Amendments of 1962 and for which the 
                                Secretary has determined there is a 
                                compelling justification for its 
                                medical need, or is identical, similar, 
                                or related (within the meaning of 
                                section 310.6(b)(1) of title 21 of the 
                                Code of Federal Regulations) to such a 
                                drug, and (bb) for which the Secretary 
                                has not issued a notice of an 
                                opportunity for a hearing under section 
                                505(e) of the Federal Food, Drug, and 
                                Cosmetic Act on a proposed order of the 
                                Secretary to withdraw approval of an 
                                application for such drug under such 
                                section because the Secretary has 
                                determined that the drug is less than 
                                effective for all conditions of use 
                                prescribed, recommended, or suggested 
                                in its labeling.
                            ``(ii) A biological product which--
                                    ``(I) may only be dispensed upon 
                                prescription;
                                    ``(II) is licensed under section 
                                351 of the Public Health Service Act; 
                                and
                                    ``(III) is produced at an 
                                establishment licensed under such 
                                section to produce such product.
                            ``(iii) Insulin approved under appropriate 
                        Federal law.
                            ``(iv) A prescribed drug or biological 
                        product that would meet the requirements of 
                        clause (i) or (ii) but that is available over-
                        the-counter in addition to being available upon 
                        prescription.
                    ``(B) Exclusion.--The term `covered outpatient 
                drug' does not include any product--
                            ``(i) except as provided in subparagraph 
                        (A)(iv), which may be distributed to 
                        individuals without a prescription;
                            ``(ii) when furnished as part of, or as 
                        incident to, a diagnostic service or any other 
                        item or service for which payment may be made 
                        under this title;
                            ``(iii) that was covered under this title 
                        on the day before the date of enactment of the 
                        Medicare Prescription Drug Benefit Act of 1999; 
                        or
                            ``(iv) that is a therapeutically equivalent 
                        replacement for a product described in clause 
                        (ii) or (iii), as determined by the Secretary.
            ``(2) Eligible beneficiary.--The term `eligible 
        beneficiary' means an individual that is enrolled under part B 
        of this title.
            ``(3) Eligible entity.--The term `eligible entity' means 
        any entity that the Secretary determines to be appropriate, 
        including--
                    ``(A) pharmaceutical benefit management companies;
                    ``(B) wholesale and retail pharmacist delivery 
                systems;
                    ``(C) insurers;
                    ``(D) other entities; or
                    ``(E) any combination of the entities described in 
                subparagraphs (A) through (D).''.

SEC. 4. OPTIONAL COVERAGE FOR CERTAIN BENEFICIARIES.

    (a) In General.--If drug coverage under a group health plan that 
provides health insurance coverage for retirees is equivalent to or 
greater than the coverage provided under section 1849 of the Social 
Security Act (as added by section 3), beneficiaries receiving coverage 
through the group health plan may continue to receive such coverage 
from the plan and the Secretary may make payments to such plans, 
subject to the requirements of this section.
    (b) Requirements.--To receive payment under this section, group 
health plans shall--
            (1) comply with certain requirements of this Act and other 
        reasonable, necessary, and related requirements that are needed 
        to administer this section, as determined by the Secretary;
            (2) to the extent that there is a contractual obligation to 
        provide drug coverage to retirees that is equal to or greater 
        than the drug coverage provided under this Act, reimburse or 
        otherwise arrange to compensate beneficiaries during the life 
        of the contract for the portion of the part B premium under 
        section 1839 of the Social Security Act that is identified by 
        the Secretary of Health and Human Services as attributable to 
        the drug coverage provided under section 1849 of that Act (as 
        added by section 3); or
            (3) for group health plans that are in existence prior to 
        enactment of this section and provide drug coverage to retirees 
        that is equal to or greater than the drug coverage provided 
        under section 1849 of the Social Security Act (as added by 
        section 3), reimburse or otherwise arrange to compensate 
        beneficiaries for the portion of the part B premium under 
        section 1839 of the Social Security Act that is identified by 
        the Secretary of Health and Human Services as attributable to 
        the drug coverage provided under section 1849 of that Act (as 
        added by section 3) for at least 1 year from the date that the 
        group health plan begins participation under this section.
    (c) Payments.--The Secretary shall establish a process to provide 
payments to eligible group health plans under this section on behalf of 
enrolled beneficiaries. Such payments shall not exceed the amount that 
would otherwise be paid to a private entity serving similar 
beneficiaries in the same service area under section 1849 of the Social 
Security Act (as added by section 3).

SEC. 5. MEDIGAP REVISIONS.

    (a) Required Coverage of Covered Outpatient Drugs.--Section 
1882(p)(2)(B) of the Social Security Act (42 U.S.C. 1395ss(p)(2)(B)) is 
amended by inserting before ``and'' at the end the following: 
``including a requirement that an appropriate number of policies 
provide coverage of drugs which compliments but does not duplicate the 
drug benefits that beneficiaries are otherwise entitled to under this 
title (with the Secretary and the National Association of Insurance 
Commissioners determining the appropriate level of drug benefits that 
each benefit package must provide and ensuring that policies providing 
such coverage remain affordable for beneficiaries);''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on July 1, 2000.
    (c) Transition Provisions.--
            (1) In general.--If the Secretary of Health and Human 
        Services identifies a State as requiring a change to its 
        statutes or regulations to conform its regulatory program to 
        the amendments made by this section, the State regulatory 
        program shall not be considered to be out of compliance with 
        the requirements of section 1882 of the Social Security Act due 
        solely to failure to make such change until the date specified 
        in paragraph (4).
            (2) NAIC standards.--If, within 9 months after the date of 
        enactment of this Act, the National Association of Insurance 
        Commissioners (in this subsection referred to as the ``NAIC'') 
        modifies its NAIC Model Regulation relating to section 1882 of 
        the Social Security Act (referred to in such section as the 
        1991 NAIC Model Regulation, as subsequently modified) to 
        conform to the amendments made by this section, such revised 
        regulation incorporating the modifications shall be considered 
        to be the applicable NAIC model regulation (including the 
        revised NAIC model regulation and the 1991 NAIC Model 
        Regulation) for the purposes of such section.
            (3) Secretary standards.--If the NAIC does not make the 
        modifications described in paragraph (2) within the period 
        specified in such paragraph, the Secretary of Health and Human 
        Services shall make the modifications described in such 
        paragraph and such revised regulation incorporating the 
        modifications shall be considered to be the appropriate 
        regulation for the purposes of such section.
            (4) Date specified.--
                    (A) In general.--Subject to subparagraph (B), the 
                date specified in this paragraph for a State is the 
                earlier of--
                            (i) the date the State changes its statutes 
                        or regulations to conform its regulatory 
                        program to the changes made by this section; or
                            (ii) 1 year after the date the NAIC or the 
                        Secretary first makes the modifications under 
                        paragraph (2) or (3), respectively.
                    (B) Additional legislative action required.--In the 
                case of a State which the Secretary identifies as--
                            (i) requiring State legislation (other than 
                        legislation appropriating funds) to conform its 
                        regulatory program to the changes made in this 
                        section; but
                            (ii) having a legislature which is not 
                        scheduled to meet in 2000 in a legislative 
                        session in which such legislation may be 
                        considered;
                the date specified in this paragraph is the first day 
                of the first calendar quarter beginning after the close 
                of the first legislative session of the State 
                legislature that begins on or after July 1, 2000. For 
                purposes of the previous sentence, in the case of a 
                State that has a 2-year legislative session, each year 
                of such session shall be deemed to be a separate 
                regular session of the State legislature.

SEC. 6. IMPROVED MEDICAID ASSISTANCE FOR LOW-INCOME INDIVIDUALS.

    (a) Increase in SLMB Eligibility to 135 Percent of Poverty 
Level.--.
            (1) In general.--Section 1902(a)(10)(E) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
                    (A) in clause (iii), by striking ``and 120 percent 
                in 1995 and years thereafter'' and inserting ``, 120 
                percent in 1995 and through July 1, 2000, and 135 
                percent for subsequent periods''; and
                    (B) in clause (iv)--
                            (i) by striking the dash and all that 
                        follows through ``(II)'', and
                            (ii) by striking ``who would be described 
                        in subclause (I) if `135 percent' and `175 
                        percent' were substituted for `120 percent' and 
                        `135 percent' respectively'' and inserting 
                        ``who would be described in clause (iii) but 
                        for the fact that their income exceeds 135 
                        percent, but is less than 175 percent, of the 
                        official poverty line (referred to in such 
                        clause) for a family of the size involved''.
            (2) Conforming amendment.--Section 1933(c)(2)(A) of such 
        Act (42 U.S.C. 1396v(c)(2)(A)) is amended by striking ``the 
        sum'' and all that follows and inserting ``the total number of 
        individuals described in section 1902(a)(10)(E)(iv) in the 
        State; to''.
    (b) Provision of Medicaid Prescription Drug Benefits for QMBs and 
SLMBs as Wrap-Around Benefit.--
            (1) In general.--Section 1902(a)(10) of such Act (42 U.S.C. 
        1396a(a)(10)) is amended--
                    (A) in subparagraph (E)(i), by inserting ``and for 
                prescribed drugs (in the same amount, duration, and 
                scope as for individuals described in subparagraph 
                (A)(i))'' after ``1905(p)(3))'';
                    (B) in subparagraph (E)(iii), by inserting ``and 
                for prescribed drugs (in the same amount, duration, and 
                scope as for individuals described in subparagraph 
                (A)(i))'' after ``section 1905(p)(3)(A)(ii)''; and
                    (C) in the clause (VIII) following subparagraph 
                (F), by inserting ``and to medical assistance for 
                prescribed drugs described in subparagraph (E)(i)'' 
                after ``1905(p)(3))''.
            (2) Conforming amendment.--Section 1916(a) of such Act (42 
        U.S.C. 1396o(a)) is amended, in the matter before paragraph 
        (1), by striking ``(E)(i)'' and inserting ``(E)''.
    (c) Effective Dates.--
            (1) The amendments made by subsections (a)(1) and (b) take 
        effect on July 1, 2000, and apply to prescribed drugs furnished 
        on or after such date.
            (2) The amendment made by subsection (a)(2) applies to the 
        allocation for the portion of fiscal year 2000 that occurs on 
        or after July 1, 2000, and to the allocation for subsequent 
        fiscal years.
            (3) The amendments made by this section apply without 
        regard to whether or not regulations to implement such 
        amendments are promulgated by July 1, 2000.

SEC. 7. WAIVER OF ADDITIONAL PORTION OF PART B PREMIUM FOR CERTAIN 
              MEDICARE BENEFICIARIES HAVING ACTUARIALLY EQUIVALENT 
              COVERAGE.

    (a) In General.--The Secretary of Health and Human Services shall 
establish a method under which the portion of the part B premium under 
section 1839 of the Social Security Act that is identified by the 
Secretary of Health and Human Services as attributable to the drug 
coverage provided under section 1849 of that Act (as added by section 
3) is waived (and not collected) for any individual enrolled under part 
B of title XVIII of the Social Security Act who demonstrates that the 
individual has drug coverage that is actuarially equivalent to the 
coverage provided under that part.
    (b) Limitation.--Subsection (a) shall not apply to an individual 
with coverage through a group health plan if the group health plan 
receives payments for such individual pursuant to section 4.

SEC. 8. ELIMINATION OF TIME LIMITATION ON MEDICARE BENEFITS FOR 
              IMMUNOSUPPRESSIVE DRUGS.

    (a) Revision.--
            (1) In general.--Section 1861(s)(2)(J) of the Social 
        Security Act (42 U.S.C. 1395x(s)(2)(J)) is amended by striking 
        ``, but only'' and all that follows up to the semicolon at the 
        end.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to drugs furnished on or after the date of 
        enactment of this Act.
    (b) Extension of Certain Secondary Payer Requirements.--Section 
1862(b)(1)(C) of the Social Security Act (42 U.S.C. 1395y(b)(1)(C)) is 
amended by adding at the end the following: ``With regard to 
immunosuppressive drugs furnished on or after the date of enactment of 
the Medicare Prescription Drug Benefit Act of 1999, this subparagraph 
shall be applied without regard to any time limitation.''.

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

    (a) In General.--Section 1805(c) of the Social Security Act (42 
U.S.C. 1395b-6(c)), as amended by section 5202 of the Tax and Trade 
Relief Extension Act of 1998 (contained in division J of Public Law 
105-277), is amended--
            (1) in paragraph (1), by striking ``17'' and inserting 
        ``19''; and
            (2) in paragraph (2)(B), by inserting ``experts in the area 
        of pharmacology and prescription drug benefit programs,'' after 
        ``other health professionals,''.
    (b) Initial Terms of Additional Members.--
            (1) In general.--For purposes of staggering the initial 
        terms of members of the Medicare Payment Advisory Commission 
        under section 1805(c)(3) of the Social Security Act (42 U.S.C. 
        1395b-6(c)(3)), the initial terms of the 2 additional members 
        of the Commission provided for by the amendment under 
        subsection (a)(1) are as follows:
                    (A) One member shall be appointed for 1 year.
                    (B) One member shall be appointed for 2 years.
            (2) Commencement of terms.--Such terms shall begin on 
        January 1, 2000.

SEC. 10. GAO STUDY AND REPORT TO CONGRESS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study and analysis of the implementation of the competitive 
bidding process for covered outpatient drugs under section 1849 of the 
Social Security Act (as added by section 3), including an analysis of--
            (1) the reduction of hospital visits (or lengths of such 
        visits) by beneficiaries as a result of providing coverage of 
        covered outpatient drugs under such section;
            (2) prices paid by the medicare program relative to 
        comparable private and public sector programs; and
            (3) any other savings to the medicare program as a result 
        of--
                    (A) such coverage; and
                    (B) the education and counseling provisions of 
                section 1849(g).
    (b) Report.--Not later than January 1, 2001, and annually 
thereafter, the Comptroller General of the United States shall submit a 
report to Congress on the study and analysis conducted pursuant to 
subsection (a), and shall include in the report such recommendations 
regarding the coverage of covered outpatient drugs under the medicare 
program as the Comptroller General determines to be appropriate.

SEC. 11. EFFECTIVE DATE.

    Except as otherwise provided, the amendments made by this Act apply 
to items and services furnished on or after July 1, 2000.
                                 <all>
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