II 

111TH CONGRESS 

1ST SESSION S. 1040 

To establish a demonstration program requiring the utilization of ValueBased Insurance Design in order to demonstrate that reducing the copayments or coinsurance charged Medicare beneficiaries for selected medications can increase adherence to prescribed medication, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 14, 2009 

Mrs. HUTCHISON (for herself and Ms. STABENOW) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

To establish a demonstration program requiring the utilization of Value-Based Insurance Design in order to demonstrate that reducing the copayments or coinsurance 

charged Medicare beneficiaries for selected medications 

can increase adherence to prescribed medication, and 

for other purposes. 

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 ‘‘Seniors’ Medication 

5 Copayment Reduction Act of 2009’’. 


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1 SEC. 2. FINDINGS. 

2 Congress makes the following findings: 

3 (1) A growing body of evidence demonstrates 

4 that patient-level financial barriers, including copay5 ments and coinsurance for medications, systemati6 cally reduce the use of high value medical services. 

7 (2) Empirical studies demonstrate that reduc8 tions in cost-sharing can mitigate the adverse health 

9 consequences attributable to cost related decreases 

10 in the utilization of prescription medications and re11 duce aggregate medical expenditures as a result. 

12 (3) Financial barriers to prescription medica13 tions that are of high value should be reduced or 

14 eliminated to increase adherence to prescribed medi15 cation. 

16 (4) Value-Based Insurance Design recognizes 

17 that medical services and prescription medications 

18 differ in the clinical benefit achieved and that pa19 tient out-of-pocket costs should be adjusted accord20 ing to the value of the services provided. 

21 (5) The current ‘‘one size fits all’’ copayment or 

22 coinsurance design for medications provided under 

23 the Medicare program does not recognize the well-es24 tablished value differences in health outcomes pro25 duced by various medical interventions. 


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1 (6) The establishment by Medicare of copay2 ment and coinsurance requirements for medications 

3 using Value-Based Insurance Design will optimize 

4 clinical gains for each dollar spent, which would be 

5 a benefit to seniors and a fiscally responsible use of 

6 taxpayer dollars. 

7 SEC. 3. DEMONSTRATION PROGRAM. 

8 (a) IN GENERAL.—Not later than 1 year after the 

9 date of enactment of this Act, the Secretary of Health and 

10 Human Services (in this section referred to as the ‘‘Sec11 retary’’) shall establish a demonstration program to test 

12 Value-Based Insurance Design methodologies for Medi13 care beneficiaries with chronic conditions. 

14 (b) DEMONSTRATION PROGRAM DESIGN.— 

15 (1) IN GENERAL.—The Secretary shall select 

16 not less than 2 Medicare Advantage plans to partici17 pate in this demonstration program under this sec18 tion initially. 

19 (2) REQUIREMENTS.—A plan selected to par20 ticipate in the demonstration program under para21 graph (1) shall meet the following requirements: 

22 (A) The plan offers a coordinated Part D 

23 drug benefit. 


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1 (B) The plan and organization offering 

2 such plan meet such other criteria as the Sec3 retary determines appropriate. 

4 (c) DURATION.— 

5 (1) IN GENERAL.—Subject to subsection (b), 

6 the demonstration program under this section shall 

7 be conducted for a 5-year period. 

8 (2) EXPANSION OF DEMONSTRATION PROGRAM; 

9 IMPLEMENTATION OF DEMONSTRATION PROGRAM

10 RESULTS.— 

11 (A) EXPANSION OF DEMONSTRATION PRO12 GRAM.—If the report under paragraph sub13 section (e) or (f)(3) contains an evaluation that 

14 the demonstration program under this section— 

15 (i) reduces expenditures under the 

16 Medicare program; or 

17 (ii) does not increase expenditures 

18 under the Medicare program and increases 

19 the quality of health care services provided 

20 to Medicare beneficiaries, 

21 then the Secretary shall continue the existing 

22 demonstration program and may expand the 

23 demonstration program. 

24 (B) IMPLEMENTATION OF DEMONSTRA25 TION PROGRAM RESULTS.—If the report under 


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1 subsection (e) or (f)(3) contains an evaluation 

2 contained in clause (i) or (ii) of subparagraph 

3 (A), the Secretary may issue regulations to im4 plement, on a permanent basis, the components 

5 of the demonstration program that are bene6 ficial to the Medicare program. 

7 (d) VALUE-BASED INSURANCE DESIGN METHOD8 OLOGY.— 

9 (1) REDUCTION OF COPAYMENTS AND COINSUR10 ANCE.—Utilizing Value-Based Insurance Design 

11 methodologies, the Secretary shall identify each 

12 medication for which the amount of the copayment 

13 or coinsurance payable should be reduced or elimi14 nated. 

15 (2) VALUE-BASED INSURANCE DESIGN.—For 

16 purposes of this section, ‘‘Value-Based Insurance 

17 Design’’ is a methodology for identifying specific 

18 medications or classes of medications for which co19 payments or coinsurance should be reduced or elimi20 nated due to the high value and effectiveness of such 

21 medications when prescribed for particular clinical 

22 conditions. 

23 (3) PARTICULAR MEDICATIONS.—In identifying 

24 medications for purposes of paragraph (1), the SecVerDate Nov 24 2008 23:13 May 18, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1040.IS S1040

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1 retary shall, at a minimum, consider the medications 

2 utilized in the treatment of the following conditions: 

3 (A) Asthma. 

4 (B) Atrial fibrillation. 

5 (C) Deep venous thrombosis. 

6 (D) Chronic obstructive pulmonary disease. 

7 (E) Chronic renal failure. 

8 (F) Congestive heart failure. 

9 (G) Coronary artery disease. 

10 (H) Myocardial infarction. 

11 (I) Depression. 

12 (J) Epilepsy. 

13 (K) Diabetes mellitus. 

14 (L) Hypertension. 

15 (M) Hypothyroidism. 

16 (N) Schizophrenia. 

17 (O) Tobacco abuse disorder. 

18 (e) REPORT ON IMPLEMENTATION.— 

19 (1) IN GENERAL.—Not later than 1 year after 

20 the date of enactment of this Act, the Secretary 

21 shall submit to Congress a report on the implemen22 tation by the Secretary of the demonstration pro23 gram under this section. 

24 (2) ELEMENTS.—The report required by para25 graph (1) shall include the following: 


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1 (A) A statement setting forth each medica2 tion identified pursuant to subsection (d)(1). 

3 (B) For each such medication, a statement 

4 of the amount of the copayment or coinsurance 

5 required to be paid for such medication and the 

6 amount of the reduction from previous levels. 

7 (f) REVIEW AND ASSESSMENT OF UTILIZATION OF

8 METHODOLOGIES.— 

9 (1) IN GENERAL.—The Secretary shall enter 

10 into a contract or agreement with an independent 

11 entity having expertise in Value-Based Insurance 

12 Design to review and assess the implementation by 

13 the Secretary of the demonstration program under 

14 this section. The review and assessment shall include 

15 the following: 

16 (A) An assessment of the utilization by the 

17 Secretary of the methodologies referred to in 

18 subsection (d). 

19 (B) An analysis of whether reducing or 

20 eliminating the copayment or coinsurance for 

21 each medication identified by the Secretary pur22 suant to subsection (d)(1) resulted in increased 

23 adherence to medication regimens and better 

24 health outcomes. 


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1 (C) An analysis of the cost savings result2 ing from reducing or eliminating the copayment 

3 or coinsurance for each medication so identi4 fied. 

5 (D) Such other matters as the Secretary 

6 considers appropriate. 

7 (2) REPORT.—The contract or agreement en8 tered into under paragraph (1) shall require the en9 tity concerned to submit to the Secretary a report on 

10 the review and assessment conducted by the entity 

11 under that paragraph in time for the inclusion of the 

12 results of such report in the report required by para13 graph (3). 

14 (3) REPORT TO CONGRESS.—Not later than 3 

15 years after the date of the enactment of this Act, the 

16 Secretary shall submit to Congress a report on the 

17 review and assessment conducted under this sub18 section. The report shall include the following: 

19 (A) A description of the results of the re20 view and assessment. 

21 (B) Such recommendations as the Sec22 retary considers appropriate for enhancing the 

23 utilization of the methodologies referred to in 

24 subsection (a)(1) so as to reduce copayments 

25 and coinsurance paid by Medicare beneficiaries 


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1 for medications furnished under the Medicare 

2 program and to otherwise improve the quality 

3 of health care provided under such Medicare 

4 program. 

5 (g) WAIVER.—The Secretary may waive such provi6 sions of titles XI and XVIII of the Social Security Act 

7 as may be necessary to carry out the demonstration pro8 gram under this section. 

9 (h) IMPLEMENTATION FUNDING.—For purposes of 

10 carrying out the demonstration program under this sec11 tion, the Secretary shall provide for the transfer from the 

12 Federal Hospital Insurance Trust Fund under section 

13 1817 of the Social Security Act (42 U.S.C. 1395i) and 

14 the Federal Supplementary Insurance Trust Fund under 

15 section 1841 of the Social Security Act (42 U.S.C. 1395t), 

16 including the Medicare Prescription Drug Account in such 

17 Trust Fund, in such proportion as determined appropriate 

18 by the Secretary, of such sums as may be necessary. 

Æ 


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