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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1589 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1589

 To amend title XIX of the Social Security Act to reduce the costs of 
prescription drugs for enrollees of Medicaid managed care organizations 
 by extending the discounts offered under fee-for-service Medicaid to 
                          such organizations.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 11, 2007

   Mr. Bingaman (for himself, Mr. Kerry, Mr. Akaka, Mr. Salazar, Mr. 
Whitehouse, and Ms. Mikulski) introduced the following bill; which was 
          read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend title XIX of the Social Security Act to reduce the costs of 
prescription drugs for enrollees of Medicaid managed care organizations 
 by extending the discounts offered under fee-for-service Medicaid to 
                          such organizations.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Drug Rebate Equalization Act of 
2007''.

SEC. 2. EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO ENROLLEES OF 
              MEDICAID MANAGED CARE ORGANIZATIONS.

    (a) In General.--Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) 
is amended--
            (1) in clause (xi), by striking ``and'' at the end;
            (2) in clause (xii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                            ``(xiii) such contract provides that (I) 
                        payment for covered outpatient drugs dispensed 
                        to individuals eligible for medical assistance 
                        who are enrolled with the entity shall be 
                        subject to the same rebate required by the 
                        agreement entered into under section 1927 as 
                        the State is subject to and that the State 
                        shall allow the entity to collect such rebates 
                        from manufacturers, and (II) capitation rates 
                        paid to the entity shall be based on actual 
                        cost experience related to rebates and subject 
                        to the Federal regulations requiring 
                        actuarially sound rates.''.
    (b) Conforming Amendments.--Section 1927 (42 U.S.C. 1396r-8) is 
amended--
            (1) in subsection (d)--
                    (A) in paragraph (1), by adding at the end the 
                following:
                    ``(C) Notwithstanding the subparagraphs (A) and 
                (B)--
                            ``(i) a medicaid managed care organization 
                        with a contract under section 1903(m) may 
                        exclude or otherwise restrict coverage of a 
                        covered outpatient drug on the basis of 
                        policies or practices of the organization, such 
                        as those affecting utilization management, 
                        formulary adherence, and cost sharing or 
                        dispute resolution, in lieu of any State 
                        policies or practices relating to the exclusion 
                        or restriction of coverage of such drugs; and
                            ``(ii) nothing in this section or paragraph 
                        (2)(A)(xiii) of section 1903(m) shall be 
                        construed as requiring a medicaid managed care 
                        organization with a contract under such section 
                        to maintain the same such polices and practices 
                        as those established by the State for purposes 
                        of individuals who receive medical assistance 
                        for covered outpatient drugs on a fee-for 
                        service basis.''; and
                    (B) in paragraph (4), by inserting after 
                subparagraph (E) the following:
                    ``(F) Notwithstanding the preceding subparagraphs 
                of this paragraph, any formulary established by 
                medicaid managed care organization with a contract 
                under section 1903(m) may be based on positive 
                inclusion of drugs selected by a formulary committee 
                consisting of physicians, pharmacists, and other 
                individuals with appropriate clinical experience as 
                long as drugs excluded from the formulary are available 
                through prior authorization, as described in paragraph 
                (5).''; and
            (2) in subsection (j), by striking paragraph (1) and 
        inserting the following:
            ``(1) Covered outpatients drugs are not subject to the 
        requirements of this section if such drugs are--
                    ``(A) dispensed by a health maintenance 
                organization other than a medicaid managed care 
                organization with a contract under section 1903(m); and
                    ``(B) subject to discounts under section 340B of 
                the Public Health Service Act.''.
    (c) Effective Date.--The amendments made by this section take 
effect on the date of enactment of this Act and apply to rebate 
agreements entered into or renewed under section 1927 of the Social 
Security Act (42 U.S.C. 1396r-8) on or after such date.
                                 <all>
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