II 

110TH CONGRESS 

1ST SESSION S. 1827 

To amend title XVIII of the Social Security Act to require prompt payment 

to pharmacies under part D, to restrict pharmacy co-branding on prescription drug cards issued under such part, and to provide guidelines 

for Medication Therapy Management Services programs offered by prescription drug plans and MA–PD plans under such part. 

IN THE SENATE OF THE UNITED STATES 

JULY 19, 2007 

Mr. COCHRAN (for himself, Mr. PRYOR, and Mr. ENZI) introduced the 

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

A BILL 

To amend title XVIII of the Social Security Act to require 

prompt payment to pharmacies under part D, to restrict 

pharmacy co-branding on prescription drug cards issued 

under such part, and to provide guidelines for Medication 

Therapy Management Services programs offered by prescription drug plans and MA–PD plans under such part. 

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 ‘‘Pharmacist Access and 

5 Recognition in Medicare (PhARM) Act of 2007’’. 


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1 SEC. 2. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS 

2 AND MA–PD PLANS UNDER PART D. 

3 (a) PROMPT PAYMENT BY PRESCRIPTION DRUG

4 PLANS.—Section 1860D–12(b) of the Social Security Act 

5 (42 U.S.C. 1395w–112(b)) is amended by adding at the 

6 end the following new paragraph: 

7 ‘‘(4) PROMPT PAYMENT OF CLEAN CLAIMS.— 

8 ‘‘(A) PROMPT PAYMENT.— 

9 ‘‘(i) IN GENERAL.—Each contract en10 tered into with a PDP sponsor under this 

11 section with respect to a prescription drug 

12 plan offered by such sponsor shall provide 

13 that payment shall be issued, mailed, or 

14 otherwise transmitted with respect to all 

15 clean claims submitted under this part 

16 within the applicable number of calendar 

17 days after the date on which the claim is 

18 received. 

19 ‘‘(ii) CLEAN CLAIM DEFINED.—In this 

20 paragraph, the term ‘clean claim’ means a 

21 claim that has no apparent defect or im22 propriety (including any lack of any re23 quired substantiating documentation) or 

24 particular circumstance requiring special 

25 treatment that prevents timely payment 


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1 from being made on the claim under this 

2 part. 

3 ‘‘(B) APPLICABLE NUMBER OF CALENDAR

4 DAYS DEFINED.—In this paragraph, the term 

5 ‘applicable number of calendar days’ means— 

6 ‘‘(i) with respect to claims submitted 

7 electronically, 14 days; and 

8 ‘‘(ii) with respect to claims submitted 

9 otherwise, 30 days. 

10 ‘‘(C) INTEREST PAYMENT.—If payment is 

11 not issued, mailed, or otherwise transmitted 

12 within the applicable number of calendar days 

13 (as defined in subparagraph (B)) after a clean 

14 claim is received, interest shall be paid at a rate 

15 used for purposes of section 3902(a) of title 31, 

16 United States Code (relating to interest pen17 alties for failure to make prompt payments), for 

18 the period beginning on the day after the re19 quired payment date and ending on the date on 

20 which payment is made. 

21 ‘‘(D) PROCEDURES INVOLVING CLAIMS.— 

22 ‘‘(i) IN GENERAL.—A contract entered 

23 into with a PDP sponsor under this sec24 tion with respect to a prescription drug 

25 plan offered by such sponsor shall provide 


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1 that, not later than 10 days after the date 

2 on which a clean claim is submitted, the 

3 PDP sponsor shall provide the claimant 

4 with a notice that acknowledges receipt of 

5 the claim by such sponsor. Such notice 

6 shall be considered to have been provided 

7 on the date on which the notice is mailed 

8 or electronically transferred. 

9 ‘‘(ii) CLAIM DEEMED TO BE CLEAN.— 

10 A claim is deemed to be a clean claim if 

11 the PDP sponsor involved does not provide 

12 notice to the claimant of any deficiency in 

13 the claim within 10 days of the date on 

14 which the claim is submitted. 

15 ‘‘(iii) CLAIM DETERMINED TO NOT BE

16 A CLEAN CLAIM.— 

17 ‘‘(I) IN GENERAL.—If a PDP 

18 sponsor determines that a submitted 

19 claim is not a clean claim, the PDP 

20 sponsor shall, not later than the end 

21 of the period described in clause (ii), 

22 notify the claimant of such determina23 tion. Such notification shall specify all 

24 defects or improprieties in the claim 

25 and shall list all additional informaVerDate Aug 31 2005 02:22 Jul 21, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1827.IS S1827

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1 tion or documents necessary for the 

2 proper processing and payment of the 

3 claim. 

4 ‘‘(II) DETERMINATION AFTER

5 SUBMISSION OF ADDITIONAL INFOR6 MATION.—A claim is deemed to be a 

7 clean claim under this paragraph if 

8 the PDP sponsor involved does not 

9 provide notice to the claimant of any 

10 defect or impropriety in the claim 

11 within 10 days of the date on which 

12 additional information is received 

13 under subclause (I). 

14 ‘‘(III) PAYMENT OF CLEAN POR15 TION OF ACLAIM.—A PDP sponsor 

16 shall pay any portion of a claim that 

17 would be a clean claim but for a de18 fect or impropriety in a separate por19 tion of the claim in accordance with 

20 subparagraph (A). 

21 ‘‘(iv) OBLIGATION TO PAY.—A claim 

22 submitted to a PDP sponsor that is not 

23 paid or contested by the provider within 

24 the applicable number of days (as defined 

25 in subparagraph (B)) shall be deemed to 


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1 be a clean claim and shall be paid by the 

2 PDP sponsor in accordance with subpara3 graph (A). 

4 ‘‘(v) DATE OF PAYMENT OF CLAIM.— 

5 Payment of a clean claim under such sub6 paragraph is considered to have been made 

7 on the date on which full payment is re8 ceived by the provider. 

9 ‘‘(E) ELECTRONIC TRANSFER OF

10 FUNDS.—A PDP sponsor shall pay all clean 

11 claims submitted electronically by electronic 

12 transfer of funds.’’. 

13 (b) PROMPT PAYMENT BY MA–PD PLANS.—Section 

14 1857(f) of the Social Security Act (42 U.S.C. 1395w– 

15 27(f)) is amended by adding at the end the following new 

16 paragraph: 

17 ‘‘(3) INCORPORATION OF CERTAIN PRESCRIP18 TION DRUG PLAN CONTRACT REQUIREMENTS.—The 

19 provisions of section 1860D–12(b)(4) shall apply to 

20 contracts with a Medicare Advantage organization in 

21 the same manner as they apply to contracts with a 

22 PDP sponsor offering a prescription drug plan 

23 under part D.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to contracts entered into or re3 newed on or after the date of enactment of this Act. 

4 SEC. 3. RESTRICTION ON PHARMACY CO-BRANDING ON 

5 MEDICARE PRESCRIPTION DRUG CARDS 

6 ISSUED BY PRESCRIPTION DRUG PLANS AND 

7 MA–PD PLANS. 

8 (a) IN GENERAL.—Section 1860D–4 of the Social 

9 Security Act (42 U.S.C. 1395w–104) is amended— 

10 (1) in subsection (b)(2)(A), by striking ‘‘The 

11 PDP sponsor’’ and inserting ‘‘Subject to subsection 

12 (l), the PDP sponsor’’; and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(l) CO-BRANDING PROHIBITED.—A card that is 

16 issued under subsection (b)(2)(A) for use under a pre17 scription drug plan offered by a PDP sponsor shall not 

18 display the name, brand, or trademark of any pharmacy.’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 this section shall take effect on the date of enactment of 

21 this Act and shall apply to all cards regardless of when 

22 the card was issued. 


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1 SEC. 4. PROVISION OF MEDICATION THERAPY MANAGE2 MENT SERVICES UNDER PART D. 

3 (a) PROVISION OF MEDICATION THERAPY MANAGE4 MENT SERVICES UNDER PART D.— 

5 (1) IN GENERAL.—Section 1860D–4(c)(2) of 

6 the Social Security Act (42 U.S.C. 1395w– 

7 104(c)(2)) is amended— 

8 (A) in subparagraph (A)— 

9 (i) in clause (i)— 

10 (I) by inserting ‘‘or other health 

11 care provider with advanced training 

12 in medication management’’ after 

13 ‘‘furnished by a pharmacist’’; and 

14 (II) by striking ‘‘targeted bene15 ficiaries described in clause (ii)’’ and 

16 inserting ‘‘targeted beneficiaries speci17 fied under clause (ii)’’; and 

18 (ii) by striking clause (ii) and insert19 ing the following: 

20 ‘‘(ii) TARGETED BENEFICIARIES.— 

21 The Secretary shall specify the population 

22 of part D eligible individuals appropriate 

23 for services under a medication therapy 

24 management program based on the fol25 lowing characteristics: 


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1 ‘‘(I) Having a disease state in 

2 which evidence-based medicine has 

3 demonstrated the benefit of medica4 tion therapy management intervention 

5 based on objective outcome measures. 

6 ‘‘(II) Taking multiple covered 

7 part D drugs or having a disease state 

8 in which a complex combination medi9 cation regimen is utilized. 

10 ‘‘(III) Being identified as likely 

11 to incur annual costs for covered part 

12 D drugs that exceed a level specified 

13 by the Secretary or where acute or 

14 chronic decompensation of disease 

15 would likely increase expenditures 

16 under the Federal Hospital Insurance 

17 Trust Fund or the Federal Supple18 mentary Medical Insurance Trust 

19 Fund under sections 1817 and 1841, 

20 respectively, such as through the re21 quirement of emergency care or acute 

22 hospitalization.’’; 

23 (B) by striking subparagraph (B) and in24 serting the following: 

25 ‘‘(B) ELEMENTS.— 


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1 ‘‘(i) MINIMUM DEFINED PACKAGE OF

2 SERVICES.—The Secretary shall specify a 

3 minimum defined package of medication 

4 therapy management services that shall be 

5 provided to each enrollee. Such package 

6 shall be based on the following consider7 ations: 

8 ‘‘(I) Performing necessary assess9 ments of the health status of each en10 rollee. 

11 ‘‘(II) Providing medication ther12 apy review to identify, resolve, and 

13 prevent medication-related problems, 

14 including adverse events. 

15 ‘‘(III) Increasing enrollee under16 standing to promote the appropriate 

17 use of medications by enrollees and to 

18 reduce the risk of potential adverse 

19 events associated with medications, 

20 through beneficiary and family edu21 cation, counseling, and other appro22 priate means. 

23 ‘‘(IV) Increasing enrollee adher24 ence with prescription medication 

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1 minders, special packaging, and other 

2 compliance programs and other appro3 priate means. 

4 ‘‘(V) Promoting detection of ad5 verse drug events and patterns of 

6 overuse and underuse of prescription 

7 drugs. 

8 ‘‘(VI) Developing a medication 

9 action plan which may alter the medi10 cation regimen, when permitted by the 

11 State licensing authority. This infor12 mation should be provided to, or ac13 cessible by, the primary health care 

14 provider of the enrollee. 

15 ‘‘(VII) Monitoring and evaluating 

16 the response to therapy and evalu17 ating the safety and effectiveness of 

18 the therapy, which may include lab19 oratory assessment. 

20 ‘‘(VIII) Providing disease-specific 

21 medication therapy management serv22 ices when appropriate. 

23 ‘‘(IX) Coordinating and inte24 grating medication therapy manage25 ment services within the broader scope 


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1 of health care management services 

2 being provided to each enrollee. 

3 ‘‘(ii) DELIVERY OF SERVICES.— 

4 ‘‘(I) PERSONAL DELIVERY.—To 

5 the extent feasible, face-to-face inter6 action shall be the preferred method 

7 of delivery of medication therapy man8 agement services. 

9 ‘‘(II) INDIVIDUALIZED.—Such 

10 services shall be patient-specific and 

11 individualized and shall be provided 

12 directly to the patient by a pharmacist 

13 or other health care provider with ad14 vanced training in medication man15 agement. 

16 ‘‘(III) DISTINCT FROM OTHER

17 ACTIVITIES.—Such services shall be 

18 distinct from any activities related to 

19 formulary development and use, gen20 eralized patient education and infor21 mation activities, and any population22 focused quality assurance measures 

23 for medication use. 

24 ‘‘(iii) OPPORTUNITY TO IDENTIFY PA25 TIENTS IN NEED OF MEDICATION THERAPY


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1 MANAGEMENT SERVICES.—The program 

2 shall provide opportunities for health care 

3 providers to identify patients who should 

4 receive medication therapy management 

5 services.’’; 

6 (C) by striking subparagraph (E) and in7 serting the following: 

8 ‘‘(E) PHARMACY FEES.— 

9 ‘‘(i) IN GENERAL.—The PDP sponsor 

10 of a prescription drug plan shall pay phar11 macists and others providing services 

12 under the medication therapy management 

13 program under this paragraph based on 

14 the time and intensity of services provided 

15 to enrollees. 

16 ‘‘(ii) SUBMISSION ALONG WITH PLAN

17 INFORMATION.—Each such sponsor shall 

18 disclose to the Secretary upon request the 

19 amount of any such payments and shall 

20 submit a description of how such payments 

21 are calculated along with the information 

22 submitted under section 1860D–11(b). 

23 Such description shall be submitted at the 

24 same time and in a similar manner to the 

25 manner in which the information described 


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1 in paragraph (2) of such section is sub2 mitted.’’; and 

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

4 subparagraph: 

5 ‘‘(F) PHARMACY ACCESS REQUIRE6 MENTS.—The PDP sponsor of a prescription 

7 drug plan shall secure the participation in its 

8 network of a sufficient number of retail phar9 macies to assure that enrollees have the option 

10 of obtaining services under the medication ther11 apy management program under this paragraph 

12 directly from community-based retail phar13 macies.’’. 

14 (2) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply to medication therapy 

16 management services provided on or after January 

17 1, 2009. 

18 (b) MEDICATION THERAPY MANAGEMENT DEM19 ONSTRATION PROGRAM.—Section 1860D–4(c) of the So20 cial Security Act (42 U.S.C. 1395w–104(c)) is amended 

21 by adding at the end the following new paragraph: 

22 ‘‘(3) COMMUNITY-BASED MEDICATION THERAPY

23 MANAGEMENT DEMONSTRATION PROGRAM.— 

24 ‘‘(A) ESTABLISHMENT.— 


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1 ‘‘(i) IN GENERAL.—By not later than 

2 January 1, 2009, the Secretary shall es3 tablish a 2-year demonstration program, 

4 based on the recommendations of the Best 

5 Practices Commission established under 

6 subparagraph (B), with both PDP spon7 sors of prescription drug plans and Medi8 care Advantage Organizations offering 

9 MA–PD plans, to examine the impact of 

10 medication therapy management furnished 

11 by a pharmacist in a community-based or 

12 ambulatory-based setting on quality of 

13 care, spending under this part, and patient 

14 health. 

15 ‘‘(ii) SITES.— 

16 ‘‘(I) IN GENERAL.—Subject to 

17 subclause (II), the Secretary shall 

18 designate not less than 10 PDP spon19 sors of prescription drug plans or 

20 Medicare Advantage Organizations of21 fering MA–PD plans, none of which 

22 provide prescription drug coverage 

23 under such plans in the same PDP or 

24 MA region, respectively, to conduct 


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1 the demonstration program under this 

2 paragraph. 

3 ‘‘(II) DESIGNATION CONSISTENT

4 WITH RECOMMENDATIONS OF BEST

5 PRACTICES COMMISSION.—The Sec6 retary shall ensure that the designa7 tion of sites under subclause (I) is 

8 consistent with the recommendations 

9 of the Best Practices Commission 

10 under subparagraph (B)(ii). 

11 ‘‘(B) BEST PRACTICES COMMISSION.— 

12 ‘‘(i) ESTABLISHMENT.—The Secretary 

13 shall establish a Best Practices Commis14 sion composed of representatives from 

15 pharmacy organizations, health care orga16 nizations, beneficiary advocates, chronic 

17 disease groups, and other stakeholders (as 

18 determined appropriate by the Secretary) 

19 for the purpose of developing a best prac20 tices model for medication therapy man21 agement. 

22 ‘‘(ii) RECOMMENDATIONS.—The Com23 mission shall submit to the Secretary rec24 ommendations on the following: 


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1 ‘‘(I) The minimum number of en2 rollees that should be included in the 

3 demonstration program, and at each 

4 demonstration program site, to deter5 mine the impact of medication ther6 apy management furnished by a phar7 macist in a community-based setting 

8 on quality of care, spending under 

9 this part, and patient health. 

10 ‘‘(II) The number of urban and 

11 rural sites that should be included in 

12 the demonstration program to ensure 

13 that prescription drug plans and MA– 

14 PD plans offered in urban and rural 

15 areas are adequately represented. 

16 ‘‘(III) A best practices model for 

17 medication therapy management to be 

18 implemented under the demonstration 

19 program under this paragraph. 

20 ‘‘(C) REPORTS.— 

21 ‘‘(i) INTERIM REPORT.—Not later 

22 than 1 year after the commencement of the 

23 demonstration program, the Secretary 

24 shall submit to Congress an interim report 

25 on such program. 


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1 ‘‘(ii) FINAL REPORT.—Not later than 

2 6 months after the completion of the dem3 onstration program, the Secretary shall 

4 submit to Congress a final report on such 

5 program, together with recommendations 

6 for such legislation and administrative ac7 tion as the Secretary determines appro8 priate. 

9 ‘‘(D) WAIVER AUTHORITY.—The Secretary 

10 may waive such requirements of titles XI and 

11 XVIII as may be necessary for the purpose of 

12 carrying out the demonstration program under 

13 this paragraph.’’. 

Æ 


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