I 

108TH CONGRESS 

1ST SESSION H. R. 513

To amend title XVIII of the Social Security Act to authorize the Secretary 

of Health and Human Services to endorse prescription drug discount 

cards for use by Medicare beneficiaries. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 31, 2003

Mr. FOLEY introduced the following bill; which was referred to the Committee 

on Energy and 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 title XVIII of the Social Security Act to authorize 

the Secretary of Health and Human Services to endorse 

prescription drug discount cards for use by Medicare 

beneficiaries.

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 Rx Drug Dis5 count Act of 2003’’.
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1 SEC. 2. MEDICARE PRESCRIPTION DRUG DISCOUNT CARD 

2 ENDORSEMENT PROGRAM. 

3 Title XVIII of the Social Security Act (42 U.S.C. 

4 1395 et seq.) is amended by inserting after section 1806 

5 the following new sections: 

6 ‘‘MEDICARE PRESCRIPTION DRUG DISCOUNT CARD

7 ENDORSEMENT PROGRAM

8 ‘‘SEC. 1807. (a) IN GENERAL.—The Secretary shall 

9 establish a program—

10 ‘‘(1) to endorse prescription drug discount card 

11 programs that meet the requirements of this section; 

12 and 

13 ‘‘(2) to make available to medicare beneficiaries 

14 information regarding such endorsed programs. 

15 ‘‘(b) REQUIREMENTS FOR ENDORSEMENT.—The 

16 Secretary may not endorse a prescription drug discount 

17 card program under this section unless the program meets 

18 the following requirements: 

19 ‘‘(1) SAVINGS TO MEDICARE BENEFICIARIES.—

20 The program passes on to medicare beneficiaries 

21 who enroll in the program discounts on prescription 

22 drugs, including discounts negotiated with manufac23 turers. 

24 ‘‘(2) PROHIBITION ON APPLICATION ONLY TO

25 MAIL ORDER.—The program applies to drugs that 

26 are available other than solely through mail order. 
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1 ‘‘(3) BENEFICIARY SERVICES.—The program 

2 provides pharmaceutical support services, such as 

3 education and counseling, and services to prevent 

4 adverse drug interactions. 

5 ‘‘(4) INFORMATION.—The program makes 

6 available to medicare beneficiaries through the Inter7 net and otherwise information, including information 

8 on enrollment fees, prices charged to beneficiaries, 

9 and services offered under the program, that the 

10 Secretary identifies as being necessary to provide for 

11 informed choice by beneficiaries among endorsed 

12 programs. 

13 ‘‘(5) DEMONSTRATED EXPERIENCE.—The enti14 ty operating the program has demonstrated experi15 ence and expertise in operating such a program or 

16 a similar program. 

17 ‘‘(6) QUALITY ASSURANCE.—The entity has in 

18 place adequate procedures for assuring quality serv19 ice under the program. 

20 ‘‘(7) OPERATION OF ASSISTANCE PROGRAM.—

21 The entity meets such requirements relating to sol22 vency, compliance with financial reporting require23 ments, audit compliance, and contractual guarantees 

24 as the Secretary finds necessary for participation. 
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1 ‘‘(8) ENROLLMENT FEES.—The program may 

2 charge an annual enrollment fee, but the amount of 

3 such annual fee may not exceed $25. 

4 ‘‘(9) ADDITIONAL BENEFICIARY PROTEC5 TIONS.—The program meets such additional require6 ments as the Secretary identifies to protect and pro7 mote the interest of medicare beneficiaries, including 

8 requirements that ensure that beneficiaries are not 

9 charged more than the lower of the negotiated retail 

10 price or the usual and customary price. 

11 The prices negotiated by a prescription drug discount card 

12 program endorsed under this section shall (notwith13 standing any other provision of law) not be taken into ac14 count for the purposes of establishing the best price under 

15 section 1927(c)(1)(C). 

16 ‘‘(c) PROGRAM OPERATION.—The Secretary shall op17 erate the program under this section consistent with the 

18 following: 

19 ‘‘(1) PROMOTION OF INFORMED CHOICE.—In 

20 order to promote informed choice among endorsed 

21 prescription drug discount card programs, the Sec22 retary shall provide for the dissemination of infor23 mation which compares the prices and services of 

24 such programs in a manner coordinated with the 
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1 dissemination of educational information on 

2 Medicare+Choice plans under part C. 

3 ‘‘(2) OVERSIGHT.—The Secretary shall provide 

4 appropriate oversight to ensure compliance of en5 dorsed programs with the requirements of this sec6 tion, including verification of the discounts and serv7 ices provided. 

8 ‘‘(3) USE OF MEDICARE TOLL-FREE NUMBER.—

9 The Secretary shall provide through the 1-800-medi10 care toll free telephone number for the receipt and 

11 response to inquiries and complaints concerning the 

12 program and programs endorsed under this section. 

13 ‘‘(4) SANCTIONS FOR ABUSIVE PRACTICES.—

14 The Secretary may implement intermediate sanc15 tions or may revoke the endorsement of a program 

16 in the case of a program that the Secretary deter17 mines no longer meets the requirements of this sec18 tion or that has engaged in false or misleading mar19 keting practices. 

20 ‘‘(5) ENROLLMENT PRACTICES.—A medicare 

21 beneficiary may not be enrolled in more than one en22 dorsed program at any time. A medicare beneficiary 

23 may change the endorsed program in which the ben24 eficiary is enrolled, but may not make such change 

25 until the beneficiary has been enrolled in a program 
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1 for a minimum period of time specified by the Sec2 retary. 

3 ‘‘(d) TRANSITION.—The Secretary shall provide for 

4 an appropriate transition and discontinuation of the pro5 gram under this section at the time outpatient prescrip6 tion drug benefits first become available under this title. 

7 ‘‘(e) ENDORSEMENT CONDITION.—The Secretary 

8 shall require, as condition of endorsement under of a pre9 scription drug discount card program under this section 

10 that the program implement policies and procedures to 

11 safeguard the use and disclosure of program beneficiaries’ 

12 individually identifiable health information in a manner 

13 consistent with the Federal regulations (concerning the 

14 privacy of individually identifiable health information) pro15 mulgated under section 264(c) of the Health Insurance 

16 Portability and Accountability Act of 1996. 

17 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated such sums as may be 

19 necessary to carry out the program under this section.’’.

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