To amend title XIX of the Social Security Act to exclude abuse-deterrent formulations of prescription drugs from the Medicaid additional rebate requirement for new formulations of prescription drugs, and for other purposes.

To amend title XIX of the Social Security Act to exclude abuse-deterrent formulations of prescription drugs from the Medicaid additional rebate requirement for new formulations of prescription drugs, and for other purposes. 1. Excluding abuse-deterrent formulations of prescription drugs from the Medicaid additional rebate requirement for new formulations of prescription drugs (a) In general The last sentence of section 1927(c)(2)(C) of the Social Security Act ( 42 U.S.C. 1396r–8(c)(2)(C) , but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation (b) Effective date The amendment made by subsection (a) shall apply to drugs that are paid for by a State in calendar quarters beginning on or after the date of the enactment of this Act. 2. Limiting disclosure of predictive modeling and other analytics technologies to identify and prevent waste, fraud, and abuse (a) In general Title XI of the Social Security Act is amended by inserting after section 1128J ( 42 U.S.C. 1320a–7k 1128K. Disclosure of predictive modeling and other analytics technologies to identify and prevent waste, fraud, and abuse (a) Reference to predictive modeling technologies requirements For provisions relating to the use of predictive modeling and other analytics technologies to identify and prevent waste, fraud, and abuse with respect to the Medicare program under title XVIII, the Medicaid program under title XIX, and the Children’s Health Insurance Program under title XXI, see section 4241 of the Small Business Jobs Act of 2010 ( 42 U.S.C. 1320a–7m (b) Limiting disclosure of predictive modeling technologies In implementing such provisions under such section 4241 with respect to covered algorithms (as defined in subsection (c)), the following shall apply: (1) Nonapplication of FOIA The covered algorithms used or developed for purposes of such section (including by the Secretary or a State (or an entity operating under a contract with a State)) shall be exempt from disclosure under section 552(b)(3) of title 5, United States Code. (2) Limitation with respect to use and disclosure of information by State agencies (A) In general A State agency may not use or disclose covered algorithms used or developed for purposes of such section except for purposes of administering the State plan (or a waiver of the plan) under the Medicaid program under title XIX or the State child health plan (or a waiver of the plan) under the Children’s Health Insurance Program under title XXI, including by enabling an entity operating under a contract with a State to assist the State to identify or prevent waste, fraud and abuse with respect to such programs. (B) Information security A State agency shall have in effect data security and control policies that the Secretary finds adequate to ensure the security of covered algorithms used or developed for purposes of such section 4241 and to ensure that access to such information is restricted to authorized persons for purposes of authorized uses and disclosures described in subparagraph (A). (C) Procedural requirements State agencies to which information is disclosed pursuant to such section 4241 shall adhere to uniform procedures established by the Secretary. (c) Covered algorithm defined In this section, the term covered algorithm (1) means a predictive modeling or other analytics technology, as used for purposes of section 4241(a) of the Small Business Jobs Act of 2010 (42 U.S.C. 1320a–7m(a)) to identify and prevent waste, fraud, and abuse with respect to the Medicare program under title XVIII, the Medicaid program under title XIX, and the Children’s Health Insurance Program under title XXI; and (2) includes the mathematical expressions utilized in the application of such technology and the means by which such technology is developed. . (b) Conforming amendments (1) Medicaid State plan requirement Section 1902(a) of the Social Security Act ( 42 U.S.C. 1396a(a) (A) in paragraph (80), by striking and (B) in paragraph (81), by striking the period at the end and inserting ; and (C) by inserting after paragraph (81) the following new paragraph: (82) provide that the State agency responsible for administering the State plan under this title provides assurances to the Secretary that the State agency is in compliance with subparagraphs (A), (B), and (C) of section 1128K(b)(2). . (2) State child health plan requirement Section 2102(a)(7) of the Social Security Act ( 42 U.S.C. 1397bb(a)(7) (A) in subparagraph (A), by striking , and (B) in subparagraph (B), by striking the period at the end and inserting ; and (C) by adding at the end the following new subparagraph: (C) to ensure that the State agency involved is in compliance with subparagraphs (A), (B), and (C) of section 1128K(b)(2). . 3. Medicaid Improvement Fund Section 1941(b)(1) of the Social Security Act ( 42 U.S.C. 1396w–1(b)(1) (1) In general There shall be available to the Fund, for expenditures from the Fund for fiscal year 2021 and thereafter, $5,000,000. .

Summary: This bill amends title XIX (Medicaid) of the Social Security Act to exclude abuse-deterrent formulations of prescription drugs from the requirement that manufacturers of single-source or innovator drugs pay additional rebates to state Medicaid programs. Under current law, the Centers for Medicare & Medicaid Services (CMS) must use predictive modeling and other analytic technologies to identify improper Medicaid claims. The bill prohibits a state agency from using or disclosing such technologies except for purposes of administering a state Medicaid program or Children's Health Insurance Program (CHIP). A state agency shall have in effect adequate data security and control policies to ensure that access to such information is restricted to authorized persons for authorized uses. The bill places $5 million in the Medicaid Improvement Fund to be available beginning in FY2021.