I 
110TH CONGRESS 
1ST SESSION H. R. 2056 
To amend part D of title XVIII of the Social Security Act to improve 
the Medicare part D prescription drug program. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 26, 2007 
Mr. COURTNEY (for himself and Mr. MURPHY of Connecticut) introduced the 
following bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committee on Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To amend part D of title XVIII of the Social Security 
Act to improve the Medicare part D prescription drug 
program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicare Part D Im-
provement Act of 2007’’. 
SEC. 2. REFORM OF ‘‘DONUT HOLE’’. 
(a) COUNTING CERTAIN EXPENDITURES TOWARDS 
OUT-OF-POCKET LIMITS.— 
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(1) IN
GENERAL.—Section 1860D–2(b)(4)(C) 
of the Social Security Act (42 U.S.C. 1395w– 
102(b)(4)(C)) is amended— 
(A) in clause (i), by striking ‘‘and’’ at the 
end; 
(B) in clause (ii)— 
(i) by striking ‘‘such costs shall be 
treated as incurred only if’’ and inserting 
‘‘subject to clause (iii), such costs shall be 
treated as incurred if’’; 
(ii) by striking ‘‘, under section 
1860D–14, or under a State Pharma-
ceutical Assistance Program’’; 
(iii) by striking ‘‘(other than under 
such section or such a Program)’’; and 
(iv) by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) such costs shall be treated as in-
curred and shall not be considered to be 
reimbursed under clause (ii) if such costs 
are borne or paid— 
‘‘(I) under section 1860D–14; 
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‘‘(II) under a State Pharma-
ceutical Assistance Program; 
‘‘(III) by the Indian Health Serv-
ice, an Indian tribe or tribal organiza-
tion, or an urban Indian organization 
(as defined in section 4 of the Indian 
Health Care Improvement Act); 
‘‘(IV) by a rural health clinic or 
Federally qualified health center (as 
defined in section 1861(aa)); 
‘‘(V) under an AIDS Drug As-
sistance Program under part B of 
title XXVI of the Public Health Serv-
ice Act; 
‘‘(VI) by a pharmaceutical manu-
facturer patient assistance program, 
either directly or through the distribu-
tion or donation of covered part D 
drugs, which shall be valued at the 
negotiated price of such covered part 
D drug under the enrollee’s prescrip-
tion drug plan or MA–PD plan as of 
the date that the drug was distributed 
or donated; or 
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‘‘(VII) by a subsection (d) hos-
pital 
(as 
defined 
in 
section 
1886(d)(1)(B) that meets the require-
ments of clauses (i) and (ii) of the 
section 340B(a)(4)(L) of the Public 
Health Service Act.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to costs incurred on or 
after January 1, 2008, for plan years beginning on 
or after such date. 
(b) REPORT ON CLOSING THE GAP.—The Secretary 
of Health and Human Services shall conduct a study on 
how to eliminate the gap in Medicare part D prescription 
drug coverage created through the application of an initial 
coverage limit and how to finance such elimination. Not 
later than 180 days after the date of the enactment of 
this Act, the Secretary shall submit to Congress a report 
on such study. 
SEC. 3. CONFORMING LATE ENROLLMENT PENALTY TO 
MEDICARE PART B PENALTY STRUCTURE. 
(a) IN GENERAL.—Section 1860D–13(b)(3) of the 
Social Security Act (42 U.S.C. 1395w–113(b)(3)) is 
amended by striking ‘‘is the greater of’’ and all that fol-
lows and inserting the following: ‘‘is 10 percent of the base 
beneficiary premium (as computed under subsection 
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(a)(2)) for each continuous period of 12 consecutive un-
covered months in such period’’. 
(b) NOT COUNTING PERIODS OF NON-ENROLLMENT 
DURING FIRST YEAR OF PROGRAM.—Subparagraph (B) 
of such section is amended by inserting ‘‘(after December 
2007)’’ after ‘‘any month’’. 
(c) PRESUMPTION OF ERRORS IN ENROLLMENT OR 
NONENROLLMENT DUE TO OFFICIAL ERROR.—Section 
1837(h) of such Act (42 U.S.C. 1395p(h)) is amended by 
adding at the end the following: ‘‘In applying the previous 
sentence, an individual’s unintentional, inadvertent, or er-
roneous enrollment or nonenrollment shall be presumed to 
be the result of an error, misrepresentation, or inaction 
of an officer, employee, or agent of the Federal Govern-
ment, or its instrumentalities, unless the Secretary dem-
onstrates otherwise.’’. 
(d) EFFECTIVE DATES.—The amendments made by 
subsections (a) and (b) shall apply to late enrollment pen-
alties for months beginning with January 2008. The 
amendment made by subsection (c) shall take effect on 
January 1, 2008, and shall apply as of such date to enroll-
ments (and non-enrollments) occurring before, on, or after 
such date. 
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SEC. 4. MORE FREQUENT CHANGES IN PLANS PERMITTED. 
(a) IN GENERAL.—Section 1860D–1(b)(3) of the So-
cial Security Act (42 U.S.C. 1395w–101(b)(3)) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(F) SAME FREQUENCY AS CHANGES IN 
FORMULARIES.—In the case of an individual 
enrolled in a prescription drug plan (or MA–PD 
plan), as often as the Secretary permits such 
plan to make changes in its formulary.’’. 
(b) PERMITTING CHANGE IN ENROLLMENT DURING 
FIRST 3 MONTHS OF EACH YEAR AS PERMITTED UNDER 
THE MEDICARE ADVANTAGE PROGRAM.—Section 1860D– 
1(b)(1)(B)(iii) 
of 
such 
Act 
(42 
U.S.C. 
1395w– 
101(b)(1)(B)(iii)) is amended by striking ‘‘, (C),’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2008. 
SEC. 5. LOW INCOME SUBSIDY IMPROVEMENTS. 
(a) REMOVAL OF ASSET TEST.— 
(1) IN GENERAL.—Section 1860D–14(a) of the 
Social Security Act (42 U.S.C. 1395w–114(a)) is 
amended— 
(A) in paragraph (1), in the matter before 
subparagraph (A), by striking ‘‘and who meets 
the resources requirement described in para-
graph (3)(D)’’; and 
(B) in paragraph (3)— 
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(i) in paragraph (3)(A), by adding 
‘‘and’’ at the end of clause (i), by striking 
‘‘; and’’ at the end of clause (ii) and insert-
ing a period, and by striking clause (iii); 
and 
(ii) by striking subparagraphs (D) 
and (E). 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to benefits for months 
beginning with January 2008. 
(b) ELIMINATION
OF LATE ENROLLMENT PEN-
ALTIES FOR SUBSIDY ELIGIBLE INDIVIDUALS.— 
(1) IN GENERAL.—Section 1860D–13(b)(2) of 
the Social Security Act (42 U.S.C. 1395w– 
113(b)(2)) is amended by inserting ‘‘who is not a 
subsidy eligible individual and’’ after ‘‘an indi-
vidual’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
1860D–14 of such Act (42 U.S.C. 1395w–114) is 
amended— 
(A) in subsection (a)(1)(A), by striking 
‘‘equal to’’ and all that follows and inserting 
the following: ‘‘100 percent of the amount de-
scribed in subsection (b)(1), but not to exceed 
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the premium amount specified in subsection 
(b)(2)(B).’’; and 
(B) in subsection (b)(2)(B), by striking the 
last sentence. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to late enrollment pen-
alties for months beginning with January 2008. 
Æ 
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