datamatters24/research-document-archive huggingface dataset:
tions described in section 2(b)(2)(A)–(B), but 
only 
(B) to the extent that those amounts 
would, if such amounts were instead payable by 
virtue of the State law’s being deemed to be so 
modified pursuant to section 2(b)(1), have been 
reimbursable under paragraph (1). 
(b) DETERMINATION OF AMOUNT.—Sums under sub-
section (a) payable to any State by reason of such State 
having an agreement under this Act shall be payable, ei-
ther in advance or by way of reimbursement (as may be 
determined by the Secretary), in such amounts as the Sec-
retary estimates the State will be entitled to receive under 
this Act for each calendar month, reduced or increased, 
as the case may be, by any amount by which the Secretary 
finds that the Secretary’s estimates for any prior calendar 
month were greater or less than the amounts which should 
have been paid to the State. Such estimates may be made 
on the basis of such statistical, sampling, or other method 
as may be agreed upon by the Secretary and the State 
agency of the State involved.
(c) ADMINISTRATIVE EXPENSES, ETC.—There is 
hereby appropriated out of the employment security ad-
ministration account of the Unemployment Trust Fund 
(as established by section 901(a) of the Social Security
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
Æ
†
786
HR 1 EAS
cian, practitioner, or supplier under subpara-
graph (B)(ii). Taking into consideration such
information, the Secretary shall determine if
there still appears to be an overpayment. If so,
the Secretary—
‘‘(i) shall provide notice of such deter-
mination to the provider of services, physi-
cian, practitioner, or supplier, including an
explanation of the reason for such deter-
mination; and
‘‘(ii) in order to resolve the overpay-
ment, may offer the provider of services,
physician, practitioner, or supplier—
‘‘(I) the opportunity for a statis-
tically valid random sample; or
‘‘(II) a consent settlement.
The opportunity provided under clause (ii)(I)
does not waive any appeal rights with respect to
the alleged overpayment involved.
‘‘(D) CONSENT
SETTLEMENT
DEFINED.—
For purposes of this paragraph, the term ‘con-
sent settlement’ means an agreement between the
Secretary and a provider of services, physician,
practitioner, or supplier whereby both parties
agree to settle a projected overpayment based on
288
sions of the Federal Acquisition Regulation as 
are necessary for the efficient implementation 
of this section, other than provisions relating to 
confidentiality of information and such other 
provisions as the Secretary determines appro-
priate. 
‘‘(D) EXCLUSION
AUTHORITY.—The Sec-
retary may exclude covered outpatient drugs 
and biologicals (including a class of such drugs 
and biologicals) from the competitive bidding 
system under this section if the drugs or 
biologicals (or class) are not appropriate for 
competitive bidding due to low volume of utili-
zation by beneficiaries under this part or a 
unique mode or method of delivery or similar 
reasons.
‘‘(2) 
COVERED
OUTPATIENT
DRUGS
AND 
BIOLOGICALS, CATEGORIES, PROGRAM
DEFINED.—
For purposes of this section—
‘‘(A) COVERED OUTPATIENT DRUGS AND 
BIOLOGICALS
DEFINED.—The term ‘covered 
outpatient drugs and biologicals’ means drugs 
and biologicals to which section 1842(o) applies 
and which are not covered under section 1847 
(relating to competitive acquisition for items of
524
report to Congress and the Comptroller General of 
the United States that describes the plan for imple-
mentation of the amendments made by this section. 
The Comptroller General shall conduct an evaluation 
of such plan and shall submit to Congress, not later 
than 6 months after the date the report is received, 
a report on such evaluation and shall include in such 
report such recommendations as the Comptroller 
General deems appropriate. 
(2) STATUS OF IMPLEMENTATION.—The Sec-
retary shall submit a report to Congress not later 
than October 1, 2008, that describes the status of 
implementation of such amendments and that in-
cludes a description of the following: 
(A) The number of contracts that have 
been competitively bid as of such date. 
(B) The distribution of functions among 
contracts and contractors. 
(C) A timeline for complete transition to 
full competition. 
(D) A detailed description of how the Sec-
retary has modified oversight and management 
of medicare contractors to adapt to full com-
petition.
mined under subsection (e)), to provide for the 
payment, with respect to costs incurred that are 
equal to the initial coverage limit under sub-
section (b)(3), of an amount equal to at least 
the product of—
‘‘(i) the amount by which the initial 
coverage limit described in subsection 
(b)(3) exceeds the deductible described in 
subsection (b)(1); and 
‘‘(ii) 100 percent minus the cost-shar-
ing percentage specified in subsection 
(b)(2)(A)(i). 
‘‘(2) CATASTROPHIC
PROTECTION.—The cov-
erage provides for beneficiaries the catastrophic pro-
tection described in subsection (b)(4). 
‘‘(d) ACCESS TO NEGOTIATED PRICES.—
‘‘(1) IN GENERAL.—Under qualified prescrip-
tion drug coverage offered by a PDP sponsor or an 
entity offering a MA-EFFS Rx plan, the sponsor or 
entity shall provide beneficiaries with access to nego-
tiated prices (including applicable discounts) used 
for payment for covered outpatient drugs, regardless 
of the fact that no benefits may be payable under 
the coverage with respect to such drugs because of 
the application of cost-sharing or an initial coverage
678
determines necessary or appropriate, upon application of 
the Commission. 
SEC. 1116. RULEMAKING. 
The Commission, by rule in accordance with section 
553 of title 5, United States Code, consistent with the pur-
poses of this subtitle—
(1) may define the terms used in this subtitle; 
(2) may exempt classes of persons or agree-
ments from the requirements of this subtitle; and 
(3) may prescribe such other rules as may be 
necessary and appropriate to carry out the purposes 
of this subtitle. 
SEC. 1117. SAVINGS CLAUSE. 
Any action taken by the Commission, or any failure 
of the Commission to take action, under this subtitle shall 
not at any time bar any proceeding or any action with 
respect to any agreement between a brand name drug 
company and a generic drug applicant, or any agreement 
between generic drug applicants, under any other provi-
sion of law, nor shall any filing under this subtitle con-
stitute or create a presumption of any violation of any 
competition laws. 
SEC. 1118. EFFECTIVE DATE. 
This subtitle shall—
HR 1 RDS 
ing conditions provided under section 
1851(e)(4)(D)) as the Administrator may 
provide; and 
‘‘(iv) in cases of individuals (as deter-
mined by the Administrator) who become 
eligible for prescription drug assistance 
under title XIX under section 1935(d). 
‘‘(3) INFORMATION
ON
PLANS.—Information 
described in section 1860D–3(b)(1) on prescription 
drug plans and MA-EFFS Rx plans shall be made 
available during election periods. 
‘‘(4) ADDITIONAL INFORMATION.—In order to 
promote the efficient marketing of prescription drug 
plans and MA-EFFS plans, the Administrator may 
provide information to the sponsors and organiza-
tions offering such plans about individuals eligible to 
enroll in such plans. 
‘‘(c) GUARANTEED ISSUE; COMMUNITY RATING; AND 
NONDISCRIMINATION.—
‘‘(1) GUARANTEED ISSUE.—
‘‘(A) IN GENERAL.—An eligible individual 
who is eligible to elect qualified prescription 
drug coverage under a prescription drug plan or 
MA-EFFS Rx plan at a time during which elec-
tions are accepted under this part with respect
‘‘Sec. 1860D–3. Beneficiary protections for qualified prescription drug cov-
erage. 
‘‘Sec. 1860D–4. Requirements for and contracts with prescription drug 
plan (PDP) sponsors. 
‘‘Sec. 1860D–5. Process for beneficiaries to select qualified prescription 
drug coverage. 
‘‘Sec. 1860D–6. Submission of bids and premiums. 
‘‘Sec. 1860D–7. Premium and cost-sharing subsidies for low-income indi-
viduals. 
‘‘Sec. 1860D–8. Subsidies for all medicare beneficiaries for qualified pre-
scription drug coverage. 
‘‘Sec. 1860D–9. Medicare Prescription Drug Trust Fund. 
‘‘Sec. 1860D–10. Definitions; application to medicare advantage and 
EFFS programs; treatment of references to provisions in 
part C. 
Sec. 102. Offering of qualified prescription drug coverage under Medicare Ad-
vantage and enhanced fee-for-service (EFFS) program. 
Sec. 103. Medicaid amendments. 
Sec. 104. Medigap transition. 
Sec. 105. Medicare prescription drug discount card and assistance program. 
Sec. 106. Disclosure of return information for purposes of carrying out medi-
care catastrophic prescription drug program. 
Sec. 107. State Pharmaceutical Assistance Transition Commission. 
Sec. 108. Additional requirements for annual financial report and oversight on 
medicare program, including prescription drug spending. 
TITLE II—MEDICARE ENHANCED FEE-FOR-SERVICE AND 
MEDICARE ADVANTAGE PROGRAMS; MEDICARE COMPETITION 
Sec. 200. Medicare modernization and revitalization. 
Subtitle A—Medicare Enhanced Fee-for-Service Program 
Sec. 201. Establishment of enhanced fee-for-service (EFFS) program under 
medicare. 
‘‘PART E—ENHANCED FEE-FOR-SERVICE PROGRAM 
‘‘Sec. 1860E–1. Offering of enhanced fee-for-service plans throughout the 
United States. 
‘‘Sec. 1860E–2. Offering of enhanced fee-for-service (EFFS) plans. 
‘‘Sec. 1860E–3. Submission of bids; beneficiary savings; payment of plans. 
‘‘Sec. 1860E–4. Premiums; organizational and financial requirements; es-
tablishment of standards; contracts with EFFS organiza-
tions. 
Subtitle B—Medicare Advantage Program 
CHAPTER 1—IMPLEMENTATION OF PROGRAM 
Sec. 211. Implementation of medicare advantage program. 
Sec. 212. Medicare advantage improvements. 
CHAPTER 2—IMPLEMENTATION OF COMPETITION PROGRAM 
Sec. 221. Competition program beginning in 2006. 
CHAPTER 3—ADDITIONAL REFORMS
dividual’s initial enrollment period under this 
part or maintains (as determined under sub-
paragraph (C)) continuous prescription drug 
coverage since the date the individual first 
qualifies to elect prescription drug coverage 
under this part, a PDP sponsor or entity offer-
ing a prescription drug plan or MA-EFFS Rx 
plan and in which the individual is enrolled may 
not deny, limit, or condition the coverage or 
provision of covered prescription drug benefits 
or vary or increase the premium under the plan 
based on any health status-related factor de-
scribed in section 2702(a)(1) of the Public 
Health Service Act or any other factor. 
‘‘(B) LATE
ENROLLMENT
PENALTY.—In 
the case of an individual who does not maintain 
such continuous prescription drug coverage (as 
described in subparagraph (C)), a PDP sponsor 
or an entity offering a MA-EFFS Rx plan may 
(notwithstanding any provision in this title) ad-
just the premium otherwise applicable with re-
spect to qualified prescription drug coverage in 
a manner that reflects additional actuarial risk 
involved. Such a risk shall be established 
through an appropriate actuarial opinion of the
type described in subparagraphs (A) through 
(C) of section 2103(c)(4). The Administrator 
shall provide a mechanism for assisting such 
sponsors and entities in identifying eligible indi-
viduals who have (or have not) maintained such 
continuous prescription drug coverage. 
‘‘(C) CONTINUOUS
PRESCRIPTION
DRUG 
COVERAGE.—An individual is considered for 
purposes of this part to be maintaining contin-
uous prescription drug coverage on and after 
the date the individual first qualifies to elect 
prescription drug coverage under this part if 
the individual establishes that as of such date 
the individual is covered under any of the fol-
lowing prescription drug coverage and before 
the date that is the last day of the 63-day pe-
riod that begins on the date of termination of 
the particular prescription drug coverage in-
volved (regardless of whether the individual 
subsequently obtains any of the following pre-
scription drug coverage): 
‘‘(i) COVERAGE UNDER PRESCRIPTION 
DRUG PLAN OR MA-EFFS RX PLAN.—Quali-
fied prescription drug coverage under a
prescription drug plan or under a MA-
EFFS Rx plan. 
‘‘(ii) MEDICAID PRESCRIPTION DRUG 
COVERAGE.—Prescription drug coverage 
under a medicaid plan under title XIX, in-
cluding through the Program of All-inclu-
sive Care for the Elderly (PACE) under 
section 1934, or through a demonstration 
project under part C that demonstrates the 
application of capitation payment rates for 
frail elderly medicare beneficiaries through 
the use of an interdisciplinary team and 
through the provision of primary care serv-
ices to such beneficiaries by means of such 
a team at the nursing facility involved. 
‘‘(iii) PRESCRIPTION DRUG COVERAGE 
UNDER GROUP HEALTH PLAN.—Any out-
patient prescription drug coverage under a 
group health plan, including a health bene-
fits plan under the Federal Employees 
Health Benefit Plan under chapter 89 of 
title 5, United States Code, and a qualified 
retiree prescription drug plan as defined in 
section 1860D–8(f)(1), but only if (subject 
to subparagraph (E)(ii)) the coverage pro-
‘‘(B) DISAPPROVAL AUTHORITY.—The Ad-
ministrator shall review the offering of qualified 
prescription drug coverage under this part or 
part C or E. If the Administrator finds, in the 
case of a qualified prescription drug coverage 
under a prescription drug plan or a MA-EFFS 
Rx plan, that the organization or sponsor offer-
ing the coverage is engaged in activities in-
tended to discourage enrollment of classes of el-
igible medicare beneficiaries obtaining coverage 
through the plan on the basis of their higher 
likelihood of utilizing prescription drug cov-
erage, the Administrator may terminate the 
contract with the sponsor or organization under 
this part or part C or E. 
‘‘(3) APPLICATION OF SECONDARY PAYOR PRO-
VISIONS.—The provisions of section 1852(a)(4) shall 
apply under this part in the same manner as they 
apply under part C. 
‘‘(b) STANDARD COVERAGE.—For purposes of this 
part, the ‘standard coverage’ is coverage of covered out-
patient drugs (as defined in subsection (f)) that meets the 
following requirements: 
‘‘(1) DEDUCTIBLE.—The coverage has an an-
nual deductible—
‘‘(A) for 2006, that is equal to $250; or 
‘‘(B) for a subsequent year, that is equal 
to the amount specified under this paragraph 
for the previous year increased by the percent-
age specified in paragraph (5) for the year in-
volved. 
Any amount determined under subparagraph (B) 
that is not a multiple of $10 shall be rounded to the 
nearest multiple of $10. 
‘‘(2) 80:20 BENEFIT STRUCTURE.—
‘‘(A) 20 PERCENT
COINSURANCE.—The 
coverage has cost-sharing (for costs above the 
annual deductible specified in paragraph (1) 
and up to the initial coverage limit under para-
graph (3)) that is—
‘‘(i) equal to 20 percent; or 
‘‘(ii) is actuarially equivalent (using 
processes established under subsection (e)) 
to an average expected payment of 20 per-
cent of such costs. 
‘‘(B) USE OF TIERS.—Nothing in this part 
shall be construed as preventing a PDP sponsor 
from applying tiered copayments, so long as 
such tiered copayments are consistent with sub-
paragraph (A).
‘‘(3) INITIAL
COVERAGE
LIMIT.—Subject to 
paragraph (4), the coverage has an initial coverage 
limit on the maximum costs that may be recognized 
for payment purposes—
‘‘(A) for 2006, that is equal to $2,000; or 
‘‘(B) for a subsequent year, that is equal 
to the amount specified in this paragraph for 
the previous year, increased by the annual per-
centage increase described in paragraph (5) for 
the year involved. 
Any amount determined under subparagraph (B) 
that is not a multiple of $25 shall be rounded to the 
nearest multiple of $25.
‘‘(4) CATASTROPHIC PROTECTION.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (3), the coverage provides benefits with 
no cost-sharing after the individual has in-
curred costs (as described in subparagraph (C)) 
for covered outpatient drugs in a year equal to 
the annual out-of-pocket threshold specified in 
subparagraph (B). 
‘‘(B) ANNUAL
OUT-OF-POCKET
THRESH-
OLD.—
‘‘(i) IN
GENERAL.—For purposes of 
this part, the ‘annual out-of-pocket thresh-
old’ specified in this subparagraph is equal 
to $3,500 (subject to adjustment under 
clause (ii) and subparagraph (D)). 
‘‘(ii) INFLATION
INCREASE.—For a 
year after 2006, the dollar amount speci-
fied in clause (i) shall be increased by the 
annual percentage increase described in 
paragraph (5) for the year involved. Any 
amount determined under the previous 
sentence that is not a multiple of $100 
shall be rounded to the nearest multiple of 
$100. 
‘‘(C) APPLICATION.—In applying subpara-
graph (A)—
‘‘(i) incurred costs shall only include 
costs incurred for the annual deductible 
(described in paragraph (1)), cost-sharing 
(described in paragraph (2)), and amounts 
for which benefits are not provided because 
of the application of the initial coverage 
limit described in paragraph (3); and 
‘‘(ii) such costs shall be treated as in-
curred only if they are paid by the indi-
vidual (or by another individual, such as a 
family member, on behalf of the indi-
vidual), under section 1860D–7, under title 
XIX, or under a State pharmaceutical as-
sistance program and the individual (or 
other individual) is not reimbursed through 
insurance or otherwise, a group health 
plan, or other third-party payment ar-
rangement (other than under such title or 
such program) for such costs. 
‘‘(D) ADJUSTMENT
OF
ANNUAL
OUT-OF-
POCKET THRESHOLDS.—
‘‘(i) IN GENERAL.—Subject to clause 
(vii), for each enrollee in a prescription 
drug plan or in a MA-EFFS Rx plan 
whose adjusted gross income exceeds the 
income threshold as defined in clause (ii) 
for a year, the annual out-of-pocket thresh-
old otherwise determined under subpara-
graph (B) for such year shall be increased 
by an amount equal to the percentage 
specified in clause (iii), multiplied by the 
lesser of—
‘‘(I) the amount of such excess; 
or
‘‘(II) the amount by which the 
income threshold limit exceeds the in-
come threshold. 
Any amount determined under the previous 
sentence that is not a multiple of $100 
shall be rounded to the nearest multiple of 
$100. 
‘‘(ii) INCOME THRESHOLD.—For pur-
poses of clause (i)—
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), the term ‘income 
threshold’ means $60,000 and the 
term ‘income threshold limit’ means 
$200,000. 
‘‘(II) INCOME
INFLATION
AD-
JUSTMENT.—In the case of a year be-
ginning after 2006, each of the dollar 
amounts in subclause (I) shall be in-
creased by an amount equal to such 
dollar amount multiplied by the cost-
of-living adjustment determined under 
section 1(f)(3) of the Internal Rev-
enue Code of 1986 for such year, de-
termined by substituting ‘calendar 
year 2005’ for ‘calendar year 1992’.
If any amount increased under the 
previous sentence is not a multiple of 
$100, such amount shall be rounded 
to the nearest multiple of $100. 
‘‘(iii) PERCENTAGE.—The percentage 
specified in this clause for a year is a frac-
tion (expressed as a percentage) equal to—
‘‘(I) the annual out-of-pocket 
threshold for a year under subpara-
graph (B) (determined without regard 
to this subparagraph), divided by 
‘‘(II) the income threshold under 
clause (ii) for that year. 
If any percentage determined under the 
previous sentence that is not a multiple of 
1⁄10th of 1 percentage point, such percent-
age shall be rounded to the nearest mul-
tiple of 1⁄10th of 1 percentage point. 
‘‘(iv) USE OF MOST RECENT RETURN 
INFORMATION.—For purposes of clause (i) 
for an enrollee for a year, except as pro-
vided in clause (v), the adjusted gross in-
come of an individual shall be based on the 
most recent information disclosed to the 
Secretary under section 6109(l)(19) of the
Internal Revenue Code of 1986 before the 
beginning of that year. 
‘‘(v) 
INDIVIDUAL
ELECTION
TO 
PRESENT MOST RECENT INFORMATION RE-
GARDING
INCOME.—The Secretary shall 
provide, in coordination with the Secretary 
of the Treasury, a procedure under which, 
for purposes of applying this subparagraph 
for a calendar year, instead of using the 
information described in clause (iv), an en-
rollee may elect to use more recent infor-
mation, including information with respect 
to a taxable year ending in such calendar 
year. Such process shall—
‘‘(I) require the enrollee to pro-
vide the Secretary with a copy of the 
relevant portion of the more recent re-
turn to be used under this clause; 
‘‘(II) provide for the Medicare 
Beneficiary Ombudsman (under sec-
tion 1810) offering assistance to such 
enrollees in presenting such informa-
tion and the toll-free number under 
such section being a point of contact
‘‘(G) INFORMATION
REGARDING
THIRD-
PARTY REIMBURSEMENT.—In order to ensure 
compliance with the requirements of subpara-
graph (C)(ii), the Administrator is authorized 
to establish procedures, in coordination with the 
Secretary of Treasury and the Secretary of 
Labor, for determining whether costs for indi-
viduals are being reimbursed through insurance 
or otherwise, a group health plan, or other 
third-party payment arrangement, and for 
alerting the sponsors and organization that 
offer the plans in which such individuals are en-
rolled about such reimbursement arrangements. 
A PDP sponsor or Medicare Advantage or 
EFFS organization may also periodically ask 
individuals enrolled in a prescription drug plan 
or MA-EFFS Rx plan offered by the sponsor or 
organization whether the individuals have or ex-
pect to receive such third-party reimbursement. 
A material misrepresentation of the information 
described in the preceding sentence by an indi-
vidual (as defined in standards set by the Ad-
ministrator and determined through a process 
established by the Administrator) shall con-
stitute grounds for termination of enrollment 
under section 1860D–1(d)(3).
‘‘(5) ANNUAL
PERCENTAGE
INCREASE.—For 
purposes of this part, the annual percentage increase 
specified in this paragraph for a year is equal to the 
annual percentage increase in average per capita ag-
gregate expenditures for covered outpatient drugs in 
the United States for medicare beneficiaries, as de-
termined by the Administrator for the 12-month pe-
riod ending in July of the previous year.
‘‘(c) ALTERNATIVE COVERAGE REQUIREMENTS.—A 
prescription drug plan or MA-EFFS Rx plan may provide 
a different prescription drug benefit design from the 
standard coverage described in subsection (b) so long as 
the Administrator determines (based on an actuarial anal-
ysis approved by the Administrator) that the following re-
quirements are met and the plan applies for, and receives, 
the approval of the Administrator for such benefit design: 
‘‘(1) ASSURING AT LEAST ACTUARIALLY EQUIV-
ALENT COVERAGE.—
‘‘(A) ASSURING
EQUIVALENT
VALUE
OF 
TOTAL COVERAGE.—The actuarial value of the 
total coverage (as determined under subsection 
(e)) is at least equal to the actuarial value (as 
so determined) of standard coverage.
‘‘(4) APPLICATION
OF
GENERAL
EXCLUSION 
PROVISIONS.—A prescription drug plan or MA-
EFFS Rx plan may exclude from qualified prescrip-
tion drug coverage any covered outpatient drug—
‘‘(A) for which payment would not be 
made if section 1862(a) applied to part D; or 
‘‘(B) which are not prescribed in accord-
ance with the plan or this part. 
Such exclusions are determinations subject to recon-
sideration and appeal pursuant to section 1860D–
3(f). 
‘‘SEC. 1860D–3. BENEFICIARY PROTECTIONS FOR QUALI-
FIED PRESCRIPTION DRUG COVERAGE. 
‘‘(a) GUARANTEED ISSUE, COMMUNITY-RATED PRE-
MIUMS, ACCESS
TO NEGOTIATED PRICES, AND NON-
DISCRIMINATION.—For provisions requiring guaranteed 
issue, community-rated premiums, access to negotiated 
prices, and nondiscrimination, see sections 1860D–
1(c)(1), 1860D–1(c)(2), 1860D–2(d), and 1860D–6(b), 
respectively. 
‘‘(b) DISSEMINATION OF INFORMATION.—
‘‘(1) GENERAL INFORMATION.—A PDP sponsor 
shall disclose, in a clear, accurate, and standardized 
form to each enrollee with a prescription drug plan 
offered by the sponsor under this part at the time