IB 
Union Calendar No. 563 
115TH CONGRESS 
2D SESSION 
H. R. 5799 
[Report No. 115–728] 
To amend title XIX of the Social Security Act to require as a condition 
of receipt of full Federal medical assistance percentage under Medicaid 
that State Medicaid plans have in place certain drug utilization review 
activities. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 15, 2018 
Mrs. BLACKBURN (for herself, Mr. BARR, and Mr. KNIGHT) introduced the 
following bill; which was referred to the Committee on Energy and Commerce 
JUNE 12, 2018 
Additional sponsor: Mr. WALDEN 
JUNE 12, 2018 
Reported with amendments, committed to the Committee of the Whole House 
on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on May 15, 2018] 
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A BILL 
To amend title XIX of the Social Security Act to require 
as a condition of receipt of full Federal medical assist-
ance percentage under Medicaid that State Medicaid 
plans have in place certain drug utilization review activi-
ties. 
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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 ‘‘Medicaid Drug Review, 
Utilization, Good Governance Improvement Act’’ or the 
‘‘Medicaid DRUG Improvement Act’’. 
SEC. 2. MEDICAID DRUG UTILIZATION REVIEW. 
(a) STATE PLAN REQUIREMENT.—Section 1902(a) of 
the Social Security Act (42 U.S.C. 1396a(a)) is amended— 
(1) in paragraph (82), at the end, by striking 
‘‘and’’; 
(2) in paragraph (83), at the end, by striking 
the period and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (83) the fol-
lowing new paragraph: 
‘‘(84) provide that the State is in compliance 
with the drug review and utilization requirements 
under subsection (nn)(1).’’. 
(b) DRUG
REVIEW
AND
UTILIZATION
REQUIRE-
MENTS.—Section 1902 of the Social Security Act (42 
U.S.C. 1396a) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(nn) DRUG REVIEW
AND UTILIZATION REQUIRE-
MENTS.— 
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‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(84), the drug review and utilization requirements 
under this subsection are, subject to paragraph (3) 
and beginning October 1, 2019, the following: 
‘‘(A) CLAIMS REVIEW LIMITATIONS.— 
‘‘(i) IN GENERAL.—The State has in 
place— 
‘‘(I) safety edits (as specified by 
the State) for subsequent fills for 
opioids and a claims review automated 
process (as designed and implemented 
by the State) that indicates when an 
individual enrolled under the State 
plan (or under a waiver of the State 
plan) is prescribed a subsequent fill of 
opioids in excess of any limitation that 
may be identified by the State; 
‘‘(II) safety edits (as specified by 
the State) on the maximum daily mor-
phine equivalent that can be prescribed 
to an individual enrolled under the 
State plan (or under a waiver of the 
State plan) for treatment of chronic 
pain and a claims review automated 
process (as designed and implemented 
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by the State) that indicates when an 
individual enrolled under the plan (or 
waiver) is prescribed the morphine 
equivalent for such treatment in excess 
of any limitation that may be identi-
fied by the State; and 
‘‘(III) a claims review automated 
process (as designed and implemented 
by the State) that monitors when an 
individual enrolled under the State 
plan (or under a waiver of the State 
plan) 
is 
concurrently 
prescribed 
opioids and— 
‘‘(aa) benzodiazepines; or 
‘‘(bb) antipsychotics. 
‘‘(ii) MANAGED CARE ENTITIES.—The 
State requires each managed care entity (as 
defined in section 1932(a)(1)(B)) with re-
spect to which the State has a contract 
under section 1903(m) or under section 
1905(t)(3) to have in place, subject to para-
graph (3), with respect to individuals who 
are eligible for medical assistance under the 
State plan (or under a waiver of the State 
plan) and who are enrolled with the entity, 
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the limitations described in subclauses (I) 
and (II) of clause (i) and a claims review 
automated process described in subclause 
(III) of such clause. 
‘‘(iii) RULES
OF
CONSTRUCTION.— 
Nothing in this subparagraph may be con-
strued as prohibiting a State or managed 
care entity from designing and imple-
menting a claims review automated process 
under this subparagraph that provides for 
prospective or retrospective reviews of 
claims. Nothing in this subparagraph shall 
be understood as prohibiting the exercise of 
clinical judgment from a provider enrolled 
as a participating provider in a State plan 
(or waiver of the State plan) or contracting 
with a managed care entity regarding the 
best items and services for an individual en-
rolled under such State plan (or waiver). 
‘‘(B) PROGRAM TO MONITOR ANTIPSYCHOTIC 
MEDICATIONS BY CHILDREN.—The State has in 
place a program (as designed and implemented 
by the State), including such a program that the 
State had in place before the date of the enact-
ment of this subsection, to monitor and manage 
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the appropriate use of antipsychotic medications 
by children enrolled under the State plan (or 
under a waiver of the State plan) and submits 
annually to the Secretary such information as 
the Secretary may require on activities carried 
out under such program for individuals not more 
than the age of 18 years generally and children 
in foster care specifically. 
‘‘(C) FRAUD AND ABUSE IDENTIFICATION.— 
The State has in place a process (as designed 
and implemented by the State), including such a 
process that the State had in place before the 
date of the enactment of this subsection, that 
identifies potential fraud or abuse of controlled 
substances by individuals enrolled under the 
State plan (or under a waiver of the State plan), 
health care providers prescribing drugs to indi-
viduals so enrolled, and pharmacies dispensing 
drugs to individuals so enrolled. 
‘‘(D) REPORTS.—The State shall include in 
the annual report submitted to the Secretary 
under section 1927(g)(3)(D) information on the 
limitations, requirement, program, and processes 
applied by the State under subparagraphs (A) 
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through (C) in accordance with such manner 
and time as specified by the Secretary. 
‘‘(2) ANNUAL REPORT BY SECRETARY.—For each 
fiscal year beginning with fiscal year 2020, the Sec-
retary shall submit to Congress a report on the most 
recent information submitted by States under para-
graph (1)(D). 
‘‘(3) EXCEPTIONS.— 
‘‘(A) CERTAIN
INDIVIDUALS
EXEMPTED.— 
The drug review and utilization requirements 
under this subsection shall not apply with re-
spect to an individual who— 
‘‘(i) is receiving— 
‘‘(I) hospice or palliative care; or 
‘‘(II) treatment for cancer; 
‘‘(ii) is a resident of a long-term care 
facility, of a facility described in section 
1905(d), or of another facility for which fre-
quently abused drugs are dispensed for resi-
dents through a contract with a single phar-
macy; or 
‘‘(iii) the State elects to treat as ex-
empted from such requirements. 
‘‘(B) EXCEPTION RELATING TO ENSURING 
ACCESS.—In order to ensure reasonable access to 
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health care, the Secretary may waive the drug 
review and utilization requirements under this 
subsection, with respect to a State, in the case of 
natural disasters and similar situations, and in 
the case of the provision of emergency services 
(as defined for purposes of section 1860D– 
4(c)(5)(D)(ii)(II)).’’. 
(c) MANAGED CARE ENTITIES.—Section 1932 of the 
Social Security Act (42 U.S.C. 1396u–2) is amended by 
adding at the end the following new subsection: 
‘‘(i) DRUG UTILIZATION REVIEW ACTIVITIES AND RE-
QUIREMENTS.—Beginning not later than October 1, 2019, 
each contract under a State plan with a managed care enti-
ty (other than a primary care case manager) under section 
1903(m) shall provide that the entity is in compliance with 
the applicable provisions of section 438.3(s)(2) of title 42 
of the Code of Federal Regulations, section 483.3(s)(4)) of 
such title, and section 483.3(s)(5) of such title, as such pro-
visions were in effect on March 31, 2018.’’. 
SEC. 3. IDENTIFYING AND ADDRESSING INAPPROPRIATE 
PRESCRIBING 
AND 
BILLING 
PRACTICES 
UNDER MEDICAID. 
(a) IN GENERAL.—Section 1927(g) of the Social Secu-
rity Act (42 U.S.C. 1396r–8(g)) is amended— 
(1) in paragraph (1)(A)— 
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(A) by striking ‘‘of section 1903(i)(10)(B)’’ 
and inserting ‘‘of section 1902(a)(54)’’; 
(B) by striking ‘‘, by not later than Janu-
ary 1, 1993,’’; 
(C) by inserting after ‘‘gross overuse,’’ the 
following: ‘‘excessive utilization,’’; and 
(D) by striking ‘‘or inappropriate or medi-
cally unnecessary care’’ and inserting ‘‘inappro-
priate or medically unnecessary care, or pre-
scribing or billing practices that indicate abuse 
or excessive utilization’’; and 
(2) in paragraph (2)(B)— 
(A) by inserting after ‘‘gross overuse,’’ the 
following: ‘‘excessive utilization,’’; 
(B) by striking ‘‘or inappropriate or medi-
cally unnecessary care’’ and inserting ‘‘inappro-
priate or medically unnecessary care, or pre-
scribing or billing practices that indicate abuse 
or excessive utilization’’; and 
(C) by adding at the end the following new 
sentence: ‘‘In the case that the program identifies 
a pattern described in the previous sentence, the 
State shall take such remedial actions as deter-
mined necessary to address such pattern.’’. 
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(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect with respect to retrospective drug 
use reviews conducted on or after October 1, 2020. 
Amend the title so as to read: ‘‘A bill to amend title 
XIX of the Social Security Act to require under Medicaid 
that State Medicaid plans have in place certain drug uti-
lization review activities, and to require States to identify 
and address inappropriate prescribing and billing prac-
tices under Medicaid.’’. 
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