1692 
‘‘(1) IN
GENERAL.—In this part, the 
term ‘covered part D drug’ does not in-
clude any drug or biologic that is manu-
factured by a manufacturer that has not 
entered into and have in effect a rebate 
agreement described in paragraph (2). 
‘‘(2) REBATE
AGREEMENT.—A rebate 
agreement under this subsection shall re-
quire the manufacturer to provide to the 
Secretary a rebate for each rebate period 
(as defined in paragraph (6)(B)) ending 
after December 31, 2010, in the amount 
specified in paragraph (3) for any cov-
ered part D drug of the manufacturer dis-
pensed after December 31, 2010, to any 
full-benefit dual eligible individual (as 
defined in paragraph (6)(A)) for which 
payment was made by a PDP sponsor 
under part D or a MA organization under 
part C for such period. Such rebate shall 
be paid by the manufacturer to the Sec-
retary not later than 30 days after the 
date of receipt of the information de-
scribed in section 1860D–12(b)(7), includ-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01692
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1693 
ing as such section is applied under sec-
tion 1857(f)(3). 
‘‘(3) REBATE FOR FULL-BENEFIT DUAL EL-
IGIBLE MEDICARE DRUG PLAN ENROLLEES.— 
‘‘(A) IN GENERAL.—The amount of 
the rebate specified under this para-
graph for a manufacturer for a rebate 
period, with respect to each dosage 
form and strength of any covered 
part D drug provided by such manu-
facturer and dispensed to a full-ben-
efit dual eligible individual, shall be 
equal to the product of— 
‘‘(i) the total number of units 
of such dosage form and strength 
of the drug so provided and dis-
pensed for which payment was 
made by a PDP sponsor under 
part D or a MA organization 
under part C for the rebate pe-
riod (as reported under section 
1860D–12(b)(7), including as such 
section is applied under section 
1857(f)(3)); and 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01693
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1694 
‘‘(ii) the amount (if any) by 
which— 
‘‘(I) the Medicaid rebate 
amount (as defined in sub-
paragraph (B)) for such form, 
strength, and period, exceeds 
‘‘(II) the average Medicare 
drug 
program 
full-benefit 
dual eligible rebate amount 
(as defined in subparagraph 
(C)) for such form, strength, 
and period. 
‘‘(B) MEDICAID
REBATE
AMOUNT.— 
For purposes of this paragraph, the 
term 
‘Medicaid 
rebate 
amount’ 
means, with respect to each dosage 
form and strength of a covered part D 
drug provided by the manufacturer 
for a rebate period— 
‘‘(i) in the case of a single 
source drug or an innovator mul-
tiple source drug, the amount 
specified in paragraph (1)(A)(ii) of 
section 1927(b) plus the amount, if 
any, 
specified 
in 
paragraph 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01694
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1695 
(2)(A)(ii) of such section, for such 
form, strength, and period; or 
‘‘(ii) in the case of any other 
covered 
outpatient 
drug, 
the 
amount specified in paragraph 
(3)(A)(i) of such section for such 
form, strength, and period. 
‘‘(C) AVERAGE MEDICARE DRUG PRO-
GRAM FULL-BENEFIT DUAL ELIGIBLE RE-
BATE
AMOUNT.—For purposes of this 
subsection, the term ‘average Medi-
care drug program full-benefit dual 
eligible rebate amount’ means, with 
respect to each dosage form and 
strength of a covered part D drug 
provided by a manufacturer for a re-
bate period, the sum, for all PDP 
sponsors under part D and MA orga-
nizations 
administering 
a 
MA–PD 
plan under part C, of— 
‘‘(i) the product, for each such 
sponsor or organization, of— 
‘‘(I) the sum of all rebates, 
discounts, or other price con-
cessions (not taking into ac-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01695
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1696 
count any rebate provided 
under paragraph (2) for such 
dosage form and strength of 
the 
drug 
dispensed, 
cal-
culated on a per-unit basis, 
but only to the extent that 
any such rebate, discount, or 
other price concession applies 
equally to drugs dispensed to 
full-benefit dual eligible Medi-
care drug plan enrollees and 
drugs dispensed to PDP and 
MA–PD enrollees who are not 
full-benefit dual eligible indi-
viduals; and 
‘‘(II) the number of the 
units 
of 
such 
dosage 
and 
strength 
of 
the 
drug 
dis-
pensed during the rebate pe-
riod to full-benefit dual eligi-
ble individuals enrolled in the 
prescription drug plans ad-
ministered by the PDP spon-
sor or the MA–PD plans ad-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01696
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1697 
ministered by the MA–PD or-
ganization; divided by 
‘‘(ii) the total number of units 
of such dosage and strength of 
the drug dispensed during the re-
bate period to full-benefit dual el-
igible individuals enrolled in all 
prescription drug plans adminis-
tered by PDP sponsors and all 
MA–PD plans administered by 
MA–PD organizations. 
‘‘(4) LENGTH OF AGREEMENT.—The pro-
visions of paragraph (4) of section 1927(b) 
(other than clauses (iv) and (v) of sub-
paragraph (B)) shall apply to rebate 
agreements under this subsection in the 
same manner as such paragraph applies 
to a rebate agreement under such sec-
tion. 
‘‘(5) OTHER
TERMS
AND
CONDITIONS.— 
The Secretary shall establish other terms 
and conditions of the rebate agreement 
under this subsection, including terms 
and conditions related to compliance, 
that are consistent with this subsection. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01697
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1698 
‘‘(6) DEFINITIONS.—In this subsection 
and section 1860D–12(b)(7): 
‘‘(A) FULL-BENEFIT
DUAL
ELIGIBLE 
INDIVIDUAL.—The 
term 
‘full-benefit 
dual 
eligible 
individual’ 
has 
the 
meaning given such term in section 
1935(c)(6). 
‘‘(B) REBATE
PERIOD.—The term 
‘rebate period’ has the meaning given 
such term in section 1927(k)(8).’’. 
(2) REPORTING REQUIREMENT FOR THE 
DETERMINATION AND PAYMENT OF REBATES 
BY MANUFACTURES RELATED TO REBATE FOR 
FULL-BENEFIT
DUAL
ELIGIBLE
MEDICARE 
DRUG PLAN ENROLLEES.— 
(A) REQUIREMENTS FOR PDP SPON-
SORS.—Section 1860D–12(b) of the So-
cial Security Act (42 U.S.C. 1395w– 
112(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(7) REPORTING REQUIREMENT FOR THE 
DETERMINATION AND PAYMENT OF REBATES 
BY
MANUFACTURERS
RELATED
TO
REBATE 
FOR FULL-BENEFIT DUAL ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.— 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01698
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1699 
‘‘(A) IN GENERAL.—For purposes of 
the rebate under section 1860D–2(f) 
for contract years beginning on or 
after January 1, 2011, each contract 
entered into with a PDP sponsor 
under this part with respect to a pre-
scription drug plan shall require that 
the sponsor comply with subpara-
graphs (B) and (C). 
‘‘(B) 
REPORT
FORM
AND
CON-
TENTS.—Not later than 60 days after 
the end of each rebate period (as de-
fined 
in 
section 
1860D–2(f)(6)(B)) 
within such a contract year to which 
such section applies, a PDP sponsor 
of a prescription drug plan under this 
part shall report to each manufac-
turer— 
‘‘(i) information (by National 
Drug Code number) on the total 
number of units of each dosage, 
form, and strength of each drug 
of such manufacturer dispensed 
to full-benefit dual eligible Medi-
care drug plan enrollees under 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01699
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1700 
any prescription drug plan oper-
ated by the PDP sponsor during 
the rebate period; 
‘‘(ii) information on the price 
discounts, price concessions, and 
rebates for such drugs for such 
form, strength, and period; 
‘‘(iii) information on the ex-
tent to which such price dis-
counts, price concessions, and re-
bates apply equally to full-benefit 
dual eligible Medicare drug plan 
enrollees and PDP enrollees who 
are not full-benefit dual eligible 
Medicare drug plan enrollees; and 
‘‘(iv) any additional informa-
tion that the Secretary deter-
mines is necessary to enable the 
Secretary to calculate the average 
Medicare drug program full-ben-
efit dual eligible rebate amount 
(as defined in paragraph (3)(C) of 
such section), and to determine 
the amount of the rebate required 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01700
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1701 
under this section, for such form, 
strength, and period. 
Such report shall be in a form con-
sistent with a standard reporting for-
mat established by the Secretary. 
‘‘(C) SUBMISSION
TO
SECRETARY.— 
Each PDP sponsor shall promptly 
transmit a copy of the information re-
ported under subparagraph (B) to the 
Secretary for the purpose of audit 
oversight and evaluation. 
‘‘(D) CONFIDENTIALITY OF INFORMA-
TION.—The 
provisions 
of 
subpara-
graph (D) of section 1927(b)(3), relat-
ing to confidentiality of information, 
shall apply to information reported 
by PDP sponsors under this para-
graph in the same manner that such 
provisions apply to information dis-
closed by manufacturers or whole-
salers under such section, except— 
‘‘(i) that any reference to ‘this 
section’ in clause (i) of such sub-
paragraph shall be treated as 
being a reference to this section; 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01701
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1702 
‘‘(ii) the reference to the Di-
rector of the Congressional Budg-
et Office in clause (iii) of such 
subparagraph shall be treated as 
including a reference to the Medi-
care Payment Advisory Commis-
sion; and 
‘‘(iii) clause (iv) of such sub-
paragraph shall not apply. 
‘‘(E) OVERSIGHT.—Information re-
ported under this paragraph may be 
used by the Inspector General of the 
Department of Health and Human 
Services for the statutorily author-
ized purposes of audit, investigation, 
and evaluations. 
‘‘(F) PENALTIES
FOR
FAILURE
TO 
PROVIDE TIMELY INFORMATION AND PRO-
VISION OF FALSE INFORMATION.—In the 
case of a PDP sponsor— 
‘‘(i) that fails to provide infor-
mation required under subpara-
graph (B) on a timely basis, the 
sponsor is subject to a civil 
money penalty in the amount of 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01702
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1703 
$10,000 for each day in which 
such information has not been 
provided; or 
‘‘(ii) that knowingly (as de-
fined in section 1128A(i)) provides 
false information under such sub-
paragraph, the sponsor is subject 
to a civil money penalty in an 
amount not to exceed $100,000 for 
each item of false information. 
Such civil money penalties are in ad-
dition to other penalties as may be 
prescribed by law. The provisions of 
section 1128A (other than subsections 
(a) and (b)) shall apply to a civil 
money penalty under this subpara-
graph in the same manner as such 
provisions apply to a penalty or pro-
ceeding under section 1128A(a).’’. 
(B) APPLICATION TO MA ORGANIZA-
TIONS.—Section 1857(f)(3) of the Social 
Security Act (42 U.S.C. 1395w–27(f)(3)) 
is amended by adding at the end the 
following: 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01703
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1704 
‘‘(D) REPORTING REQUIREMENT RE-
LATED
TO
REBATE
FOR
FULL-BENEFIT 
DUAL
ELIGIBLE
MEDICARE
DRUG
PLAN 
ENROLLEES.—Section 1860D–12(b)(7).’’. 
(3) DEPOSIT OF REBATES INTO MEDICARE 
PRESCRIPTION
DRUG
ACCOUNT.—Section 
1860D–16(c) of such Act (42 U.S.C. 1395w– 
116(c)) is amended by adding at the end 
the following new paragraph: 
‘‘(6) REBATE FOR FULL-BENEFIT DUAL EL-
IGIBLE MEDICARE DRUG PLAN ENROLLEES.— 
Amounts paid under a rebate agreement 
under section 1860D–2(f) shall be depos-
ited into the Account and shall be used to 
pay for all or part of the gradual elimi-
nation of the coverage gap under section 
1860D–2(b)(7).’’. 
SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN 
ORIGINAL COVERAGE GAP. 
Section 1860D–2 of the Social Security Act 
(42 U.S.C. 1395w–102), as amended by section 
1181, is amended— 
(1) in subsection (b)(4)(C)(ii), by in-
serting ‘‘subject to subsection (g)(2)(C),’’ 
after ‘‘(ii)’’; 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01704
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1705 
(2) in subsection (e)(1), in the matter 
before subparagraph (A), by striking 
‘‘subsection 
(f)’’ 
and 
inserting 
‘‘sub-
sections (f) and (g)’’ after ‘‘this sub-
section’’; and 
(3) by adding at the end the following 
new subsection: 
‘‘(g) REQUIREMENT FOR MANUFACTURER DIS-
COUNT AGREEMENT
FOR CERTAIN QUALIFYING 
DRUGS.— 
‘‘(1) IN
GENERAL.—In this part, the 
term ‘covered part D drug’ does not in-
clude any drug or biologic that is manu-
factured by a manufacturer that has not 
entered into and have in effect for all 
qualifying drugs (as defined in paragraph 
(5)(A)) a discount agreement described in 
paragraph (2). 
‘‘(2) DISCOUNT AGREEMENT.— 
‘‘(A) PERIODIC
DISCOUNTS.—A dis-
count agreement under this para-
graph shall require the manufacturer 
involved to provide, to each PDP 
sponsor with respect to a prescrip-
tion drug plan or each MA organiza-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01705
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1706 
tion with respect to each MA–PD 
plan, a discount in an amount speci-
fied in paragraph (3) for qualifying 
drugs (as defined in paragraph (5)(A)) 
of the manufacturer dispensed to a 
qualifying enrollee after December 
31, 2010, insofar as the individual is 
in the original gap in coverage (as de-
fined in paragraph (5)(E)). 
‘‘(B) DISCOUNT
AGREEMENT.—Inso-
far as not inconsistent with this sub-
section, the Secretary shall establish 
terms and conditions of such agree-
ment, including terms and conditions 
relating to compliance, similar to the 
terms 
and 
conditions 
for 
rebate 
agreements under paragraphs (2), (3), 
and (4) of section 1927(b), except 
that— 
‘‘(i) discounts shall be applied 
under this subsection to prescrip-
tion drug plans and MA–PD plans 
instead of State plans under title 
XIX; 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01706
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1707 
‘‘(ii) PDP sponsors and MA or-
ganizations shall be responsible, 
instead of States, for provision of 
necessary utilization information 
to drug manufacturers; and 
‘‘(iii) sponsors and MA organi-
zations shall be responsible for 
reporting information on drug- 
component negotiated price, in-
stead 
of 
other 
manufacturer 
prices. 
‘‘(C) COUNTING
DISCOUNT
TOWARD 
TRUE
OUT-OF-POCKET
COSTS.—Under 
the discount agreement, in applying 
subsection (b)(4), with regard to sub-
paragraph (C)(i) of such subsection, if 
a qualified enrollee purchases the 
qualified drug insofar as the enrollee 
is in an actual gap of coverage (as de-
fined 
in 
paragraph 
(5)(D)), 
the 
amount of the discount under the 
agreement shall be treated and count-
ed as costs incurred by the plan en-
rollee. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01707
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1708 
‘‘(3) DISCOUNT
AMOUNT.—The amount 
of the discount specified in this para-
graph for a discount period for a plan is 
equal to 50 percent of the amount of the 
drug-component negotiated price (as de-
fined in paragraph (5)(C)) for qualifying 
drugs for the period involved. 
‘‘(4) ADDITIONAL TERMS.—In the case of 
a discount provided under this sub-
section with respect to a prescription 
drug plan offered by a PDP sponsor or an 
MA–PD plan offered by an MA organiza-
tion, if a qualified enrollee purchases the 
qualified drug— 
‘‘(A) insofar as the enrollee is in 
an actual gap of coverage (as defined 
in paragraph (5)(D)), the sponsor or 
plan shall provide the discount to the 
enrollee at the time the enrollee pays 
for the drug; and 
‘‘(B) insofar as the enrollee is in 
the portion of the original gap in cov-
erage (as defined in paragraph (5)(E)) 
that is not in the actual gap in cov-
erage, the discount shall not be ap-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01708
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1709 
plied against the negotiated price (as 
defined in subsection (d)(1)(B)) for 
the purpose of calculating the bene-
ficiary payment. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) QUALIFYING DRUG.—The term 
‘qualifying drug’ means, with respect 
to a prescription drug plan or MA–PD 
plan, a drug or biological product 
that— 
‘‘(i)(I) is a drug produced or 
distributed under an original new 
drug application approved by the 
Food and Drug Administration, 
including a drug product mar-
keted by any cross-licensed pro-
ducers or distributors operating 
under the new drug application; 
‘‘(II) is a drug that was origi-
nally marketed under an original 
new drug application approved 
by the Food and Drug Adminis-
tration; or 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01709
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1710 
‘‘(III) is a biological product 
as approved under Section 351(a) 
of the Public Health Services Act; 
‘‘(ii) is covered under the for-
mulary of the plan; and 
‘‘(iii) is dispensed to an indi-
vidual who is in the original gap 
in coverage. 
‘‘(B) QUALIFYING
ENROLLEE.—The 
term ‘qualifying enrollee’ means an 
individual enrolled in a prescription 
drug plan or MA–PD plan other than 
such an individual who is a subsidy- 
eligible individual (as defined in sec-
tion 1860D–14(a)(3)). 
‘‘(C) DRUG-COMPONENT NEGOTIATED 
PRICE.—The term ‘drug-component ne-
gotiated price’ means, with respect to 
a qualifying drug, the negotiated 
price 
(as 
defined 
in 
subsection 
(d)(1)(B)), as determined without re-
gard to any dispensing fee, of the 
drug under the prescription drug 
plan or MA–PD plan involved. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01710
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1711 
‘‘(D) ACTUAL
GAP
IN
COVERAGE.— 
The term ‘actual gap in coverage’ 
means the gap in prescription drug 
coverage that occurs between the ini-
tial coverage limit (as modified under 
subparagraph (B) of subsection (b)(7)) 
and the annual out-of-pocket thresh-
old (as modified under subparagraph 
(C) of such subsection). 
‘‘(E) ORIGINAL GAP IN COVERAGE.— 
The term ‘original in gap coverage’ 
means the gap in prescription drug 
coverage that would occur between 
the initial coverage limit (described 
in subsection (b)(3)) and the out-of- 
pocket threshold (as defined in sub-
section (b)(4))(B) if subsection (b)(7) 
did not apply.’’. 
SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS-
SION OF CLAIMS BY PHARMACIES LOCATED 
IN OR CONTRACTING WITH LONG-TERM CARE 
FACILITIES. 
(a) PART D SUBMISSION.—Section 1860D– 
12(b) of the Social Security Act (42 U.S.C. 
1395w–112(b)), 
as 
amended 
by 
section 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01711
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1712 
172(a)(1) of Public Law 110–275, is amended 
by striking paragraph (5) and redesignating 
paragraph (6) and paragraph (7), as added by 
section 1181(b)(2), as paragraph (5) and para-
graph (6), respectively. 
(b) SUBMISSION TO MA–PD PLANS.—Section 
1857(f)(3) of the Social Security Act (42 U.S.C. 
1395w-27(f)(3)), as added by section 171(b) of 
Public Law 110–275 and amended by section 
172(a)(2) of such Public Law and section 1181 
of this Act, is amended by striking subpara-
graph (B) and redesignating subparagraphs 
(C) and (D) as subparagraphs (B) and (C) re-
spectively. 
(c) EFFECTIVE
DATE.—The amendments 
made by this section shall apply for contract 
years beginning with 2010. 
SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS-
SISTANCE PROGRAMS AND INDIAN HEALTH 
SERVICE 
IN 
PROVIDING 
PRESCRIPTION 
DRUGS TOWARD THE ANNUAL OUT-OF-POCK-
ET THRESHOLD UNDER PART D. 
(a) IN GENERAL.—Section 1860D–2(b)(4)(C) 
of the Social Security Act (42 U.S.C. 1395w– 
102(b)(4)(C)) is amended— 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01712
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1713 
(1) in clause (i), by striking ‘‘and’’ at 
the end; 
(2) in clause (ii)— 
(A) by striking ‘‘such costs shall 
be treated as incurred only if’’ and in-
serting ‘‘subject to clause (iii), such 
costs shall be treated as incurred 
only if’’; 
(B) by striking ‘‘, under section 
1860D–14, or under a State Pharma-
ceutical Assistance Program’’; and 
(C) by striking the period at the 
end and inserting ‘‘; and’’; and 
(3) by inserting after clause (ii) the 
following new clause: 
‘‘(iii) such costs shall be treat-
ed as incurred and shall not be 
considered 
to 
be 
reimbursed 
under clause (ii) if such costs are 
borne or paid— 
‘‘(I) under section 1860D– 
14; 
‘‘(II) under a State Phar-
maceutical 
Assistance 
Pro-
gram; 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01713
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1714 
‘‘(III) by the Indian Health 
Service, an Indian tribe or 
tribal 
organization, 
or 
an 
urban Indian organization (as 
defined in section 4 of the In-
dian Health Care Improve-
ment Act); or 
‘‘(IV) under an AIDS Drug 
Assistance 
Program 
under 
part B of title XXVI of the 
Public Health Service Act.’’. 
(b) EFFECTIVE
DATE.—The amendments 
made by subsection (a) shall apply to costs in-
curred on or after January 1, 2011. 
SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLL-
MENT FOR FORMULARY CHANGES THAT AD-
VERSELY IMPACT AN ENROLLEE. 
(a) IN GENERAL.—Section 1860D–1(b)(3) of 
the Social Security Act (42 U.S.C. 1395w– 
101(b)(3)) is amended by adding at the end the 
following new subparagraph: 
‘‘(F) CHANGE
IN
FORMULARY
RE-
SULTING
IN
INCREASE
IN
COST-SHAR-
ING.— 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01714
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1715 
‘‘(i) IN
GENERAL.—Except as 
provided in clause (ii), in the case 
of an individual enrolled in a pre-
scription drug plan (or MA–PD 
plan) who has been prescribed 
and is using a covered part D 
drug while so enrolled, if the for-
mulary of the plan is materially 
changed (other than at the end of 
a contract year) so to reduce the 
coverage (or increase the cost- 
sharing) of the drug under the 
plan. 
‘‘(ii) 
EXCEPTION.—Clause 
(i) 
shall not apply in the case that a 
drug is removed from the for-
mulary of a plan because of a re-
call or withdrawal of the drug 
issued by the Food and Drug Ad-
ministration, because the drug is 
replaced with a generic drug that 
is a therapeutic equivalent, or be-
cause of utilization management 
applied to— 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01715
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1716 
‘‘(I) a drug whose labeling 
includes a boxed warning re-
quired by the Food and Drug 
Administration under section 
210.57(c)(1) of title 21, Code of 
Federal Regulations (or a suc-
cessor regulation); or 
‘‘(II) 
a 
drug 
required 
under subsection (c)(2) of sec-
tion 
505–1 
of 
the 
Federal 
Food, Drug, and Cosmetic Act 
to have a Risk Evaluation and 
Management Strategy that in-
cludes elements under sub-
section (f) of such section.’’. 
(b) EFFECTIVE
DATE.—The amendment 
made by subsection (a) shall apply to contract 
years beginning on or after January 1, 2011. 
Subtitle F—Medicare Rural Access 
Protections 
SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. 
. 
(a) ADDITIONAL TELEHEALTH SITE.— 
(1) IN GENERAL.—Paragraph (4)(C)(ii) 
of section 1834(m) of the Social Security 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01716
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1718 
ices regarding telehealth services as es-
tablished under section 1834(m), includ-
ing the appropriate addition or deletion 
of services (and HCPCS codes) to those 
specified in paragraphs (4)(F)(i) and 
(4)(F)(ii) of such section and for author-
ized payment under paragraph (1) of 
such section. 
‘‘(2) MEMBERSHIP; TERMS.— 
‘‘(A) MEMBERSHIP.— 
‘‘(i) IN
GENERAL.—The Advi-
sory Committee shall be com-
posed of 9 members, to be ap-
pointed 
by 
the 
Secretary, 
of 
whom— 
‘‘(I) 5 shall be practicing 
physicians; 
‘‘(II) 2 shall be practicing 
non-physician 
health 
care 
practitioners; and 
‘‘(III) 2 shall be adminis-
trators 
of 
telehealth 
pro-
grams. 
‘‘(ii) REQUIREMENTS
FOR
AP-
POINTING MEMBERS.—In appointing 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01718
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1719 
members of the Advisory Com-
mittee, the Secretary shall— 
‘‘(I) ensure that each mem-
ber has prior experience with 
the practice of telemedicine 
or telehealth; 
‘‘(II) give preference to in-
dividuals who are currently 
providing 
telemedicine 
or 
telehealth services or who are 
involved in telemedicine or 
telehealth programs; 
‘‘(III) 
ensure 
that 
the 
membership of the Advisory 
Committee represents a bal-
ance of specialties and geo-
graphic regions; and 
‘‘(IV) take into account the 
recommendations 
of 
stake-
holders. 
‘‘(B) TERMS.—The members of the 
Advisory Committee shall serve for 
such term as the Secretary may speci-
fy. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01719
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1720 
‘‘(C) CONFLICTS
OF
INTEREST.—An 
advisory committee member may not 
participate with respect to a par-
ticular matter considered in an advi-
sory committee meeting if such mem-
ber (or an immediate family member 
of such member) has a financial inter-
est that could be affected by the ad-
vice given to the Secretary with re-
spect to such matter. 
‘‘(3) MEETINGS.—The Advisory Com-
mittee shall meet twice each calendar 
year and at such other times as the Sec-
retary may provide. 
‘‘(4) PERMANENT
COMMITTEE.—Section 
14 of the Federal Advisory Committee Act 
(5 U.S.C. App.) shall not apply to the Ad-
visory Committee.’’ 
(2) 
FOLLOWING
RECOMMENDATIONS.— 
Section 1834(m)(4)(F) of such Act (42 
U.S.C. 1395m(m)(4)(F)) is amended by 
adding at the end the following new 
clause: 
‘‘(iii) 
RECOMMENDATIONS
OF 
THE
TELEHEALTH
ADVISORY
COM-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01720
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1721 
MITTEE.—In 
making 
determina-
tions under clauses (i) and (ii), 
the Secretary shall take into ac-
count the recommendations of the 
Telehealth Advisory Committee 
(established 
under 
section 
1868(c)) when adding or deleting 
services (and HCPCS codes) and 
in establishing policies of the 
Centers for Medicare & Medicaid 
Services regarding the delivery of 
telehealth services. If the Sec-
retary does not implement such a 
recommendation, the Secretary 
shall publish in the Federal Reg-
ister a statement regarding the 
reason such recommendation was 
not implemented.’’ 
(3) WAIVER OF ADMINISTRATIVE LIMITA-
TION.—The 
Secretary 
of 
Health 
and 
Human Services shall establish the Tele-
health Advisory Committee under the 
amendment made by paragraph (1) not-
withstanding any limitation that may 
apply to the number of advisory commit-
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01721
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1722 
tees that may be established (within the 
Department of Health and Human Serv-
ices or otherwise). 
(c) CREDENTIALING TELEMEDICINE PRACTI-
TIONERS.—Section 1834(m) of such Act (42 
U.S.C. 1395m(m)) is amended by adding at the 
end the following new paragraph: 
‘‘(5) HOSPITAL CREDENTIALING OF TELE-
MEDICINE PRACTITIONERS.—A telemedicine 
practitioner that is credentialed by a hos-
pital in compliance with the Joint Com-
mission Standards for Telemedicine shall 
be considered in compliance with condi-
tions of participation and reimbursement 
credentialing requirements under this 
title for telemedicine services.’’. 
SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS 
PROVISION. 
Section 1833(t)(7)(D)(i) of the Social Secu-
rity Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amend-
ed— 
(1) in subclause (II)— 
(A) in the first sentence, by strik-
ing ‘‘‘2010’’ and inserting ‘‘2012’’; and 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01722
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1723 
(B) in the second sentence, by 
striking ‘‘or 2009’’ and inserting ‘‘, 
2009, 2010, or 2011’’; and 
(2) in subclause (III), by striking 
‘‘January 1, 2010’’ and inserting ‘‘January 
1, 2012’’. 
SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLAS-
SIFICATIONS. 
Subsection (a) of section 106 of division B 
of the Tax Relief and Health Care Act of 2006 
(42 U.S.C. 1395 note), as amended by section 
117 of the Medicare, Medicaid, and SCHIP Ex-
tension Act of 2007 (Public Law 110–173) and 
section 124 of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public 
Law 110–275), is amended by striking ‘‘Sep-
tember 30, 2009’’ and inserting ‘‘September 30, 
2011’’. 
SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK. 
Section 1848(e)(1)(E) of the Social Secu-
rity Act (42 U.S.C. 1395w–4(e)(1)(E)) is amend-
ed by striking ‘‘before January 1, 2010’’ and in-
serting ‘‘before January 1, 2012’’. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01723
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1724 
SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COM-
PONENT OF CERTAIN PHYSICIAN PATHOL-
OGY SERVICES. 
Section 542(c) of the Medicare, Medicaid, 
and SCHIP Benefits Improvement and Protec-
tion Act of 2000 (as enacted into law by sec-
tion 1(a)(6) of Public Law 106–554), as amend-
ed by section 732 of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 
2003 (42 U.S.C. 1395w–4 note), section 104 of 
division B of the Tax Relief and Health Care 
Act of 2006 (42 U.S.C. 1395w–4 note), section 
104 of the Medicare, Medicaid, and SCHIP Ex-
tension Act of 2007 (Public Law 110–173), and 
section 136 of the Medicare Improvements for 
Patients and Providers Act of 1008 (Public 
Law 110–275), is amended by striking ‘‘and 
2009’’ and inserting ‘‘2009, 2010, and 2011’’. 
SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS. 
(a) IN GENERAL.—Section 1834(l)(13) of the 
Social Security Act (42 U.S.C. 1395m(l)(13)) is 
amended— 
(1) in subparagraph (A)— 
(A) in the matter preceding clause 
(i), by striking ‘‘before January 1, 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01724
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1725 
2010’’ and inserting ‘‘before January 
1, 2012’’; and 
(B) in each of clauses (i) and (ii), 
by striking ‘‘before January 1, 2010’’ 
and inserting ‘‘before January 1, 
2012’’. 
(b) AIR AMBULANCE IMPROVEMENTS.—Sec-
tion 146(b)(1) of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public 
Law 110–275) is amended by striking ‘‘ending 
on December 31, 2009’’ and inserting ‘‘ending 
on December 31, 2011’’. 
TITLE II—MEDICARE 
BENEFICIARY IMPROVEMENTS 
Subtitle A—Improving and Simpli-
fying Financial Assistance for 
Low 
Income 
Medicare 
Bene-
ficiaries 
SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAV-
INGS PROGRAM AND LOW-INCOME SUBSIDY 
PROGRAM. 
(a) APPLICATION
OF HIGHEST LEVEL PER-
MITTED UNDER LIS TO ALL SUBSIDY ELIGIBLE IN-
DIVIDUALS.— 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01725
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1726 
(1) 
IN
GENERAL.—Section 
1860D– 
14(a)(1) of the Social Security Act (42 
U.S.C. 1395w–114(a)(1)) is amended in the 
matter before subparagraph (A), by in-
serting ‘‘(or, beginning with 2012, para-
graph (3)(E))’’ after ‘‘paragraph (3)(D)’’. 
(2) ANNUAL INCREASE IN LIS RESOURCE 
TEST.—Section 
1860D–14(a)(3)(E)(i) 
of 
such Act (42 U.S.C. 1395w–114(a)(3)(E)(i)) 
is amended— 
(A) by striking ‘‘and’’ at the end of 
subclause (I); 
(B) in subclause (II), by inserting 
‘‘(before 
2012)’’ 
after 
‘‘subsequent 
year’’; 
(C) by striking the period at the 
end of subclause (II) and inserting a 
semicolon; 
(D) by inserting after subclause 
(II) the following new subclauses: 
‘‘(III) for 2012, $17,000 (or 
$34,000 in the case of the com-
bined value of the individual’s 
assets or resources and the 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01726
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1727 
assets or resources of the in-
dividual’s spouse); and 
‘‘(IV) 
for 
a 
subsequent 
year, the dollar amounts spec-
ified in this subclause (or sub-
clause (III)) for the previous 
year increased by the annual 
percentage increase in the 
consumer 
price 
index 
(all 
items; U.S. city average) as of 
September of such previous 
year.’’; and 
(E) in the last sentence, by insert-
ing ‘‘or (IV)’’ after ‘‘subclause (II)’’. 
(3) APPLICATION
OF
LIS
TEST
UNDER 
MEDICARE
SAVINGS
PROGRAM.—Section 
1905(p)(1)(C) 
of 
such 
Act 
(42 
U.S.C. 
1396d(p)(1)(C)) is amended— 
(A) by striking ‘‘effective begin-
ning with January 1, 2010’’ and in-
serting ‘‘effective for the period be-
ginning with January 1, 2010, and 
ending with December 31, 2011’’; and 
(B) by inserting before the period 
at the end the following: ‘‘or, effective 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01727
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1728 
beginning 
with 
January 
1, 
2012, 
whose resources (as so determined) 
do not exceed the maximum resource 
level applied for the year under sub-
paragraph 
(E) 
of 
section 
1860D– 
14(a)(3) (determined without regard 
to the life insurance policy exclusion 
provided under subparagraph (G) of 
such section) applicable to an indi-
vidual or to the individual and the in-
dividual’s spouse (as the case may 
be)’’. 
(b) EFFECTIVE
DATE.—The amendments 
made by subsection (a) shall apply to eligi-
bility determinations for income-related sub-
sidies and medicare cost-sharing furnished 
for periods beginning on or after January 1, 
2012. 
SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR 
CERTAIN 
NON-INSTITUTIONALIZED 
FULL- 
BENEFIT DUAL ELIGIBLE INDIVIDUALS. 
(a) 
IN
GENERAL.—Section 
1860D– 
14(a)(1)(D)(i) of the Social Security Act (42 
U.S.C. 1395w–114(a)(1)(D)(i)) is amended— 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01728
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1729 
(1) by striking ‘‘INSTITUTIONALIZED IN-
DIVIDUALS.—In’’ 
and 
inserting 
‘‘ELIMI-
NATION
OF
COST-SHARING
FOR
CERTAIN 
FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 
‘‘(I) INSTITUTIONALIZED
IN-
DIVIDUALS.—In’’; and 
(2) by adding at the end the following 
new subclause: 
‘‘(II) CERTAIN
OTHER
INDI-
VIDUALS.—In the case of an in-
dividual who is a full-benefit 
dual eligible individual and 
with respect to whom there 
has been a determination that 
but for the provision of home 
and community based care 
(whether under section 1915, 
1932, or under a waiver under 
section 1115) the individual 
would require the level of 
care provided in a hospital or 
a nursing facility or inter-
mediate care facility for the 
mentally retarded the cost of 
which could be reimbursed 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01729
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1730 
under the State plan under 
title XIX, the elimination of 
any beneficiary coinsurance 
described in section 1860D– 
2(b)(2) 
(for 
all 
amounts 
through the total amount of 
expenditures at which bene-
fits are available under sec-
tion 1860D–2(b)(4)).’’. 
(b) EFFECTIVE
DATE.—The amendments 
made by subsection (a) shall apply to drugs 
dispensed on or after January 1, 2011. 
SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT. 
(a) ADMINISTRATIVE VERIFICATION
OF IN-
COME AND RESOURCES UNDER THE LOW-INCOME 
SUBSIDY PROGRAM.— 
(1) IN GENERAL.—Clause (iii) of section 
1860D–14(a)(3)(E) of the Social Security 
Act 
(42 
U.S.C. 
1395w–114(a)(3)(E)) 
is 
amended to read as follows: 
‘‘(iii) CERTIFICATION OF INCOME 
AND RESOURCES.—For purposes of 
applying this section— 
‘‘(I) an individual shall be 
permitted to apply on the 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01730
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1731 
basis of self-certification of in-
come and resources; and 
‘‘(II) matters attested to in 
the application shall be sub-
ject to appropriate methods of 
verification without the need 
of the individual to provide 
additional documentation, ex-
cept in extraordinary situa-
tions as determined by the 
Commissioner.’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall apply begin-
ning January 1, 2010. 
(b) DISCLOSURES TO FACILITATE IDENTIFICA-
TION OF INDIVIDUALS LIKELY TO BE INELIGIBLE 
FOR THE LOW-INCOME ASSISTANCE UNDER THE 
MEDICARE PRESCRIPTION DRUG PROGRAM TO AS-
SIST SOCIAL SECURITY ADMINISTRATION’S OUT-
REACH
TO ELIGIBLE INDIVIDUALS.—For provi-
sion authorizing disclosure of return informa-
tion to facilitate identification of individuals 
likely to be ineligible for low-income sub-
sidies under Medicare prescription drug pro-
gram, see section 1801. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01731
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS
1744 
(B) The feasibility of adopting a 
payment methodology for on-site in-
terpreters, 
including 
interpreters 
who work as independent contractors 
and interpreters who work for agen-
cies that provide on-site interpreta-
tion, pursuant to which such inter-
preters could directly bill Medicare 
for services provided in support of 
physician office services for an LEP 
Medicare patient. 
(C) The feasibility of Medicare 
contracting directly with agencies 
that provide off-site interpretation in-
cluding telephonic and video inter-
pretation pursuant to which such 
contractors could directly bill Medi-
care for the services provided in sup-
port of physician office services for 
an LEP Medicare patient. 
(D) The feasibility of modifying 
the existing Medicare resource-based 
relative value scale (RBRVS) by using 
adjustments (such as multipliers or 
add-ons) when a patient is LEP. 
VerDate Nov 24 2008 
03:16 Oct 15, 2009
Jkt 089200
PO 00000
Frm 01744
Fmt 6652
Sfmt 6202
E:\BILLS\H3200.RH
H3200
bajohnson on DSK2BSOYB1PROD with BILLS