I
106TH CONGRESS
2D SESSION
H. R. 5151
To amend the Social Security Act to establish an outpatient prescription
drug assistance program for low-income Medicare beneficiaries and Medi-
care beneficiaries with high drug costs.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 12, 2000
Mr. BILIRAKIS (for himself and Mr. PETERSON of Minnesota) introduced the
following bill; which was referred to the Committee on Commerce, and
in addition to the Committee on Ways and Means, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of
such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Social Security Act to establish an outpatient
prescription drug assistance program for low-income
Medicare beneficiaries and Medicare beneficiaries with
high drug costs.
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 Beneficiary
Prescription Drug Assistance and Stop-Loss Protection
Act of 2000’’.
SEC. 2. OUTPATIENT PRESCRIPTION DRUG ASSISTANCE
PROGRAM.
(a) ESTABLISHMENT.—The Social Security Act (42
U.S.C. 301 et seq.) is amended by adding at the end the
following new title:
‘‘TITLE XXII—OUTPATIENT PRESCRIPTION
DRUG ASSISTANCE PROGRAM
‘‘SEC. 2201. PURPOSE; OUTPATIENT PRESCRIPTION DRUG
ASSISTANCE PLANS.
‘‘(a) PURPOSE.—The purpose of this title is to pro-
vide funds to States to enable States, individually or in
a group, to establish a program, separate from the med-
icaid program under title XIX, to provide assistance to
low-income medicare beneficiaries (as defined in section
2202(b)) and, at State option, medicare beneficiaries with
high drug costs (as defined in section 2202(c)) to obtain
coverage for outpatient prescription drugs.
‘‘(b) OUTPATIENT PRESCRIPTION DRUG ASSISTANCE
PLAN REQUIRED.—A State may not receive payments
under section 2205 unless the State, individually or as
part of a group of States, submits in writing to the Sec-
retary an outpatient prescription drug assistance plan
under section 2206(a)(1) that—
‘‘(1) describes how the State or group of States
intends to use the funds provided under this title to
provide outpatient prescription drug assistance to
low-income medicare beneficiaries and, if applicable,
medicare beneficiaries with high drug costs con-
sistent with the provisions of this title;
‘‘(2) includes a description of the budget for the
plan (updated periodically as necessary) and details
on the planned use of funds, the sources of the non-
Federal share of plan expenditures, and any require-
ments for cost-sharing by beneficiaries;
‘‘(3) describes the procedures to be used to en-
sure that the outpatient prescription drug assistance
provided to low-income medicare beneficiaries and, if
applicable, medicare beneficiaries with high drug
costs under the plan does not supplant privately fi-
nanced coverage for outpatient prescription drugs
available to such beneficiaries under group health
plans; and
‘‘(4) has been approved by the Secretary under
section 2206(a)(2).
‘‘(c) ENTITLEMENT.—Subject to subsection (d)(2),
this title constitutes budget authority in advance of appro-
priations Acts and represents the obligation of the Federal
Government to provide for the payment to States, groups
of 
States, 
and 
contractors 
described 
in 
section
2209(a)(2)(A), of amounts provided under section 2204.
‘‘(d) PERIOD OF APPLICABILITY.—
‘‘(1) IN GENERAL.—No State, group of States,
or contractor described in section 2209(a)(2)(A),
may receive payments under section 2205 for out-
patient prescription drug assistance provided for pe-
riods beginning before October 1, 2000, or after
September 30, 2004.
‘‘(2) MEDICARE REFORM.—If medicare reform
legislation that includes coverage for outpatient pre-
scription drugs is enacted during the period that be-
gins on October 1, 2000, and ends on September 30,
2004, this title shall be repealed upon the effective
date of such legislation, and no State, group of
States, 
or 
contractor 
described 
in 
section
2209(a)(2)(A) shall be entitled to receive payments
for any outpatient prescription drug assistance pro-
vided on or after such date.
‘‘SEC. 2202. BENEFICIARY ELIGIBILITY.
‘‘(a) ELIGIBILITY.—
‘‘(1) IN GENERAL.—In order for a State (indi-
vidually or as part of a group of States) to receive
payments under section 2205 with respect to an out-
patient prescription drug assistance program, the
program must provide, subject to the availability of
funds, outpatient prescription drug assistance to
each individual who—
‘‘(A) resides in the State;
‘‘(B) applies for such assistance; and
‘‘(C) establishes that the individual is—
‘‘(i) a low-income medicare beneficiary
(as defined in subsection (b)); or
‘‘(ii) at the option of the State, a
medicare beneficiary with high drug costs
(as defined in subsection (c)).
‘‘(2) RESIDENCY
RULES.—In applying para-
graph (1), residency rules similar to the residency
rules applicable to the State plan under title XIX
shall apply.
‘‘(b) LOW-INCOME MEDICARE BENEFICIARY DE-
FINED.—
‘‘(1) IN GENERAL.—In this title, except as pro-
vided in section 2209(a)(2)(B), the term ‘low-income
medicare beneficiary’ means an individual who—
‘‘(A) is entitled to benefits under part A of
title XVIII or enrolled under part B of such
title, including an individual enrolled in a
Medicare+Choice plan under part C of such
title;
‘‘(B) subject to subsection (d), is not enti-
tled to medical assistance with respect to pre-
scribed drugs under title XIX or under a waiver
under section 1115 of the requirements of such
title;
‘‘(C) is determined to have family income
that does not exceed a percentage of the pov-
erty line for a family of the size involved speci-
fied by the State that, subject to paragraph (2),
may not exceed 175 percent; and
‘‘(D) at the option of the State, is deter-
mined to have resources that do not exceed a
level specified by the State.
‘‘(2) STATE-ONLY
DRUG
ASSISTANCE
PRO-
GRAMS.—
‘‘(A) IN GENERAL.—In the case of a State
that has a State-based drug assistance program
described in section 2203(e) that provides out-
patient prescription drug coverage for individ-
uals described in paragraph (1)(A) who have
family income up to or exceeding 175 percent
of the poverty line, the State may specify a per-
centage of the poverty line under paragraph
(1)(C) that exceeds the income eligibility level
specified by the State for such program but
does not exceed 50 percentage points above
such income eligibility level.
‘‘(B) ELIGIBILITY OF PROGRAM PARTICI-
PANTS.—Individuals participating in such a
State-based drug assistance program (with in-
come below 175 percent of the poverty line or,
if higher, the level specified under subpara-
graph (A)) are eligible to be treated as low-in-
come medicare beneficiaries under this title, re-
gardless of their participation in such a pro-
gram. Funds provided under this title may be
used to supplant funds otherwise expended by
the State under such a program.
‘‘(c) MEDICARE BENEFICIARY WITH HIGH DRUG
COSTS DEFINED.—
‘‘(1) IN GENERAL.—In this title, except as pro-
vided in section 2209(a)(2)(C), the term ‘medicare
beneficiary with high drug costs’ means an
individual—
‘‘(A) who satisfies the requirements of sub-
paragraphs (A) and (B) of subsection (b)(1);
‘‘(B) whose family income exceeds the per-
centage of the poverty line specified by the
State in accordance with subsection (b)(1)(C);
‘‘(C) at the option of the State, whose re-
sources exceed a level (if any) specified by the
State in accordance with subsection (b)(1)(D);
and
‘‘(D) who has out-of-pocket expenses for
outpatient prescription drugs and biologicals
(including insulin and insulin supplies) for
which outpatient prescription drug assistance is
available under this title that exceed such
amount as the State specifies in accordance
with paragraph (2).
‘‘(2) DETERMINATION OF OUT-OF-POCKET EX-
PENSES.—A State that elects to provide outpatient
prescription drug assistance to an individual de-
scribed in paragraph (1) shall provide the Secretary
with the methodology and standards used to deter-
mine the individual’s eligibility under subparagraph
(D) of such paragraph.
‘‘(d) ACCESS FOR MEDICAID EXPANSION STATES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this title, with respect to any State that,
as of the date of enactment of this title, has made
outpatient prescription drug coverage for individuals
described in paragraph (2) available through the
State medicaid program under title XIX under a
section 1115 waiver, the Secretary, in consultation
with such State, shall establish procedures under
which the State shall be able to receive payments
from the allotment made available under section
2204 for such State for a fiscal year for purposes
of offsetting the costs of making such coverage avail-
able to such individuals.
‘‘(2) INDIVIDUALS DESCRIBED.—Individuals de-
scribed in this paragraph are individuals who are—
‘‘(A) entitled to benefits under part A of
title XVIII or enrolled under part B of such
title, including an individual enrolled in a
Medicare+Choice plan under part C of such
title; and
‘‘(B) eligible for outpatient prescription
drug coverage only, under a State medicaid pro-
gram under title XIX as a result of a section
1115 waiver.
‘‘(e) INDIVIDUAL NONENTITLEMENT.—Nothing in
this title shall be construed as providing an individual with
an entitlement to outpatient prescription drug assistance
provided under this title.
‘‘SEC. 2203. COVERAGE REQUIREMENTS.
‘‘(a) REQUIRED SCOPE OF COVERAGE.—
‘‘(1) IN GENERAL.—The outpatient prescription
drug assistance provided under the plan may consist
of any of the following:
‘‘(A) BENCHMARK COVERAGE.—Outpatient
prescription drug coverage that is equivalent to
the outpatient prescription drug coverage in a
benchmark benefit package described in sub-
section (b).
‘‘(B) 
AGGREGATE
ACTUARIAL
VALUE
EQUIVALENT TO BENCHMARK PACKAGE.—Out-
patient prescription drug coverage that has an
aggregate actuarial value that is at least equiv-
alent to one of the benchmark benefit packages.
‘‘(C) EXISTING
COMPREHENSIVE
STATE-
BASED
COVERAGE.—Outpatient 
prescription
drug coverage under an existing State-based
program, described in subsection (e).
‘‘(D) SECRETARY-APPROVED COVERAGE.—
Any other outpatient prescription drug coverage
that the Secretary determines, upon application
by a State or group of States, provides appro-
priate outpatient prescription drug coverage for
the population of medicare beneficiaries pro-
posed to be provided such coverage.
‘‘(2) CONSISTENT DESIGN.—A State or group
of States may only select one of the options de-
scribed in paragraph (1) (and, if the State or group
chooses to provide outpatient prescription drug cov-
erage that is equivalent to the outpatient prescrip-
tion drug coverage in a benchmark benefit package,
only one of the benchmark benefit package options
described in subsection (b)) in order to provide out-
patient prescription drug assistance in a uniform
manner for the population of medicare beneficiaries
provided such coverage.
‘‘(3) MEDICATION THERAPY MANAGEMENT.—
‘‘(A) IN
GENERAL.—The outpatient pre-
scription drug assistance provided by the plan
shall provide medication therapy management
benefits.
‘‘(B) MEDICATION THERAPY MANAGEMENT
DEFINED.—For purposes of this title, the term
‘medication therapy management’—
‘‘(i) means a program designed—
‘‘(I) to assure that medications
are used appropriately by patients;
‘‘(II) to enhance patients’ under-
standing of the appropriate use of
medications;
‘‘(III) to increase patients’ adher-
ence with prescription medication
regimens;
‘‘(IV) to reduce the risk of poten-
tial adverse events associated with
medications; and
‘‘(V) to reduce the need for other
costly medical services through better
management of medication therapy;
and
‘‘(ii) includes services provided or co-
ordinated by pharmacy providers (in co-
operation with physicians when necessary),
involving case management, disease man-
agement, drug therapy management, pa-
tient training and education, counseling,
medication refill reminders, drug therapy
problem resolution, medication administra-
tion, the provision of special packaging, or
other services that enhance the use of pre-
scription medications.
‘‘(C) PROGRAM OPERATION.—A medication
therapy management program should—
‘‘(i) identify and provide medication
therapy management services to those at
risk for potential medication problems,
such as those taking multiple medications,
or those with complex or chronic medical
conditions;
‘‘(ii) be developed and structured in
cooperation 
with 
organizations 
rep-
resenting pharmacy providers, including
identifying those medication therapy man-
agement services that will be provided, as
well as payment mechanisms for these
services;
‘‘(iii) structure and update payments
to pharmacy providers to reflect the re-
sources and time involved in the provision
of these services; and
‘‘(iv) provide for ongoing evaluation
and documentation of these services in im-
proving quality of care and reducing health
care costs.
‘‘(b) BENCHMARK BENEFIT PACKAGES.—The bench-
mark benefit packages are as follows:
‘‘(1) MEDICAID
OUTPATIENT
PRESCRIPTION
DRUG COVERAGE.—In the case of—
‘‘(A) a State, the outpatient prescription
drug coverage provided under the State med-
icaid plan under title XIX; or
‘‘(B) a group of States, the outpatient pre-
scription drug coverage provided under the
State medicaid plan under such title of one of
the States in the group, as identified in the out-
patient prescription drug assistance plan.
‘‘(2) FEHBP-EQUIVALENT
OUTPATIENT
PRE-
SCRIPTION DRUG COVERAGE.—The outpatient pre-
scription drug coverage provided under the Standard
Option Blue Cross and Blue Shield Service Benefit
Plan described in and offered under section 8903(1)
of title 5, United States Code.
‘‘(3) STATE EMPLOYEE OUTPATIENT PRESCRIP-
TION DRUG COVERAGE.—In the case of—
‘‘(A) a State, the outpatient prescription
drug coverage provided under a health benefits
coverage plan that is offered and generally
available to State employees in the State in-
volved; or
‘‘(B) a group of States, the outpatient pre-
scription drug coverage provided under a health
benefits coverage plan that is offered and gen-
erally available to State employees in one of the
States in the group, as identified in the out-
patient prescription drug assistance plan.
‘‘(4) OUTPATIENT
PRESCRIPTION
DRUG
COV-
ERAGE OFFERED THROUGH LARGEST HMO.—In the
case of—
‘‘(A) a State, the outpatient prescription
drug coverage provided under a health insur-
ance coverage plan that is offered by a health
maintenance organization (as defined in section
2791(b)(3) of the Public Health Service Act)
and has the largest insured commercial, non-
medicaid enrollment of covered lives of such
coverage plans offered by such a health mainte-
nance organization in the State involved; or
‘‘(B) a group of States, the outpatient pre-
scription drug coverage provided under a health
insurance coverage plan that is offered by a
health maintenance organization (as defined in
section 2791(b)(3) of the Public Health Service
Act) and has the largest insured commercial,
nonmedicaid enrollment of covered lives of such
coverage plans offered by such a health mainte-
nance organization in one of the States in-
volved.
‘‘(c) DETERMINATION
OF ACTUARIAL VALUE
OF
COVERAGE.—
‘‘(1) IN GENERAL.—The actuarial value of out-
patient prescription drug coverage offered under
benchmark benefit packages and the outpatient pre-
scription drug assistance plan shall be set forth in
an opinion in a report that has been prepared—
‘‘(A) by an individual who is a member of
the American Academy of Actuaries;
‘‘(B) using generally accepted actuarial
principles and methodologies;
‘‘(C) using a standardized set of utilization
and price factors;
‘‘(D) using a standardized population that
is representative of the population to be covered
under the outpatient prescription drug assist-
ance plan;
‘‘(E) applying the same principles and fac-
tors in comparing the value of different cov-
erage;
‘‘(F) without taking into account any dif-
ferences in coverage based on the method of de-
livery or means of cost control or utilization
used; and
‘‘(G) taking into account the ability of a
State or group of States to reduce benefits by
taking into account the increase in actuarial
value of benefits coverage offered under the
outpatient prescription drug assistance plan
that results from the limitations on cost-sharing
under such coverage.
‘‘(2) REQUIREMENT.—The actuary preparing
the opinion shall select and specify in the report the
standardized set and population to be used under
subparagraphs (C) and (D) of paragraph (1).
‘‘(d) PROHIBITED COVERAGE.—Nothing in this sec-
tion shall be construed as requiring any outpatient pre-
scription drug coverage offered under the plan to provide
coverage for an outpatient prescription drug for which
payment is prohibited under this title, notwithstanding
that any benchmark benefit package includes coverage for
such an outpatient prescription drug.
‘‘(e) DESCRIPTION OF EXISTING COMPREHENSIVE
STATE-BASED COVERAGE.—
‘‘(1) IN
GENERAL.—A program described in
this paragraph is an outpatient prescription drug
coverage program for individuals who are entitled to
benefits under part A of title XVIII or enrolled
under part B of such title, including an individual
enrolled in a Medicare+Choice plan under part C of
such title, that—
‘‘(A) is administered or overseen by the
State and receives funds from the State;
‘‘(B) was offered as of the date of the en-
actment of this title;
‘‘(C) does not receive or use any Federal
funds;
‘‘(D) is certified by the Secretary as pro-
viding outpatient prescription drug coverage
that satisfies the scope of coverage required
under subparagraph (A), (B), or (D) of sub-
section (a)(1); and
‘‘(E) provides medication therapy manage-
ment programs described in subsection (a)(3).
‘‘(2) MODIFICATIONS.—A State may modify a
program described in paragraph (1) from time to
time so long as it does not reduce the actuarial value
(evaluated as of the time of the modification) of the
outpatient prescription drug coverage under the pro-
gram below the lower of—
‘‘(A) the actuarial value of the coverage
under the program as of the date of enactment
of this title; or
‘‘(B) the actuarial value described in sub-
section (a)(1)(B).
‘‘(f) BENEFICIARY
PREMIUMS
AND
COST-SHAR-
ING.—
‘‘(1) DESCRIPTION; GENERAL CONDITIONS.—
‘‘(A) DESCRIPTION.—
‘‘(i) IN GENERAL.—An outpatient pre-
scription drug assistance plan shall include
a description, consistent with this sub-
section, of the amount of any premiums or
cost-sharing imposed under the plan.
‘‘(ii) 
PUBLIC
SCHEDULE
OF
CHARGES.—Any premium or cost-sharing
described under clause (i) shall be imposed
under the plan pursuant to a public sched-
ule.
‘‘(B) PROTECTION FOR BENEFICIARIES.—
The outpatient prescription drug assistance
plan may only vary premiums and cost-sharing
based on the family income of low-income medi-
care beneficiaries and, if applicable, medicare
beneficiaries with high drug costs, in a manner
that does not favor such beneficiaries with high-
er income over beneficiaries with low-income.
‘‘(2) LIMITATIONS
ON
PREMIUMS
AND
COST-
SHARING.—
‘‘(A) NO PREMIUMS OR COST-SHARING FOR
BENEFICIARIES WITH INCOME BELOW 100 PER-
CENT OF POVERTY LINE.—In the case of a low-
income medicare beneficiary whose family in-
come does not exceed 100 percent of the pov-
erty line, the outpatient prescription drug as-
sistance plan may not impose any premium or
cost-sharing.
‘‘(B) OTHER BENEFICIARIES.—For low-in-
come medicare beneficiaries not described in
subparagraph (A) and, if applicable, medicare
beneficiaries with high drug costs, any pre-
miums or cost-sharing imposed under the out-
patient prescription drug assistance plan may
be imposed, subject to paragraph (1)(B), on a
sliding scale related to income, except that the
total annual aggregate of such premiums and
cost-sharing with respect to all such bene-
ficiaries in a family under this title may not ex-
ceed 5 percent of such family’s income for the
year involved.
‘‘(g) RESTRICTION
ON
APPLICATION
OF
PRE-
EXISTING CONDITION EXCLUSIONS.—The outpatient pre-
scription drug assistance plan shall not permit the imposi-
tion of any preexisting condition exclusion for covered ben-
efits under the plan and may not discriminate in the pric-
ing of premiums under such plan because of health status,
claims experience, receipt of health care, or medical condi-
tion.
‘‘SEC. 2204. ALLOTMENTS.
‘‘(a) APPROPRIATION.—
‘‘(1) IN GENERAL.—For the purpose of pro-
viding allotments under this section to States, there
is appropriated, out of any money in the Treasury
not otherwise appropriated—
‘‘(A) for fiscal year 2001, $2,600,000,000;
‘‘(B) for fiscal year 2002, $6,100,000,000;
‘‘(C) 
for 
fiscal 
year 
2003,
$12,200,000,000; and
‘‘(D) 
for 
fiscal 
year 
2004,
$16,000,000,000.
‘‘(2) 
AVAILABILITY.—Amounts 
appropriated
under paragraph (1) shall only be available for pro-
viding the allotments described in such paragraph
during the fiscal year for which such amounts are
appropriated. Any amounts that have not been obli-
gated by the Secretary for the purposes of making
payments from such allotments under section 2205,
or under contracts entered into under section
2209(b)(2)(B), on or before September 30 of fiscal
year 2001, 2002, 2003, or 2004 (as applicable),
shall be returned to the Treasury.
‘‘(b) ALLOTMENTS TO 50 STATES AND DISTRICT OF
COLUMBIA.—
‘‘(1) IN GENERAL.—Subject to paragraph (3),
of the amount available for allotment under sub-
section (a) for a fiscal year, reduced by the amount
of allotments made under subsection (c) for the fis-
cal year, the Secretary shall allot to each State
(other than a State described in such subsection)
with an outpatient prescription drug assistance plan
approved under this title the same proportion as the
ratio of—
‘‘(A) the number of medicare beneficiaries
with family income that does not exceed 175
percent of the poverty line residing in the State
for the fiscal year; to
‘‘(B) the total number of such beneficiaries
residing in all such States.
‘‘(2) DETERMINATION OF NUMBER OF MEDI-
CARE BENEFICIARIES WITH INCOME THAT DOES NOT
EXCEED 175 PERCENT OF POVERTY.—For purposes
of paragraph (1), a determination of the number of
medicare beneficiaries with family income that does
not exceed 175 percent of the poverty line residing
in a State for the calendar year in which such fiscal
year begins shall be made on the basis of the arith-
metic average of the number of such medicare bene-
ficiaries, as reported and defined in the 5 most re-
cent March supplements to the Current Population
Survey of the Bureau of the Census before the be-
ginning of the fiscal year.
‘‘(3) MINIMUM ALLOTMENT.—In no case shall
the amount of the allotment under this subsection
for one of the 50 States or the District of Columbia
for a fiscal year be less than an amount equal to 0.5
percent of the amount provided for allotments under
subsection (a) for that fiscal year (reduced by the
amount of allotments made under subsection (c) for
the fiscal year). To the extent that the application
of the previous sentence results in an increase in the
allotment to a State or the District of Columbia
above the amount otherwise provided, the allotments
for the other States and the District of Columbia
under this subsection shall be reduced in a pro rata
manner (but not below the minimum allotment de-
scribed in such preceding sentence) so that the total
of such allotments in a fiscal year does not exceed
the amount otherwise provided for allotment under
subsection (a) for that fiscal year (as so reduced).