H. R. 6331—77 
‘‘(A) IN GENERAL.—For plan year 2011 and subsequent 
plan years, in the case of a Medicare Advantage private 
fee-for-service plan not described in paragraph (1) or (2) 
of section 1857(i) operating in a network area (as defined 
in subparagraph (B)), the plan shall meet the access stand-
ards under paragraph (4) in that area only through 
entering into written contracts as provided for under 
subparagraph (B) of such paragraph and not, in whole 
or in part, through the establishment of payment rates 
meeting the requirements under subparagraph (A) of such 
paragraph. 
‘‘(B) 
NETWORK
AREA
DEFINED.—For 
purposes 
of 
subparagraph (A), the term ‘network area’ means, for a 
plan year, an area which the Secretary identifies (in the 
Secretary’s announcement of the proposed payment rates 
for the previous plan year under section 1853(b)(1)(B)) as 
having at least 2 network-based plans (as defined in 
subparagraph (C)) with enrollment under this part as of 
the first day of the year in which such announcement 
is made. 
‘‘(C) NETWORK-BASED PLAN DEFINED.— 
‘‘(i) IN GENERAL.—For purposes of subparagraph 
(B), the term ‘network-based plan’ means— 
‘‘(I) except as provided in clause (ii), a Medi-
care Advantage plan that is a coordinated care 
plan described in section 1851(a)(2)(A)(i); 
‘‘(II) a network-based MSA plan; and 
‘‘(III) a reasonable cost reimbursement plan 
under section 1876. 
‘‘(ii) 
EXCLUSION
OF
NON-NETWORK
REGIONAL 
PPOS.—The term ‘network-based plan’ shall not include 
an MA regional plan that, with respect to the area, 
meets access adequacy standards under this part 
substantially 
through 
the 
authority 
of 
section 
422.112(a)(1)(ii) of title 42, Code of Federal Regula-
tions, rather than through written contracts.’’. 
(2) EMPLOYER PLANS.—Section 1852(d) of the Social Secu-
rity Act (42 U.S.C. 1395w–22(d)), as amended by paragraph 
(1), is amended— 
(A) in paragraph (4), in the second sentence, by striking 
‘‘paragraph (5)’’ and inserting ‘‘paragraphs (5) and (6)’’; 
and 
(B) by adding at the end the following new paragraph: 
‘‘(6) REQUIREMENT OF ALL EMPLOYER MEDICARE ADVANTAGE 
PRIVATE FEE-FOR-SERVICE PLANS TO USE CONTRACTS WITH PRO-
VIDERS.—For plan year 2011 and subsequent plan years, in 
the case of a Medicare Advantage private fee-for-service plan 
that is described in paragraph (1) or (2) of section 1857(i), 
the plan shall meet the access standards under paragraph 
(4) only through entering into written contracts as provided 
for under subparagraph (B) of such paragraph and not, in 
whole or in part, through the establishment of payment rates 
meeting the requirements under subparagraph (A) of such para-
graph.’’. 
(3) ACCESS REQUIREMENTS.— 
(A) IN GENERAL.—Section 1852(d)(4)(B) of the Social 
Security Act (42 U.S.C. 1395w–22(d)(4)(B)) is amended by
H. R. 6331—78 
striking ‘‘a sufficient number’’ through ‘‘terms of the plan’’ 
and inserting ‘‘a sufficient number and range of providers 
within such category to meet the access standards in sub-
paragraphs (A) through (E) of paragraph (1)’’. 
(B) EFFECTIVE
DATE.—The amendment made by 
subparagraph (A) shall apply to plan year 2010 and subse-
quent plan years. 
(b) CLARIFICATION REGARDING UTILIZATION.—Section 1859(b)(2) 
of the Social Security Act (42 U.S.C. 1395w–28(b)(2)) is amended 
by adding at the end the following flush sentence: 
‘‘Nothing in subparagraph (B) shall be construed to preclude 
a plan from varying rates for such a provider based on the 
specialty of the provider, the location of the provider, or other 
factors related to such provider that are not related to utiliza-
tion, or to preclude a plan from increasing rates for such 
a provider based on increased utilization of specified preventive 
or screening services.’’. 
SEC. 163. REVISIONS TO QUALITY IMPROVEMENT PROGRAMS. 
(a) REQUIREMENT FOR MA PRIVATE FEE-FOR-SERVICE AND MSA 
PLANS
TO
HAVE
A
QUALITY
IMPROVEMENT
PROGRAM.—Section 
1852(e)(1) of the Social Security Act (42 U.S.C. 1395w–22(e)(1)) 
is amended by striking ‘‘(other than an MA private fee-for-service 
plan or an MSA plan)’’. 
(b) DATA COLLECTION REQUIREMENTS FOR MA REGIONAL PLANS, 
MA PRIVATE FEE-FOR-SERVICE PLANS, AND MSA PLANS.—Section 
1852(e)(3)(A) of the Social Security Act (42 U.S.C. 1395w– 
22(e)(3)(A)) is amended— 
(1) in clause (i), by adding at the end the following new 
sentence: ‘‘With respect to MA private fee-for-service plans and 
MSA plans, the requirements under the preceding sentence 
may not exceed the requirements under this subparagraph 
with respect to MA local plans that are preferred provider 
organization plans, except that, for plan year 2010, the limita-
tion under clause (iii) shall not apply and such requirements 
shall apply only with respect to administrative claims data.’’ 
(2) by striking clause (ii); and 
(3) in clause (iii)— 
(A) in the heading— 
(i) by inserting ‘‘LOCAL’’ after ‘‘TO’’; and 
(ii) by inserting ‘‘AND MA REGIONAL PLANS’’ after 
‘‘ORGANIZATIONS’’; and 
(B) by inserting ‘‘and to MA regional plans’’ after 
‘‘organization plans’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning on or after January 1, 2010. 
SEC. 164. REVISIONS RELATING TO SPECIALIZED MEDICARE ADVAN-
TAGE PLANS FOR SPECIAL NEEDS INDIVIDUALS. 
(a) EXTENSION OF AUTHORITY TO RESTRICT ENROLLMENT.—Sec-
tion 1859(f) of the Social Security Act (42 U.S.C. 1395w–28(f)), 
as amended by section 108(a) of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110–173) is amended by striking 
‘‘2010’’ and inserting ‘‘2011’’. 
(b) MORATORIUM ON AUTHORITY TO DESIGNATE OTHER PLANS 
AS
SPECIALIZED
MA PLANS.—During the period beginning on 
January 1, 2010, and ending on December 31, 2010, the Secretary 
of Health and Human Services may not exercise the authority
H. R. 6331—79 
provided under section 231(d) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (42 U.S.C. 1395w– 
21 note) to designate other plans as specialized MA plans for 
special needs individuals. 
(c) REQUIREMENTS FOR ENROLLMENT.— 
(1) IN GENERAL.—Section 1859 of the Social Security Act 
(42 U.S.C. 1395w–28) is amended— 
(A) in subsection (b)(6)(A), by inserting ‘‘and that, as 
of January 1, 2010, meets the applicable requirements 
of paragraph (2), (3), or (4) of subsection (f), as the case 
may be’’ before the period at the end; and 
(B) in subsection (f)— 
(i) by amending the heading to read as follows: 
‘‘REQUIREMENTS REGARDING ENROLLMENT IN SPECIAL-
IZED MA PLANS FOR SPECIAL NEEDS INDIVIDUALS’’; 
(ii) by designating the sentence beginning ‘‘In the 
case of’’ as paragraph (1) with the heading ‘‘REQUIRE-
MENTS
FOR
ENROLLMENT.—’’ and with appropriate 
indentation; and 
(iii) by adding at the end the following new para-
graphs: 
‘‘(2) ADDITIONAL REQUIREMENTS FOR INSTITUTIONAL SNPS.— 
In the case of a specialized MA plan for special needs individ-
uals described in subsection (b)(6)(B)(i), the applicable require-
ments described in this paragraph are as follows: 
‘‘(A) Each individual that enrolls in the plan on or 
after January 1, 2010, is a special needs individuals 
described in subsection (b)(6)(B)(i). In the case of an indi-
vidual who is living in the community but requires an 
institutional level of care, such individual shall not be 
considered a special needs individual described in sub-
section (b)(6)(B)(i) unless the determination that the indi-
vidual requires an institutional level of care was made— 
‘‘(i) using a State assessment tool of the State 
in which the individual resides; and 
‘‘(ii) by an entity other than the organization 
offering the plan. 
‘‘(B) The plan meets the requirements described in 
paragraph (5). 
‘‘(3) ADDITIONAL REQUIREMENTS FOR DUAL SNPS.—In the 
case of a specialized MA plan for special needs individuals 
described in subsection (b)(6)(B)(ii), the applicable requirements 
described in this paragraph are as follows: 
‘‘(A) Each individual that enrolls in the plan on or 
after January 1, 2010, is a special needs individuals 
described in subsection (b)(6)(B)(ii). 
‘‘(B) The plan meets the requirements described in 
paragraph (5). 
‘‘(C) The plan provides each prospective enrollee, prior 
to enrollment, with a comprehensive written statement 
(using standardized content and format established by the 
Secretary) that describes— 
‘‘(i) the benefits and cost-sharing protections that 
the individual is entitled to under the State Medicaid 
program under title XIX; and 
‘‘(ii) which of such benefits and cost-sharing protec-
tions are covered under the plan.
H. R. 6331—80 
Such statement shall be included with any description of 
benefits offered by the plan. 
‘‘(D) The plan has a contract with the State Medicaid 
agency to provide benefits, or arrange for benefits to be 
provided, for which such individual is entitled to receive 
as medical assistance under title XIX. Such benefits may 
include long-term care services consistent with State policy. 
‘‘(4) ADDITIONAL REQUIREMENTS FOR SEVERE OR DISABLING 
CHRONIC CONDITION SNPS.—In the case of a specialized MA 
plan for special needs individuals described in subsection 
(b)(6)(B)(iii), the applicable requirements described in this para-
graph are as follows: 
‘‘(A) Each individual that enrolls in the plan on or 
after January 1, 2010, is a special needs individual 
described in subsection (b)(6)(B)(iii). 
‘‘(B) The plan meets the requirements described in 
paragraph (5).’’. 
(2) AUTHORITY TO OPERATE BUT NO SERVICE AREA EXPAN-
SION FOR DUAL SNPS THAT DO NOT MEET CERTAIN REQUIRE-
MENTS.—Notwithstanding subsection (f) of section 1859 of the 
Social Security Act (42 U.S.C. 1395w–28), during the period 
beginning on January 1, 2010, and ending on December 31, 
2010, in the case of a specialized Medicare Advantage plan 
for special needs individuals described in subsection (b)(6)(B)(ii) 
of such section, as amended by this section, that does not 
meet the requirement described in subsection (f)(3)(D) of such 
section, the Secretary of Health and Human Services— 
(A) shall permit such plan to be offered under part 
C of title XVIII of such Act; and 
(B) shall not permit an expansion of the service area 
of the plan under such part C. 
(3) RESOURCES FOR STATE MEDICAID AGENCIES.—The Sec-
retary of Health and Human Services shall provide for the 
designation of appropriate staff and resources that can address 
State inquiries with respect to the coordination of State and 
Federal policies for specialized MA plans for special needs 
individuals described in section 1859(b)(6)(B)(ii) of the Social 
Security Act (42 U.S.C. 1395w–28(b)(6)(B)(ii)), as amended by 
this section. 
(4) NO REQUIREMENT FOR CONTRACT.—Nothing in the provi-
sions of, or amendments made by, this subsection shall require 
a State to enter into a contract with a Medicare Advantage 
organization with respect to a specialized MA plan for special 
needs individuals described in section 1859(b)(6)(B)(ii) of the 
Social Security Act (42 U.S.C. 1395w–28(b)(6)(B)(ii)), as 
amended by this section. 
(d) CARE MANAGEMENT REQUIREMENTS FOR ALL SNPS.— 
(1) REQUIREMENTS.—Section 1859(f) of the Social Security 
Act (42 U.S.C. 1395w–28(f)), as amended by subsection (c)(1), 
is amended by adding at the end the following new paragraph: 
‘‘(5) CARE MANAGEMENT REQUIREMENTS FOR ALL SNPS.— 
The requirements described in this paragraph are that the 
organization offering a specialized MA plan for special needs 
individuals described in subsection (b)(6)(B)(i)— 
‘‘(A) have in place an evidenced-based model of care 
with appropriate networks of providers and specialists; and
H. R. 6331—81 
‘‘(B) with respect to each individual enrolled in the 
plan— 
‘‘(i) conduct an initial assessment and an annual 
reassessment of the individual’s physical, psychosocial, 
and functional needs; 
‘‘(ii) develop a plan, in consultation with the indi-
vidual as feasible, that identifies goals and objectives, 
including measurable outcomes as well as specific serv-
ices and benefits to be provided; and 
‘‘(iii) use an interdisciplinary team in the manage-
ment of care.’’. 
(2) REVIEW TO ENSURE COMPLIANCE WITH CARE MANAGE-
MENT REQUIREMENTS.—Section 1857(d) of the Social Security 
Act (42 U.S.C. 1395w–27(d)) is amended by adding at the 
end the following new paragraph: 
‘‘(6) REVIEW TO ENSURE COMPLIANCE WITH CARE MANAGE-
MENT REQUIREMENTS FOR SPECIALIZED MEDICARE ADVANTAGE 
PLANS FOR SPECIAL NEEDS INDIVIDUALS.—In conjunction with 
the periodic audit of a specialized Medicare Advantage plan 
for special needs individuals under paragraph (1), the Secretary 
shall conduct a review to ensure that such organization offering 
the plan meets the requirements described in section 
1859(f)(5).’’. 
(e) CLARIFICATION OF THE DEFINITION OF A SEVERE OR DIS-
ABLING CHRONIC CONDITIONS SPECIALIZED NEEDS INDIVIDUAL.— 
(1) IN
GENERAL.—Section 1859(b)(6)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w–28(b)(6)(B)(iii)) is amended by 
inserting ‘‘who have one or more comorbid and medically com-
plex chronic conditions that are substantially disabling or life 
threatening, have a high risk of hospitalization or other signifi-
cant adverse health outcomes, and require specialized delivery 
systems across domains of care’’ before the period at the end. 
(2) PANEL.—The Secretary of Health and Human Services 
shall convene a panel of clinical advisors to determine the 
conditions that meet the definition of severe and disabling 
chronic conditions under section 1859(b)(6)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w–28(b)(6)(B)(iii)), as amended by 
paragraph (1). The panel shall include the Director of the 
Agency for Healthcare Research and Quality (or the Director’s 
designee). 
(f) SPECIAL REQUIREMENTS REGARDING QUALITY REPORTING FOR 
SPECIALIZED MA PLANS FOR SPECIAL NEEDS INDIVIDUALS.— 
(1) IN GENERAL.—Section 1852(e)(3)(A) of the Social Secu-
rity Act (42 U.S.C. 1395w–22(e)(3)(A)), as amended by section 
163, is amended by inserting after clause (i) the following 
new clause: 
‘‘(ii) SPECIAL REQUIREMENTS FOR SPECIALIZED MA 
PLANS FOR SPECIAL NEEDS INDIVIDUALS.—In addition 
to the data required to be collected, analyzed, and 
reported under clause (i) and notwithstanding the 
limitations under subparagraph (B), as part of the 
quality improvement program under paragraph (1), 
each MA organization offering a specialized Medicare 
Advantage plan for special needs individuals shall pro-
vide for the collection, analysis, and reporting of data 
that permits the measurement of health outcomes and
H. R. 6331—82 
other indices of quality with respect to the require-
ments described in paragraphs (2) through (5) of sub-
section (f). Such data may be based on claims data 
and shall be at the plan level.’’. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1) shall take effect on a date specified by the Secretary of 
Health and Human Services (but in no case later than January 
1, 2010), and shall apply to all specialized Medicare Advantage 
plans for special needs individuals regardless of when the plan 
first entered the Medicare Advantage program under part C 
of title XVIII of the Social Security Act. 
(g) EFFECTIVE DATE AND APPLICATION.—The amendments made 
by subsections (c)(1), (d), and (e)(1) shall apply to plan years begin-
ning on or after January 1, 2010, and shall apply to all specialized 
Medicare Advantage plans for special needs individuals regardless 
of when the plan first entered the Medicare Advantage program 
under part C of title XVIII of the Social Security Act. 
(h) NO AFFECT ON MEDICAID BENEFITS FOR DUALS.—Nothing 
in the provisions of, or amendments made by, this section shall 
affect the benefits available under the Medicaid program under 
title XIX of the Social Security Act for special needs individuals 
described in section 1859(b)(6)(B)(ii) of such Act (42 U.S.C. 1395w– 
28(b)(6)(B)(ii)). 
SEC. 165. LIMITATION ON OUT-OF-POCKET COSTS FOR DUAL ELIGI-
BLES 
AND 
QUALIFIED 
MEDICARE 
BENEFICIARIES 
ENROLLED IN A SPECIALIZED MEDICARE ADVANTAGE 
PLAN FOR SPECIAL NEEDS INDIVIDUALS. 
(a) IN GENERAL.—Section 1852(a) of the Social Security Act 
(42 U.S.C. 1395w–22(a)) is amended by adding at the end the 
following new paragraph: 
‘‘(7) LIMITATION ON COST-SHARING FOR DUAL ELIGIBLES AND 
QUALIFIED MEDICARE BENEFICIARIES.—In the case of an indi-
vidual who is a full-benefit dual eligible individual (as defined 
in section 1935(c)(6)) or a qualified medicare beneficiary (as 
defined in section 1905(p)(1)) and who is enrolled in a special-
ized Medicare Advantage plan for special needs individuals 
described in section 1859(b)(6)(B)(ii), the plan may not impose 
cost-sharing that exceeds the amount of cost-sharing that would 
be permitted with respect to the individual under title XIX 
if the individual were not enrolled in such plan.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to plan years beginning on or after January 1, 2010. 
SEC. 166. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZA-
TION FUND. 
Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395w–27a(e)(2)(A)(i)), as amended by section 110 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110– 
173), is amended— 
(1) by striking ‘‘2013’’ and inserting ‘‘2014’’; and 
(2) by striking ‘‘$1,790,000,000’’ and inserting ‘‘$1’’. 
SEC. 167. ACCESS TO MEDICARE REASONABLE COST CONTRACT PLANS. 
(a) EXTENSION
OF REASONABLE COST CONTRACTS.—Section 
1876(h)(5)(C)(ii) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395mm(h)(5)(C)(ii)), as amended by section 109 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110–
H. R. 6331—83 
173), is amended by striking ‘‘January 1, 2009’’ and inserting 
‘‘January 1, 2010’’ in the matter preceding subclause (I). 
(b) REQUIREMENT FOR AT LEAST TWO MEDICARE ADVANTAGE 
ORGANIZATIONS TO BE OFFERING A PLAN IN AN AREA FOR THE 
PROHIBITION TO BE APPLICABLE.—Subclauses (I) and (II) of section 
1876(h)(5)(C)(ii) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395mm(h)(5)(C)(ii)) are each amended by inserting ‘‘, provided 
that all such plans are not offered by the same Medicare Advantage 
organization’’ after ‘‘clause (iii)’’. 
(c) REVISION OF REQUIREMENTS FOR A PLAN THAT ARE USED 
TO DETERMINE IF PROHIBITION IS APPLICABLE.— 
(1) IN GENERAL.—Section 1876(h)(5)(C)(iii)(I) of the Social 
Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by 
inserting ‘‘that are not in another Metropolitan Statistical Area 
with a population of more than 250,000’’ after ‘‘such Metropoli-
tan Statistical Area’’. 
(2) CLARIFICATION.—Section 1876(h)(5)(C)(iii)(I) of the 
Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is 
amended by adding at the end the following new sentence: 
‘‘If the service area includes a portion in more than 1 Metropoli-
tan Statistical Area with a population of more than 250,000, 
the minimum enrollment determination under the preceding 
sentence shall be made with respect to each such Metropolitan 
Statistical Area (and such applicable contiguous counties to 
such Metropolitan Statistical Area).’’. 
(d) GAO STUDY AND REPORT.— 
(1) STUDY.—The Comptroller General of the United States 
shall conduct a study of the reasons (if any) why reasonable 
cost contracts under section 1876(h) of the Social Security Act 
(42 U.S.C. 1395mm(h)) are unable to become Medicare Advan-
tage plans under part C of title XVIII of such Act. 
(2) REPORT.—Not later than December 31, 2009, the Comp-
troller General of the United States shall submit to Congress 
a report containing the results of the study conducted under 
paragraph (1), together with recommendations for such legisla-
tion and administrative action as the Comptroller General 
determines appropriate. 
SEC. 168. MEDPAC STUDY AND REPORT ON QUALITY MEASURES. 
(a) STUDY.—The Medicare Payment Advisory Commission shall 
conduct a study on how comparable measures of performance and 
patient experience can be collected and reported by 2011 for the 
Medicare Advantage program under part C of title XVIII of the 
Social Security Act and the original Medicare fee-for-service pro-
gram under parts A and B of such title. Such study shall address 
technical issues, such as data requirements, in addition to issues 
relating to appropriate quality benchmarks that— 
(1) compare the quality of care Medicare beneficiaries 
receive across Medicare Advantage plans; and 
(2) compare the quality of care Medicare beneficiaries 
receive under Medicare Advantage plans and under the original 
Medicare fee-for-service program. 
(b) REPORT.—Not later than March 31, 2010, the Medicare 
Payment Advisory Commission shall submit to Congress a report 
containing the results of the study conducted under subsection 
(a), together with recommendations for such legislation and
H. R. 6331—84 
administrative action as the Medicare Payment Advisory Commis-
sion determines appropriate. 
SEC. 169. MEDPAC STUDY AND REPORT ON MEDICARE ADVANTAGE 
PAYMENTS. 
(a) STUDY.—The Medicare Payment Advisory Commission (in 
this section referred to as the ‘‘Commission’’) shall conduct a study 
of the following: 
(1) The correlation between— 
(A) the costs that Medicare Advantage organizations 
with respect to Medicare Advantage plans incur in pro-
viding coverage under the plan for items and services cov-
ered under the original Medicare fee-for-service program 
under parts A and B of title XVIII of the Social Security 
Act, as reflected in plan bids; and 
(B) county-level spending under such original Medicare 
fee-for-service program on a per capita basis, as calculated 
by the Chief Actuary of the Centers for Medicare & Med-
icaid Services. 
The study with respect to the issue described in the preceding 
sentence shall include differences in correlation statistics by 
plan type and geographic area. 
(2) Based on these results of the study with respect to 
the issue described in paragraph (1), and other data the 
Commission determines appropriate— 
(A) alternate approaches to payment with respect to 
a Medicare beneficiary enrolled in a Medicare Advantage 
plan other than through county-level payment area equiva-
lents. 
(B) the accuracy and completeness of county-level esti-
mates of per capita spending under such original Medicare 
fee-for-service program (including counties in Puerto Rico), 
as used to determine the annual Medicare Advantage capi-
tation rate under section 1853 of the Social Security Act 
(42 U.S.C. 1395w–23), and whether such estimates 
include— 
(i) expenditures with respect to Medicare bene-
ficiaries at facilities of the Department of Veterans 
Affairs; and 
(ii) 
all 
appropriate 
administrative 
expenses, 
including claims processing. 
(3) Ways to improve the accuracy and completeness of 
county-level estimates of per capita spending described in para-
graph (2)(B). 
(b) REPORT.—Not later than March 31, 2010, the Commission 
shall submit to Congress a report containing the results of the 
study conducted under subsection (a), together with recommenda-
tions for such legislation and administrative action as the Commis-
sion determines appropriate.
H. R. 6331—85 
Subtitle E—Provisions Relating to Part D 
PART I—IMPROVING PHARMACY ACCESS 
SEC. 171. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS AND 
MA–PD PLANS UNDER PART D. 
(a) PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS.—Section 
1860D–12(b) of the Social Security Act (42 U.S.C. 1395w–112(b)) 
is amended by adding at the end the following new paragraph: 
‘‘(4) PROMPT PAYMENT OF CLEAN CLAIMS.— 
‘‘(A) PROMPT PAYMENT.— 
‘‘(i) IN GENERAL.—Each contract entered into with 
a PDP sponsor under this part with respect to a 
prescription drug plan offered by such sponsor shall 
provide that payment shall be issued, mailed, or other-
wise transmitted with respect to all clean claims sub-
mitted by pharmacies (other than pharmacies that dis-
pense drugs by mail order only or are located in, or 
contract with, a long-term care facility) under this 
part within the applicable number of calendar days 
after the date on which the claim is received. 
‘‘(ii) CLEAN
CLAIM
DEFINED.—In this paragraph, 
the term ‘clean claim’ means a claim that has no defect 
or impropriety (including any lack of any required 
substantiating 
documentation) 
or 
particular 
cir-
cumstance requiring special treatment that prevents 
timely payment from being made on the claim under 
this part. 
‘‘(iii) DATE OF RECEIPT OF CLAIM.—In this para-
graph, a claim is considered to have been received— 
‘‘(I) with respect to claims submitted electroni-
cally, on the date on which the claim is transferred; 
and 
‘‘(II) with respect to claims submitted other-
wise, on the 5th day after the postmark date of 
the claim or the date specified in the time stamp 
of the transmission. 
‘‘(B) 
APPLICABLE
NUMBER
OF
CALENDAR
DAYS 
DEFINED.—In this paragraph, the term ‘applicable number 
of calendar days’ means— 
‘‘(i) with respect to claims submitted electronically, 
14 days; and 
‘‘(ii) with respect to claims submitted otherwise, 
30 days. 
‘‘(C) INTEREST PAYMENT.— 
‘‘(i) IN GENERAL.—Subject to clause (ii), if payment 
is not issued, mailed, or otherwise transmitted within 
the applicable number of calendar days (as defined 
in subparagraph (B)) after a clean claim is received, 
the PDP sponsor shall pay interest to the pharmacy 
that submitted the claim at a rate equal to the 
weighted average of interest on 3-month marketable 
Treasury securities determined for such period, 
increased by 0.1 percentage point for the period begin-
ning on the day after the required payment date and 
ending on the date on which payment is made (as
H. R. 6331—86 
determined under subparagraph (D)(iv)). Interest 
amounts paid under this subparagraph shall not be 
counted against the administrative costs of a prescrip-
tion drug plan or treated as allowable risk corridor 
costs under section 1860D–15(e). 
‘‘(ii) AUTHORITY NOT TO CHARGE INTEREST.—The 
Secretary may provide that a PDP sponsor is not 
charged interest under clause (i) in the case where 
there are exigent circumstances, including natural 
disasters and other unique and unexpected events, that 
prevent the timely processing of claims. 
‘‘(D) PROCEDURES INVOLVING CLAIMS.— 
‘‘(i) CLAIM
DEEMED
TO
BE
CLEAN.—A claim is 
deemed to be a clean claim if the PDP sponsor involved 
does not provide notice to the claimant of any deficiency 
in the claim— 
‘‘(I) with respect to claims submitted electroni-
cally, within 10 days after the date on which the 
claim is received; and 
‘‘(II) with respect to claims submitted other-
wise, within 15 days after the date on which the 
claim is received. 
‘‘(ii) CLAIM
DETERMINED
TO
NOT
BE
A
CLEAN 
CLAIM.— 
‘‘(I) IN GENERAL.—If a PDP sponsor determines 
that a submitted claim is not a clean claim, the 
PDP sponsor shall, not later than the end of the 
period described in clause (i), notify the claimant 
of such determination. Such notification shall 
specify all defects or improprieties in the claim 
and shall list all additional information or docu-
ments necessary for the proper processing and pay-
ment of the claim. 
‘‘(II) DETERMINATION
AFTER
SUBMISSION
OF 
ADDITIONAL INFORMATION.—A claim is deemed to 
be a clean claim under this paragraph if the PDP 
sponsor involved does not provide notice to the 
claimant of any defect or impropriety in the claim 
within 10 days of the date on which additional 
information is received under subclause (I). 
‘‘(iii) OBLIGATION TO PAY.—A claim submitted to 
a PDP sponsor that is not paid or contested by the 
sponsor within the applicable number of days (as 
defined in subparagraph (B)) after the date on which 
the claim is received shall be deemed to be a clean 
claim and shall be paid by the PDP sponsor in accord-
ance with subparagraph (A). 
‘‘(iv) DATE
OF
PAYMENT
OF
CLAIM.—Payment of 
a clean claim under such subparagraph is considered 
to have been made on the date on which— 
‘‘(I) with respect to claims paid electronically, 
the payment is transferred; and 
‘‘(II) with respect to claims paid otherwise, 
the payment is submitted to the United States 
Postal Service or common carrier for delivery.
H. R. 6331—87 
‘‘(E) ELECTRONIC TRANSFER OF FUNDS.—A PDP sponsor 
shall pay all clean claims submitted electronically by elec-
tronic transfer of funds if the pharmacy so requests or 
has so requested previously. In the case where such pay-
ment is made electronically, remittance may be made by 
the PDP sponsor electronically as well. 
‘‘(F) PROTECTING THE RIGHTS OF CLAIMANTS.— 
‘‘(i) IN GENERAL.—Nothing in this paragraph shall 
be construed to prohibit or limit a claim or action 
not covered by the subject matter of this section that 
any individual or organization has against a provider 
or a PDP sponsor. 
‘‘(ii) 
ANTI-RETALIATION.—Consistent 
with 
applicable Federal or State law, a PDP sponsor shall 
not retaliate against an individual or provider for exer-
cising a right of action under this subparagraph. 
‘‘(G) RULE OF CONSTRUCTION.—A determination under 
this paragraph that a claim submitted by a pharmacy 
is a clean claim shall not be construed as a positive deter-
mination regarding eligibility for payment under this title, 
nor is it an indication of government approval of, or 
acquiescence regarding, the claim submitted. The deter-
mination shall not relieve any party of civil or criminal 
liability with respect to the claim, nor does it offer a defense 
to any administrative, civil, or criminal action with respect 
to the claim.’’. 
(b) PROMPT PAYMENT BY MA–PD PLANS.—Section 1857(f) of 
the Social Security Act (42 U.S.C. 1395w–27) is amended by adding 
at the end the following new paragraph: 
‘‘(3) INCORPORATION OF CERTAIN PRESCRIPTION DRUG PLAN 
CONTRACT REQUIREMENTS.—The following provisions shall apply 
to contracts with a Medicare Advantage organization offering 
an MA–PD plan in the same manner as they apply to contracts 
with a PDP sponsor offering a prescription drug plan under 
part D: 
‘‘(A) PROMPT PAYMENT.—Section 1860D–12(b)(4).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning on or after January 1, 2010. 
SEC. 172. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR 
CONTRACTING WITH LONG-TERM CARE FACILITIES. 
(a) SUBMISSION
OF CLAIMS
BY PHARMACIES LOCATED
IN
OR 
CONTRACTING WITH LONG-TERM CARE FACILITIES.— 
(1) SUBMISSION OF CLAIMS TO PRESCRIPTION DRUG PLANS.— 
Section 1860D–12(b) of the Social Security Act (42 U.S.C. 
1395w–112(b)), as amended by section 171(a), is amended by 
adding at the end the following new paragraph: 
‘‘(5) SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN 
OR CONTRACTING WITH LONG-TERM CARE FACILITIES.—Each con-
tract entered into with a PDP sponsor under this part with 
respect to a prescription drug plan offered by such sponsor 
shall provide that a pharmacy located in, or having a contract 
with, a long-term care facility shall have not less than 30 
days (but not more than 90 days) to submit claims to the 
sponsor for reimbursement under the plan.’’. 
(2) SUBMISSION
OF
CLAIMS
TO
MA–PD
PLANS.—Section 
1857(f)(3) of the Social Security Act, as added by section 171(b),
H. R. 6331—88 
is amended by adding at the end the following new subpara-
graph: 
‘‘(B) SUBMISSION OF CLAIMS BY PHARMACIES LOCATED 
IN OR CONTRACTING WITH LONG-TERM CARE FACILITIES.— 
Section 1860D–12(b)(5).’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning on or after January 1, 2010. 
SEC. 173. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING 
STANDARD. 
(a) REQUIREMENT
FOR PRESCRIPTION DRUG PLANS.—Section 
1860D–12(b) of the Social Security Act (42 U.S.C. 1395w–112(b)), 
as amended by section 172(a)(1), is amended by adding at the 
end the following new paragraph: 
‘‘(6) REGULAR
UPDATE
OF
PRESCRIPTION
DRUG
PRICING 
STANDARD.—If the PDP sponsor of a prescription drug plan 
uses a standard for reimbursement of pharmacies based on 
the cost of a drug, each contract entered into with such sponsor 
under this part with respect to the plan shall provide that 
the sponsor shall update such standard not less frequently 
than once every 7 days, beginning with an initial update on 
January 1 of each year, to accurately reflect the market price 
of acquiring the drug.’’. 
(b) REQUIREMENT FOR MA–PD PLANS.—Section 1857(f)(3) of 
the Social Security Act, as amended by section 172(a)(2), is amended 
by adding at the end the following new subparagraph: 
‘‘(C) REGULAR UPDATE OF PRESCRIPTION DRUG PRICING 
STANDARD.—Section 1860D–12(b)(6).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning on or after January 1, 2009. 
PART II—OTHER PROVISIONS 
SEC. 175. INCLUSION OF BARBITURATES AND BENZODIAZEPINES AS 
COVERED PART D DRUGS. 
(a) IN GENERAL.—Section 1860D–2(e)(2)(A) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(e)(2)(A)) is amended by inserting 
after ‘‘agents),’’ the following ‘‘other than subparagraph (I) of such 
section (relating to barbiturates) if the barbiturate is used in the 
treatment of epilepsy, cancer, or a chronic mental health disorder, 
and other than subparagraph (J) of such section (relating to 
benzodiazepines),’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to prescriptions dispensed on or after January 1, 
2013. 
SEC. 176. FORMULARY REQUIREMENTS WITH RESPECT TO CERTAIN 
CATEGORIES OR CLASSES OF DRUGS. 
Section 1860D–4(b)(3) of the Social Security Act (42 U.S.C. 
1395w–104(b)(3)) is amended— 
(1) in subparagraph (C)(i), by striking ‘‘The formulary’’ 
and inserting ‘‘Subject to subparagraph (G), the formulary’’; 
and 
(2) by inserting after subparagraph (F) the following new 
subparagraph: 
‘‘(G) REQUIRED INCLUSION OF DRUGS IN CERTAIN CAT-
EGORIES AND CLASSES.—
H. R. 6331—89 
‘‘(i) IDENTIFICATION
OF
DRUGS
IN
CERTAIN
CAT-
EGORIES
AND
CLASSES.—Beginning with plan year 
2010, the Secretary shall identify, as appropriate, cat-
egories and classes of drugs for which both of the 
following criteria are met: 
‘‘(I) Restricted access to drugs in the category 
or class would have major or life threatening clin-
ical consequences for individuals who have a dis-
ease or disorder treated by the drugs in such cat-
egory or class. 
‘‘(II) There is significant clinical need for such 
individuals to have access to multiple drugs within 
a category or class due to unique chemical actions 
and pharmacological effects of the drugs within 
the category or class, such as drugs used in the 
treatment of cancer. 
‘‘(ii) FORMULARY REQUIREMENTS.—Subject to clause 
(iii), PDP sponsors offering prescription drug plans 
shall be required to include all covered part D drugs 
in the categories and classes identified by the Secretary 
under clause (i). 
‘‘(iii) EXCEPTIONS.—The Secretary may establish 
exceptions that permits a PDP sponsor of a prescription 
drug plan to exclude from its formulary a particular 
covered part D drug in a category or class that is 
otherwise required to be included in the formulary 
under clause (ii) (or to otherwise limit access to such 
a drug, including through prior authorization or utiliza-
tion management). Any exceptions established under 
the preceding sentence shall be provided under a 
process that— 
‘‘(I) ensures that any exception to such require-
ment is based upon scientific evidence and medical 
standards of practice (and, in the case of 
antiretroviral medications, is consistent with the 
Department of Health and Human Services Guide-
lines for the Use of Antiretroviral Agents in HIV- 
1-Infected Adults and Adolescents); and 
‘‘(II) includes a public notice and comment 
period.’’. 
Subtitle F—Other Provisions 
SEC. 181. USE OF PART D DATA. 
Section 1860D–12(b)(3)(D) of the Social Security Act (42 U.S.C. 
1395w–112(b)(3)(D)) is amended by adding at the end the following 
sentence: ‘‘Notwithstanding any other provision of law, information 
provided to the Secretary under the application of section 1857(e)(1) 
to contracts under this section under the preceding sentence— 
‘‘(i) may be used for the purposes of carrying out 
this part, improving public health through research 
on the utilization, safety, effectiveness, quality, and 
efficiency of health care services (as the Secretary 
determines appropriate); and 
‘‘(ii) shall be made available to Congressional sup-
port agencies (in accordance with their obligations to
H. R. 6331—90 
support Congress as set out in their authorizing stat-
utes) for the purposes of conducting Congressional 
oversight, monitoring, making recommendations, and 
analysis of the program under this title.’’. 
SEC. 182. REVISION OF DEFINITION OF MEDICALLY ACCEPTED INDICA-
TION FOR DRUGS. 
(a) REVISION OF DEFINITION FOR PART D DRUGS.— 
(1) IN GENERAL.—Section 1860D–2(e)(1) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(e)(1)) is amended, in the matter 
following subparagraph (B)— 
(A) by striking ‘‘(as defined in section 1927(k)(6))’’ and 
inserting ‘‘(as defined in paragraph (4))’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(4) MEDICALLY ACCEPTED INDICATION DEFINED.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (1), the 
term ‘medically accepted indication’ has the meaning given 
that term— 
‘‘(i) in the case of a covered part D drug used 
in an anticancer chemotherapeutic regimen, in section 
1861(t)(2)(B), except that in applying such section— 
‘‘(I) ‘prescription drug plan or MA–PD plan’ 
shall be substituted for ‘carrier’ each place it 
appears; and 
‘‘(II) subject to subparagraph (B), the com-
pendia described in section 1927(g)(1)(B)(i)(III) 
shall be included in the list of compendia described 
in clause (ii)(I) section 1861(t)(2)(B); and 
‘‘(ii) in the case of any other covered part D drug, 
in section 1927(k)(6). 
‘‘(B) CONFLICT OF INTEREST.—On and after January 
1, 2010, subparagraph (A)(i)(II) shall not apply unless the 
compendia described in section 1927(g)(1)(B)(i)(III) meets 
the 
requirement 
in 
the 
third 
sentence 
of 
section 
1861(t)(2)(B). 
‘‘(C) UPDATE.—For purposes of applying subparagraph 
(A)(ii), the Secretary shall revise the list of compendia 
described in section 1927(g)(1)(B)(i) as is appropriate for 
identifying medically accepted indications for drugs. Any 
such revision shall be done in a manner consistent with 
the 
process 
for 
revising 
compendia 
under 
section 
1861(t)(2)(B).’’. 
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to plan years beginning on or after January 
1, 2009. 
(b) CONFLICTS OF INTEREST.—Section 1861(t)(2)(B) of the Social 
Security Act (42 U.S.C. 1395x(t)(2)(B)) is amended by adding at 
the end the following new sentence: ‘‘On and after January 1, 
2010, no compendia may be included on the list of compendia 
under this subparagraph unless the compendia has a publicly trans-
parent process for evaluating therapies and for identifying potential 
conflicts of interests.’’. 
SEC. 183. CONTRACT WITH A CONSENSUS-BASED ENTITY REGARDING 
PERFORMANCE MEASUREMENT. 
(a) CONTRACT.—