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with the laws of the State in which a bene-
ficiary resides) regarding the appropriate use of
prescription drugs.
‘‘(2) TREATMENT
OF
DRUGS
NOT
COVERED
UNDER MEDICARE.—The MMEDS shall provide for
review, information, and counseling with respect to
any prescription drug furnished to a Medicare bene-
ficiary without regard to whether or not payment
may be made for the drug under this title.
‘‘(3) MEDICARE
BENEFICIARY
DEFINED.—In
this section, a ‘Medicare beneficiary’ is any individ-
ual entitled to benefits under part A or enrolled
under part B.
‘‘(b) REQUIREMENTS
FOR REVIEW
OF PRESCRIP-
TIONS.—
‘‘(1) IN GENERAL.—The MMEDS shall provide
on-line prospective review of prescriptions on a 24-
hour basis and periodic retrospective review of
claims.
‘‘(2) PROSPECTIVE
DRUG
UTILIZATION
RE-
VIEW.—
‘‘(A) IN
GENERAL.—The MMEDS shall
provide for on-line prospective review of each
outpatient prescription drug prescribed for a
Medicare beneficiary before the prescription is
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filled or the drug is furnished, including screen-
ing for potential drug therapy problems due to
therapeutic duplication, drug-to-drug inter-
actions, drug-disease contraindications, and in-
correct drug dosage or duration of drug treat-
ment.
‘‘(B) DISCUSSION OF APPROPRIATE USE.—
In conducting prospective review under the
MMEDS, any individual or entity that dis-
penses an outpatient prescription drug shall
offer (consistent with the law of the State in
which the patient resides) to discuss with the
patient to whom the drug is furnished or the
patient’s caregiver (in person if practicable, or
through access to a toll-free telephone service)
information regarding the appropriate use of
the drug, potential interactions between the
drug and other drugs dispensed to the individ-
ual, and such other matters as the Secretary
may require.
‘‘(C) ADDITIONAL
DUTIES.—In carrying
out this paragraph, the Secretary shall—
‘‘(i) develop public domain software
which could be used by carriers and phar-
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macies to provide the on-line prospective
review; and
‘‘(ii) study the feasibility and desir-
ability of requiring patient diagnosis codes
on prescriptions and the feasibility of ex-
panding the prospective drug utilization re-
view program to include the identification
of drug-disease contraindications, inter-
actions with over-the-counter drugs, and
drug-allergy interactions.
‘‘(3) RETROSPECTIVE DRUG UTILIZATION RE-
VIEW.—As part of the MMEDS, the Secretary shall
provide for a retrospective drug utilization review
program to provide for the ongoing periodic exam-
ination of claims data and other records on out-
patient prescription drugs furnished to Medicare
beneficiaries in order to identify patterns of inappro-
priate or medically unnecessary patient care.
‘‘(4) USE OF ELECTRONIC SYSTEM.—
‘‘(A) IN
GENERAL.—As part of the
MMEDS, the Secretary shall establish, by not
later than June 1, 1998, a point-of-sale elec-
tronic system for use by carriers and phar-
macies in the submission of information re-
specting outpatient prescription drugs dis-
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pensed to Medicare beneficiaries. Such system
shall be consistent with the standards estab-
lished by the National Council of Prescription
Drug Programs.
‘‘(B) TECHNICAL ASSISTANCE.—The Sec-
retary shall provide technical assistance in the
use of the electronic system established under
subparagraph (A) to carriers and pharmacies.
‘‘(c) EDUCATION REGARDING APPROPRIATE USE OF
PRESCRIPTION DRUGS.—
‘‘(1) IN GENERAL.—Under the MMEDS, the
Secretary (either directly or through contract) shall
provide for an educational outreach program to edu-
cate patients, pharmacists, and other health care
providers concerning—
‘‘(A) instances or patterns of unnecessary
or inappropriate prescribing or dispensing prac-
tices for outpatient prescription drugs,
‘‘(B) instances or patterns of substandard
care with respect to such drugs,
‘‘(C) potential adverse reactions and inter-
actions, and
‘‘(D) appropriate use of generic products.
‘‘(2) INFORMATION ON CHANGES IN PRESCRIB-
ING AND DISPENSING PRACTICES.—Under the pro-
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gram described in paragraph (1), the Secretary shall
provide information (in such format as the Secretary
considers appropriate) on changes in prescribing and
dispensing practices to promote the appropriate use
of prescription drugs.
‘‘(d) PRIVACY PROTECTION.—The Secretary shall es-
tablish standards to protect from public disclosure any in-
formation provided by or through the MMEDS that identi-
fies an individual and relates to the individual’s physical
or mental health and the identity of any individual (wheth-
er a patient or an individual involved in the prescribing,
dispensing, or administration of the drug) who is the sub-
ject of such information.
‘‘(e) 
ASSISTANCE
FOR
PARTICIPATING
PHAR-
MACISTS.—
‘‘(1) IN GENERAL.—The Secretary shall provide
to each pharmacist meeting the requirements of
paragraph (2)—
‘‘(A) a distinctive emblem (suitable for dis-
play to the public) indicating that the pharmacy
participates in the MMEDS, and
‘‘(B) upon request, such technical assist-
ance as the Secretary determines may be nec-
essary for the pharmacist to submit information
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to and retrieve information from the electronic
system established under subsection (b)(4).
‘‘(2) REQUIREMENTS
DESCRIBED.—A phar-
macist meets the requirements of this paragraph if
the pharmacist is legally authorized under State law
(or the State regulatory mechanism provided by
State law) of the State in which the drug is received
by the beneficiary to dispense outpatient prescription
drugs and meets other participation standards estab-
lished by the Secretary with respect to the following:
‘‘(A) Maintenance of patient records.
‘‘(B) Accuracy of information submitted
under the MMEDS.
‘‘(C) Patient counseling.
‘‘(D) Performance of drug use review ac-
tivities under the MMEDS.
‘‘(f) ADOPTION OF MEDICAID PROGRAMS.—To the
extent considered appropriate by the Secretary, the
MMEDS with respect to drugs furnished in a State may
include elements applicable to the furnishing of covered
outpatient drugs under the State Medicaid program under
section 1927.’’.
(b) RECOMMENDATIONS
ON COORDINATION WITH
PROGRAMS UNDER OTHER PLANS.—Not later than Octo-
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(3) PAYMENT
ON
OTHER
THAN
A
COST
BASIS.—Section 1842(c)(1)(A) of such Act (42
U.S.C. 1395u(c)(1)(A)) is amended—
(A) by inserting ‘‘(A)’’ after ‘‘(c)(1)’’,
(B) in the first sentence, by inserting ‘‘,
except as otherwise provided in subparagraph
(B),’’ after ‘‘under this part, and’’, and
(C) by adding at the end the following:
‘‘(B) To the extent that a contract under this section
provides for activities related to the Medicare Medication
Evaluation and Dispensing System under section 1889,
the Secretary may provide for payment for those activities
based on any method of payment determined by the Sec-
retary to be appropriate.’’.
(4) USE OF OTHER ENTITIES.—Section 1842(f)
of such Act (42 U.S.C. 1395u(f)) is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (1),
(B) by striking the period at the end of
paragraph (2) and inserting ‘‘; and’’, and
(C) by adding at the end the following:
‘‘(3) with respect to activities related to the
Medicare Medication Evaluation and Dispensing
System under section 1889, any other private entity
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which the Secretary determines is qualified to con-
duct such activities.’’.
SEC. 3. RECOMMENDATIONS ON MEDICARE COVERAGE OF
PHARMACIST PROFESSIONAL SERVICES.
Not later than the expiration of the 2-year period
which begins on the date of the initial operation of the
Medicare Medication Evaluation and Dispensing System
under section 1889 of the Social Security Act (as added
by section 2(a)), the Secretary of Health and Human
Services shall submit to Congress (in consultation with ac-
tively practicing pharmacists)—
(1) an analysis of the effect on net aggregate
expenditures under the Medicare program from the
establishment and operation of such System; and
(2) such recommendations as the Secretary con-
siders appropriate regarding the coverage of and
payment for pharmacist professional services under
part B of the Medicare program as the Secretary
considers appropriate, except that the Secretary may
recommend coverage of and payment for such serv-
ices only under a methodology which does not result
in an increase in net expenditures under the pro-
gram (taking into account reductions in expendi-
tures under the program as a result of demonstrable
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reductions in the inappropriate use of outpatient
prescription drugs).
SEC. 4. DISTRIBUTION OF CONSUMER GUIDE TO OUT-
PATIENT PRESCRIPTION DRUGS.
Not later than January 1, 1998, the Secretary of
Health and Human Services shall publish and disseminate
a consumer guide to outpatient prescription drugs to as-
sist Medicare beneficiaries in reducing expenditures for
outpatient prescription drugs and to assist individuals and
entities furnishing items and services to such beneficiaries
in determining the cost-effectiveness of such drugs.
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