for the drug, biological, or parenteral nutrient shall be the
lowest of the following:
‘‘(A) The actual acquisition cost, as defined in
paragraph (2), to the person submitting the claim
for payment for the drug, biological, or parenteral
nutrient.
‘‘(B) 95 percent of the average wholesale price
of such drug, biological, or parenteral nutrient, as
determined by the Secretary.
‘‘(C) For payments for drugs, biologicals, or
parenteral nutrients furnished on or after January
1, 2000, the median actual acquisition cost of all
claims for payment for such drugs, biologicals, or
parenteral nutrients for the 12-month period begin-
ning July 1, 1998 (and adjusted, as the Secretary
determines appropriate, to reflect changes in the
cost of such drugs, biologicals, or parenteral nutri-
ents due to inflation, and such other factors as the
Secretary determines appropriate).
‘‘(D) The amount otherwise determined under
this part.
‘‘(2) For purposes of paragraph (1)(A), the term ‘ac-
tual acquisition cost’ means, with respect to such drugs,
biologicals, or parenteral nutrients the cost of the drugs,
biologicals, or parenteral nutrients based on the most eco-
nomical case size in inventory on the date of dispensing
or, if less, the most economical case size purchased within
six months of the date of dispensing whether or not that
specific drug, biological, or nutrient was furnished to an
individual whether or not enrolled under this part. Such
term includes appropriate adjustments, as determined by
the Secretary, for all discounts, rebates, or any other bene-
fit in cash or in kind (including travel, equipment, or free
products). The Secretary shall include an additional pay-
ment to cover costs reasonably incurred for administrative,
storage, and handling. The Secretary shall consult with
the provider community to simplify the accounting and re-
porting requirements used in calculating actual acquisition
cost and may accept various averaging procedures, tax
documents, and tax accounting procedures (such as last-
in-first-out (LIFO) and first-in-first-out (FIFO)) instead
of new reporting requirements.
‘‘(3)(A) No payment shall be made under this part
for drugs, biologicals, or parenteral nutrients to a person
whose bill or request for payment for such drugs,
biologicals, or parenteral nutrients does not include a
statement of the person’s actual acquisition cost.
‘‘(B) A person may not bill an individual enrolled
under this part—
‘‘(i) any amount other than the payment
amount specified in paragraph (1), (4), or (5) (plus
any applicable deductible and coinsurance amounts),
or
‘‘(ii) any amount for such drugs, biologicals, or
parenteral nutrients for which payment may not be
made pursuant to subparagraph (A).
‘‘(C) If a person knowingly and willfully in repeated
cases bills one or more individuals in violation of subpara-
graph (B), the Secretary may apply sanctions against that
person in accordance with subsection (j)(2).
‘‘(4) The Secretary may pay a reasonable dispensing
fee (less the applicable deductible and coinsurance
amounts) for drugs or biologicals to a licensed pharmacy
approved to dispense drugs or biologicals under this part,
if payment for such drugs or biologicals is made to the
pharmacy.
‘‘(5) The Secretary shall pay a reasonable amount
(less the applicable deductible and coinsurance amounts)
for the services associated with the furnishing of paren-
teral nutrients for which payment is determined under this
subsection.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to drugs, biologicals, and parenteral
nutrients furnished on or after January 1, 2001.
(c) ELIMINATION OF REPORT ON AVERAGE WHOLE-
SALE PRICE.—Section 4556 of the Balanced Budget Act
of 1997 is amended—
(1) by striking subsection (c); and
(2) by redesignating subsection (d) as sub-
section (c).
SEC. 8. TREATMENT OF PART B PREMIUM INCREASES RE-
SULTING FROM ENACTMENT.
(a) ADDITIONAL PART B PREMIUM COVERED UNDER
QMB AND SLMB PROGRAMS.—Any increase in the pre-
mium under part B of title XVIII of the Social Security
Act resulting from the amendments made by this Act is
covered for qualified Medicare beneficiaries and for special
low income Medicare beneficiaries under the medicaid pro-
gram under clauses (i) and (iii) of section 1902(a)(10)(A)
of such Act.
(b) SEPARATE LISTING OF PORTION OF PREMIUM
COVERING PRESCRIPTION DRUG BENEFIT.—The Sec-
retary of Health and Human Services shall provide, in any
statement of premiums established under section 1839 of
the Social Security Act, for a separate statement of the
portion of such premiums which is attributable to the
amendments made by this Act.
(c) WAIVER OF ADDITIONAL PORTION FOR MEDI-
CARE BENEFICIARIES HAVING ACTUARIALLY EQUIVA-
LENT COVERAGE.—The Secretary of Health and Human
Services shall establish a method under which the portion
of the premium described in subsection (b) is waived (and
not collected) for any individual enrolled under part B of
title XVIII of the Social Security Act who demonstrates
that the individual has coverage (through a group health
plan, Medicare supplemental policy, under the medicaid
program under title XIX of the Social Security Act,
through the Department of Veterans Affairs, or otherwise)
that is actuarially equivalent to the coverage provided
under such part.
SEC. 9. EFFECTIVE DATE.
Except as otherwise provided, the amendments made
by this Act apply to items and services furnished on or
after January 1, 2002.
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