I 
118TH CONGRESS 
2D SESSION 
H. R. 7716 
To amend title XVIII of the Social Security Act to provide for enforcement 
of standards for reasonable and relevant contract terms and conditions 
and essential retail pharmacy protections under the Medicare program. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 19, 2024 
Mr. GALLEGO introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
Ways and Means, for a period to be subsequently 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 title XVIII of the Social Security Act to provide 
for enforcement of standards for reasonable and relevant 
contract terms and conditions and essential retail phar-
macy protections under the Medicare program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. PROVIDING FOR ENFORCEMENT OF STAND-
ARDS FOR REASONABLE AND RELEVANT 
CONTRACT TERMS AND CONDITIONS AND ES-
SENTIAL RETAIL PHARMACY PROTECTIONS 
UNDER THE MEDICARE PROGRAM. 
(a) IN GENERAL.—Section 1860D–4(b)(1) of the So-
cial Security Act (42 U.S.C. 1395w–104(b)(1)) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(F) ENFORCEMENT OF STANDARDS FOR 
REASONABLE AND RELEVANT CONTRACT TERMS 
AND
CONDITIONS
AND
ESSENTIAL
RETAIL 
PHARMACY PROTECTIONS.— 
‘‘(i) ALLEGATION SUBMISSION PROC-
ESS.— 
‘‘(I) IN
GENERAL.—Not later 
than January 1, 2028, the Secretary 
shall establish a process through 
which a pharmacy may submit an al-
legation of a violation by a PDP spon-
sor offering a prescription drug plan 
of— 
‘‘(aa) the standards for rea-
sonable and relevant contract 
terms and conditions under sub-
paragraph (A)(ii); or 
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‘‘(bb) the requirements for 
total reimbursement for essential 
retail pharmacies that are inde-
pendent community pharmacies 
under subparagraph (C)(v)(II). 
‘‘(II) FREQUENCY
OF
SUBMIS-
SION.— 
‘‘(aa) VIOLATIONS OF REA-
SONABLE
AND
RELEVANT
CON-
TRACT
TERMS
AND
CONDI-
TIONS.— 
‘‘(AA) IN
GENERAL.— 
Except 
as 
provided 
in 
subitem (BB), the allegation 
submission 
process 
under 
this clause shall allow phar-
macies to submit any allega-
tions of violations described 
in item (aa) of subclause (I) 
not more frequently than 
once per plan year per con-
tract between a pharmacy 
and a PDP sponsor. 
‘‘(BB) 
ALLEGATIONS 
RELATING
TO
CONTRACT 
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CHANGES.—In 
the 
case 
where a contract is amended 
or otherwise updated fol-
lowing the submission of al-
legations by a pharmacy 
with respect to such contract 
and plan year, the allegation 
submission 
process 
under 
this clause shall allow such 
pharmacy to submit an addi-
tional allegation related to 
those changes with respect 
to such contract and plan 
year. 
‘‘(CC) SUBMISSIONS.— 
Submissions of any allega-
tions under this item shall 
be separate from any sub-
missions under item (bb) 
and may include multiple al-
legations of such violations. 
‘‘(bb) VIOLATIONS
OF
ES-
SENTIAL RETAIL PHARMACY PRO-
TECTIONS.— 
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‘‘(AA) IN
GENERAL.— 
The allegation submission 
process under this clause 
shall allow essential retail 
pharmacies that are inde-
pendent community phar-
macies to submit any allega-
tions of violations described 
in item (bb) of subclause (I) 
once per calendar quarter. 
‘‘(BB) SUBMISSIONS.— 
Submissions of any allega-
tions under this item shall 
be separate from any sub-
missions under item (aa) 
and may include multiple al-
legations of such violations. 
‘‘(III) ACCESS
TO
RELEVANT 
DOCUMENTS
AND
MATERIALS.—A 
PDP sponsor subject to an allegation 
under this clause— 
‘‘(aa) shall provide docu-
ments or materials, as specified 
by the Secretary, including con-
tract offers made by such spon-
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sor to such pharmacy or cor-
respondence related to such of-
fers, to the Secretary at a time 
and in a form and manner speci-
fied by the Secretary; and 
‘‘(bb) shall not prohibit or 
otherwise limit the ability of a 
pharmacy to submit such docu-
ments or materials to the Sec-
retary for the purpose of submit-
ting an allegation or providing 
evidence for such an allegation 
under this clause. 
‘‘(IV) 
STANDARDIZED
TEM-
PLATE.—The Secretary shall establish 
separate standardized templates for 
pharmacies to use for the submission 
of allegations described in items (aa) 
and (bb) of subclause (I). Each such 
template shall require that the sub-
mission include a certification by the 
pharmacy that the information in-
cluded is accurate, complete, and true 
to the best of the knowledge, informa-
tion, and belief of such pharmacy. 
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‘‘(V) PREVENTING
FRIVOLOUS 
ALLEGATIONS.—In the case where the 
Secretary determines that a pharmacy 
has submitted frivolous allegations 
under this clause on a routine basis, 
the Secretary may temporarily pro-
hibit such pharmacy from using the 
allegation submission process under 
this clause, as determined appropriate 
by the Secretary. 
‘‘(VI) EXEMPTION
FROM
FREE-
DOM OF INFORMATION ACT.—Allega-
tions submitted under this clause shall 
be exempt from disclosure under sec-
tion 552 of title 5, United States 
Code. 
‘‘(ii) INVESTIGATION.—The Secretary 
shall investigate, as determined appro-
priate by the Secretary, allegations sub-
mitted pursuant to clause (i). 
‘‘(iii) ENFORCEMENT.— 
‘‘(I) REASONABLE
AND
REL-
EVANT CONTRACT TERMS AND CONDI-
TIONS.—In the case where the Sec-
retary determines that a PDP sponsor 
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offering a prescription drug plan has 
violated the standards for reasonable 
and relevant contract terms and con-
ditions under subparagraph (A)(ii), 
the Secretary shall use existing au-
thorities under sections 1857(g) and 
1860D–12(b)(3)(E) to impose civil 
monetary penalties or take other en-
forcement actions. 
‘‘(II) ESSENTIAL RETAIL PHAR-
MACY
PROTECTIONS.—In the case 
where the Secretary determines that a 
PDP sponsor offering a prescription 
drug plan has violated the require-
ments for total reimbursement for es-
sential retail pharmacies that are 
independent community pharmacies 
under subparagraph (C)(v)(II), the 
Secretary shall— 
‘‘(aa) if the amount of total 
reimbursement paid by the spon-
sor to an essential retail phar-
macy that is an independent 
community pharmacy for a cov-
ered part D drug was less than 
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the amount of total reimburse-
ment required to be paid to the 
pharmacy under subparagraph 
(C)(v)(II) for such drug, require 
the PDP sponsor to pay to the 
pharmacy an amount equal to 
the 
difference 
between 
such 
amounts; and 
‘‘(bb) use existing authori-
ties under section 1857(g) and 
1860D–12(b)(3)(E) 
to 
impose 
civil monetary penalties or take 
other enforcement actions. 
‘‘(III) APPLICATION
OF
CIVIL 
MONETARY
PENALTIES.—The provi-
sions of section 1128A (other than 
subsections (a) and (b)) shall apply to 
a civil monetary penalty under this 
clause in the same manner as such 
provisions apply to a penalty or pro-
ceeding under section 1128A(a). 
‘‘(iv) DEFINITIONS.—In this subpara-
graph, the terms ‘essential retail phar-
macy’, ‘independent community pharmacy’, 
and ‘total reimbursement’ have the mean-
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ing given those terms in subparagraph 
(C)(v).’’. 
(b) CONFORMING AMENDMENT.—Section 1857(g)(1) 
of the Social Security Act (42 U.S.C. 1395w–27(g)(1)) is 
amended— 
(1) in subparagraph (J), by striking ‘‘or’’ after 
the semicolon; 
(2) by redesignating subparagraph (K) as sub-
paragraph (L); 
(3) by inserting after subparagraph (J), the fol-
lowing new subparagraph: 
‘‘(K) fails to comply with— 
‘‘(i) the standards for reasonable and 
relevant contract terms and conditions 
under subparagraph (A)(ii) of section 
1860D–4(b)(1); or 
‘‘(ii) the requirements for total reim-
bursement for essential retail pharmacies 
that are independent community phar-
macies under subparagraph (C)(v)(II) of 
such section; or’’; 
(4) in subparagraph (L), as redesignated by 
subparagraph (B), by striking ‘‘through (J)’’ and in-
serting ‘‘through (K)’’; and 
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(5) in the flush matter following subparagraph 
(L), as so redesignated, by striking ‘‘subparagraphs 
(A) through (K)’’ and inserting ‘‘subparagraphs (A) 
through (L)’’. 
Æ 
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