payment levels provided to other States under 
paragraph (2). 
‘‘(e) DEFINITIONS; SPECIAL RULES.—For purposes 
of this section: 
‘‘(1) QUALIFIED
MEDICARE
MEDICINE
BENE-
FICIARY.—The term ‘qualified medicare medicine 
beneficiary’ means an individual— 
‘‘(A) who is entitled to hospital insurance 
benefits under part A (including an individual 
entitled to such benefits pursuant to an enroll-
ment under section 1818, but not including an 
individual entitled to such benefits only pursu-
ant to an enrollment under section 1818A); 
‘‘(B) whose income (as determined under 
section 1612 for purposes of the supplemental 
security income program, except as provided in 
section 1905(p)(2)(D)) is above 100 percent 
but below 150 percent of the official poverty 
line (as defined by the Office of Management 
and Budget, and revised annually in accordance 
with section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981) applicable to a fam-
ily of the size involved; and 
‘‘(C) whose resources (as determined under 
section 1613 for purposes of the supplemental
security income program) do not exceed twice 
the maximum amount of resources that an indi-
vidual may have and obtain benefits under that 
program. 
‘‘(2) MEDICARE
MEDICINE
COST-SHARING.— 
The term ‘medicare medicine cost-sharing’ means 
the following costs incurred with respect to a quali-
fied medicare medicine beneficiary, without regard to 
whether the costs incurred were for items and serv-
ices for which medical assistance is otherwise avail-
able under a State plan under title XIX: 
‘‘(A) In the case of a qualified medicare 
medicine beneficiary whose income (as deter-
mined under paragraph (1)) is less than 135 
percent of the official poverty line— 
‘‘(i) premiums under section 1860D; 
and 
‘‘(ii) 
the 
difference 
between 
the 
amount that is paid under section 1860B 
and the amount that would be paid under 
such section if any reference to ‘50 per-
cent’ therein were deemed a reference to 
‘100 percent’ (or, if the Secretary approves 
a higher percentage under such section, if
such percentage were deemed to be 100 
percent). 
‘‘(B) In the case of a qualified medicare 
medicine beneficiary whose income (as deter-
mined under paragraph (1)) is at least 135 per-
cent but less than 150 percent of the official 
poverty line, a percentage of premiums under 
section 1860D, determined on a linear sliding 
scale ranging from 100 percent for individuals 
with incomes at 135 percent of such line to 0 
percent for individuals with incomes at 150 per-
cent of such line. 
‘‘(3) STATE.—The term ‘State’ has the mean-
ing given such term under section 1101(a) for pur-
poses of title XIX. 
‘‘(4) TREATMENT OF DRUGS PURCHASED.—The 
provisions of section 1927 shall not apply to pre-
scription drugs purchased under this part pursuant 
to an agreement with the Secretary under this sec-
tion (including any drugs so purchased after the 
limit under section 1860B(b) has been exceeded). 
‘‘PRESCRIPTION MEDICINE INSURANCE ACCOUNT 
‘‘SEC. 1860F. (a) ESTABLISHMENT.—There is cre-
ated within the Federal Supplemental Medical Insurance 
Trust Fund established by section 1841 an account to be
known as the ‘Prescription Medicine Insurance Account’ 
(in this section referred to as the ‘Account’). 
‘‘(b) AMOUNTS IN ACCOUNT.— 
‘‘(1) IN GENERAL.—The Account shall consist 
of— 
‘‘(A) such amounts as may be deposited in, 
or appropriated to, such fund as provided in 
this part; and 
‘‘(B) such gifts and bequests as may be 
made as provided in section 201(i)(1). 
‘‘(2) SEPARATION OF FUNDS.—Funds provided 
under this part to the Account shall be kept sepa-
rate from all other funds within the Federal Supple-
mental Medical Insurance Trust Fund. 
‘‘(c) PAYMENTS FROM ACCOUNT.—The Managing 
Trustee shall pay from time to time from the Account such 
amounts as the Secretary certifies are necessary to make 
the payments provided for by this part, and the payments 
with respect to administrative expenses in accordance with 
section 201(g). 
‘‘ADMINISTRATION OF BENEFITS 
‘‘SEC. 1860G. (a) THROUGH CMS.—The Secretary 
shall provide for administration of the benefits under this 
part through the Centers for Medicare & Medicaid Serv-
ices in accordance with the provisions of this section. The 
Administrator of such Centers may enter into contracts
with carriers to administer this part in the same manner 
as the Administrator enters into such contracts to admin-
ister part B. Any such contract shall be separate from any 
contract under section 1842. 
‘‘(b) ADMINISTRATION FUNCTIONS.—In carrying out 
this part, the Administrator (or a carrier under a contract 
with the Administrator) shall (or in the case of the func-
tion described in paragraph (9), may) perform the fol-
lowing functions: 
‘‘(1) PARTICIPATION
AGREEMENTS, 
PRICES, 
AND FEES.— 
‘‘(A) 
NEGOTIATED
PRICES.—Establish, 
through negotiations with medicine manufactur-
ers and wholesalers and pharmacies, a schedule 
of prices for covered prescription medicines. 
‘‘(B) AGREEMENTS WITH PHARMACIES.— 
Enter into participation agreements under sub-
section (c) with pharmacies, that include terms 
that— 
‘‘(i) secure the participation of suffi-
cient numbers of pharmacies to ensure 
convenient 
access 
(including 
adequate 
emergency access); 
‘‘(ii) permit the participation of any 
pharmacy in the service area that meets
the participation requirements described in 
subsection (c); and 
‘‘(iii) allow for reasonable dispensing 
and consultation fees for pharmacies. 
‘‘(C) LISTS OF PRICES AND PARTICIPATING 
PHARMACIES.—Ensure 
that 
the 
negotiated 
prices established under subparagraph (A) and 
the list of pharmacies with agreements under 
subsection (c) are regularly updated and readily 
available to health care professionals authorized 
to prescribe medicines, participating phar-
macies, and enrolled individuals. 
‘‘(2) TRACKING OF COVERED ENROLLED INDI-
VIDUALS.—Maintain accurate, updated records of all 
enrolled individuals (other than individuals enrolled 
in a plan under part C). 
‘‘(3) PAYMENT AND COORDINATION OF BENE-
FITS.— 
‘‘(A) PAYMENT.— 
‘‘(i) Administer claims for payment of 
benefits under this part and encourage, to 
the maximum extent possible, use of elec-
tronic means for the submissions of claims. 
‘‘(ii) Determine amounts of benefit 
payments to be made.