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medication therapy management services to the eligible ben-
eficiary under the assessment program.
(c) CONTRACTS WITH QUALIFIED PHARMACISTS.—
(1) IN GENERAL.—The Secretary shall enter into
a contract with qualified pharmacists to provide
medication therapy management services to eligible
beneficiaries residing in the area served by the quali-
fied pharmacist.
(2) NUMBER OF QUALIFIED PHARMACISTS.—The
Secretary may contract with more than 1 qualified
pharmacist at each site.
(d) PAYMENT TO QUALIFIED PHARMACISTS.—
(1) IN
GENERAL.—Under an contract entered
into under subsection (c), the Secretary shall pay
qualified pharmacists a fee for providing medication
therapy management services.
(2) ASSESSMENT
OF
PAYMENT
METHODOLO-
GIES.—The Secretary shall, in consultation with na-
tional pharmacist and pharmacy associations, design
the fee paid under paragraph (1) to test various pay-
ment methodologies applicable with respect to medica-
tion therapy management services, including a pay-
ment methodology that applies a relative value scale
and fee-schedule with respect to such services that take
into account the differences in—
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(A) the time required to perform the dif-
ferent types of medication therapy management
services;
(B) the level of risk associated with the use
of particular outpatient prescription drugs or
groups of drugs; and
(C) the health status of individuals to whom
such services are provided.
(e) FUNDING.—
(1) IN GENERAL.—Subject to paragraph (2), the
Secretary shall provide for the transfer from the Fed-
eral Supplementary Insurance Trust Fund established
under section 1841 of the Social Security Act (42
U.S.C. 1395t) of such funds as are necessary for the
costs of carrying out the assessment program under
this section.
(2) BUDGET
NEUTRALITY.—In conducting the
assessment program under this section, the Secretary
shall ensure that the aggregate payments made by the
Secretary do not exceed the amount which the Sec-
retary would have paid if the assessment program
under this section was not implemented.
(f) WAIVER AUTHORITY.—The Secretary may waive
such requirements of titles XI and XVIII of the Social Secu-
rity Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be
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necessary for the purpose of carrying out the assessment
program under this section.
(g) AVAILABILITY OF DATA.—During the period in
which the assessment program is conducted, the Secretary
annually shall make available data regarding—
(1) the geographic areas and sites designated
under subsection (a)(2);
(2) the number of eligible beneficiaries partici-
pating in the program under subsection (b) and the
level and types medication therapy management serv-
ices used by such beneficiaries;
(3) the number of qualified pharmacists with
contracts under subsection (c), the location of such
pharmacists, and the number of eligible beneficiaries
served by such pharmacists; and
(4) the types of payment methodologies being
tested under subsection (d)(2).
(h) REPORT.—
(1) IN GENERAL.—Not later than 6 months after
the completion of the assessment program under this
section, the Secretary shall submit to Congress a final
report summarizing the final outcome of the program
and evaluating the results of the program, together
with recommendations for such legislation and ad-
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ministrative action as the Secretary determines to be
appropriate.
(2) ASSESSMENT
OF
PAYMENT
METHODOLO-
GIES.—The final report submitted under paragraph
(1) shall include an assessment of the feasibility and
appropriateness of the various payment methodologies
tested under subsection (d)(2).
(i) DEFINITIONS.—In this section:
(1) MEDICATION THERAPY MANAGEMENT SERV-
ICES.—The term ‘‘medication therapy management
services’’ means services or programs furnished by a
qualified pharmacist to an eligible beneficiary, indi-
vidually or on behalf of a pharmacy provider, which
are designed—
(A) to ensure that medications are used ap-
propriately by such individual;
(B) to enhance the individual’s under-
standing of the appropriate use of medications;
(C) to increase the individual’s compliance
with prescription medication regimens;
(D) to reduce the risk of potential adverse
events associated with medications; and
(E) to reduce the need for other costly med-
ical services through better management of medi-
cation therapy.
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(2) ELIGIBLE BENEFICIARY.—The term ‘‘eligible
beneficiary’’ means an individual who is—
(A) entitled to (or enrolled for) benefits
under part A and enrolled for benefits under
part B of the Social Security Act (42 U.S.C.
1395c et seq.; 1395j et seq.);
(B) not enrolled with a Medicare+Choice
plan or a MedicareAdvantage plan under part
C; and
(C) receiving, in accordance with State law
or regulation, medication for—
(i) the treatment of asthma, diabetes,
or chronic cardiovascular disease, including
an individual on anticoagulation or lipid
reducing medications; or
(ii) such other chronic diseases as the
Secretary may specify.
(3) QUALIFIED PHARMACIST.—The term ‘‘quali-
fied pharmacist’’ means an individual who is a li-
censed pharmacist in good standing with the State
Board of Pharmacy.
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Subtitle B—Medicare Prescription
Drug Discount Card and Transi-
tional Assistance for Low-In-
come Beneficiaries
SEC. 111. MEDICARE PRESCRIPTION DRUG DISCOUNT CARD
AND TRANSITIONAL ASSISTANCE FOR LOW-
INCOME BENEFICIARIES.
(a) IN GENERAL.—Title XVIII is amended by insert-
ing after section 1806 the following new sections:
‘‘MEDICARE PRESCRIPTION DRUG DISCOUNT CARD
ENDORSEMENT PROGRAM
‘‘SEC. 1807. (a) ESTABLISHMENT.—There is estab-
lished a medicare prescription drug discount card endorse-
ment program under which the Secretary shall—
‘‘(1) endorse prescription drug discount card
programs offered by prescription drug card sponsors
that meet the requirements of this section; and
‘‘(2) make available to eligible beneficiaries in-
formation regarding such endorsed programs.
‘‘(b) ELIGIBILITY, ELECTION OF PROGRAM, AND EN-
ROLLMENT FEES.—
‘‘(1) ELIGIBILITY AND ELECTION OF PROGRAM.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph 
(B), 
the 
Secretary 
shall 
establish
procedures—
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‘‘(i) for identifying eligible bene-
ficiaries; and
‘‘(ii) under which such beneficiaries
may make an election to enroll in any pre-
scription drug discount card program en-
dorsed under this section and disenroll from
such a program.
‘‘(B) LIMITATION.—An eligible beneficiary
may not be enrolled in more than 1 prescription
drug discount card program at any time.
‘‘(2) ENROLLMENT FEES.—
‘‘(A) IN
GENERAL.—A prescription drug
card sponsor may charge an annual enrollment
fee to each eligible beneficiary enrolled in a pre-
scription drug discount card program offered by
such sponsor.
‘‘(B) AMOUNT.—No enrollment fee charged
under subparagraph (A) may exceed $25.
‘‘(C) UNIFORM ENROLLMENT FEE.—A pre-
scription drug card sponsor shall ensure that the
enrollment fee for a prescription drug discount
card program endorsed under this section is the
same for all eligible medicare beneficiaries en-
rolled in the program.
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‘‘(D) COLLECTION.—Any enrollment fee
shall be collected by the prescription drug card
sponsor.
‘‘(c) PROVIDING INFORMATION TO ELIGIBLE BENE-
FICIARIES.—
‘‘(1) PROMOTION OF INFORMED CHOICE.—
‘‘(A) BY THE SECRETARY.—In order to pro-
mote informed choice among endorsed prescrip-
tion drug discount card programs, the Secretary
shall provide for the dissemination of informa-
tion which compares the costs and benefits of
such programs. Such dissemination shall be co-
ordinated with the dissemination of educational
information on other medicare options.
‘‘(B) BY PRESCRIPTION DRUG CARD SPON-
SORS.—Each prescription drug card sponsor
shall make available to each eligible beneficiary
(through 
the 
Internet 
and 
otherwise)
information—
‘‘(i) that the Secretary identifies as
being necessary to promote informed choice
among endorsed prescription drug discount
card programs by eligible beneficiaries, in-
cluding information on enrollment fees, ne-
gotiated 
prices 
for 
prescription 
drugs
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charged to beneficiaries, and services relat-
ing to prescription drugs offered under the
program;
‘‘(ii) on how any formulary used by
such sponsor functions.
‘‘(2) USE OF MEDICARE TOLL-FREE NUMBER.—
The Secretary shall provide through the 1–800–
MEDICARE toll free telephone number for the receipt
and response to inquiries and complaints concerning
the medicare prescription drug discount card endorse-
ment program established under this section and pre-
scription drug discount card programs endorsed
under such program.
‘‘(d) BENEFICIARY PROTECTIONS.—
‘‘(1) IN GENERAL.—Each prescription drug dis-
count card program endorsed under this section shall
meet such requirements as the Secretary identifies to
protect and promote the interest of eligible bene-
ficiaries, including requirements that—
‘‘(A) relate to appeals by eligible bene-
ficiaries and marketing practices; and
‘‘(B) ensure that beneficiaries are not
charged more than the lower of the negotiated re-
tail price or the usual and customary price.
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‘‘(2) ENSURING PHARMACY ACCESS.—Each pre-
scription drug card sponsor offering a prescription
drug discount card program endorsed under this sec-
tion shall secure the participation in its network of
a sufficient number of pharmacies that dispense
(other than by mail order) drugs directly to patients
to ensure convenient access (as determined by the Sec-
retary and including adequate emergency access) for
enrolled beneficiaries. Such standards shall take into
account reasonable distances to pharmacy services in
urban and rural areas and access to pharmacy serv-
ices of the Indian Health Service and Indian tribes
and tribal organizations.
‘‘(3) QUALITY
ASSURANCE.—Each prescription
drug card sponsor offering a prescription drug dis-
count card program endorsed under this section shall
have in place adequate procedures for assuring that
quality service is provided to eligible beneficiaries en-
rolled in a prescription drug discount card program
offered by such sponsor.
‘‘(4) 
CONFIDENTIALITY
OF
ENROLLEE
RECORDS.—Insofar as a prescription drug card spon-
sor maintains individually identifiable medical
records or other health information regarding eligible
beneficiaries enrolled in a prescription drug discount
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card program endorsed under this section, the pre-
scription drug card sponsor shall have in place proce-
dures to safeguard the privacy of any individually
identifiable beneficiary information in a manner that
the Secretary determines is consistent with the Fed-
eral regulations (concerning the privacy of individ-
ually identifiable health information) promulgated
under section 264(c) of the Health Insurance Port-
ability and Accountability Act of 1996.
‘‘(5) NO
OTHER
FEES.—A prescription drug
card sponsor may not charge any fee to an eligible
beneficiary under a prescription drug discount card
program endorsed under this section other than an
enrollment fee charged under subsection (b)(2)(A).
‘‘(6) PRICES.—
‘‘(A) 
AVOIDANCE
OF
HIGH
PRICED
DRUGS.—A prescription drug card sponsor may
not recommend switching an eligible beneficiary
to a drug with a higher negotiated price absent
a recommendation by a licensed health profes-
sional that there is a clinical indication with re-
spect to the patient for such a switch.
‘‘(B) PRICE STABILITY.—Negotiated prices
charged for prescription drugs covered under a
prescription drug discount card program en-
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dorsed under this section may not change more
frequently than once every 60 days.
‘‘(e) PRESCRIPTION DRUG BENEFITS.—
‘‘(1) IN GENERAL.—Each prescription drug card
sponsor may only provide benefits that relate to pre-
scription drugs (as defined in subsection (i)(2)) under
a prescription drug discount card program endorsed
under this section.
‘‘(2) SAVINGS TO ELIGIBLE BENEFICIARIES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (D), each prescription drug card sponsor
shall provide eligible beneficiaries who enroll in
a prescription drug discount card program of-
fered by such sponsor that is endorsed under this
section with access to negotiated prices used by
the sponsor with respect to prescription drugs
dispensed to eligible beneficiaries.
‘‘(B) INAPPLICABILITY OF MEDICAID BEST
PRICE RULES.—The requirements of section 1927
relating to manufacturer best price shall not
apply to the negotiated prices for prescription
drugs made available under a prescription drug
discount card program endorsed under this sec-
tion.
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‘‘(C) GUARANTEED ACCESS TO NEGOTIATED
PRICES.—The Secretary, in consultation with the
Inspector General of the Department of Health
and Human Services, shall establish procedures
to ensure that eligible beneficiaries have access to
the negotiated prices for prescription drugs pro-
vided under subparagraph (A).
‘‘(D) APPLICATION
OF
FORMULARY
RE-
STRICTIONS.—A drug prescribed for an eligible
beneficiary that would otherwise be a covered
drug under this section shall not be so considered
under a prescription drug discount card pro-
gram if the program excludes the drug under a
formulary.
‘‘(3) BENEFICIARY
SERVICES.—Each prescrip-
tion drug discount card program endorsed under this
section shall provide pharmaceutical support services,
such as education, counseling, and services to prevent
adverse drug interactions.
‘‘(4) DISCOUNT CARDS.—Each prescription drug
card sponsor shall issue a card to eligible beneficiaries
enrolled in a prescription drug discount card pro-
gram offered by such sponsor that the beneficiary may
use to obtain benefits under the program.
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‘‘(f) SUBMISSION OF APPLICATIONS FOR ENDORSE-
MENT AND APPROVAL.—
‘‘(1) SUBMISSION
OF
APPLICATIONS
FOR
EN-
DORSEMENT.—Each prescription drug card sponsor
that seeks endorsement of a prescription drug dis-
count card program under this section shall submit to
the Secretary, at such time and in such manner as
the Secretary may specify, such information as the
Secretary may require.
‘‘(2) APPROVAL.—The Secretary shall review the
information submitted under paragraph (1) and shall
determine whether to endorse the prescription drug
discount card program to which such information re-
lates. The Secretary may not approve a program un-
less the program and prescription drug card sponsor
offering the program comply with the requirements
under this section.
‘‘(g) REQUIREMENTS ON DEVELOPMENT AND APPLICA-
TION OF FORMULARIES.—If a prescription drug card spon-
sor offering a prescription drug discount card program uses
a formulary, the following requirements must be met:
‘‘(1) PHARMACY AND THERAPEUTIC (P&T) COM-
MITTEE.—
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‘‘(A) IN GENERAL.—The eligible entity must
establish a pharmacy and therapeutic committee
that develops and reviews the formulary.
‘‘(B) 
COMPOSITION.—A 
pharmacy 
and
therapeutic committee shall include at least 1
academic expert, at least 1 practicing physician,
and at least 1 practicing pharmacist, all of
whom have expertise in the care of elderly or dis-
abled persons, and a majority of the members of
such committee shall consist of individuals who
are a practicing physician or a practicing phar-
macist (or both).
‘‘(2) FORMULARY DEVELOPMENT.—In developing
and reviewing the formulary, the committee shall base
clinical decisions on the strength of scientific evidence
and standards of practice, including assessing peer-
reviewed medical literature, such as randomized clin-
ical trials, pharmacoeconomic studies, outcomes re-
search data, and such other information as the com-
mittee determines to be appropriate.
‘‘(3) INCLUSION OF DRUGS IN ALL THERAPEUTIC
CATEGORIES AND CLASSES.—
‘‘(A) IN GENERAL.—The formulary must in-
clude drugs within each therapeutic category and
class of covered outpatient drugs (as defined by
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the Secretary), although not necessarily for all
drugs within such categories and classes.
‘‘(B) REQUIREMENT.—In defining thera-
peutic categories and classes of covered out-
patient drugs pursuant to subparagraph (A), the
Secretary shall use the compendia referred to sec-
tion 1927(g)(1)(B)(i) or other recognized sources
for categorizing drug therapeutic categories and
classes.
‘‘(4) PROVIDER
EDUCATION.—The committee
shall establish policies and procedures to educate and
inform health care providers concerning the for-
mulary.
‘‘(5) NOTICE BEFORE REMOVING DRUGS FROM
FORMULARY.—Any removal of a drug from a for-
mulary shall take effect only after appropriate notice
is made available to beneficiaries and pharmacies.
‘‘(h) FRAUD AND ABUSE PREVENTION.—
‘‘(1) IN GENERAL.—The Secretary shall provide
appropriate oversight to ensure compliance of en-
dorsed programs with the requirements of this section,
including verification of the negotiated prices and
services provided.
‘‘(2) DISQUALIFICATION
FOR
ABUSIVE
PRAC-
TICES.—The Secretary may implement intermediate
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sanctions and may revoke the endorsement of a pro-
gram that the Secretary determines no longer meets
the requirements of this section or that has engaged
in false or misleading marketing practices.
‘‘(3) AUTHORITY WITH RESPECT TO CIVIL MONEY
PENALTIES.—The Secretary may impose a civil
money penalty in an amount not to exceed $10,000
for any violation of this section. The provisions of sec-
tion 1128A (other than subsections (a) and (b)) shall
apply to a civil money penalty under the previous
sentence in the same manner as such provisions apply
to a penalty or proceeding under section 1128A(a).
‘‘(4) REPORTING
TO
SECRETARY.—Each pre-
scription drug card sponsor offering a prescription
drug discount card program endorsed under this sec-
tion shall report information relating to program per-
formance, use of prescription drugs by eligible bene-
ficiaries enrolled in the program, financial informa-
tion of the sponsor, and such other information as the
Secretary may specify. The Secretary may not dis-
close any proprietary data reported under this para-
graph.
‘‘(5) DRUG
UTILIZATION
REVIEW.—The Sec-
retary may use claims data from parts A and B for
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purposes of conducting a drug utilization review pro-
gram.
‘‘(i) DEFINITIONS.—In this section:
‘‘(1) ELIGIBLE BENEFICIARY.—
‘‘(A) IN GENERAL.—The term ‘eligible bene-
ficiary’ means an individual who—
‘‘(i) is entitled to, or enrolled for, bene-
fits under part A and enrolled under part
B; and
‘‘(ii) is not a dual eligible individual
(as defined in subparagraph (B)).
‘‘(B) DUAL ELIGIBLE INDIVIDUAL.—
‘‘(i) IN GENERAL.—The term ‘dual eli-
gible individual’ means an individual who
is—
‘‘(I) enrolled under title XIX or
under a waiver under section 1115 of
the requirements of such title for med-
ical assistance that is not less than the
medical assistance provided to an indi-
vidual 
described 
in 
section
1902(a)(10)(A)(i) and includes covered
outpatient drugs (as such term is de-
fined for purposes of section 1927); and
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‘‘(II) entitled to benefits under
part A and enrolled under part B.
‘‘(ii) 
INCLUSION
OF
MEDICALLY
NEEDY.—Such term includes an individual
described in section 1902(a)(10)(C).
‘‘(2) PRESCRIPTION DRUG.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the term ‘prescription drug’
means—
‘‘(i) a drug that may be dispensed only
upon a prescription and that is described in
clause (i) or (ii) of subparagraph (A) of sec-
tion 1927(k)(2); or
‘‘(ii) a biological product or insulin
described in subparagraph (B) or (C) of
such section (including syringes, and nec-
essary medical supplies associated with the
administration of insulin, as defined by the
Secretary),
and such term includes a vaccine licensed under
section 351 of the Public Health Service Act and
any use of a covered outpatient drug for a medi-
cally accepted indication (as defined in section
1927(k)(6)).
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‘‘(B) EXCLUSIONS.—The term ‘prescription
drug’ does not include drugs or classes of drugs,
or their medical uses, which may be excluded
from coverage or otherwise restricted under sec-
tion 1927(d)(2), other than subparagraph (E)
thereof (relating to smoking cessation agents), or
under section 1927(d)(3).
‘‘(3) NEGOTIATED PRICE.—The term ‘negotiated
price’ includes all discounts, direct or indirect sub-
sidies, rebates, price concessions, and direct or indi-
rect remunerations.
‘‘(4) PRESCRIPTION DRUG CARD SPONSOR.—The
term ‘prescription drug card sponsor’ means any en-
tity with demonstrated experience and expertise in
operating a prescription drug discount card program,
an insurance program that provides coverage for pre-
scription drugs, or a similar program that the Sec-
retary determines to be appropriate to provide eligible
beneficiaries with the benefits under a prescription
drug discount card program endorsed by the Sec-
retary under this section, including—
‘‘(A) a pharmaceutical benefit management
company;
‘‘(B) a wholesale or retail pharmacist deliv-
ery system;
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‘‘(C) an insurer (including an insurer that
offers medicare supplemental policies under sec-
tion 1882);
‘‘(D) any other entity; or
‘‘(E) any combination of the entities de-
scribed in subparagraphs (A) through (D).
‘‘TRANSITIONAL PRESCRIPTION DRUG ASSISTANCE CARD
PROGRAM FOR ELIGIBLE LOW-INCOME BENEFICIARIES
‘‘SEC. 1807A. (a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—There is established a pro-
gram under which the Secretary shall award con-
tracts to prescription drug card sponsors offering a
prescription drug discount card that has been en-
dorsed by the Secretary under section 1807 under
which such sponsors shall offer a prescription drug
assistance card program to eligible low-income bene-
ficiaries in accordance with the requirements of this
section.
‘‘(2) APPLICATION
OF
DISCOUNT
CARD
PROVI-
SIONS.—Except as otherwise provided in this section,
the provisions of section 1807 shall apply to the pro-
gram established under this section.
‘‘(b) ELIGIBILITY, ELECTION OF PROGRAM, AND EN-
ROLLMENT FEES.—
‘‘(1) ELIGIBILITY AND ELECTION OF PROGRAM.—
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‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph, the enroll-
ment 
procedures 
established 
under 
section
1807(b)(1)(A)(ii) shall apply for purposes of this
section.
‘‘(B) ENROLLMENT OF ANY ELIGIBLE LOW-
INCOME BENEFICIARY.—Each prescription drug
card sponsor offering a prescription drug assist-
ance card program under this section shall per-
mit any eligible low-income beneficiary to enroll
in such program if it serves the geographic area
in which the beneficiary resides.
‘‘(C) SIMULTANEOUS ENROLLMENT IN PRE-
SCRIPTION DRUG DISCOUNT CARD PROGRAM.—
An eligible low-income beneficiary who enrolls in
a prescription drug assistance card program of-
fered by a prescription drug card sponsor under
this section shall be simultaneously enrolled in a
prescription drug discount card program offered
by such sponsor.
‘‘(2) WAIVER OF ENROLLMENT FEES.—
‘‘(A) IN
GENERAL.—A prescription drug
card sponsor may not charge an enrollment fee
to any eligible low-income beneficiary enrolled in
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a prescription drug discount card program of-
fered by such sponsor.
‘‘(B) PAYMENT BY SECRETARY.—Under a
contract awarded under subsection (f)(2), the
Secretary shall pay to each prescription drug
card sponsor an amount equal to any enrollment
fee charged under section 1807(b)(2)(A) on behalf
of each eligible low-income beneficiary enrolled
in a prescription drug discount card program
under paragraph (1)(C) offered by such sponsor.
‘‘(c) ADDITIONAL BENEFICIARY PROTECTIONS.—
‘‘(1) PROVIDING
INFORMATION
TO
ELIGIBLE
LOW-INCOME BENEFICIARIES.—In addition to the in-
formation provided to eligible beneficiaries under sec-
tion 1807(c), the prescription drug card sponsor
shall—
‘‘(A) periodically notify each eligible low-in-
come beneficiary enrolled in a prescription drug
assistance card program offered by such sponsor
of the amount of coverage for prescription drugs
remaining under subsection (d)(2)(A); and
‘‘(B) notify each eligible low-income bene-
ficiary enrolled in a prescription drug assistance
card program offered by such sponsor of the
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grievance and appeals processes under the pro-
gram.
‘‘(2) CONVENIENT ACCESS IN LONG-TERM CARE
FACILITIES.—For purposes of determining whether
convenient access has been provided under section
1807(d)(2) with respect to eligible low-income bene-
ficiaries enrolled in a prescription drug assistance
card program, the Secretary may only make a deter-
mination that such access has been provided if an ap-
propriate arrangement is in place for eligible low-in-
come beneficiaries who are in a long-term care facil-
ity (as defined by the Secretary) to receive prescrip-
tion drug benefits under the program.
‘‘(3) COORDINATION OF BENEFITS.—
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures under which eligible low-in-
come beneficiaries who are enrolled for coverage
described in subparagraph (B) and enrolled in a
prescription drug assistance card program have
access to the prescription drug benefits available
under such program.
‘‘(B) COVERAGE DESCRIBED.—Coverage de-
scribed in this subparagraph is as follows:
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‘‘(i) Coverage of prescription drugs
under a State pharmaceutical assistance
program.
‘‘(ii) 
Enrollment 
in 
a
Medicare+Choice plan under part C.
‘‘(4) GRIEVANCE
MECHANISM.—Each prescrip-
tion drug card sponsor with a contract under this sec-
tion shall provide in accordance with section 1852(f)
meaningful procedures for hearing and resolving
grievances between the prescription drug card sponsor
(including any entity or individual through which
the prescription drug card sponsor provides covered
benefits) and enrollees in a prescription drug assist-
ance card program offered by such sponsor.
‘‘(5) APPLICATION
OF
COVERAGE
DETERMINA-
TION AND RECONSIDERATION PROVISIONS.—
‘‘(A) IN
GENERAL.—The requirements of
paragraphs (1) through (3) of section 1852(g)
shall apply with respect to covered benefits under
a prescription drug assistance card program
under this section in the same manner as such
requirements apply to a Medicare+Choice orga-
nization with respect to benefits it offers under
a Medicare+Choice plan under part C.
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‘‘(B) REQUEST
FOR
REVIEW
OF
TIERED
FORMULARY DETERMINATIONS.—In the case of a
prescription drug assistance card program of-
fered by a prescription drug card sponsor that
provides for tiered pricing for drugs included
within a formulary and provides lower prices for
preferred drugs included within the formulary,
an eligible low-income beneficiary who is en-
rolled in the program may request coverage of a
nonpreferred drug under the terms applicable for
preferred drugs if the prescribing physician de-
termines that the preferred drug for treatment of
the same condition is not as effective for the eli-
gible low-income beneficiary or has adverse ef-
fects for the eligible low-income beneficiary.
‘‘(C) FORMULARY
DETERMINATIONS.—An
eligible low-income beneficiary who is enrolled in
a prescription drug assistance card program of-
fered by a prescription drug card sponsor may
appeal to obtain coverage for a covered drug that
is not on a formulary of the entity if the pre-
scribing physician determines that the formulary
drug for treatment of the same condition is not
as effective for the eligible low-income beneficiary
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or has adverse effects for the eligible low-income
beneficiary.
‘‘(6) APPEALS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a prescription drug card sponsor
shall meet the requirements of paragraphs (4)
and (5) of section 1852(g) with respect to drugs
not included on any formulary in a similar
manner (as determined by the Secretary) as such
requirements apply to a Medicare+Choice orga-
nization with respect to benefits it offers under
a Medicare+Choice plan under part C.
‘‘(B) FORMULARY
DETERMINATIONS.—An
eligible low-income beneficiary who is enrolled in
a prescription drug assistance card program of-
fered by a prescription drug card sponsor may
appeal to obtain coverage for a covered drug that
is not on a formulary of the entity if the pre-
scribing physician determines that the formulary
drug for treatment of the same condition is not
as effective for the eligible low-income beneficiary
or has adverse effects for the eligible low-income
beneficiary.
‘‘(C) APPEALS AND EXCEPTIONS TO APPLI-
CATION.—The prescription drug card sponsor
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must have, as part of the appeals process under
this paragraph, a process for timely appeals for
denials of coverage based on the application of
the formulary.
‘‘(d) PRESCRIPTION DRUG BENEFITS.—
‘‘(1) IN GENERAL.—Subject to paragraph (5), all
the benefits available under a prescription drug dis-
count card program offered by a prescription drug
card sponsor and endorsed under section 1807 shall
be available to eligible low-income beneficiaries en-
rolled in a prescription drug assistance card program
offered by such sponsor.
‘‘(2) ASSISTANCE
FOR
ELIGIBLE
LOW-INCOME
BENEFICIARIES.—
‘‘(A) $600 ANNUAL ASSISTANCE.—Subject to
subparagraphs (B) and (C) and paragraph (5),
each prescription drug card sponsor with a con-
tract under this section shall provide coverage for
the first $600 of expenses for prescription drugs
incurred during each calendar year by an eligi-
ble low-income beneficiary enrolled in a pre-
scription drug assistance card program offered
by such sponsor.
‘‘(B) COINSURANCE.—
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‘‘(i) IN
GENERAL.—The prescription
drug card sponsor shall determine an
amount of coinsurance to collect from each
eligible low-income beneficiary enrolled in a
prescription drug assistance card program
offered by such sponsor for which coverage
is available under subparagraph (A).
‘‘(ii) AMOUNT.—The amount of coin-
surance collected under clause (i) shall be at
least 10 percent of the negotiated price of
each prescription drug dispensed to an eli-
gible low-income beneficiary.
‘‘(iii) CONSTRUCTION.—Amounts col-
lected under clause (i) shall not be counted
against the total amount of coverage avail-
able under subparagraph (A).
‘‘(C) 
REDUCTION
FOR
LATE
ENROLL-
MENT.—For each month during a calendar quar-
ter in which an eligible low-income beneficiary is
not enrolled in a prescription drug assistance
card program offered by a prescription drug
card sponsor with a contract under this section,
the amount of assistance available under sub-
paragraph (A) shall be reduced by $50.
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‘‘(D) CREDITING OF UNUSED BENEFITS TO-
WARD FUTURE YEARS.—The dollar amount of
coverage described in subparagraph (A) shall be
increased by any amount of coverage described
in such subparagraph that was not used during
the previous calendar year.
‘‘(E) WAIVER
TO
ENSURE
PROVISION
OF
BENEFIT.—The Secretary may waive such re-
quirements of this section and section 1807 as
may be necessary to ensure that each eligible
low-income beneficiaries has access to the assist-
ance described in subparagraph (A).
‘‘(3) ADDITIONAL
DISCOUNTS.—A prescription
drug card sponsor with a contract under this section
shall provide each eligible low-income beneficiary en-
rolled in a prescription drug assistance program of-
fered by the sponsor with access to negotiated prices
that reflect a minimum average discount of at least
20 percent of the average wholesale price for prescrip-
tion drugs covered under that program.
‘‘(4) ASSISTANCE
CARDS.—Each prescription
drug card sponsor shall permit eligible low-income
beneficiaries enrolled in a prescription drug assist-
ance card program offered by such sponsor to use the
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discount card issued under section 1807(e)(4) to ob-
tain benefits under the program.
‘‘(5) APPLICATION
OF
FORMULARY
RESTRIC-
TIONS.—A drug prescribed for an eligible low-income
beneficiary that would otherwise be a covered drug
under this section shall not be so considered under a
prescription drug assistance card program if the pro-
gram excludes the drug under a formulary and such
exclusion is not successfully resolved under paragraph
(4), (5), or (6) of subsection (c).
‘‘(e) REQUIREMENTS FOR PRESCRIPTION DRUG CARD
SPONSORS THAT OFFER PRESCRIPTION DRUG ASSISTANCE
CARD PROGRAMS.—
‘‘(1) IN GENERAL.—Each prescription drug card
sponsor shall—
‘‘(A) process claims made by eligible low-in-
come beneficiaries;
‘‘(B) negotiate with brand name and ge-
neric prescription drug manufacturers and oth-
ers for low prices on prescription drugs;
‘‘(C) track individual beneficiary expendi-
tures in a format and periodicity specified by
the Secretary; and
‘‘(D) perform such other functions as the
Secretary may assign.
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‘‘(2) DATA EXCHANGES.—Each prescription drug
card sponsor shall receive data exchanges in a format
specified by the Secretary and shall maintain real-
time beneficiary files.
‘‘(3) PUBLIC DISCLOSURE OF PHARMACEUTICAL
PRICES FOR EQUIVALENT DRUGS.—The prescription
drug card sponsor offering the prescription drug as-
sistance card program shall provide that each phar-
macy or other dispenser that arranges for the dis-
pensing of a covered drug shall inform the eligible
low-income beneficiary at the time of purchase of the
drug of any differential between the price of the pre-
scribed drug to the enrollee and the price of the lowest
priced generic drug covered under the plan that is
therapeutically equivalent and bioequivalent and
available at such pharmacy or other dispenser.
‘‘(f) SUBMISSION OF BIDS AND AWARDING OF CON-
TRACTS.—
‘‘(1) SUBMISSION OF BIDS.—Each prescription
drug card sponsor that seeks to offer a prescription
drug assistance card program under this section shall
submit to the Secretary, at such time and in such
manner as the Secretary may specify, such informa-
tion as the Secretary may require.
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‘‘(2) AWARDING OF CONTRACTS.—The Secretary
shall review the information submitted under para-
graph (1) and shall determine whether to award a
contract to the prescription drug card sponsor offer-
ing the program to which such information relates.
The Secretary may not approve a program unless the
program and prescription drug card sponsor offering
the program comply with the requirements under this
section.
‘‘(3) NUMBER OF CONTRACTS.—There shall be no
limit on the number of prescription drug card spon-
sors that may be awarded contracts under paragraph
(2).
‘‘(4) CONTRACT PROVISIONS.—
‘‘(A) 
DURATION.—A 
contract 
awarded
under paragraph (2) shall be for the lifetime of
the program under this section.
‘‘(B) WITHDRAWAL.—A prescription drug
card sponsor that desires to terminate the con-
tract awarded under paragraph (2) may termi-
nate such contract without penalty if such spon-
sor gives notice—
‘‘(i) to the Secretary 90 days prior to
the termination of such contract; and
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‘‘(ii) to each eligible low-income bene-
ficiary that is enrolled in a prescription
drug assistance card program offered by
such sponsor 60 days prior to such termi-
nation.
‘‘(C) SERVICE
AREA.—The service area
under the contract shall be the same as the area
served by the prescription drug card sponsor
under section 1807.
‘‘(5) SIMULTANEOUS
APPROVAL
OF
DISCOUNT
CARD AND ASSISTANCE PROGRAMS.—A prescription
drug card sponsor may submit an application for en-
dorsement under section 1807 as part of the bid sub-
mitted under paragraph (1) and the Secretary may
approve such application at the same time as the Sec-
retary awards a contract under this section.
‘‘(g) PAYMENTS TO PRESCRIPTION DRUG CARD SPON-
SORS.—
‘‘(1) IN GENERAL.—The Secretary shall pay to
each prescription drug card sponsor offering a pre-
scription drug assistance card program in which an
eligible low-income beneficiary is enrolled an amount
equal to the amount agreed to by the Secretary and
the sponsor in the contract awarded under subsection
(f)(2).
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‘‘(2) PAYMENT FROM PART B TRUST FUND.—The
costs of providing benefits under this section shall be
payable from the Federal Supplementary Medical In-
surance Trust Fund established under section 1841.
‘‘(h) ELIGIBILITY DETERMINATIONS MADE BY STATES;
PRESUMPTIVE ELIGIBILITY.—States shall perform the func-
tions described in section 1935(a)(1).
‘‘(i) APPROPRIATIONS.—There are appropriated from
the Federal Supplementary Medical Insurance Trust Fund
established under section 1841 such sums as may be nec-
essary to carry out the program under this section.
‘‘(j) DEFINITIONS.—In this section:
‘‘(1) 
ELIGIBLE
BENEFICIARY; 
NEGOTIATED
PRICE; PRESCRIPTION DRUG.—The terms ‘eligible ben-
eficiary’, ‘negotiated price’, and ‘prescription drug’
have the meanings given those terms in section
1807(i).
‘‘(2) ELIGIBLE LOW-INCOME BENEFICIARY.—The
term ‘eligible low-income beneficiary’ means an indi-
vidual who—
‘‘(A) is an eligible beneficiary (as defined in
section 1807(i)); and
‘‘(B) is described in clause (iii) or (iv) of
section 1902(a)(10)(E) or in section 1905(p)(1).
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‘‘(3) PRESCRIPTION DRUG CARD SPONSOR.—The
term ‘prescription drug card sponsor’ has the mean-
ing given that term in section 1807(i), except that
such sponsor shall also be an entity that the Secretary
determines is—
‘‘(A) is appropriate to provide eligible low-
income beneficiaries with the benefits under a
prescription drug assistance card program under
this section; and
‘‘(B) is able to manage the monetary assist-
ance made available under subsection (d)(2);
‘‘(C) agrees to submit to audits by the Sec-
retary; and
‘‘(D) provides such other assurances as the
Secretary may require.
‘‘(4) STATE.—The term ‘State’ has the meaning
given such term for purposes of title XIX.’’.
(b) EXCLUSION OF PRICES FROM DETERMINATION OF
BEST PRICE.—Section 1927(c)(1)(C)(i) (42 U.S.C. 1396r–
8(c)(1)(C)(i)) is amended—
(1) by striking ‘‘and’’ at the end of subclause
(III);
(2) by striking the period at the end of subclause
(IV) and inserting ‘‘; and’’; and
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(3) by adding at the end the following new sub-
clause:
‘‘(V) 
any 
negotiated 
prices
charged under the medicare prescrip-
tion drug discount card endorsement
program under section 1807 or under
the transitional prescription drug as-
sistance card program for eligible low-
income 
beneficiaries 
under 
section
1807A.’’.
(c) EXCLUSION OF PRESCRIPTION DRUG ASSISTANCE
CARD COSTS FROM DETERMINATION OF PART B MONTHLY
PREMIUM.—Section 1839(g) of the Social Security Act (42
U.S.C. 1395r(g)) is amended—
(1) by striking ‘‘attributable to the application of
section’’ and inserting ‘‘attributable to—
‘‘(1) the application of section’’;
(2) by striking the period and inserting ‘‘; and’’;
and
(3) by adding at the end the following new para-
graph:
‘‘(2) the prescription drug assistance card pro-
gram under section 1807A.’’.
(d) REGULATIONS.—
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(1) AUTHORITY
FOR
INTERIM
FINAL
REGULA-
TIONS.—The Secretary may promulgate initial regu-
lations implementing sections 1807 and 1807A of the
Social Security Act (as added by this section) in in-
terim final form without prior opportunity for public
comment.
(2) FINAL REGULATIONS.—A final regulation re-
flecting public comments must be published within 1
year of the interim final regulation promulgated
under paragraph (1).
(3) EXEMPTION FROM THE PAPERWORK REDUC-
TION
ACT.—The promulgation of the regulations
under this subsection and the administration the pro-
grams established by sections 1807 and 1807A of the
Social Security Act (as added by this section) shall
be made without regard to chapter 35 of title 44,
United States Code (commonly known as the ‘‘Paper-
work Reduction Act’’).
(e) IMPLEMENTATION; TRANSITION.—
(1) IMPLEMENTATION.—The Secretary shall im-
plement the amendments made by this section in a
manner that discounts are available to eligible bene-
ficiaries under section 1807 of the Social Security Act
and assistance is available to eligible low-income
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beneficiaries under section 1807A of such Act not
later than January 1, 2004.
(2) TRANSITION.—The Secretary shall provide
for an appropriate transition and discontinuation of
the programs under section 1807 and 1807A of the
Social Security Act. Such transition and discontinu-
ation shall ensure that such programs continue to op-
erate until the date on which the first enrollment pe-
riod under part D ends.
Subtitle C—Standards for
Electronic Prescribing
SEC. 121. STANDARDS FOR ELECTRONIC PRESCRIBING.
Title XI (42 U.S.C. 1301 et seq.) is amended by adding
at the end the following new part:
‘‘PART D—ELECTRONIC PRESCRIBING
‘‘STANDARDS FOR ELECTRONIC PRESCRIBING
‘‘SEC. 1180. (a) STANDARDS.—
‘‘(1) DEVELOPMENT AND ADOPTION.—
‘‘(A) IN GENERAL.—The Secretary shall de-
velop or adopt standards for transactions and
data elements for such transactions (in this sec-
tion referred to as ‘standards’) to enable the elec-
tronic transmission of medication history, eligi-
bility, benefit, and other prescription informa-
tion.
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‘‘(B) CONSULTATION.—In developing and
adopting the standards under subparagraph (A),
the Secretary shall consult with representatives
of physicians, hospitals, pharmacists, standard
setting organizations, pharmacy benefit man-
agers, beneficiary information exchange net-
works, technology experts, and representatives of
the Departments of Veterans Affairs and Defense
and other interested parties.
‘‘(2) OBJECTIVE.—Any standards developed or
adopted under this part shall be consistent with the
objectives of improving—
‘‘(A) patient safety; and
‘‘(B) the quality of care provided to pa-
tients.
‘‘(3) REQUIREMENTS.—Any standards developed
or adopted under this part shall comply with the fol-
lowing:
‘‘(A) PATIENT
MAY
REQUEST
A
WRITTEN
PRESCRIPTION.—The standards provide that—
‘‘(i) a prescription shall be written and
not transmitted electronically if the patient
makes such a request; and
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‘‘(ii) no additional charges may be im-
posed on the patient for making such a re-
quest.
‘‘(B) PATIENT-SPECIFIC
MEDICATION
HIS-
TORY, ELIGIBILITY, BENEFIT, AND OTHER PRE-
SCRIPTION INFORMATION.—
‘‘(i) IN GENERAL.—The standards shall
accommodate electronic transmittal of pa-
tient-specific medication history, eligibility,
benefit, and other prescription information
among prescribing and dispensing profes-
sionals at the point of care.
‘‘(ii) REQUIRED
INFORMATION.—The
information described in clause (i) shall in-
clude the following:
‘‘(I) Information (to the extent
available and feasible) on the drugs
being prescribed for that patient and
other information relating to the medi-
cation history of the patient that may
be relevant to the appropriate prescrip-
tion for that patient.
‘‘(II) Cost-effective alternatives (if
any) to the drug prescribed.
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‘‘(III) Information on eligibility
and benefits, including the drugs in-
cluded in the applicable formulary and
any requirements for prior authoriza-
tion.
‘‘(IV) Information on potential
interactions with drugs listed on the
medication history, graded by severity
of the potential interaction.
‘‘(V) Other information to im-
prove the quality of patient care and
to reduce medical errors.
‘‘(C) UNDUE BURDEN.—The standards shall
be designed so that, to the extent practicable, the
standards do not impose an undue administra-
tive burden on the practice of medicine, phar-
macy, or other health professions.
‘‘(D) COMPATIBILITY WITH ADMINISTRATIVE
SIMPLIFICATION AND PRIVACY LAWS.—The stand-
ards shall be—
‘‘(i) consistent with the Federal regula-
tions (concerning the privacy of individ-
ually identifiable health information) pro-
mulgated under section 264(c) of the Health
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Insurance Portability and Accountability
Act of 1996; and
‘‘(ii) compatible with the standards
adopted under part C.
‘‘(4) TRANSFER
OF
INFORMATION.—The Sec-
retary shall develop and adopt standards for transfer-
ring among prescribing and insurance entities and
other necessary entities appropriate standard data
elements needed for the electronic exchange of medica-
tion history, eligibility, benefit, and other prescrip-
tion drug information and other health information
determined appropriate in compliance with the
standards adopted or modified under this part.
‘‘(b) TIMETABLE FOR ADOPTION OF STANDARDS.—
‘‘(1) IN GENERAL.—The Secretary shall adopt
the standards under this part by January 1, 2006.
‘‘(2) ADDITIONS AND MODIFICATIONS TO STAND-
ARDS.—The Secretary shall, in consultation with ap-
propriate representatives of interested parties, review
the standards developed or adopted under this part
and adopt modifications to the standards (including
additions to the standards), as determined appro-
priate. Any addition or modification to such stand-
ards shall be completed in a manner which minimizes
the disruption and cost of compliance.
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‘‘(c) COMPLIANCE WITH STANDARDS.—
‘‘(1) REQUIREMENT FOR ALL INDIVIDUALS AND
ENTITIES
THAT
TRANSMIT
OR
RECEIVE
PRESCRIP-
TIONS ELECTRONICALLY.—
‘‘(A) IN GENERAL.—Individuals or entities
that transmit or receive prescriptions electroni-
cally shall comply with the standards adopted or
modified under this part.
‘‘(B) RELATION
TO
STATE
LAWS.—The
standards adopted or modified under this part
shall supersede any State law or regulations per-
taining to the electronic transmission of medica-
tion history, eligibility, benefit and prescription
information.
‘‘(2) TIMETABLE FOR COMPLIANCE.—
‘‘(A) INITIAL COMPLIANCE.—
‘‘(i) IN GENERAL.—Not later than 24
months after the date on which an initial
standard is adopted under this part, each
individual or entity to whom the standard
applies shall comply with the standard.
‘‘(ii) 
SPECIAL
RULE
FOR
SMALL
HEALTH
PLANS.—In the case of a small
health plan, as defined by the Secretary for
purposes of section 1175(b)(1)(B), clause (i)
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shall be applied by substituting ‘36 months’
for ‘24 months’.
‘‘(d) CONSULTATION WITH ATTORNEY GENERAL.—The
Secretary shall consult with the Attorney General before de-
veloping, adopting, or modifying a standard under this
part to ensure that the standard accommodates secure elec-
tronic transmission of prescriptions for controlled sub-
stances in a manner that minimizes the possibility of viola-
tions under the Comprehensive Drug Abuse Prevention and
Control Act of 1970 and related Federal laws.
‘‘(e) NO REQUIREMENT TO TRANSMIT OR RECEIVE
PRESCRIPTIONS ELECTRONICALLY.—Nothing in this part
shall be construed to require an individual or entity to
transmit or receive prescriptions electronically.
‘‘GRANTS TO HEALTH CARE PROVIDERS TO IMPLEMENT
ELECTRONIC PRESCRIPTION PROGRAMS
‘‘SEC. 1180A. (a) IN GENERAL.—The Secretary is au-
thorized to make grants to health care providers for the pur-
pose of assisting such entities to implement electronic pre-
scription programs that comply with the standards adopted
or modified under this part.
‘‘(b) APPLICATION.—No grant may be made under this
section except pursuant to a grant application that is sub-
mitted in a time, manner, and form approved by the Sec-
retary.
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‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated for each of fiscal years 2006,
2007, and 2008, such sums as may be necessary to carry
out this section.’’.
Subtitle D—Other Provisions
SEC. 131. ADDITIONAL REQUIREMENTS FOR ANNUAL FI-
NANCIAL REPORT AND OVERSIGHT ON MEDI-
CARE PROGRAM.
(a) IN GENERAL.—Section 1817 (42 U.S.C. 1395i) is
amended by adding at the end the following new subsection:
‘‘(l) COMBINED REPORT ON OPERATION AND STATUS
OF THE TRUST FUND AND THE FEDERAL SUPPLEMENTARY
MEDICAL INSURANCE TRUST FUND (INCLUDING THE PRE-
SCRIPTION DRUG ACCOUNT).—In addition to the duty of
the Board of Trustees to report to Congress under subsection
(b), on the date the Board submits the report required under
subsection (b)(2), the Board shall submit to Congress a re-
port on the operation and status of the Trust Fund and
the Federal Supplementary Medical Insurance Trust Fund
established under section 1841 (including the Prescription
Drug Account within such Trust Fund), in this subsection
referred to as the ‘Trust Funds’. Such report shall include
the following information:
‘‘(1) OVERALL SPENDING FROM THE GENERAL
FUND
OF
THE
TREASURY.—A statement of total
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amounts obligated during the preceding fiscal year
from the General Revenues of the Treasury to the
Trust Funds, separately stated in terms of the total
amount and in terms of the percentage such amount
bears to all other amounts obligated from such Gen-
eral Revenues during such fiscal year, for each of the
following amounts:
‘‘(A) MEDICARE
BENEFITS.—The amount
expended for payment of benefits covered under
this title.
‘‘(B) ADMINISTRATIVE
AND
OTHER
EX-
PENSES.—The amount expended for payments
not related to the benefits described in subpara-
graph (A).
‘‘(2) HISTORICAL
OVERVIEW
OF
SPENDING.—
From the date of the inception of the program of in-
surance under this title through the fiscal year in-
volved, a statement of the total amounts referred to in
paragraph (1), separately stated for the amounts de-
scribed in subparagraphs (A) and (B) of such para-
graph.
‘‘(3) 10-YEAR AND 50-YEAR PROJECTIONS.—An
estimate of total amounts referred to in paragraph
(1), separately stated for the amounts described in
subparagraphs (A) and (B) of such paragraph, re-
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quired to be obligated for payment for benefits covered
under this title for each of the 10 fiscal years suc-
ceeding the fiscal year involved and for the 50-year
period beginning with the succeeding fiscal year.
‘‘(4) RELATION
TO
OTHER
MEASURES
OF
GROWTH.—A comparison of the rate of growth of the
total amounts referred to in paragraph (1), separately
stated for the amounts described in subparagraphs
(A) and (B) of such paragraph, to the rate of growth
for the same period in—
‘‘(A) the gross domestic product;
‘‘(B) health insurance costs in the private
sector;
‘‘(C) employment-based health insurance
costs in the public and private sectors; and
‘‘(D) other areas as determined appropriate
by the Board of Trustees.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply with respect to fiscal years beginning
on or after the date of enactment of this Act.
(c) CONGRESSIONAL HEARINGS.—It is the sense of
Congress that the committees of jurisdiction of Congress
shall hold hearings on the reports submitted under section
1817(l) of the Social Security Act (as added by subsection
(a)).
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SEC. 132. TRUSTEES’ REPORT ON MEDICARE’S UNFUNDED
OBLIGATIONS.
(a) REPORT.—The report submitted under sections
1817(b)(2) and 1841(b)(2) of the Social Security Act (42
U.S.C. 1395i(b)(2) and 1395t(b)(2)) during 2004 shall in-
clude an analysis of the total amount of the unfunded obli-
gations of the Medicare program under title XVIII of the
Social Security Act.
(b) MATTERS ANALYZED.—The analysis described in
subsection (A) shall compare the long-term obligations of
the Medicare program to the dedicated funding sources for
that program (other than general revenue transfers), includ-
ing the combined obligations of the Federal Hospital Insur-
ance Trust Fund established under section 1817 of such Act
(42 U.S.C. 1395i) and the Federal Supplementary Medical
Insurance Trust Fund established under section 1841 of
such Act (42 U.S.C. 1395t).
SEC. 133. PHARMACY BENEFIT MANAGERS TRANSPARENCY
REQUIREMENTS.
Subpart 3 of part D of title XVIII of the Social Secu-
rity Act (as added by section 101) is amended by adding
at the end the following new section:
‘‘PHARMACY BENEFIT MANAGERS TRANSPARENCY
REQUIREMENTS
‘‘SEC. 1860D–27. (a) PROHIBITION.—
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‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, an eligible entity offering a Medi-
care Prescription Drug plan under this part or a
MedicareAdvantage 
organization 
offering 
a
MedicareAdvantage plan under part C shall not enter
into a contract with any pharmacy benefit manager
(in this section referred to as a ‘PBM’) that is owned
by a pharmaceutical manufacturing company.
‘‘(2) PROVISION OF INFORMATION.—A PBM that
manages prescription drug coverage under this part
or part C shall provide the following information, on
an annual basis, to the Assistant Attorney General
for Antitrust of the Department of Justice and the In-
spector General of the Health and Human Services
Department:
‘‘(A) The aggregate amount of any and all
rebates, discounts, administrative fees, pro-
motional allowances, and other payments re-
ceived or recovered from each pharmaceutical
manufacturer.
‘‘(B) The amount of payments received or
recovered from each pharmaceutical manufac-
turer for each of the top 50 drugs as measured
by volume (as determined by the Secretary).
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‘‘(C) The percentage differential between the
price the PBM pays pharmacies for a drug de-
scribed in subparagraph (B) and the price the
PBM charges a Medicare Prescription Drug
Plan or a MedicareAdvantage organization for
such drug.
‘‘(b) FAILURE TO DISCLOSE.—
‘‘(1) CIVIL PENALTY.—Any PBM that fails to
comply with subsection (a) shall be liable for a civil
penalty as determined appropriate through regula-
tions promulgated by the Attorney General. Such pen-
alty may be recovered in a civil action brought by the
United States.
‘‘(2) COMPLIANCE AND EQUITABLE RELIEF.—If
any PBM fails to comply with subsection (a), the
United States district court may order compliance,
and may grant such other equitable relief as the court
in its discretion determines necessary or appropriate,
upon application of the Assistant Attorney General.
‘‘(c) DISCLOSURE
EXEMPTION.—Any information
filed with the Assistant Attorney General under subsection
(a)(2) shall be exempt from disclosure under section 552
of title 5, and no such information may be made public,
except as may be relevant to any administrative or judicial
action or proceeding. Nothing in this section is intended
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to prevent disclosure to either body of Congress or to any
duly authorized committee or subcommittee of the Con-
gress.’’.
SEC. 134. OFFICE OF THE MEDICARE BENEFICIARY ADVO-
CATE.
(a) ESTABLISHMENT.—Not later than 1 year after the
date of enactment of this Act, the Secretary shall establish
within the Department of Health and Human Services, an
Office of the Medicare Beneficiary Advocate (in this section
referred to as the ‘‘Office’’).
(b) DUTIES.—The Office shall carry out the following
activities:
(1) Establishing a toll-free telephone number for
medicare beneficiaries to use to obtain information on
the medicare program, and particularly with respect
to the benefits provided under part D of title XVIII
of the Social Security Act and the Medicare Prescrip-
tion Drug plans and MedicareAdvantage plans offer-
ing such benefits. The Office shall ensure that the toll-
free telephone number accommodates beneficiaries
with disabilities and limited-English proficiency.
(2) Establishing an Internet website with easily
accessible information regarding Medicare Prescrip-
tion Drug plans and MedicareAdvantage plans and
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the benefits offered under such plans. The website
shall—
(A) be updated regularly to reflect changes
in services and benefits, including with respect to
the plans offered in a region and the associated
monthly premiums, benefits offered, formularies,
and contact information for such plans, and to
ensure that there are no broken links or errors;
(B) have printer-friendly, downloadable fact
sheets on the medicare coverage options and ben-
efits;
(C) be easy to navigate, with large print
and easily recognizable links; and
(D) provide links to the websites of the eligi-
ble entities participating in part D of title
XVIII.
(3) Providing regional publications to medicare
beneficiaries that include regional contacts for infor-
mation, and that inform the beneficiaries of the pre-
scription drug benefit options under title XVIII of the
Social Security Act, including with respect to—
(A) monthly premiums;
(B) formularies; and
(C) the scope of the benefits offered.
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(4) Conducting outreach to medicare bene-
ficiaries to inform the beneficiaries of the medicare
coverage options and benefits under parts A, B, C,
and D of title XVIII of the Social Security Act.
(5) Working with local benefits administrators,
ombudsmen, local benefits specialists, and advocacy
groups to ensure that medicare beneficiaries are
aware of the medicare coverage options and benefits
under parts A, B, C, and D of title XVIII of the So-
cial Security Act.
(c) FUNDING.—
(1) ESTABLISHMENT.—Of the amounts author-
ized to be appropriated under the Secretary’s discre-
tion for administrative expenditures, $2,000,000 may
be used to establish the Office in accordance with this
section.
(2) OPERATION.—With respect to each fiscal
year occurring after the fiscal year in which the Of-
fice is established under this section, the Secretary
may use, out of amounts authorized to be appro-
priated under the Secretary’s discretion for adminis-
trative expenditures for such fiscal year, such sums as
may be necessary to operate the Office in that fiscal
year.
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TITLE II—MEDICAREADVANTAGE
Subtitle A—MedicareAdvantage
Competition
SEC. 201. ELIGIBILITY, ELECTION, AND ENROLLMENT.
Section 1851 (42 U.S.C. 1395w–21) is amended to
read as follows:
‘‘ELIGIBILITY, ELECTION, AND ENROLLMENT
‘‘SEC. 1851. (a) CHOICE
OF MEDICARE BENEFITS
THROUGH MEDICAREADVANTAGE PLANS.—
‘‘(1) IN GENERAL.—Subject to the provisions of
this section, each MedicareAdvantage eligible indi-
vidual (as defined in paragraph (3)) is entitled to
elect to receive benefits under this title—
‘‘(A) through—
‘‘(i) the original Medicare fee-for-serv-
ice program under parts A and B; and
‘‘(ii) the voluntary prescription drug
delivery program under part D; or
‘‘(B) 
through 
enrollment 
in 
a
MedicareAdvantage plan under this part.
‘‘(2) TYPES
OF
MEDICAREADVANTAGE
PLANS
THAT
MAY
BE
AVAILABLE.—A MedicareAdvantage
plan may be any of the following types of plans of
health insurance:
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‘‘(A) COORDINATED CARE PLANS.—Coordi-
nated care plans which provide health care serv-
ices, including health maintenance organization
plans (with or without point of service options)
and plans offered by provider-sponsored organi-
zations (as defined in section 1855(d)).
‘‘(B) COMBINATION OF MSA PLAN AND CON-
TRIBUTIONS TO MEDICAREADVANTAGE MSA.—An
MSA plan, as defined in section 1859(b)(3), and
a contribution into a MedicareAdvantage med-
ical savings account (MSA).
‘‘(C) PRIVATE FEE-FOR-SERVICE PLANS.—A
MedicareAdvantage private fee-for-service plan,
as defined in section 1859(b)(2).
‘‘(3) 
MEDICAREADVANTAGE
ELIGIBLE
INDI-
VIDUAL.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph 
(B), 
in 
this 
title, 
the 
term
‘MedicareAdvantage eligible individual’ means
an individual who is entitled to (or enrolled for)
benefits under part A, enrolled under part B,
and enrolled under part D.
‘‘(B) SPECIAL RULE FOR END-STAGE RENAL
DISEASE.—Such term shall not include an indi-
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vidual medically determined to have end-stage
renal disease, except that—
‘‘(i) an individual who develops end-
stage renal disease while enrolled in a
Medicare+Choice or a MedicareAdvantage
plan may continue to be enrolled in that
plan; and
‘‘(ii) in the case of such an individual
who is enrolled in a Medicare+Choice plan
or a MedicareAdvantage plan under clause
(i) (or subsequently under this clause), if
the enrollment is discontinued under cir-
cumstances 
described 
in 
section
1851(e)(4)(A), then the individual will be
treated as a ‘MedicareAdvantage eligible in-
dividual’ for purposes of electing to con-
tinue 
enrollment 
in 
another
MedicareAdvantage plan.
‘‘(b) SPECIAL RULES.—
‘‘(1) RESIDENCE REQUIREMENT.—
‘‘(A) IN GENERAL.—Except as the Secretary
may otherwise provide and except as provided in
subparagraph (C), an individual is eligible to
elect a MedicareAdvantage plan offered by a
MedicareAdvantage organization only if the plan
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serves the geographic area in which the indi-
vidual resides.
‘‘(B) CONTINUATION OF ENROLLMENT PER-
MITTED.—Pursuant to rules specified by the Sec-
retary, the Secretary shall provide that a plan
may offer to all individuals residing in a geo-
graphic area the option to continue enrollment
in the plan, notwithstanding that the individual
no longer resides in the service area of the plan,
so long as the plan provides that individuals ex-
ercising this option have, as part of the basic
benefits described in section 1852(a)(1)(A), rea-
sonable access within that geographic area to the
full range of basic benefits, subject to reasonable
cost-sharing liability in obtaining such benefits.
‘‘(C) CONTINUATION OF ENROLLMENT PER-
MITTED
WHERE
SERVICE
CHANGED.—Notwith-
standing subparagraph (A) and in addition to
subparagraph (B), if a MedicareAdvantage orga-
nization eliminates from its service area a
MedicareAdvantage payment area that was pre-
viously within its service area, the organization
may elect to offer individuals residing in all or
portions of the affected area who would otherwise
be ineligible to continue enrollment the option to
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continue enrollment in a MedicareAdvantage
plan it offers so long as—
‘‘(i) the enrollee agrees to receive the
full range of basic benefits (excluding emer-
gency and urgently needed care) exclusively
at facilities designated by the organization
within the plan service area; and
‘‘(ii) 
there 
is 
no 
other
MedicareAdvantage plan offered in the area
in which the enrollee resides at the time of
the organization’s election.
‘‘(2) SPECIAL RULE FOR CERTAIN INDIVIDUALS
COVERED UNDER FEHBP OR ELIGIBLE FOR VETERANS
OR MILITARY HEALTH BENEFITS.—
‘‘(A) FEHBP.—An individual who is en-
rolled in a health benefit plan under chapter 89
of title 5, United States Code, is not eligible to
enroll in an MSA plan until such time as the
Director of the Office of Management and Budget
certifies to the Secretary that the Office of Per-
sonnel Management has adopted policies which
will ensure that the enrollment of such individ-
uals in such plans will not result in increased
expenditures for the Federal Government for
health benefit plans under such chapter.
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‘‘(B) VA AND
DOD.—The Secretary may
apply rules similar to the rules described in sub-
paragraph (A) in the case of individuals who are
eligible for health care benefits under chapter 55
of title 10, United States Code, or under chapter
17 of title 38 of such Code.
‘‘(3) LIMITATION ON ELIGIBILITY OF QUALIFIED
MEDICARE
BENEFICIARIES
AND
OTHER
MEDICAID
BENEFICIARIES TO ENROLL IN AN MSA PLAN.—An in-
dividual who is a qualified medicare beneficiary (as
defined in section 1905(p)(1)), a qualified disabled
and 
working 
individual 
(described 
in 
section
1905(s)), 
an 
individual 
described 
in 
section
1902(a)(10)(E)(iii), or otherwise entitled to medicare
cost-sharing under a State plan under title XIX is
not eligible to enroll in an MSA plan.
‘‘(4) COVERAGE UNDER MSA PLANS ON A DEM-
ONSTRATION BASIS.—
‘‘(A) IN GENERAL.—An individual is not el-
igible to enroll in an MSA plan under this
part—
‘‘(i) on or after January 1, 2004, un-
less the enrollment is the continuation of
such an enrollment in effect as of such date;
or
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‘‘(ii) as of any date if the number of
such individuals so enrolled as of such date
has reached 390,000.
Under rules established by the Secretary, an in-
dividual is not eligible to enroll (or continue en-
rollment) in an MSA plan for a year unless the
individual provides assurances satisfactory to the
Secretary that the individual will reside in the
United States for at least 183 days during the
year.
‘‘(B) EVALUATION.—The Secretary shall
regularly evaluate the impact of permitting en-
rollment in MSA plans under this part on selec-
tion (including adverse selection), use of preven-
tive care, access to care, and the financial status
of the Trust Funds under this title.
‘‘(C) REPORTS.—The Secretary shall submit
to Congress periodic reports on the numbers of
individuals enrolled in such plans and on the
evaluation being conducted under subparagraph
(B).
‘‘(c) PROCESS FOR EXERCISING CHOICE.—
‘‘(1) IN GENERAL.—The Secretary shall establish
a process through which elections described in sub-
section (a) are made and changed, including the form
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and manner in which such elections are made and
changed. Such elections shall be made or changed only
during coverage election periods specified under sub-
section (e) and shall become effective as provided in
subsection (f).
‘‘(2) 
COORDINATION
THROUGH
MEDICAREADVANTAGE ORGANIZATIONS.—
‘‘(A) ENROLLMENT.—Such process shall
permit an individual who wishes to elect a
MedicareAdvantage 
plan 
offered 
by 
a
MedicareAdvantage organization to make such
election through the filing of an appropriate elec-
tion form with the organization.
‘‘(B) DISENROLLMENT.—Such process shall
permit an individual, who has elected a
MedicareAdvantage 
plan 
offered 
by 
a
MedicareAdvantage organization and who wishes
to terminate such election, to terminate such elec-
tion through the filing of an appropriate election
form with the organization.
‘‘(3) DEFAULT.—
‘‘(A) INITIAL ELECTION.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii), an individual who fails to make an
election during an initial election period
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under subsection (e)(1) is deemed to have
chosen the original medicare fee-for-service
program option.
‘‘(ii) SEAMLESS
CONTINUATION
OF
COVERAGE.—The Secretary may establish
procedures under which an individual who
is enrolled in a Medicare+Choice plan or
another 
health 
plan 
(other 
than 
a
MedicareAdvantage plan) offered by a
MedicareAdvantage organization at the
time of the initial election period and who
fails to elect to receive coverage other than
through the organization is deemed to have
elected the MedicareAdvantage plan offered
by the organization (or, if the organization
offers more than 1 such plan, such plan or
plans as the Secretary identifies under such
procedures).
‘‘(B) CONTINUING PERIODS.—An individual
who has made (or is deemed to have made) an
election under this section is considered to have
continued to make such election until such time
as—
‘‘(i) the individual changes the election
under this section; or
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‘‘(ii) the MedicareAdvantage plan with
respect to which such election is in effect is
discontinued 
or, 
subject 
to 
subsection
(b)(1)(B), no longer serves the area in
which the individual resides.
‘‘(d) PROVIDING
INFORMATION
TO
PROMOTE
IN-
FORMED CHOICE.—
‘‘(1) IN GENERAL.—The Secretary shall provide
for activities under this subsection to broadly dissemi-
nate information to medicare beneficiaries (and pro-
spective medicare beneficiaries) on the coverage op-
tions provided under this section in order to promote
an active, informed selection among such options.
‘‘(2) PROVISION OF NOTICE.—
‘‘(A) OPEN SEASON NOTIFICATION.—At least
15 days before the beginning of each annual, co-
ordinated election period (as defined in sub-
section (e)(3)(B)), the Secretary shall mail to
each MedicareAdvantage eligible individual re-
siding in an area the following:
‘‘(i) 
GENERAL
INFORMATION.—The
general information described in paragraph
(3).
‘‘(ii) LIST OF PLANS AND COMPARISON
OF PLAN OPTIONS.—A list identifying the
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MedicareAdvantage plans that are (or will
be) available to residents of the area and in-
formation described in paragraph (4) con-
cerning such plans. Such information shall
be presented in a comparative form.
‘‘(iii) 
ADDITIONAL
INFORMATION.—
Any other information that the Secretary
determines will assist the individual in
making the election under this section.
The mailing of such information shall be coordi-
nated, to the extent practicable, with the mailing
of any annual notice under section 1804.
‘‘(B) NOTIFICATION
TO
NEWLY
ELIGIBLE
MEDICAREADVANTAGE ELIGIBLE INDIVIDUALS.—
To the extent practicable, the Secretary shall, not
later than 30 days before the beginning of the
initial MedicareAdvantage enrollment period for
an individual described in subsection (e)(1),
mail to the individual the information described
in subparagraph (A).
‘‘(C) FORM.—The information disseminated
under this paragraph shall be written and for-
matted using language that is easily understand-
able by medicare beneficiaries.
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‘‘(D) PERIODIC
UPDATING.—The informa-
tion described in subparagraph (A) shall be up-
dated on at least an annual basis to reflect
changes in the availability of MedicareAdvantage
plans, the benefits under such plans, and the
MedicareAdvantage monthly basic beneficiary
premium, MedicareAdvantage monthly bene-
ficiary premium for enhanced medical benefits,
and MedicareAdvantage monthly beneficiary ob-
ligation for qualified prescription drug coverage
for such plans.
‘‘(3) GENERAL INFORMATION.—General informa-
tion under this paragraph, with respect to coverage
under this part during a year, shall include the fol-
lowing:
‘‘(A) BENEFITS
UNDER
THE
ORIGINAL
MEDICARE
FEE-FOR-SERVICE
PROGRAM
OP-
TION.—A general description of the benefits cov-
ered under parts A and B of the original medi-
care fee-for-service program, including—
‘‘(i) covered items and services;
‘‘(ii) beneficiary cost-sharing, such as
deductibles, coinsurance, and copayment
amounts; and
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‘‘(iii) any beneficiary liability for bal-
ance billing.
‘‘(B) CATASTROPHIC COVERAGE AND COM-
BINED DEDUCTIBLE.—A description of the cata-
strophic coverage and unified deductible applica-
ble under the plan.
‘‘(C) OUTPATIENT
PRESCRIPTION
DRUG
COVERAGE BENEFITS.—The information required
under section 1860D–4 with respect to coverage
for prescription drugs under the plan.
‘‘(D) ELECTION
PROCEDURES.—Informa-
tion and instructions on how to exercise election
options under this section.
‘‘(E) RIGHTS.—A general description of
procedural rights (including grievance and ap-
peals procedures) of beneficiaries under the origi-
nal medicare fee-for-service program (including
such 
rights 
under 
part 
D) 
and 
the
MedicareAdvantage program and the right to be
protected against discrimination based on health
status-related factors under section 1852(b).
‘‘(F) INFORMATION ON MEDIGAP AND MEDI-
CARE SELECT.—A general description of the ben-
efits, enrollment rights, and other requirements
applicable to medicare supplemental policies
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under section 1882 and provisions relating to
medicare select policies described in section
1882(t).
‘‘(G) POTENTIAL
FOR
CONTRACT
TERMI-
NATION.—The fact that a MedicareAdvantage or-
ganization may terminate its contract, refuse to
renew its contract, or reduce the service area in-
cluded in its contract, under this part, and the
effect of such a termination, nonrenewal, or serv-
ice area reduction may have on individuals en-
rolled with the MedicareAdvantage plan under
this part.
‘‘(4) INFORMATION COMPARING PLAN OPTIONS.—
Information under this paragraph, with respect to a
MedicareAdvantage plan for a year, shall include the
following:
‘‘(A) 
BENEFITS.—The 
benefits 
covered
under the plan, including the following:
‘‘(i) Covered items and services beyond
those provided under the original medicare
fee-for-service program option.
‘‘(ii) Beneficiary cost-sharing for any
items and services described in clause (i)
and paragraph (3)(A)(i), including infor-
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mation on the unified deductible under sec-
tion 1852(a)(1)(C).
‘‘(iii) The maximum limitations on
out-of-pocket 
expenses 
under 
section
1852(a)(1)(C).
‘‘(iv) In the case of an MSA plan, dif-
ferences in cost-sharing, premiums, and bal-
ance billing under such a plan compared to
under other MedicareAdvantage plans.
‘‘(v) 
In 
the 
case 
of 
a
MedicareAdvantage private fee-for-service
plan, differences in cost-sharing, premiums,
and balance billing under such a plan com-
pared to under other MedicareAdvantage
plans.
‘‘(vi) The extent to which an enrollee
may obtain benefits through out-of-network
health care providers.
‘‘(vii) The extent to which an enrollee
may select among in-network providers and
the types of providers participating in the
plan’s network.
‘‘(viii) The organization’s coverage of
emergency and urgently needed care.
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‘‘(ix) The comparative information de-
scribed in section 1860D–4(b)(2) relating to
prescription drug coverage under the plan.
‘‘(B) PREMIUMS.—
‘‘(i) 
IN
GENERAL.—The
MedicareAdvantage monthly basic bene-
ficiary premium and MedicareAdvantage
monthly beneficiary premium for enhanced
medical benefits, if any, for the plan or, in
the 
case 
of 
an 
MSA 
plan, 
the
MedicareAdvantage 
monthly 
MSA 
pre-
mium.
‘‘(ii) REDUCTIONS.—The reduction in
part B premiums, if any.
‘‘(iii) NATURE OF THE PREMIUM FOR
ENHANCED
MEDICAL
BENEFITS.—Whether
the MedicareAdvantage monthly premium
for enhanced benefits is optional or manda-
tory.
‘‘(C) SERVICE AREA.—The service area of
the plan.
‘‘(D) QUALITY
AND
PERFORMANCE.—Plan
quality and performance indicators for the bene-
fits under the plan (and how such indicators
compare to quality and performance indicators
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under the original medicare fee-for-service pro-
gram under parts A and B and under the vol-
untary prescription drug delivery program
under part D in the area involved), including—
‘‘(i) disenrollment rates for medicare
enrollees electing to receive benefits through
the plan for the previous 2 years (excluding
disenrollment due to death or moving out-
side the plan’s service area);
‘‘(ii) information on medicare enrollee
satisfaction;
‘‘(iii) information on health outcomes;
and
‘‘(iv) the recent record regarding com-
pliance of the plan with requirements of
this part (as determined by the Secretary).
‘‘(5) MAINTAINING A TOLL-FREE NUMBER AND
INTERNET
SITE.—The Secretary shall maintain a
toll-free 
number 
for 
inquiries 
regarding
MedicareAdvantage options and the operation of this
part in all areas in which MedicareAdvantage plans
are offered and an Internet site through which indi-
viduals may electronically obtain information on
such options and MedicareAdvantage plans.
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‘‘(6) USE OF NON-FEDERAL ENTITIES.—The Sec-
retary may enter into contracts with non-Federal en-
tities to carry out activities under this subsection.
‘‘(7) 
PROVISION
OF
INFORMATION.—A
MedicareAdvantage organization shall provide the
Secretary with such information on the organization
and each MedicareAdvantage plan it offers as may be
required for the preparation of the information re-
ferred to in paragraph (2)(A).
‘‘(e) COVERAGE ELECTION PERIODS.—
‘‘(1) INITIAL CHOICE UPON ELIGIBILITY TO MAKE
ELECTION IF MEDICAREADVANTAGE PLANS AVAILABLE
TO INDIVIDUAL.—If, at the time an individual first
becomes eligible to elect to receive benefits under part
B or D (whichever is later), there is 1 or more
MedicareAdvantage plans offered in the area in which
the individual resides, the individual shall make the
election under this section during a period specified
by the Secretary such that if the individual elects a
MedicareAdvantage plan during the period, coverage
under the plan becomes effective as of the first date
on which the individual may receive such coverage.
‘‘(2) OPEN ENROLLMENT AND DISENROLLMENT
OPPORTUNITIES.—Subject to paragraph (5), the fol-
lowing rules shall apply:
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‘‘(A) CONTINUOUS OPEN ENROLLMENT AND
DISENROLLMENT THROUGH 2005.—At any time
during the period beginning January 1, 1998,
and 
ending 
on 
December 
31, 
2005, 
a
Medicare+Choice eligible individual may change
the election under subsection (a)(1).
‘‘(B) CONTINUOUS OPEN ENROLLMENT AND
DISENROLLMENT FOR FIRST 6 MONTHS DURING
2006.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii) and subparagraph (D), at any time
during the first 6 months of 2006, or, if the
individual 
first 
becomes 
a
MedicareAdvantage eligible individual dur-
ing 2006, during the first 6 months during
2006 
in 
which 
the 
individual 
is 
a
MedicareAdvantage eligible individual, a
MedicareAdvantage eligible individual may
change the election under subsection (a)(1).
‘‘(ii) LIMITATION OF 1 CHANGE.—An
individual may exercise the right under
clause (i) only once. The limitation under
this clause shall not apply to changes in
elections effected during an annual, coordi-
nated election period under paragraph (3)
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or during a special enrollment period under
the first sentence of paragraph (4).
‘‘(C) CONTINUOUS OPEN ENROLLMENT AND
DISENROLLMENT FOR FIRST 3 MONTHS IN SUB-
SEQUENT YEARS.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii) and subparagraph (D), at any time
during the first 3 months of 2007 and each
subsequent year, or, if the individual first
becomes a MedicareAdvantage eligible indi-
vidual during 2007 or any subsequent year,
during the first 3 months of such year in
which 
the 
individual 
is 
a
MedicareAdvantage eligible individual, a
MedicareAdvantage eligible individual may
change the election under subsection (a)(1).
‘‘(ii) LIMITATION OF 1 CHANGE DURING
OPEN ENROLLMENT PERIOD EACH YEAR.—
An individual may exercise the right under
clause (i) only once during the applicable 3-
month period described in such clause in
each year. The limitation under this clause
shall not apply to changes in elections ef-
fected during an annual, coordinated elec-
tion period under paragraph (3) or during
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a special enrollment period under para-
graph (4).
‘‘(D) CONTINUOUS OPEN ENROLLMENT FOR
INSTITUTIONALIZED INDIVIDUALS.—At any time
during 2006 or any subsequent year, in the case
of a MedicareAdvantage eligible individual who
is institutionalized (as defined by the Secretary),
the individual may elect under subsection
(a)(1)—
‘‘(i) to enroll in a MedicareAdvantage
plan; or
‘‘(ii) to change the MedicareAdvantage
plan in which the individual is enrolled.
‘‘(3) ANNUAL, 
COORDINATED
ELECTION
PE-
RIOD.—
‘‘(A) IN GENERAL.—Subject to paragraph
(5), each individual who is eligible to make an
election under this section may change such elec-
tion during an annual, coordinated election pe-
riod.
‘‘(B) ANNUAL, COORDINATED ELECTION PE-
RIOD.—For purposes of this section, the term
‘annual, coordinated election period’ means, with
respect to a year before 2003 and after 2006, the
month of November before such year and with re-
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spect to 2003, 2004, 2005, and 2006, the period
beginning on November 15 and ending on De-
cember 31 of the year before such year.
‘‘(C) MEDICAREADVANTAGE HEALTH INFOR-
MATION FAIRS.—During the fall season of each
year (beginning with 2006), in conjunction with
the annual coordinated election period defined in
subparagraph (B), the Secretary shall provide
for a nationally coordinated educational and
publicity 
campaign 
to 
inform
MedicareAdvantage eligible individuals about
MedicareAdvantage plans and the election proc-
ess provided under this section.
‘‘(D) SPECIAL INFORMATION CAMPAIGN IN
2005.—During the period beginning on November
15, 2005, and ending on December 31, 2005, the
Secretary shall provide for an educational and
publicity 
campaign 
to 
inform
MedicareAdvantage eligible individuals about the
availability of MedicareAdvantage plans, and el-
igible organizations with risk-sharing contracts
under section 1876, offered in different areas and
the election process provided under this section.
‘‘(4) SPECIAL ELECTION PERIODS.—Effective on
and after January 1, 2006, an individual may dis-
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continue an election of a MedicareAdvantage plan of-
fered by a MedicareAdvantage organization other
than during an annual, coordinated election period
and make a new election under this section if—
‘‘(A)(i) the certification of the organization
or plan under this part has been terminated, or
the organization or plan has notified the indi-
vidual of an impending termination of such cer-
tification; or
‘‘(ii) the organization has terminated or
otherwise discontinued providing the plan in the
area in which the individual resides, or has noti-
fied the individual of an impending termination
or discontinuation of such plan;
‘‘(B) the individual is no longer eligible to
elect the plan because of a change in the individ-
ual’s place of residence or other change in cir-
cumstances (specified by the Secretary, but not
including termination of the individual’s enroll-
ment on the basis described in clause (i) or (ii)
of subsection (g)(3)(B));
‘‘(C) the individual demonstrates (in ac-
cordance with guidelines established by the Sec-
retary) that—
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‘‘(i) the organization offering the plan
substantially violated a material provision
of the organization’s contract under this
part in relation to the individual (includ-
ing the failure to provide an enrollee on a
timely basis medically necessary care for
which benefits are available under the plan
or the failure to provide such covered care
in accordance with applicable quality
standards); or
‘‘(ii) the organization (or an agent or
other entity acting on the organization’s be-
half) materially misrepresented the plan’s
provisions in marketing the plan to the in-
dividual; or
‘‘(D) the individual meets such other excep-
tional conditions as the Secretary may provide.
Effective on and after January 1, 2006, an indi-
vidual who, upon first becoming eligible for benefits
under 
part 
A 
at 
age 
65, 
enrolls 
in 
a
MedicareAdvantage plan under this part, the indi-
vidual may discontinue the election of such plan, and
elect coverage under the original fee-for-service plan,
at any time during the 12-month period beginning on
the effective date of such enrollment.
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‘‘(5) SPECIAL RULES FOR MSA PLANS.—Notwith-
standing the preceding provisions of this subsection,
an individual—
‘‘(A) may elect an MSA plan only during—
‘‘(i) an initial open enrollment period
described in paragraph (1);
‘‘(ii) an annual, coordinated election
period described in paragraph (3)(B); or
‘‘(iii) the month of November 1998;
‘‘(B) subject to subparagraph (C), may not
discontinue an election of an MSA plan except
during the periods described in clause (ii) or
(iii) of subparagraph (A) and under the first
sentence of paragraph (4); and
‘‘(C) who elects an MSA plan during an
annual, coordinated election period, and who
never previously had elected such a plan, may
revoke such election, in a manner determined by
the Secretary, by not later than December 15 fol-
lowing the date of the election.
‘‘(6) OPEN ENROLLMENT PERIODS.—Subject to
paragraph (5), a MedicareAdvantage organization—
‘‘(A) shall accept elections or changes to
elections during the initial enrollment periods
described in paragraph (1), during the period be-
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ginning on November 15, 2005, and ending on
December 31, 2005, and during the annual, co-
ordinated election period under paragraph (3)
for each subsequent year, and during special
election periods described in the first sentence of
paragraph (4); and
‘‘(B) may accept other changes to elections
at such other times as the organization provides.
‘‘(f) EFFECTIVENESS OF ELECTIONS AND CHANGES OF
ELECTIONS.—
‘‘(1) DURING INITIAL COVERAGE ELECTION PE-
RIOD.—An election of coverage made during the ini-
tial 
coverage 
election 
period 
under 
subsection
(e)(1)(A) shall take effect upon the date the individual
becomes entitled to (or enrolled for) benefits under
part A, enrolled under part B, and enrolled under
part D, except as the Secretary may provide (con-
sistent with sections 1838 and 1860D–2)) in order to
prevent retroactive coverage.
‘‘(2) DURING
CONTINUOUS
OPEN
ENROLLMENT
PERIODS.—An election or change of coverage made
under subsection (e)(2) shall take effect with the first
day of the first calendar month following the date on
which the election or change is made.
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‘‘(3) ANNUAL, 
COORDINATED
ELECTION
PE-
RIOD.—An election or change of coverage made dur-
ing an annual, coordinated election period (as defined
in subsection (e)(3)(B)) in a year shall take effect as
of the first day of the following year.
‘‘(4) OTHER PERIODS.—An election or change of
coverage made during any other period under sub-
section (e)(4) shall take effect in such manner as the
Secretary provides in a manner consistent (to the ex-
tent practicable) with protecting continuity of health
benefit coverage.
‘‘(g) GUARANTEED ISSUE AND RENEWAL.—
‘‘(1) IN GENERAL.—Except as provided in this
subsection, a MedicareAdvantage organization shall
provide that at any time during which elections are
accepted under this section with respect to a
MedicareAdvantage plan offered by the organization,
the organization will accept without restrictions indi-
viduals who are eligible to make such election.
‘‘(2) PRIORITY.—If the Secretary determines that
a MedicareAdvantage organization, in relation to a
MedicareAdvantage plan it offers, has a capacity
limit and the number of MedicareAdvantage eligible
individuals who elect the plan under this section ex-
ceeds the capacity limit, the organization may limit
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the election of individuals of the plan under this sec-
tion but only if priority in election is provided—
‘‘(A) first to such individuals as have elect-
ed the plan at the time of the determination; and
‘‘(B) then to other such individuals in such
a manner that does not discriminate, on a basis
described in section 1852(b), among the individ-
uals (who seek to elect the plan).
The preceding sentence shall not apply if it would re-
sult in the enrollment of enrollees substantially non-
representative, as determined in accordance with reg-
ulations of the Secretary, of the medicare population
in the service area of the plan.
‘‘(3) LIMITATION
ON
TERMINATION
OF
ELEC-
TION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a MedicareAdvantage organization
may not for any reason terminate the election of
any individual under this section for a
MedicareAdvantage plan it offers.
‘‘(B) BASIS
FOR
TERMINATION
OF
ELEC-
TION.—A MedicareAdvantage organization may
terminate an individual’s election under this sec-
tion with respect to a MedicareAdvantage plan it
offers if—
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‘‘(i) any MedicareAdvantage monthly
basic 
beneficiary 
premium,
MedicareAdvantage monthly beneficiary ob-
ligation for qualified prescription drug cov-
erage, or MedicareAdvantage monthly bene-
ficiary premium for required or optional
enhanced medical benefits required with re-
spect to such plan are not paid on a timely
basis (consistent with standards under sec-
tion 1856 that provide for a grace period
for late payment of such premiums);
‘‘(ii) the individual has engaged in
disruptive behavior (as specified in such
standards); or
‘‘(iii) the plan is terminated with re-
spect to all individuals under this part in
the area in which the individual resides.
‘‘(C) CONSEQUENCE OF TERMINATION.—
‘‘(i) TERMINATIONS FOR CAUSE.—Any
individual whose election is terminated
under clause (i) or (ii) of subparagraph (B)
is deemed to have elected to receive benefits
under the original medicare fee-for-service
program option.
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‘‘(ii) TERMINATION
BASED
ON
PLAN
TERMINATION
OR
SERVICE
AREA
REDUC-
TION.—Any individual whose election is
terminated under subparagraph (B)(iii)
shall have a special election period under
subsection (e)(4)(A) in which to change cov-
erage 
to 
coverage 
under 
another
MedicareAdvantage plan. Such an indi-
vidual who fails to make an election during
such period is deemed to have chosen to
change coverage to the original medicare
fee-for-service program option.
‘‘(D) ORGANIZATION OBLIGATION WITH RE-
SPECT
TO
ELECTION
FORMS.—Pursuant to a
contract 
under 
section 
1857858., 
each
MedicareAdvantage organization receiving an
election form under subsection (c)(2) shall trans-
mit to the Secretary (at such time and in such
manner as the Secretary may specify) a copy of
such form or such other information respecting
the election as the Secretary may specify.
‘‘(h) APPROVAL OF MARKETING MATERIAL AND APPLI-
CATION FORMS.—
‘‘(1) SUBMISSION.—No marketing material or
application 
form 
may 
be 
distributed 
by 
a
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MedicareAdvantage organization to (or for the use of)
MedicareAdvantage eligible individuals unless—
‘‘(A) at least 45 days (or 10 days in the
case described in paragraph (5)) before the date
of distribution the organization has submitted
the material or form to the Secretary for review;
and
‘‘(B) the Secretary has not disapproved the
distribution of such material or form.
‘‘(2) REVIEW.—The standards established under
section 1856 shall include guidelines for the review of
any material or form submitted and under such
guidelines the Secretary shall disapprove (or later re-
quire the correction of) such material or form if the
material or form is materially inaccurate or mis-
leading or otherwise makes a material misrepresenta-
tion.
‘‘(3) DEEMED APPROVAL (1-STOP SHOPPING).—
In the case of material or form that is submitted
under paragraph (1)(A) to the Secretary or a re-
gional office of the Department of Health and Human
Services and the Secretary or the office has not dis-
approved the distribution of marketing material or
form under paragraph (1)(B) with respect to a
MedicareAdvantage plan in an area, the Secretary is
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deemed not to have disapproved such distribution in
all other areas covered by the plan and organization
except with regard to that portion of such material or
form that is specific only to an area involved.
‘‘(4) PROHIBITION
OF
CERTAIN
MARKETING
PRACTICES.—Each MedicareAdvantage organization
shall conform to fair marketing standards, in relation
to MedicareAdvantage plans offered under this part,
included in the standards established under section
1856. Such standards—
‘‘(A) shall not permit a MedicareAdvantage
organization to provide for cash or other mone-
tary rebates as an inducement for enrollment or
otherwise (other than as an additional benefit
described in section 1854(g)(1)(C)(i)); and
‘‘(B) may include a prohibition against a
MedicareAdvantage organization (or agent of
such an organization) completing any portion of
any election form used to carry out elections
under this section on behalf of any individual.
‘‘(5) SPECIAL TREATMENT OF MARKETING MATE-
RIAL FOLLOWING MODEL MARKETING LANGUAGE.—In
the case of marketing material of an organization
that uses, without modification, proposed model lan-
guage specified by the Secretary, the period specified
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in paragraph (1)(A) shall be reduced from 45 days to
10 days.
‘‘(i) EFFECT OF ELECTION OF MEDICAREADVANTAGE
PLAN OPTION.—
‘‘(1) PAYMENTS TO ORGANIZATIONS.—Subject to
sections 1852(a)(5), 1853(h), 1853(i), 1886(d)(11),
and 1886(h)(3)(D), payments under a contract with
a MedicareAdvantage organization under section
1853(a) with respect to an individual electing a
MedicareAdvantage plan offered by the organization
shall be instead of the amounts which (in the absence
of the contract) would otherwise be payable under
parts A, B, and D for items and services furnished
to the individual.
‘‘(2) ONLY
ORGANIZATION
ENTITLED
TO
PAY-
MENT.—Subject to sections 1853(f), 1853(h), 1853(i),
1857(f)(2), 1886(d)(11), and 1886(h)(3)(D), only the
MedicareAdvantage organization shall be entitled to
receive payments from the Secretary under this title
for services furnished to the individual.’’.
SEC. 202. BENEFITS AND BENEFICIARY PROTECTIONS.
Section 1852 (42 U.S.C. 1395w–22) is amended to
read as follows:
‘‘BENEFITS AND BENEFICIARY PROTECTIONS
‘‘SEC. 1852. (a) BASIC BENEFITS.—
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‘‘(1) IN GENERAL.—Except as provided in sec-
tion 
1859(b)(3) 
for 
MSA 
plans, 
each
MedicareAdvantage plan shall provide to members en-
rolled under this part, through providers and other
persons that meet the applicable requirements of this
title and part A of title XI—
‘‘(A) those items and services (other than
hospice care) for which benefits are available
under parts A and B to individuals residing in
the area served by the plan;
‘‘(B) except as provided in paragraph
(2)(D), qualified prescription drug coverage
under part D to individuals residing in the area
served by the plan;
‘‘(C) a maximum limitation on out-of-pock-
et expenses and a unified deductible; and
‘‘(D) additional benefits required under sec-
tion 1854(d)(1).
‘‘(2) SATISFACTION OF REQUIREMENT.—
‘‘(A) IN GENERAL.—A MedicareAdvantage
plan (other than an MSA plan) offered by a
MedicareAdvantage organization satisfies para-
graph (1)(A), with respect to benefits for items
and services furnished other than through a pro-
vider or other person that has a contract with
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the organization offering the plan, if the plan
provides payment in an amount so that—
‘‘(i) the sum of such payment amount
and any cost-sharing provided for under the
plan; is equal to at least
‘‘(ii) the total dollar amount of pay-
ment for such items and services as would
otherwise be authorized under parts A and
B (including any balance billing permitted
under such parts).
‘‘(B) REFERENCE
TO
RELATED
PROVI-
SIONS.—For provisions relating to—
‘‘(i) limitations on balance billing
against MedicareAdvantage organizations
for noncontract providers, see sections
1852(k) and 1866(a)(1)(O); and
‘‘(ii) limiting actuarial value of en-
rollee liability for covered benefits, see sec-
tion 1854(f).
‘‘(C) ELECTION
OF
UNIFORM
COVERAGE
POLICY.—In the case of a MedicareAdvantage or-
ganization that offers a MedicareAdvantage plan
in an area in which more than 1 local coverage
policy is applied with respect to different parts
of the area, the organization may elect to have
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the local coverage policy for the part of the area
that is most beneficial to MedicareAdvantage en-
rollees (as identified by the Secretary) apply
with respect to all MedicareAdvantage enrollees
enrolled in the plan.
‘‘(D) SPECIAL RULE FOR PRIVATE FEE-FOR-
SERVICE PLANS.—
‘‘(i) IN GENERAL.—A private fee-for-
service plan may elect not to provide quali-
fied prescription drug coverage under part
D to individuals residing in the area served
by the plan.
‘‘(ii) AVAILABILITY
OF
DRUG
COV-
ERAGE FOR ENROLLEES.—If a beneficiary
enrolls in a plan making the election de-
scribed in clause (i), the beneficiary may
enroll for drug coverage under part D with
an eligible entity under such part.
‘‘(3) ENHANCED MEDICAL BENEFITS.—
‘‘(A) BENEFITS INCLUDED SUBJECT TO SEC-
RETARY’S APPROVAL.—Each MedicareAdvantage
organization may provide to individuals enrolled
under this part, other than under an MSA plan
(without affording those individuals an option to
decline the coverage), enhanced medical benefits
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that the Secretary may approve. The Secretary
shall approve any such enhanced medical bene-
fits unless the Secretary determines that includ-
ing such enhanced medical benefits would sub-
stantially 
discourage 
enrollment 
by
MedicareAdvantage eligible individuals with the
organization.
‘‘(B) 
AT
ENROLLEES’ 
OPTION.—A
MedicareAdvantage organization may not pro-
vide, under an MSA plan, enhanced medical
benefits that cover the deductible described in sec-
tion 1859(b)(2)(B). In applying the previous
sentence, health benefits described in section
1882(u)(2)(B) shall not be treated as covering
such deductible.
‘‘(C) APPLICATION TO MEDICAREADVANTAGE
PRIVATE FEE-FOR-SERVICE PLANS.—Nothing in
this paragraph shall be construed as preventing
a MedicareAdvantage private fee-for-service plan
from offering enhanced medical benefits that in-
clude payment for some or all of the balance bill-
ing amounts permitted consistent with section
1852(k) and coverage of additional services that
the plan finds to be medically necessary.
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‘‘(D) RULE FOR APPROVAL OF MEDICAL AND
PRESCRIPTION
DRUG
BENEFITS.—Notwith-
standing the preceding provisions of this para-
graph, the Secretary may not approve any en-
hanced medical benefit that provides for the cov-
erage of any prescription drug (other than that
relating to prescription drugs covered under the
original medicare fee-for-service program op-
tion).
‘‘(4) ORGANIZATION
AS
SECONDARY
PAYER.—
Notwithstanding any other provision of law, a
MedicareAdvantage organization may (in the case of
the provision of items and services to an individual
under 
a 
MedicareAdvantage 
plan 
under 
cir-
cumstances in which payment under this title is
made secondary pursuant to section 1862(b)(2))
charge or authorize the provider of such services to
charge, in accordance with the charges allowed under
a law, plan, or policy described in such section—
‘‘(A) the insurance carrier, employer, or
other entity which under such law, plan, or pol-
icy is to pay for the provision of such services;
or
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‘‘(B) such individual to the extent that the
individual has been paid under such law, plan,
or policy for such services.
‘‘(5) NATIONAL COVERAGE DETERMINATIONS AND
LEGISLATIVE CHANGES IN BENEFITS.—If there is a
national coverage determination or legislative change
in benefits required to be provided under this part
made in the period beginning on the date of an an-
nouncement under section 1853(b) and ending on the
date of the next announcement under such section and
the Secretary projects that the determination will re-
sult in a significant change in the costs to a
MedicareAdvantage organization of providing the
benefits that are the subject of such national coverage
determination and that such change in costs was not
incorporated in the determination of the benchmark
amount announced under section 1853(b)(1)(A) at the
beginning of such period, then, unless otherwise re-
quired by law—
‘‘(A) such determination or legislative
change in benefits shall not apply to contracts
under this part until the first contract year that
begins after the end of such period; and
‘‘(B) if such coverage determination or leg-
islative change provides for coverage of addi-
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tional benefits or coverage under additional cir-
cumstances, section 1851(i)(1) shall not apply to
payment for such additional benefits or benefits
provided under such additional circumstances
until the first contract year that begins after the
end of such period.
The projection under the previous sentence shall be
based on an analysis by the Secretary of the actuarial
costs associated with the coverage determination or
legislative change in benefits.
‘‘(6) AUTHORITY
TO
PROHIBIT
RISK
SELEC-
TION.—The Secretary shall have the authority to dis-
approve any MedicareAdvantage plan that the Sec-
retary determines is designed to attract a population
that is healthier than the average population residing
in the service area of the plan.
‘‘(7) UNIFIED DEDUCTIBLE DEFINED.—In this
part, the term ‘unified deductible’ means an annual
deductible amount that is applied in lieu of the inpa-
tient hospital deductible under section 1813(b)(1) and
the deductible under section 1833(b). Nothing in this
part 
shall 
be 
construed 
as 
preventing 
a
MedicareAdvantage organization from requiring coin-
surance or a copayment for inpatient hospital serv-
ices after the unified deductible is satisfied, subject to
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the limitation on enrollee liability under section
1854(f).
‘‘(b) ANTIDISCRIMINATION.—
‘‘(1) BENEFICIARIES.—
‘‘(A) IN GENERAL.—A MedicareAdvantage
organization may not deny, limit, or condition
the coverage or provision of benefits under this
part, for individuals permitted to be enrolled
with the organization under this part, based on
any health status-related factor described in sec-
tion 2702(a)(1) of the Public Health Service Act.
‘‘(B) CONSTRUCTION.—Except as provided
under section 1851(a)(3)(B), subparagraph (A)
shall 
not 
be 
construed 
as 
requiring 
a
MedicareAdvantage organization to enroll indi-
viduals who are determined to have end-stage
renal disease.
‘‘(2) PROVIDERS.—A MedicareAdvantage organi-
zation shall not discriminate with respect to partici-
pation, reimbursement, or indemnification as to any
provider who is acting within the scope of the pro-
vider’s license or certification under applicable State
law, solely on the basis of such license or certification.
This paragraph shall not be construed to prohibit a
plan from including providers only to the extent nec-
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essary to meet the needs of the plan’s enrollees or from
establishing any measure designed to maintain qual-
ity and control costs consistent with the responsibil-
ities of the plan.
‘‘(c) DISCLOSURE REQUIREMENTS.—
‘‘(1) DETAILED DESCRIPTION OF PLAN PROVI-
SIONS.—A MedicareAdvantage organization shall dis-
close, in clear, accurate, and standardized form to
each enrollee with a MedicareAdvantage plan offered
by the organization under this part at the time of en-
rollment and at least annually thereafter, the fol-
lowing information regarding such plan:
‘‘(A) SERVICE
AREA.—The plan’s service
area.
‘‘(B) BENEFITS.—Benefits offered under the
plan, including information described section
1852(a)(1) (relating to benefits under the origi-
nal medicare fee-for-service program option, the
maximum limitation in out-of-pocket expenses
and the unified deductible, and qualified pre-
scription drug coverage under part D, respec-
tively) and exclusions from coverage and, if it is
an MSA plan, a comparison of benefits under
such 
a 
plan 
with 
benefits 
under 
other
MedicareAdvantage plans.
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‘‘(C) ACCESS.—The number, mix, and dis-
tribution of plan providers, out-of-network cov-
erage (if any) provided by the plan, and any
point-of-service 
option 
(including 
the
MedicareAdvantage monthly beneficiary pre-
mium for enhanced medical benefits for such op-
tion).
‘‘(D) 
OUT-OF-AREA
COVERAGE.—Out-of-
area coverage provided by the plan.
‘‘(E) EMERGENCY COVERAGE.—Coverage of
emergency services, including—
‘‘(i) the appropriate use of emergency
services, including use of the 911 telephone
system or its local equivalent in emergency
situations and an explanation of what con-
stitutes an emergency situation;
‘‘(ii) the process and procedures of the
plan for obtaining emergency services; and
‘‘(iii) the locations of—
‘‘(I) emergency departments; and
‘‘(II) other settings, in which plan
physicians and hospitals provide emer-
gency services and post-stabilization
care.
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‘‘(F) ENHANCED MEDICAL BENEFITS.—En-
hanced medical benefits available from the orga-
nization offering the plan, including—
‘‘(i) whether the enhanced medical ben-
efits are optional;
‘‘(ii) the enhanced medical benefits cov-
ered; and
‘‘(iii) the MedicareAdvantage monthly
beneficiary premium for enhanced medical
benefits.
‘‘(G) 
PRIOR
AUTHORIZATION
RULES.—
Rules regarding prior authorization or other re-
view requirements that could result in non-
payment.
‘‘(H) PLAN GRIEVANCE AND APPEALS PRO-
CEDURES.—All plan appeal or grievance rights
and procedures.
‘‘(I) QUALITY ASSURANCE PROGRAM.—A de-
scription of the organization’s quality assurance
program under subsection (e).
‘‘(2) DISCLOSURE
UPON
REQUEST.—Upon re-
quest of a MedicareAdvantage eligible individual, a
MedicareAdvantage organization must provide the fol-
lowing information to such individual:
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‘‘(A) The general coverage information and
general comparative plan information made
available under clauses (i) and (ii) of section
1851(d)(2)(A).
‘‘(B) Information on procedures used by the
organization to control utilization of services
and expenditures.
‘‘(C) Information on the number of griev-
ances, reconsiderations, and appeals and on the
disposition in the aggregate of such matters.
‘‘(D) An overall summary description as to
the method of compensation of participating
physicians.
‘‘(E) The information described in subpara-
graphs (A) through (C) in relation to the quali-
fied prescription drug coverage provided by the
organization.
‘‘(d) ACCESS TO SERVICES.—
‘‘(1) IN GENERAL.—A MedicareAdvantage orga-
nization offering a MedicareAdvantage plan may se-
lect the providers from whom the benefits under the
plan are provided so long as—
‘‘(A) the organization makes such benefits
available and accessible to each individual elect-
ing the plan within the plan service area with
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reasonable promptness and in a manner which
assures continuity in the provision of benefits;
‘‘(B) when medically necessary the organi-
zation makes such benefits available and acces-
sible 24 hours a day and 7 days a week;
‘‘(C) the plan provides for reimbursement
with respect to services which are covered under
subparagraphs (A) and (B) and which are pro-
vided to such an individual other than through
the organization, if—
‘‘(i) the services were not emergency
services (as defined in paragraph (3)),
but—
‘‘(I) the services were medically
necessary and immediately required
because of an unforeseen illness, injury,
or condition; and
‘‘(II) it was not reasonable given
the circumstances to obtain the services
through the organization;
‘‘(ii) the services were renal dialysis
services and were provided other than
through the organization because the indi-
vidual was temporarily out of the plan’s
service area; or
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‘‘(iii) the services are maintenance care
or post-stabilization care covered under the
guidelines established under paragraph (2);
‘‘(D) the organization provides access to ap-
propriate providers, including credentialed spe-
cialists, for medically necessary treatment and
services; and
‘‘(E) coverage is provided for emergency
services (as defined in paragraph (3)) without
regard to prior authorization or the emergency
care provider’s contractual relationship with the
organization.
‘‘(2) GUIDELINES RESPECTING COORDINATION OF
POST-STABILIZATION
CARE.—A MedicareAdvantage
plan shall comply with such guidelines as the Sec-
retary may prescribe relating to promoting efficient
and timely coordination of appropriate maintenance
and post-stabilization care of an enrollee after the en-
rollee has been determined to be stable under section
1867.
‘‘(3) DEFINITION OF EMERGENCY SERVICES.—In
this subsection—
‘‘(A) IN
GENERAL.—The term ‘emergency
services’ means, with respect to an individual
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enrolled with an organization, covered inpatient
and outpatient services that—
‘‘(i) are furnished by a provider that is
qualified to furnish such services under this
title; and
‘‘(ii) are needed to evaluate or stabilize
an emergency medical condition (as defined
in subparagraph (B)).
‘‘(B) 
EMERGENCY
MEDICAL
CONDITION
BASED
ON
PRUDENT
LAYPERSON.—The term
‘emergency medical condition’ means a medical
condition manifesting itself by acute symptoms
of sufficient severity (including severe pain) such
that a prudent layperson, who possesses an aver-
age knowledge of health and medicine, could rea-
sonably expect the absence of immediate medical
attention to result in—
‘‘(i) placing the health of the indi-
vidual (or, with respect to a pregnant
woman, the health of the woman or her un-
born child) in serious jeopardy;
‘‘(ii) serious impairment to bodily
functions; or
‘‘(iii) serious dysfunction of any bodily
organ or part.
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‘‘(4) ASSURING
ACCESS
TO
SERVICES
IN
MEDICAREADVANTAGE PRIVATE FEE-FOR-SERVICE
PLANS.—In addition to any other requirements
under 
this 
part, 
in 
the 
case 
of 
a
MedicareAdvantage private fee-for-service plan,
the organization offering the plan must dem-
onstrate to the Secretary that the organization
has sufficient number and range of health care
professionals and providers willing to provide
services under the terms of the plan. The Sec-
retary shall find that an organization has met
such requirement with respect to any category of
health care professional or provider if, with re-
spect to that category of provider—
‘‘(A) the plan has established payment
rates for covered services furnished by that
category of provider that are not less than
the payment rates provided for under part
A, B, or D for such services; or
‘‘(B) the plan has contracts or agree-
ments (other than deemed contracts or
agreements under subsection (j)(6), with a
sufficient number and range of providers
within such category to provide covered
services under the terms of the plan,
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or a combination of both. The previous sentence
shall not be construed as restricting the persons
from whom enrollees under such a plan may ob-
tain covered benefits, except that, if a plan en-
tirely meets such requirement with respect to a
category of health care professional or provider
on the basis of subparagraph (B), it may provide
for a higher beneficiary copayment in the case of
health care professionals and providers of that
category who do not have contracts or agree-
ments (other than deemed contracts or agree-
ments under subsection (j)(6)) to provide covered
services under the terms of the plan.
‘‘(e) QUALITY ASSURANCE PROGRAM.—
‘‘(1) IN GENERAL.—Each MedicareAdvantage or-
ganization must have arrangements, consistent with
any regulation, for an ongoing quality assurance pro-
gram for health care services it provides to individ-
uals enrolled with MedicareAdvantage plans of the or-
ganization.
‘‘(2) ELEMENTS OF PROGRAM.—
‘‘(A) IN GENERAL.—The quality assurance
program of an organization with respect to a
MedicareAdvantage 
plan 
(other 
than 
a
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MedicareAdvantage private fee-for-service plan
or a nonnetwork MSA plan) it offers shall—
‘‘(i) stress health outcomes and provide
for the collection, analysis, and reporting of
data (in accordance with a quality meas-
urement system that the Secretary recog-
nizes) that will permit measurement of out-
comes and other indices of the quality of
MedicareAdvantage plans and organiza-
tions;
‘‘(ii) monitor and evaluate high vol-
ume and high risk services and the care of
acute and chronic conditions;
‘‘(iii) provide access to disease man-
agement and chronic care services;
‘‘(iv) provide access to preventive bene-
fits and information for enrollees on such
benefits;
‘‘(v) evaluate the continuity and co-
ordination of care that enrollees receive;
‘‘(vi) be evaluated on an ongoing basis
as to its effectiveness;
‘‘(vii) include measures of consumer
satisfaction;
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‘‘(viii) provide the Secretary with such
access to information collected as may be
appropriate to monitor and ensure the qual-
ity of care provided under this part;
‘‘(ix) provide review by physicians and
other health care professionals of the process
followed in the provision of such health care
services;
‘‘(x) provide for the establishment of
written protocols for utilization review,
based on current standards of medical prac-
tice;
‘‘(xi) have mechanisms to detect both
underutilization and overutilization of serv-
ices;
‘‘(xii) after identifying areas for im-
provement, establish or alter practice pa-
rameters;
‘‘(xiii) take action to improve quality
and assesses the effectiveness of such action
through systematic followup; and
‘‘(xiv) make available information on
quality and outcomes measures to facilitate
beneficiary comparison and choice of health
coverage options (in such form and on such
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quality and outcomes measures as the Sec-
retary determines to be appropriate).
Such program shall include a separate focus
(with respect to all the elements described in this
subparagraph) on racial and ethnic minorities.
‘‘(B) ELEMENTS OF PROGRAM FOR ORGANI-
ZATIONS
OFFERING
MEDICAREADVANTAGE
PRI-
VATE
FEE-FOR-SERVICE
PLANS, AND
NONNET-
WORK MSA PLANS.—The quality assurance pro-
gram of an organization with respect to a
MedicareAdvantage private fee-for-service plan
or a nonnetwork MSA plan it offers shall—
‘‘(i) meet the requirements of clauses
(i) through (viii) of subparagraph (A);
‘‘(ii) insofar as it provides for the es-
tablishment of written protocols for utiliza-
tion review, base such protocols on current
standards of medical practice; and
‘‘(iii) have mechanisms to evaluate uti-
lization of services and inform providers
and enrollees of the results of such evalua-
tion.
Such program shall include a separate focus
(with respect to all the elements described in this
subparagraph) on racial and ethnic minorities.
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‘‘(C) DEFINITION
OF
NONNETWORK
MSA
PLAN.—In this subsection, the term ‘nonnetwork
MSA plan’ means an MSA plan offered by a
MedicareAdvantage organization that does not
provide benefits required to be provided by this
part, in whole or in part, through a defined set
of providers under contract, or under another ar-
rangement, with the organization.
‘‘(3) EXTERNAL REVIEW.—
‘‘(A) 
IN
GENERAL.—Each
MedicareAdvantage organization shall, for each
MedicareAdvantage plan it operates, have an
agreement with an independent quality review
and improvement organization approved by the
Secretary to perform functions of the type de-
scribed in paragraphs (4)(B) and (14) of section
1154(a) with respect to services furnished by
MedicareAdvantage plans for which payment is
made under this title. The previous sentence shall
not apply to a MedicareAdvantage private fee-
for-service plan or a nonnetwork MSA plan that
does not employ utilization review.
‘‘(B) 
NONDUPLICATION
OF
ACCREDITA-
TION.—Except in the case of the review of qual-
ity complaints, and consistent with subpara-
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graph (C), the Secretary shall ensure that the ex-
ternal review activities conducted under sub-
paragraph (A) are not duplicative of review ac-
tivities conducted as part of the accreditation
process.
‘‘(C) WAIVER
AUTHORITY.—The Secretary
may waive the requirement described in sub-
paragraph (A) in the case of an organization if
the Secretary determines that the organization
has consistently maintained an excellent record
of quality assurance and compliance with other
requirements under this part.
‘‘(4) TREATMENT OF ACCREDITATION.—
‘‘(A) IN
GENERAL.—The Secretary shall
provide that a MedicareAdvantage organization
is deemed to meet all the requirements described
in any specific clause of subparagraph (B) if the
organization is accredited (and periodically re-
accredited) by a private accrediting organization
under a process that the Secretary has deter-
mined assures that the accrediting organization
applies and enforces standards that meet or ex-
ceed the standards established under section 1856
to carry out the requirements in such clause.
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‘‘(B) 
REQUIREMENTS
DESCRIBED.—The
provisions described in this subparagraph are
the following:
‘‘(i) Paragraphs (1) and (2) of this
subsection (relating to quality assurance
programs).
‘‘(ii) Subsection (b) (relating to anti-
discrimination).
‘‘(iii) Subsection (d) (relating to access
to services).
‘‘(iv) Subsection (h) (relating to con-
fidentiality 
and 
accuracy 
of 
enrollee
records).
‘‘(v) Subsection (i) (relating to infor-
mation on advance directives).
‘‘(vi) Subsection (j) (relating to pro-
vider participation rules).
‘‘(C) TIMELY ACTION ON APPLICATIONS.—
The Secretary shall determine, within 210 days
after the date the Secretary receives an applica-
tion by a private accrediting organization and
using the criteria specified in section 1865(b)(2),
whether the process of the private accrediting or-
ganization meets the requirements with respect
to any specific clause in subparagraph (B) with
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respect to which the application is made. The
Secretary may not deny such an application on
the basis that it seeks to meet the requirements
with respect to only one, or more than one, such
specific clause.
‘‘(D) 
CONSTRUCTION.—Nothing 
in 
this
paragraph shall be construed as limiting the au-
thority of the Secretary under section 1857, in-
cluding the authority to terminate contracts with
MedicareAdvantage organizations under sub-
section (c)(2) of such section.
‘‘(5) REPORT TO CONGRESS.—
‘‘(A) IN
GENERAL.—The Secretary shall
submit to Congress a biennial report regarding
how quality assurance programs conducted
under this subsection focus on racial and ethnic
minorities.
‘‘(B) CONTENTS OF REPORT.—Each such re-
port shall include the following:
‘‘(i) A description of the means by
which such programs focus on such racial
and ethnic minorities.
‘‘(ii) An evaluation of the impact of
such programs on eliminating health dis-
parities and on improving health outcomes,
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continuity and coordination of care, man-
agement of chronic conditions, and con-
sumer satisfaction.
‘‘(iii) Recommendations on ways to re-
duce clinical outcome disparities among ra-
cial and ethnic minorities.
‘‘(f) 
GRIEVANCE
MECHANISM.—Each
MedicareAdvantage organization must provide meaningful
procedures for hearing and resolving grievances between the
organization (including any entity or individual through
which the organization provides health care services) and
enrollees with MedicareAdvantage plans of the organization
under this part.
‘‘(g) 
COVERAGE
DETERMINATIONS, 
RECONSIDER-
ATIONS, AND APPEALS.—
‘‘(1) DETERMINATIONS BY ORGANIZATION.—
‘‘(A) IN GENERAL.—A MedicareAdvantage
organization shall have a procedure for making
determinations regarding whether an individual
enrolled with the plan of the organization under
this part is entitled to receive a health service
under this section and the amount (if any) that
the individual is required to pay with respect to
such service. Subject to paragraph (3), such pro-
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cedures shall provide for such determination to
be made on a timely basis.
‘‘(B) EXPLANATION OF DETERMINATION.—
Such a determination that denies coverage, in
whole or in part, shall be in writing and shall
include a statement in understandable language
of the reasons for the denial and a description of
the reconsideration and appeals processes.
‘‘(2) RECONSIDERATIONS.—
‘‘(A) IN GENERAL.—The organization shall
provide for reconsideration of a determination
described in paragraph (1)(B) upon request by
the enrollee involved. The reconsideration shall be
within a time period specified by the Secretary,
but shall be made, subject to paragraph (3), not
later than 60 days after the date of the receipt
of the request for reconsideration.
‘‘(B) PHYSICIAN DECISION ON CERTAIN RE-
CONSIDERATIONS.—A reconsideration relating to
a determination to deny coverage based on a lack
of medical necessity shall be made only by a
physician with appropriate expertise in the field
of medicine which necessitates treatment who is
other than a physician involved in the initial de-
termination.
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‘‘(3) EXPEDITED DETERMINATIONS AND RECON-
SIDERATIONS.—
‘‘(A) RECEIPT OF REQUESTS.—
‘‘(i) ENROLLEE
REQUESTS.—An en-
rollee in a MedicareAdvantage plan may re-
quest, either in writing or orally, an expe-
dited determination under paragraph (1) or
an expedited reconsideration under para-
graph (2) by the MedicareAdvantage orga-
nization.
‘‘(ii) PHYSICIAN REQUESTS.—A physi-
cian, regardless whether the physician is af-
filiated with the organization or not, may
request, either in writing or orally, such an
expedited determination or reconsideration.
‘‘(B) ORGANIZATION PROCEDURES.—
‘‘(i) 
IN
GENERAL.—The
MedicareAdvantage 
organization 
shall
maintain procedures for expediting organi-
zation determinations and reconsiderations
when, upon request of an enrollee, the orga-
nization determines that the application of
the normal timeframe for making a deter-
mination (or a reconsideration involving a
determination) could seriously jeopardize
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the life or health of the enrollee or the en-
rollee’s ability to regain maximum function.
‘‘(ii) EXPEDITION REQUIRED FOR PHY-
SICIAN REQUESTS.—In the case of a request
for an expedited determination or reconsid-
eration made under subparagraph (A)(ii),
the organization shall expedite the deter-
mination or reconsideration if the request
indicates that the application of the normal
timeframe for making a determination (or a
reconsideration involving a determination)
could seriously jeopardize the life or health
of the enrollee or the enrollee’s ability to re-
gain maximum function.
‘‘(iii) TIMELY RESPONSE.—In cases de-
scribed in clauses (i) and (ii), the organiza-
tion shall notify the enrollee (and the physi-
cian involved, as appropriate) of the deter-
mination or reconsideration under time
limitations established by the Secretary, but
not later than 72 hours of the time of re-
ceipt of the request for the determination or
reconsideration (or receipt of the informa-
tion necessary to make the determination or
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reconsideration), or such longer period as
the Secretary may permit in specified cases.
‘‘(4) INDEPENDENT
REVIEW
OF
CERTAIN
COV-
ERAGE DENIALS.—The Secretary shall contract with
an independent, outside entity to review and resolve
in a timely manner reconsiderations that affirm de-
nial of coverage, in whole or in part. The provisions
of section 1869(c)(5) shall apply to independent out-
side entities under contract with the Secretary under
this paragraph.
‘‘(5) 
APPEALS.—An 
enrollee 
with 
a
MedicareAdvantage plan of a MedicareAdvantage or-
ganization under this part who is dissatisfied by rea-
son of the enrollee’s failure to receive any health serv-
ice to which the enrollee believes the enrollee is enti-
tled and at no greater charge than the enrollee believes
the enrollee is required to pay is entitled, if the
amount in controversy is $100 or more, to a hearing
before the Secretary to the same extent as is provided
in section 205(b), and in any such hearing the Sec-
retary shall make the organization a party. If the
amount in controversy is $1,000 or more, the indi-
vidual or organization shall, upon notifying the other
party, be entitled to judicial review of the Secretary’s
final decision as provided in section 205(g), and both
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the individual and the organization shall be entitled
to be parties to that judicial review. In applying sub-
sections (b) and (g) of section 205 as provided in this
paragraph, and in applying section 205(l) thereto,
any reference therein to the Commissioner of Social
Security or the Social Security Administration shall
be considered a reference to the Secretary or the De-
partment of Health and Human Services, respec-
tively.
‘‘(h) CONFIDENTIALITY AND ACCURACY OF ENROLLEE
RECORDS.—Insofar as a MedicareAdvantage organization
maintains medical records or other health information re-
garding enrollees under this part, the MedicareAdvantage
organization shall establish procedures—
‘‘(1) to safeguard the privacy of any individ-
ually identifiable enrollee information;
‘‘(2) to maintain such records and information
in a manner that is accurate and timely; and
‘‘(3) to assure timely access of enrollees to such
records and information.
‘‘(i) INFORMATION ON ADVANCE DIRECTIVES.—Each
MedicareAdvantage organization shall meet the requirement
of section 1866(f) (relating to maintaining written policies
and procedures respecting advance directives).
‘‘(j) RULES REGARDING PROVIDER PARTICIPATION.—
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‘‘(1) 
PROCEDURES.—Insofar 
as 
a
MedicareAdvantage organization offers benefits under
a MedicareAdvantage plan through agreements with
physicians, the organization shall establish reasonable
procedures relating to the participation (under an
agreement between a physician and the organization)
of physicians under such a plan. Such procedures
shall include—
‘‘(A) providing notice of the rules regarding
participation;
‘‘(B) providing written notice of participa-
tion decisions that are adverse to physicians;
and
‘‘(C) providing a process within the organi-
zation for appealing such adverse decisions, in-
cluding the presentation of information and
views of the physician regarding such decision.
‘‘(2) CONSULTATION IN MEDICAL POLICIES.—A
MedicareAdvantage organization shall consult with
physicians who have entered into participation agree-
ments with the organization regarding the organiza-
tion’s medical policy, quality, and medical manage-
ment procedures.
‘‘(3) PROHIBITING
INTERFERENCE
WITH
PRO-
VIDER ADVICE TO ENROLLEES.—
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‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), a MedicareAdvantage orga-
nization (in relation to an individual enrolled
under a MedicareAdvantage plan offered by the
organization under this part) shall not prohibit
or otherwise restrict a covered health care profes-
sional (as defined in subparagraph (D)) from
advising such an individual who is a patient of
the professional about the health status of the in-
dividual or medical care or treatment for the in-
dividual’s condition or disease, regardless of
whether benefits for such care or treatment are
provided under the plan, if the professional is
acting within the lawful scope of practice.
‘‘(B) CONSCIENCE PROTECTION.—Subpara-
graph (A) shall not be construed as requiring a
MedicareAdvantage plan to provide, reimburse
for, or provide coverage of a counseling or refer-
ral service if the MedicareAdvantage organiza-
tion offering the plan—
‘‘(i) objects to the provision of such
service on moral or religious grounds; and
‘‘(ii) in the manner and through the
written 
instrumentalities 
such
MedicareAdvantage organization deems ap-
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propriate, makes available information on
its policies regarding such service to pro-
spective enrollees before or during enroll-
ment and to enrollees within 90 days after
the date that the organization or plan
adopts a change in policy regarding such a
counseling or referral service.
‘‘(C) CONSTRUCTION.—Nothing in subpara-
graph (B) shall be construed to affect disclosure
requirements under State law or under the Em-
ployee Retirement Income Security Act of 1974.
‘‘(D) HEALTH
CARE
PROFESSIONAL
DE-
FINED.—For purposes of this paragraph, the
term ‘health care professional’ means a physi-
cian (as defined in section 1861(r)) or other
health care professional if coverage for the profes-
sional’s 
services 
is 
provided 
under 
the
MedicareAdvantage plan for the services of the
professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist,
licensed pharmacist, physician assistant, phys-
ical or occupational therapist and therapy as-
sistant, speech-language pathologist, audiologist,
registered or licensed practical nurse (including
nurse practitioner, clinical nurse specialist, cer-
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tified registered nurse anesthetist, and certified
nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified res-
piratory therapy technician.
‘‘(4) LIMITATIONS
ON
PHYSICIAN
INCENTIVE
PLANS.—
‘‘(A) IN GENERAL.—No MedicareAdvantage
organization may operate any physician incen-
tive plan (as defined in subparagraph (B)) un-
less the following requirements are met:
‘‘(i) No specific payment is made di-
rectly or indirectly under the plan to a phy-
sician or physician group as an inducement
to reduce or limit medically necessary serv-
ices provided with respect to a specific indi-
vidual enrolled with the organization.
‘‘(ii) If the plan places a physician or
physician group at substantial financial
risk (as determined by the Secretary) for
services not provided by the physician or
physician group, the organization—
‘‘(I) provides stop-loss protection
for the physician or group that is ade-
quate and appropriate, based on stand-
ards developed by the Secretary that
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retary estimates that an annual per capita
rate of payment for 1997 described in clause
(i) reflects payments to hospitals reimbursed
under section 1814(b)(3), the Secretary shall
estimate a payment adjustment that is com-
parable to the payment adjustment that
would have been made under clause (i) if
the hospitals had not been reimbursed under
such section.
‘‘(D) TREATMENT OF AREAS WITH HIGHLY
VARIABLE PAYMENT RATES.—In the case of a
Medicare+Choice payment area for which the
annual per capita rate of payment determined
under section 1876(a)(1)(C) for 1997 varies by
more than 20 percent from such rate for 1996,
for purposes of this subsection the Secretary may
substitute for such rate for 1997 a rate that is
more representative of the costs of the enrollees in
the area.
‘‘(4) INPUT-PRICE-ADJUSTED ANNUAL NATIONAL
MEDICARE+CHOICE CAPITATION RATE.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)(A), the input-price-adjusted annual
national Medicare+Choice capitation rate for a
Medicare+Choice payment area for a year is
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‘‘(I) Any report on drug or biological market
prices by the Inspector General of the Department of
Health and Human Services or the Comptroller Gen-
eral of the United States that is made available after
December 31, 1999.
‘‘(II) A review of drug or biological market
prices by the Secretary, which may include informa-
tion on such market prices from insurers, private
health plans, manufacturers, wholesalers, distributors,
physician supply houses, specialty pharmacies, group
purchasing arrangements, physicians, suppliers, or
any other source the Secretary determines appro-
priate.
‘‘(III) Data and information submitted by the
manufacturer of the drug or biological or by another
entity.
‘‘(IV) Other data and information as determined
appropriate by the Secretary.
‘‘(iii) If the Secretary makes a determination under
clause (i) with respect to the widely available market price
for a drug or biological for a year, the following provisions
shall apply:
‘‘(I) Subject to clause (iv), the amount deter-
mined under this subparagraph shall be substituted
for the amount determined under subparagraph (B)