in connection with the utilization of cov-
ered part D drugs, and meets additional 
requirements, if any, as determined appro-
priate by the Secretary. 
‘‘(iii) CLARIFICATION
ON
REBATES 
AND DISCOUNTS USED TO LOWER COSTS 
FOR COVERED PART D DRUGS.—Rebates, 
discounts, and other price concessions re-
ceived by a pharmacy benefit manager or 
an affiliate of a pharmacy benefit manager 
from manufacturers, even if such price 
concessions are calculated as a percentage 
of a drug’s price, shall not be considered a 
violation of the requirements of clause (i) 
if they are fully passed through to a PDP 
sponsor and are compliant with all regu-
latory and subregulatory requirements re-
lated to direct and indirect remuneration 
for manufacturer rebates under this part, 
including in cases where a PDP sponsor is 
acting as a pharmacy benefit manager on 
behalf of a prescription drug plan offered 
by such PDP sponsor. 
‘‘(iv) EVALUATION OF REMUNERATION 
ARRANGEMENTS.—Components of subsets 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
of remuneration arrangements (such as 
fees or other forms of compensation paid 
to or retained by the pharmacy benefit 
manager or affiliate of such pharmacy ben-
efit manager), as determined appropriate 
by the Secretary, between pharmacy ben-
efit managers or affiliates of such phar-
macy benefit managers, as applicable, and 
other entities involved in the dispensing or 
utilization of covered part D drugs (includ-
ing PDP sponsors, manufacturers, phar-
macies, and other entities as determined 
appropriate by the Secretary) shall be sub-
ject to review by the Secretary, in con-
sultation with the Office of the Inspector 
General of the Department of Health and 
Human Services, as determined appro-
priate by the Secretary. The Secretary, in 
consultation with the Office of the Inspec-
tor General, shall review whether remu-
neration under such arrangements is con-
sistent with fair market value (as specified 
by the Secretary) through reviews and as-
sessments of such remuneration, as deter-
mined appropriate. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(v) DISGORGEMENT.—The pharmacy 
benefit manager shall disgorge any remu-
neration paid to such pharmacy benefit 
manager or an affiliate of such pharmacy 
benefit manager in violation of this sub-
paragraph to the PDP sponsor. 
‘‘(vi) ADDITIONAL REQUIREMENTS.— 
The pharmacy benefit manager shall— 
‘‘(I) enter into a written agree-
ment with any affiliate of such phar-
macy benefit manager, under which 
the affiliate shall identify and disgorge 
any remuneration described in clause 
(v) to the pharmacy benefit manager; 
and 
‘‘(II) attest, subject to any re-
quirements determined appropriate by 
the Secretary, that the pharmacy ben-
efit manager has entered into a writ-
ten agreement described in subclause 
(I) with any relevant affiliate of the 
pharmacy benefit manager. 
‘‘(B) TRANSPARENCY REGARDING GUARAN-
TEES
AND
COST
PERFORMANCE
EVALUA-
TIONS.—The pharmacy benefit manager shall— 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(i) define, interpret, and apply, in a 
fully transparent and consistent manner 
for purposes of calculating or otherwise 
evaluating pharmacy benefit manager per-
formance against pricing guarantees or 
similar cost performance measurements re-
lated to rebates, discounts, price conces-
sions, or net costs, terms such as— 
‘‘(I) ‘generic drug’, in a manner 
consistent with the definition of the 
term under section 423.4 of title 42, 
Code of Federal Regulations, or a suc-
cessor regulation; 
‘‘(II) ‘brand name drug’, in a 
manner consistent with the definition 
of the term under section 423.4 of 
title 42, Code of Federal Regulations, 
or a successor regulation; 
‘‘(III) ‘specialty drug’; 
‘‘(IV) ‘rebate’; and 
‘‘(V) ‘discount’; 
‘‘(ii) identify any drugs, claims, or 
price concessions excluded from any pric-
ing guarantee or other cost performance 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
measure in a clear and consistent manner; 
and 
‘‘(iii) where a pricing guarantee or 
other cost performance measure is based 
on a pricing benchmark other than the 
wholesale acquisition cost (as defined in 
section 1847A(c)(6)(B)) of a drug, cal-
culate and provide a wholesale acquisition 
cost-based equivalent to the pricing guar-
antee or other cost performance measure. 
‘‘(C) PROVISION OF INFORMATION.— 
‘‘(i) IN
GENERAL.—Not later than 
July 1 of each year, beginning in 2029, the 
pharmacy benefit manager shall submit to 
the PDP sponsor, and to the Secretary, a 
report, in accordance with this subpara-
graph, and shall make such report avail-
able to such sponsor at no cost to such 
sponsor in a format specified by the Sec-
retary under paragraph (5). Each such re-
port shall include, with respect to such 
PDP sponsor and each plan offered by 
such sponsor, the following information 
with respect to the previous plan year: 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(I) A list of all drugs covered by 
the plan that were dispensed includ-
ing, with respect to each such drug— 
‘‘(aa) the brand name, ge-
neric or non-proprietary name, 
and National Drug Code; 
‘‘(bb) the number of plan 
enrollees for whom the drug was 
dispensed, the total number of 
prescription claims for the drug 
(including original prescriptions 
and refills, counted as separate 
claims), and the total number of 
dosage units of the drug dis-
pensed; 
‘‘(cc) the number of pre-
scription claims described in item 
(bb) by each type of dispensing 
channel through which the drug 
was dispensed, including retail, 
mail order, specialty pharmacy, 
long term care pharmacy, home 
infusion pharmacy, or other types 
of pharmacies or providers; 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(dd) the average wholesale 
acquisition cost, listed as cost per 
day’s supply, cost per dosage 
unit, and cost per typical course 
of treatment (as applicable); 
‘‘(ee) the average wholesale 
price for the drug, listed as price 
per day’s supply, price per dos-
age unit, and price per typical 
course of treatment (as applica-
ble); 
‘‘(ff) the total out-of-pocket 
spending by plan enrollees on 
such drug after application of 
any benefits under the plan, in-
cluding plan enrollee spending 
through copayments, coinsurance, 
and deductibles; 
‘‘(gg) total rebates paid by 
the manufacturer on the drug as 
reported under the Detailed DIR 
Report (or any successor report) 
submitted by such sponsor to the 
Centers for Medicare & Medicaid 
Services; 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(hh) all other direct or in-
direct remuneration on the drug 
as reported under the Detailed 
DIR Report (or any successor re-
port) submitted by such sponsor 
to the Centers for Medicare & 
Medicaid Services; 
‘‘(ii) the average pharmacy 
reimbursement amount paid by 
the plan for the drug in the ag-
gregate and disaggregated by dis-
pensing channel identified in item 
(cc); 
‘‘(jj) the average National 
Average Drug Acquisition Cost 
(NADAC); and 
‘‘(kk) total manufacturer-de-
rived revenue, inclusive of bona 
fide service fees, attributable to 
the drug and retained by the 
pharmacy benefit manager and 
any affiliate of such pharmacy 
benefit manager. 
‘‘(II) In the case of a pharmacy 
benefit manager that has an affiliate 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
that is a retail, mail order, or spe-
cialty pharmacy, with respect to drugs 
covered by such plan that were dis-
pensed, the following information: 
‘‘(aa) The percentage of 
total prescriptions that were dis-
pensed by pharmacies that are an 
affiliate of the pharmacy benefit 
manager for each drug. 
‘‘(bb) 
The 
interquartile 
range of the total combined costs 
paid by the plan and plan enroll-
ees, per dosage unit, per course 
of treatment, per 30-day supply, 
and per 90-day supply for each 
drug dispensed by pharmacies 
that are not an affiliate of the 
pharmacy benefit manager and 
that are included in the phar-
macy network of such plan. 
‘‘(cc) 
The 
interquartile 
range of the total combined costs 
paid by the plan and plan enroll-
ees, per dosage unit, per course 
of treatment, per 30-day supply, 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
and per 90-day supply for each 
drug dispensed by pharmacies 
that are an affiliate of the phar-
macy benefit manager and that 
are included in the pharmacy 
network of such plan. 
‘‘(dd) The lowest total com-
bined cost paid by the plan and 
plan enrollees, per dosage unit, 
per course of treatment, per 30- 
day supply, and per 90-day sup-
ply, for each drug that is avail-
able from any pharmacy included 
in the pharmacy network of such 
plan. 
‘‘(ee) The difference between 
the average acquisition cost of 
the affiliate, such as a pharmacy 
or other entity that acquires pre-
scription drugs, that initially ac-
quires the drug and the amount 
reported under subclause (I)(jj) 
for each drug. 
‘‘(ff) A list inclusive of the 
brand name, generic or non-pro-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
prietary 
name, 
and 
National 
Drug Code of covered part D 
drugs subject to an agreement 
with a covered entity under sec-
tion 340B of the Public Health 
Service Act for which the phar-
macy benefit manager or an affil-
iate of the pharmacy benefit 
manager had a contract or other 
arrangement with such a covered 
entity in the service area of such 
plan. 
‘‘(III) Where a drug approved 
under section 505(c) of the Federal 
Food, Drug, and Cosmetic Act (re-
ferred to in this subclause as the ‘list-
ed drug’) is covered by the plan, the 
following information: 
‘‘(aa) A list of currently 
marketed generic drugs approved 
under section 505(j) of the Fed-
eral Food, Drug, and Cosmetic 
Act pursuant to an application 
that references such listed drug 
that are not covered by the plan, 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
are covered on the same for-
mulary tier or a formulary tier 
typically associated with higher 
cost-sharing than the listed drug, 
or are subject to utilization man-
agement that the listed drug is 
not subject to. 
‘‘(bb) The estimated average 
beneficiary 
cost-sharing 
under 
the plan for a 30-day supply of 
the listed drug. 
‘‘(cc) Where a generic drug 
listed under item (aa) is on a for-
mulary tier typically associated 
with higher cost-sharing than the 
listed drug, the estimated aver-
age cost-sharing that a bene-
ficiary would have paid for a 30- 
day supply of each of the generic 
drugs described in item (aa), had 
the plan provided coverage for 
such drugs on the same for-
mulary tier as the listed drug. 
‘‘(dd) A written justification 
for providing more favorable cov-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
erage of the listed drug than the 
generic drugs described in item 
(aa). 
‘‘(ee) The number of cur-
rently marketed generic drugs 
approved under section 505(j) of 
the Federal Food, Drug, and 
Cosmetic Act pursuant to an ap-
plication that references such 
listed drug. 
‘‘(IV) Where a reference product 
(as defined in section 351(i) of the 
Public Health Service Act) is covered 
by the plan, the following information: 
‘‘(aa) A list of currently 
marketed 
biosimilar 
biological 
products licensed under section 
351(k) of the Public Health 
Service Act pursuant to an appli-
cation that refers to such ref-
erence product that are not cov-
ered by the plan, are covered on 
the same formulary tier or a for-
mulary tier typically associated 
with higher cost-sharing than the 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
reference product, or are subject 
to utilization management that 
the reference product is not sub-
ject to. 
‘‘(bb) The estimated average 
beneficiary 
cost-sharing 
under 
the plan for a 30-day supply of 
the reference product. 
‘‘(cc) Where a biosimilar bi-
ological product listed under item 
(aa) is on a formulary tier typi-
cally associated with higher cost- 
sharing than the reference prod-
uct, the estimated average cost- 
sharing that a beneficiary would 
have paid for a 30-day supply of 
each of the biosimilar biological 
products described in item (aa), 
had the plan provided coverage 
for such products on the same 
formulary tier as the reference 
product. 
‘‘(dd) A written justification 
for providing more favorable cov-
erage of the reference product 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
than the biosimilar biological 
product described in item (aa). 
‘‘(ee) The number of cur-
rently marketed biosimilar bio-
logical products licensed under 
section 351(k) of the Public 
Health Service Act, pursuant to 
an application that refers to such 
reference product. 
‘‘(V) Total gross spending on 
covered part D drugs by the plan, not 
net of rebates, fees, discounts, or 
other direct or indirect remuneration. 
‘‘(VI) The total amount retained 
by the pharmacy benefit manager or 
an affiliate of such pharmacy benefit 
manager in revenue related to utiliza-
tion of covered part D drugs under 
that plan, inclusive of bona fide serv-
ice fees. 
‘‘(VII) The total spending on cov-
ered part D drugs net of rebates, fees, 
discounts, or other direct and indirect 
remuneration by the plan. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(VIII) An explanation of any 
benefit design parameters under such 
plan that encourage plan enrollees to 
fill prescriptions at pharmacies that 
are an affiliate of such pharmacy ben-
efit manager, such as mail and spe-
cialty home delivery programs, and re-
tail and mail auto-refill programs. 
‘‘(IX) The following information: 
‘‘(aa) A list of all brokers, 
consultants, advisors, and audi-
tors that receive compensation 
from the pharmacy benefit man-
ager or an affiliate of such phar-
macy benefit manager for refer-
rals, 
consulting, 
auditing, 
or 
other services offered to PDP 
sponsors related to pharmacy 
benefit management services. 
‘‘(bb) The amount of com-
pensation provided by such phar-
macy benefit manager or affiliate 
to each such broker, consultant, 
advisor, and auditor. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(cc) The methodology for 
calculating the amount of com-
pensation provided by such phar-
macy benefit manager or affil-
iate, for each such broker, con-
sultant, advisor, and auditor. 
‘‘(X) A list of all affiliates of the 
pharmacy benefit manager. 
‘‘(XI) A summary document sub-
mitted in a standardized template de-
veloped by the Secretary that includes 
such information described in sub-
clauses (I) through (X). 
‘‘(ii) WRITTEN EXPLANATION OF CON-
TRACTS
OR
AGREEMENTS
WITH
DRUG 
MANUFACTURERS.— 
‘‘(I) IN
GENERAL.—The phar-
macy benefit manager shall, not later 
than 30 days after the finalization of 
any contract or agreement between 
such pharmacy benefit manager or an 
affiliate of such pharmacy benefit 
manager and a drug manufacturer (or 
subsidiary, agent, or entity affiliated 
with such drug manufacturer) that 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
makes rebates, discounts, payments, 
or other financial incentives related to 
one or more covered part D drugs or 
other prescription drugs, as applica-
ble, of the manufacturer directly or 
indirectly contingent upon coverage, 
formulary placement, or utilization 
management conditions on any other 
covered part D drugs or other pre-
scription drugs, as applicable, submit 
to the PDP sponsor a written expla-
nation of such contract or agreement. 
‘‘(II) REQUIREMENTS.—A writ-
ten explanation under subclause (I) 
shall— 
‘‘(aa) include the manufac-
turer subject to the contract or 
agreement, all covered part D 
drugs 
and 
other 
prescription 
drugs, as applicable, subject to 
the contract or agreement and 
the manufacturers of such drugs, 
and a high-level description of 
the terms of such contract or 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
agreement and how such terms 
apply to such drugs; and 
‘‘(bb) be certified by the 
Chief Executive Officer, Chief Fi-
nancial Officer, or General Coun-
sel of such pharmacy benefit 
manager, or affiliate of such 
pharmacy benefit manager, as 
applicable, or an individual dele-
gated with the authority to sign 
on behalf of one of these officers, 
who reports directly to the offi-
cer. 
‘‘(III) DEFINITION
OF
OTHER 
PRESCRIPTION DRUGS.—For purposes 
of this clause, the term ‘other pre-
scription drugs’ means prescription 
drugs covered as supplemental bene-
fits under this part or prescription 
drugs paid outside of this part. 
‘‘(D) AUDIT RIGHTS.— 
‘‘(i) IN GENERAL.—Not less than once 
a year, at the request of the PDP sponsor, 
the pharmacy benefit manager shall allow 
for an audit of the pharmacy benefit man-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
ager to ensure compliance with all terms 
and conditions under the written agree-
ment described in this paragraph and the 
accuracy of information reported under 
subparagraph (C). 
‘‘(ii) AUDITOR.—The PDP sponsor 
shall have the right to select an auditor. 
The pharmacy benefit manager shall not 
impose any limitations on the selection of 
such auditor. 
‘‘(iii) PROVISION OF INFORMATION.— 
The pharmacy benefit manager shall make 
available to such auditor all records, data, 
contracts, and other information necessary 
to confirm the accuracy of information 
provided under subparagraph (C), subject 
to reasonable restrictions on how such in-
formation must be reported to prevent re-
disclosure of such information. 
‘‘(iv) TIMING.—The pharmacy benefit 
manager must provide information under 
clause (iii) and other information, data, 
and records relevant to the audit to such 
auditor within 6 months of the initiation of 
the audit and respond to requests for addi-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
tional information from such auditor with-
in 30 days after the request for additional 
information. 
‘‘(v) INFORMATION
FROM
AFFILI-
ATES.—The pharmacy benefit manager 
shall be responsible for providing to such 
auditor information required to be reported 
under subparagraph (C) or under clause 
(iii) of this subparagraph that is owned or 
held by an affiliate of such pharmacy ben-
efit manager. 
‘‘(2) ENFORCEMENT.— 
‘‘(A) IN
GENERAL.—Each PDP sponsor 
shall— 
‘‘(i) disgorge to the Secretary any 
amounts disgorged to the PDP sponsor by 
a pharmacy benefit manager under para-
graph (1)(A)(v); 
‘‘(ii) require, in a written agreement 
with any pharmacy benefit manager acting 
on behalf of such sponsor or affiliate of 
such pharmacy benefit manager, that such 
pharmacy benefit manager or affiliate re-
imburse the PDP sponsor for any civil 
money penalty imposed on the PDP spon-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00046
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(C) ANTI-RETALIATION AND ANTI-COER-
CION.—Consistent with applicable Federal or 
State law, a PDP sponsor shall not— 
‘‘(i) retaliate against an individual or 
entity for reporting an alleged violation 
under subparagraph (B); or 
‘‘(ii) coerce, intimidate, threaten, or 
interfere with the ability of an individual 
or entity to report any such alleged viola-
tions. 
‘‘(3) CERTIFICATION OF COMPLIANCE.— 
‘‘(A) IN
GENERAL.—Each PDP sponsor 
shall furnish to the Secretary (at a time and in 
a manner specified by the Secretary) an annual 
certification of compliance with this subsection, 
as well as such information as the Secretary de-
termines necessary to carry out this subsection. 
‘‘(B) IMPLEMENTATION.—Notwithstanding 
any other provision of law, the Secretary may 
implement this paragraph by program instruc-
tion or otherwise. 
‘‘(4) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed as— 
‘‘(A) prohibiting flat dispensing fees or re-
imbursement or payment for ingredient costs 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00048
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
(including customary, industry-standard dis-
counts directly related to drug acquisition that 
are retained by pharmacies or wholesalers) to 
entities that acquire or dispense prescription 
drugs; or 
‘‘(B) modifying regulatory requirements or 
sub-regulatory program instruction or guidance 
related to pharmacy payment, reimbursement, 
or dispensing fees. 
‘‘(5) STANDARD FORMATS.— 
‘‘(A) IN GENERAL.—Not later than June 
1, 2028, the Secretary shall specify standard, 
machine-readable formats for pharmacy benefit 
managers to submit annual reports required 
under paragraph (1)(C)(i). 
‘‘(B) IMPLEMENTATION.—Notwithstanding 
any other provision of law, the Secretary may 
implement this paragraph by program instruc-
tion or otherwise. 
‘‘(6) CONFIDENTIALITY.— 
‘‘(A) IN GENERAL.—Information disclosed 
by a pharmacy benefit manager, an affiliate of 
a pharmacy benefit manager, a PDP sponsor, 
or a pharmacy under this subsection that is not 
otherwise publicly available or available for pur-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00049
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
chase shall not be disclosed by the Secretary or 
a PDP sponsor receiving the information, ex-
cept that the Secretary may disclose the infor-
mation for the following purposes: 
‘‘(i) As the Secretary determines nec-
essary to carry out this part. 
‘‘(ii) To permit the Comptroller Gen-
eral to review the information provided. 
‘‘(iii) To permit the Director of the 
Congressional Budget Office to review the 
information provided. 
‘‘(iv) To permit the Executive Direc-
tor of the Medicare Payment Advisory 
Commission to review the information pro-
vided. 
‘‘(v) To the Attorney General for the 
purposes of conducting oversight and en-
forcement under this title. 
‘‘(vi) To the Inspector General of the 
Department of Health and Human Serv-
ices in accordance with its authorities 
under the Inspector General Act of 1978 
(section 406 of title 5, United States 
Code), and other applicable statutes. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(B) RESTRICTION ON USE OF INFORMA-
TION.—The Secretary, the Comptroller General, 
the Director of the Congressional Budget Of-
fice, and the Executive Director of the Medicare 
Payment Advisory Commission shall not report 
on or disclose information disclosed pursuant to 
subparagraph (A) to the public in a manner 
that would identify— 
‘‘(i) a specific pharmacy benefit man-
ager, affiliate, pharmacy, manufacturer, 
wholesaler, PDP sponsor, or plan; or 
‘‘(ii) contract prices, rebates, dis-
counts, or other remuneration for specific 
drugs in a manner that may allow the 
identification of specific contracting parties 
or of such specific drugs. 
‘‘(7) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) AFFILIATE.—The term ‘affiliate’ 
means, with respect to any pharmacy benefit 
manager or PDP sponsor, any entity that, di-
rectly or indirectly— 
‘‘(i) owns or is owned by, controls or 
is controlled by, or is otherwise related in 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
any ownership structure to such pharmacy 
benefit manager or PDP sponsor; or 
‘‘(ii) acts as a contractor, principal, or 
agent to such pharmacy benefit manager 
or PDP sponsor, insofar as such con-
tractor, principal, or agent performs any of 
the functions described under subpara-
graph (C). 
‘‘(B) BONA FIDE SERVICE FEE.—The term 
‘bona fide service fee’ means a fee that is reflec-
tive of the fair market value (as specified by the 
Secretary, through notice and comment rule-
making) for a bona fide, itemized service actu-
ally performed on behalf of an entity, that the 
entity would otherwise perform (or contract for) 
in the absence of the service arrangement and 
that is not passed on in whole or in part to a 
client or customer, whether or not the entity 
takes title to the drug. Such fee must be a flat 
dollar amount and shall not be directly or indi-
rectly based on, or contingent upon— 
‘‘(i) drug price, such as wholesale ac-
quisition cost or drug benchmark price 
(such as average wholesale price); 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(ii) the amount of discounts, rebates, 
fees, or other direct or indirect remunera-
tion with respect to covered part D drugs 
dispensed to enrollees in a prescription 
drug plan, except as permitted pursuant to 
paragraph (1)(A)(ii); 
‘‘(iii) coverage or formulary placement 
decisions or the volume or value of any re-
ferrals or business generated between the 
parties to the arrangement; or 
‘‘(iv) any other amounts or meth-
odologies prohibited by the Secretary. 
‘‘(C) PHARMACY BENEFIT MANAGER.—The 
term ‘pharmacy benefit manager’ means any 
person or entity that, either directly or through 
an intermediary, acts as a price negotiator or 
group purchaser on behalf of a PDP sponsor or 
prescription drug plan, or manages the pre-
scription drug benefits provided by such spon-
sor or plan, including the processing and pay-
ment of claims for prescription drugs, the per-
formance of drug utilization review, the proc-
essing of drug prior authorization requests, the 
adjudication of appeals or grievances related to 
the prescription drug benefit, contracting with 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00053
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
network pharmacies, controlling the cost of cov-
ered part D drugs, or the provision of related 
services. Such term includes any person or enti-
ty that carries out one or more of the activities 
described in the preceding sentence, irrespective 
of whether such person or entity calls itself a 
‘pharmacy benefit manager’.’’. 
(2) MA–PD PLANS.—Section 1857(f)(3) of the 
Social Security Act (42 U.S.C. 1395w–27(f)(3)) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(F) REQUIREMENTS RELATING TO PHAR-
MACY BENEFIT MANAGERS.—For plan years be-
ginning on or after January 1, 2029, section 
1860D–12(h).’’. 
(3) NONAPPLICATION OF PAPERWORK REDUC-
TION ACT.—Chapter 35 of title 44, United States 
Code, shall not apply to the implementation of this 
subsection. 
(4) FUNDING.— 
(A) SECRETARY.—In addition to amounts 
otherwise available, there is appropriated to the 
Centers for Medicare & Medicaid Services Pro-
gram Management Account, out of any money 
in the Treasury not otherwise appropriated, 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00054
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
$113,000,000 for fiscal year 2026, to remain 
available until expended, to carry out this sub-
section. 
(B) OIG.—In addition to amounts other-
wise available, there is appropriated to the In-
spector General of the Department of Health 
and Human Services, out of any money in the 
Treasury 
not 
otherwise 
appropriated, 
$20,000,000 for fiscal year 2026, to remain 
available until expended, to carry out this sub-
section. 
(b) GAO STUDY AND REPORT ON PRICE-RELATED 
COMPENSATION ACROSS THE SUPPLY CHAIN.— 
(1) STUDY.—The Comptroller General of the 
United States (in this subsection referred to as the 
‘‘Comptroller General’’) shall conduct a study de-
scribing the use of compensation and payment struc-
tures related to a prescription drug’s price within 
the retail prescription drug supply chain in part D 
of title XVIII of the Social Security Act (42 U.S.C. 
1395w–101 et seq.). Such study shall summarize in-
formation from Federal agencies and industry ex-
perts, to the extent available, with respect to the fol-
lowing: 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00055
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
(A) The type, magnitude, other features 
(such as the pricing benchmarks used), and 
prevalence of compensation and payment struc-
tures related to a prescription drug’s price, 
such as calculating fee amounts as a percentage 
of a prescription drug’s price, between inter-
mediaries in the prescription drug supply chain, 
including— 
(i) pharmacy benefit managers; 
(ii) PDP sponsors offering prescrip-
tion drug plans and Medicare Advantage 
organizations offering MA–PD plans; 
(iii) drug wholesalers; 
(iv) pharmacies; 
(v) manufacturers; 
(vi) pharmacy services administrative 
organizations; 
(vii) brokers, auditors, consultants, 
and other entities that— 
(I) advise PDP sponsors offering 
prescription drug plans and Medicare 
Advantage organizations offering MA– 
PD plans regarding pharmacy bene-
fits; or 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00056
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
(II) review PDP sponsor and 
Medicare Advantage organization con-
tracts with pharmacy benefit man-
agers; and 
(viii) other service providers that con-
tract with any of the entities described in 
clauses (i) through (vii) that may use 
price-related compensation and payment 
structures, such as rebate aggregators (or 
other entities that negotiate or process 
price concessions on behalf of pharmacy 
benefit managers, plan sponsors, or phar-
macies). 
(B) The primary business models and com-
pensation structures for each category of inter-
mediary described in subparagraph (A). 
(C) Variation in price-related compensation 
structures between affiliated entities (such as 
entities with common ownership, either full or 
partial, and subsidiary relationships) and unaf-
filiated entities. 
(D) Potential conflicts of interest among 
contracting entities related to the use of pre-
scription drug price-related compensation struc-
tures, such as the potential for fees or other 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00057
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
payments set as a percentage of a prescription 
drug’s price to advantage formulary selection, 
distribution, or purchasing of prescription drugs 
with higher prices. 
(E) Notable differences, if any, in the use 
and level of price-based compensation struc-
tures over time and between different market 
segments, such as under part D of title XVIII 
of the Social Security Act (42 U.S.C. 1395w– 
101 et seq.) and the Medicaid program under 
title XIX of such Act (42 U.S.C. 1396 et seq.). 
(F) The effects of drug price-related com-
pensation structures and alternative compensa-
tion structures on Federal health care programs 
and program beneficiaries, including with re-
spect to cost-sharing, premiums, Federal out-
lays, biosimilar and generic drug adoption and 
utilization, drug shortage risks, and the poten-
tial for fees set as a percentage of a drug’s 
price to advantage the formulary selection, dis-
tribution, or purchasing of drugs with higher 
prices. 
(G) Other issues determined to be relevant 
and appropriate by the Comptroller General. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
(2) REPORT.—Not later than 2 years after the 
date of enactment of this section, the Comptroller 
General shall submit to Congress a report containing 
the results of the study conducted under paragraph 
(1), together with recommendations for such legisla-
tion and administrative action as the Comptroller 
General determines appropriate. 
(c) MEDPAC REPORTS
ON AGREEMENTS WITH 
PHARMACY BENEFIT MANAGERS WITH RESPECT TO PRE-
SCRIPTION DRUG PLANS AND MA–PD PLANS.— 
(1) IN GENERAL.—The Medicare Payment Ad-
visory Commission shall submit to Congress the fol-
lowing reports: 
(A) INITIAL REPORT.—Not later than the 
first March 15 occurring after the date that is 
2 years after the date on which the Secretary 
makes the data available to the Commission, a 
report regarding agreements with pharmacy 
benefit managers with respect to prescription 
drug plans and MA–PD plans. Such report 
shall include, to the extent practicable— 
(i) a description of trends and pat-
terns, including relevant averages, totals, 
and other figures for the types of informa-
tion submitted; 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
(ii) an analysis of any differences in 
agreements and their effects on plan en-
rollee out-of-pocket spending and average 
pharmacy reimbursement, and other im-
pacts; and 
(iii) any recommendations the Com-
mission determines appropriate. 
(B) FINAL
REPORT.—Not later than 2 
years after the date on which the Commission 
submits the initial report under subparagraph 
(A), a report describing any changes with re-
spect to the information described in subpara-
graph (A) over time, together with any rec-
ommendations the Commission determines ap-
propriate. 
(2) FUNDING.—In addition to amounts other-
wise available, there is appropriated to the Medicare 
Payment Advisory Commission, out of any money in 
the 
Treasury 
not 
otherwise 
appropriated, 
$1,000,000 for fiscal year 2026, to remain available 
until expended, to carry out this subsection. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
SEC. 6. FULL REBATE PASS THROUGH TO PLAN; EXCEP-
TION FOR INNOCENT PLAN FIDUCIARIES. 
(a) IN GENERAL.—Section 408(b)(2) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)(2)) is amended— 
(1) in subparagraph (B)(viii)— 
(A) 
by 
redesignating 
subclauses 
(II) 
through (IV) as subclauses (III) through (V), 
respectively; 
(B) in subclause (I)— 
(i) by striking ‘‘subclause (II)’’ and 
inserting ‘‘subclause (III)’’; and 
(ii) by striking ‘‘subclauses (II) and 
(III)’’ and inserting ‘‘subclauses (III) and 
(IV)’’; and 
(C) by inserting after subclause (I) the fol-
lowing: 
‘‘(II) Pursuant to subsection (a), subpara-
graphs (C) and (D) of section 406(a)(1) shall not 
apply to a responsible plan fiduciary, notwith-
standing any failure to remit required amounts 
under subparagraph (C)(i), if the following condi-
tions are met: 
‘‘(aa) The responsible plan fiduciary did 
not know that the covered service provider 
failed or would fail to make required remit-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
tances and reasonably believed that the covered 
service 
provider 
remitted 
such 
required 
amounts. 
‘‘(bb) The responsible plan fiduciary, upon 
discovering that the covered service provider 
failed to remit the required amounts, requests 
in writing that the covered service provider 
remit such amounts. 
‘‘(cc) If the covered service provider fails 
to comply with a written request described in 
subclause (III) within 90 days of the request, 
the responsible plan fiduciary notifies the Sec-
retary of the covered service provider’s failure, 
in accordance with subclauses (III) and (IV).’’; 
and 
(2) by adding at the end the following: 
‘‘(C)(i)(I) For plan years beginning on or after 
the date that is 30 months after the date of enact-
ment of this subparagraph (referred to in this clause 
as the ‘effective date’), no contract or arrangement 
or renewal or extension of a contract or arrange-
ment, entered into on or after the effective date, for 
services between a covered plan and a covered serv-
ice provider, through a health insurance issuer offer-
ing group health insurance coverage, a third party 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00062
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
administrator, an entity providing pharmacy benefit 
management services, or other entity, for pharmacy 
benefit management services, is reasonable within 
the meaning of this paragraph unless such entity 
providing pharmacy benefit management services— 
‘‘(aa) remits 100 percent of rebates, fees, 
alternative discounts, and other remuneration 
received from any applicable entity that are re-
lated to utilization of drugs or drug spending 
under such health plan or health insurance cov-
erage, to the group health plan or health insur-
ance issuer offering group health insurance cov-
erage; and 
‘‘(bb) does not enter into any contract for 
pharmacy benefit management services on be-
half of such a plan or coverage, with an applica-
ble entity unless 100 percent of rebates, fees, 
alternative discounts, and other remuneration 
received under such contract that are related to 
the utilization of drugs or drug spending under 
such group health plan or health insurance cov-
erage are remitted to the group health plan or 
health insurance issuer by the entity providing 
pharmacy benefit management services. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00063
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(II) Nothing in subclause (I) shall be con-
strued to affect the term of a contract or arrange-
ment, as in effect on the effective date (as described 
in such subclause), except that such subclause shall 
apply to any renewal or extension of such a contract 
or arrangement entered into on or after such effec-
tive date, as so described. 
‘‘(ii) With respect to such rebates, fees, alter-
native discounts, and other remuneration— 
‘‘(I) the rebates, fees, alternative dis-
counts, and other remuneration under clause 
(i)(I) shall be— 
‘‘(aa) remitted— 
‘‘(AA) on a quarterly basis, to 
the group health plan or the group 
health insurance issuer, not later than 
90 days after the end of each quarter; 
or 
‘‘(BB) in the case of an under-
payment in a remittance for a prior 
quarter, as soon as practicable, but 
not later than 90 days after notice of 
the underpayment is first given; 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00064
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(bb) fully disclosed and enumerated 
to the group health plan or health insur-
ance issuer; and 
‘‘(cc) returned to the covered service 
provider for pharmacy benefit management 
services on behalf of the group health plan 
if any audit by a plan sponsor, issuer or a 
third party designated by a plan sponsor, 
indicates that the amounts received are in-
correct after such amounts have been paid 
to the group health plan or health insur-
ance issuer; 
‘‘(II) the Secretary may establish proce-
dures for the remittance of rebates fees, alter-
native discounts, and other remuneration under 
subclause (I)(aa) and the disclosure of rebates, 
fees, alternative discounts, and other remunera-
tion under subclause (I)(bb); and 
‘‘(III) the records of such rebates, fees, al-
ternative discounts, and other remuneration 
shall be available for audit by the plan sponsor, 
issuer, or a third party designated by a plan 
sponsor, not less than once per plan year. 
‘‘(iii) To ensure that an entity providing phar-
macy benefit management services is able to meet 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00065
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
the 
requirements 
of 
clause 
(ii)(I), 
a 
rebate 
aggregator (or other purchasing entity designed to 
aggregate rebates) and an applicable group pur-
chasing organization shall remit such rebates to the 
entity providing pharmacy benefit management serv-
ices not later than 45 days after the end of each 
quarter. 
‘‘(iv) A third-party administrator of a group 
health plan, a health insurance issuer offering group 
health insurance coverage, or a covered service pro-
vider for pharmacy benefit management services 
under such health plan or health insurance coverage 
shall make rebate contracts with rebate aggregators 
or drug manufacturers available for audit by such 
plan sponsor or designated third party, subject to 
reasonable restrictions (as determined by the Sec-
retary) on confidentiality to prevent re-disclosure of 
such contracts or use of such information in audits 
for purposes unrelated to this section. 
‘‘(v) Audits carried out under clauses (ii)(III) 
and (iv) shall be performed by an auditor selected by 
the responsible plan fiduciary. Payment for such au-
dits shall not be made, whether directly or indirectly, 
by the entity providing pharmacy benefit manage-
ment services. 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00066
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(vi) Nothing in this subparagraph shall be 
construed to— 
‘‘(I) prohibit reasonable payments to enti-
ties offering pharmacy benefit management 
services for bona fide services using a fee struc-
ture not described in this subparagraph, pro-
vided that such fees are transparent and quan-
tifiable to group health plans and health insur-
ance issuers; 
‘‘(II) require a third-party administrator of 
a group health plan or covered service provider 
for pharmacy benefit management services 
under such health plan or health insurance cov-
erage to remit bona fide service fees to the 
group health plan; 
‘‘(III) limit the ability of a group health 
plan or health insurance issuer to pass through 
rebates, fees, alternative discounts, and other 
remuneration to the participant or beneficiary; 
or 
‘‘(IV) modify the requirements for the cre-
ation, receipt, maintenance, or transmission of 
protected health information under the privacy 
regulations promulgated under the Health In-
surance Portability and Accountability Act of 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00067
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
1996 in part 160 and subparts A and E of part 
164 of title 45, Code of Federal Regulations (or 
successor regulations). 
‘‘(vii) For purposes of this subparagraph— 
‘‘(I) the terms ‘applicable entity’ and ‘ap-
plicable group purchasing organization’ have 
the meanings given such terms in section 
726(e); 
‘‘(II) the terms ‘covered plan’, ‘covered 
service provider’, and ‘responsible plan fidu-
ciary’ have the meanings given such terms in 
subparagraph (B); and 
‘‘(III) the terms ‘group health insurance 
coverage’, ‘health insurance coverage’, and 
‘health insurance issuer’ have the meanings 
given such terms in section 733.’’. 
(b) RULE OF CONSTRUCTION.—Subclause (II)(aa) of 
section 408(b)(2)(B)(viii) of the Employee Retirement In-
come 
Security 
Act 
of 
1974 
(29 
U.S.C. 
1108(b)(2)(B)(viii)), as amended by subsection (a), shall 
not be construed to relieve or limit a responsible plan fidu-
ciary from the duty to monitor the practices of any covered 
service provider that contracts with the applicable covered 
plan, including for the purposes of ensuring the reason-
ableness of compensation. For purposes of this subsection, 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00068
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
the terms ‘‘covered plan’’, ‘‘covered service provider’’, and 
‘‘responsible plan fiduciary’’ have the meanings given such 
terms in section 408(b)(2)(B)(ii) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)). 
(c) CLARIFICATION
OF COVERED SERVICE PRO-
VIDER.— 
(1) SERVICES.— 
(A) 
IN
GENERAL.—Section 
408(b)(2)(B)(ii)(I)(bb) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)(I)(bb)) is amended— 
(i) in subitem (AA) by striking ‘‘Bro-
kerage services,’’ and inserting ‘‘Services 
(including brokerage services),’’; and 
(ii) in subitem (BB)— 
(I) by striking ‘‘Consulting,’’ and 
inserting ‘‘Other services,’’; and 
(II) by striking ‘‘related to the 
development or implementation of 
plan design’’ and all that follows 
through the period at the end and in-
serting ‘‘including any of the fol-
lowing: plan design, insurance or in-
surance product selection (including 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00069
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
vision and dental), recordkeeping, 
medical management, benefits admin-
istration selection (including vision 
and dental), stop-loss insurance, phar-
macy benefit management services, 
wellness design and management serv-
ices, transparency tools, group pur-
chasing organization agreements and 
services, participation in and services 
from preferred vendor panels, disease 
management, compliance services, em-
ployee assistance programs, or third 
party administration services, or con-
sulting services related to any such 
services.’’. 
(B) SENSE OF CONGRESS.—It is the sense 
of Congress that the amendment made by sub-
paragraph (A) clarifies the existing requirement 
of covered service providers with respect to 
services 
described 
in 
section 
408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee 
Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)(2)(B)(ii)(I)(bb)(BB)) that were 
in effect since the application date described in 
section 202(e) of the No Surprises Act (Public 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00070
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
Law 116–260; 29 U.S.C. 1108 note), and does 
not impose any additional requirement under 
section 408(b)(2)(B) of such Act. 
(2) CERTAIN ARRANGEMENTS FOR PHARMACY 
BENEFIT MANAGEMENT SERVICES CONSIDERED AS 
INDIRECT.— 
(A) IN GENERAL.—Section 408(b)(2)(B)(i) 
of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1108(b)(2)(B)(i)) is 
amended— 
(i) by striking ‘‘requirements of this 
clause’’ and inserting ‘‘requirements of this 
subparagraph’’; and 
(ii) by adding at the end the fol-
lowing: ‘‘For purposes of applying section 
406(a)(1)(C) with respect to a transaction 
described under this subparagraph or sub-
paragraph (C), a contract or arrangement 
for services between a covered plan and an 
entity providing services to the plan, in-
cluding a health insurance issuer providing 
health insurance coverage in connection 
with the covered plan, in which such entity 
contracts, in connection with such plan, 
with a service provider for pharmacy ben-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00071
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
efit management services, shall be consid-
ered an indirect furnishing of goods, serv-
ices, or facilities between the covered plan 
and the service provider for pharmacy ben-
efit management services acting as the 
party in interest.’’. 
(B) HEALTH
INSURANCE
ISSUER
AND 
HEALTH
INSURANCE
COVERAGE
DEFINED.— 
Section 408(b)(2)(B)(ii)(I)(aa) of such Act (29 
U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is amended by 
inserting before the period at the end ‘‘and the 
terms ‘health insurance coverage’ and ‘health 
insurance issuer’ have the meanings given such 
terms in section 733(b)’’. 
(C) 
TECHNICAL
AMENDMENT.—Section 
408(b)(2)(B)(ii)(I)(aa) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)(I)(aa)) is amended by insert-
ing ‘‘in’’ after ‘‘defined’’. 
SEC. 7. QUALIFIED EXCHANGE ENROLLEES ELIGIBLE TO 
ESTABLISH HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Section 223 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00072
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(i) QUALIFIED EXCHANGE ENROLLEES ELIGIBLE 
TO ESTABLISH HEALTH SAVINGS ACCOUNTS.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, an individual who is a qualified Exchange en-
rollee for any month during a taxable year shall be 
treated as an eligible individual for each of the 
months in such taxable year and each taxable year 
thereafter. Notwithstanding the previous sentence, 
any individual who elects to make an advance pre-
mium payment under section 1412(c)(2)(C) of the 
Patient Protection and Affordable Care Act with re-
spect to any month during a taxable year shall not 
be treated as an eligible individual for such month 
or any other month during such taxable year. 
‘‘(2) QUALIFIED
EXCHANGE
ENROLLEE.—For 
purposes of this subsection, the term ‘qualified Ex-
change enrollee’ means, with respect to any month 
during a taxable year, any individual if, as of the 1st 
day of such month, such individual is enrolled in a 
qualified health plan in the individual market 
through an Exchange established under the Patient 
Protection and Affordable Care Act that is— 
‘‘(A) the lowest cost bronze plan available 
to such individual through such Exchange, or 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00073
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(B) in the case that, for any month dur-
ing the preceding taxable year, such individual 
was enrolled in a qualified health plan in the in-
dividual market through such an Exchange (re-
ferred to in this paragraph as the ‘previous 
plan’), such a qualified health plan for which 
the monthly premium is lower than the monthly 
premium that was in effect for the previous 
plan. 
‘‘(3) APPLICATION OF MONTHLY LIMITATIONS 
FOR CONTRIBUTIONS.—In the case of an individual 
who is treated as an eligible individual under para-
graph (1), subsection (b)(2) shall be applied as if 
each reference to ‘high deductible health plan’ were 
a reference to ‘a qualified health plan in the indi-
vidual market that was enrolled in through an Ex-
change established under the Patient Protection and 
Affordable Care Act’. 
‘‘(4) COORDINATION WITH CONTRIBUTIONS OF 
PARTIAL ADVANCE PREMIUM TAX CREDIT.—The lim-
itation which would (but for this paragraph) apply 
under subsection (b) for any taxable year to an indi-
vidual who is treated as an eligible individual under 
paragraph (1) shall be reduced (but not below zero) 
by the aggregate amount contributed to health sav-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00074
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
ings accounts of such individual for such taxable 
year under section 1412(f) of the Patient Protection 
and Affordable Care Act (and such amount shall not 
be allowed as a deduction under subsection (a)). 
‘‘(5) ALLOWING
HEALTH
INSURANCE
TO
BE 
PURCHASED FROM ACCOUNT.—In the case of an in-
dividual who is treated as an eligible individual 
under paragraph (1), subsection (d)(2) shall be ap-
plied without regard to subparagraphs (B) and (C) 
thereof.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 8. OPTION TO PREPAY ANNUAL PREMIUM; OPTION TO 
DIRECT PARTIAL ADVANCE PAYMENT OF 
PREMIUM TAX CREDIT INTO HSA. 
(a) OPTION TO PREPAY ANNUAL PREMIUM.—Sec-
tion 1412(c)(2) of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18082(c)(2)) is amended— 
(1) in subparagraph (B)(i), by inserting ‘‘, and, 
in the case of an individual who elects to make an 
advance premium payment under subparagraph (C), 
further reduce such premium by $5’’ before the 
semicolon; 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00075
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
(2) by redesignating subparagraph (C), as 
added by section 3(d), as subparagraph (D); and 
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph: 
‘‘(C) INDIVIDUAL OPTION TO PREPAY AN-
NUAL
PREMIUM.—Beginning with plan years 
beginning in 2026, in the case of an individual 
with respect to whom an advance determination 
has been made under section 1411 that such in-
dividual is eligible for a premium tax credit 
under section 36B of the Internal Revenue 
Code of 1986, if the premium assistance 
amount under subsection (b)(2) of such section 
is determined with respect to such individual in 
accordance with subsection (b)(3)(A)(iii)(II) of 
such section, such individual may elect to make 
an advance premium payment to the issuer of 
the qualified health plan in which such indi-
vidual is enrolled in an amount equal to $5 
multiplied by— 
‘‘(i) in the case that the advance de-
termination of eligibility was made during 
the annual open enrollment period for such 
plan year, 12; or 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00076
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(ii) in the case that the advance de-
termination of eligibility was made during 
an open enrollment period other than the 
annual open enrollment period for such 
plan year, the number of months remain-
ing in such plan year.’’. 
(b) OPTION TO DIRECT PARTIAL ADVANCE PAY-
MENT OF PREMIUM TAX CREDIT INTO HSA.—Section 
1412 of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18082) is amended— 
(1) in subsection (c)(2)— 
(A) in subparagraph (A), by striking 
‘‘The’’ and inserting ‘‘Subject to subsection (f), 
the’’; and 
(B) in subparagraph (B), by inserting 
‘‘(including such a payment made in accordance 
with subsection (f))’’ after ‘‘an advance pay-
ment’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) OPTION TO DIRECT PARTIAL ADVANCE PAY-
MENT OF PREMIUM TAX CREDIT TO HSA.— 
‘‘(1) IN GENERAL.—Beginning with plan years 
beginning in 2026, at the election of an eligible en-
rolled individual described in paragraph (2), the ad-
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00077
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
vance payment of the premium tax credit allowed 
under section 36B of the Internal Revenue Code of 
1986 shall be made as follows: 
‘‘(A) The Secretary of the Treasury shall 
make advance payment of 50 percent of such 
premium tax credit to the issuer of a qualified 
health plan on a monthly basis (or such other 
periodic basis as the Secretary may provide). 
‘‘(B) The Secretary of the Treasury shall 
make advance payment of 50 percent of such 
premium tax credit into a health savings ac-
count (as defined in section 223(d) of the Inter-
nal Revenue Code of 1986) of such individual 
(as designated by such individual) on the same 
basis provided for under subparagraph (A), but 
only to the extent that the aggregate amount of 
such payments does not exceed the limitation 
under section 223(b) of such Code (determined 
without regard to this subsection) which is ap-
plicable to such individual for the taxable year 
in which such payments are made. 
‘‘(2) ELIGIBLE
ENROLLED
INDIVIDUAL.—For 
purposes of this subsection, the term ‘eligible en-
rolled individual’ means, with respect to a plan year 
(starting with 2026), an individual— 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00078
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB
‘‘(A) with respect to whom an advance de-
termination has been made under section 1411 
that such individual is eligible for a premium 
tax credit under section 36B of the Internal 
Revenue Code of 1986; 
‘‘(B) who is, for the first month of such 
plan year, a qualified Exchange enrollee (as de-
fined in section 223(i) of the Internal Revenue 
Code of 1986); and 
‘‘(C) who does not elect to make an ad-
vance premium payment under subsection 
(c)(2)(C).’’. 
SEC. 9. REPORT. 
Not later than one year after the date of the enact-
ment of this Act, the Secretary of the Treasury and the 
Secretary of Health and Human Services shall jointly sub-
mit to Congress a report on the implementation of sections 
7 and 8 and any recommendations on expanding accessi-
bility of health savings accounts. 
Æ 
VerDate Sep 11 2014 
00:12 Dec 23, 2025
Jkt 069200
PO 00000
Frm 00079
Fmt 6652
Sfmt 6301
E:\BILLS\H6501.IH
H6501
kjohnson on DSK7ZCZBW3PROD with $$_JOB