I 
115TH CONGRESS 
1ST SESSION H. R. 1122 
To amend title XVIII of the Social Security Act to provide for clarification 
and rationalization of Medicare prescription drug plan recovery rules 
for certain claims. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 16, 2017 
Mr. MURPHY of Pennsylvania (for himself and Mr. KIND) introduced the fol-
lowing bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committee on Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for clarification and rationalization of Medicare prescrip-
tion drug plan recovery rules for certain claims. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Secondary Payer Ad-
vancement, Rationalization, and Clarification Act’’ or the 
‘‘SPARC Act’’. 
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SEC. 2. CLARIFICATION AND RATIONALIZATION OF MEDI-
CARE 
PRESCRIPTION 
DRUG 
SECONDARY 
CLAIMS RESPONSIBILITY. 
(a) IN GENERAL.—Section 1860D–2(a)(4) of the So-
cial Security Act (42 U.S.C. 1395w–102(a)(4)) is amend-
ed to read as follows: 
‘‘(4) 
SECONDARY
PAYOR
AND
RECOVERY 
RIGHTS.— 
‘‘(A) IN GENERAL.— 
‘‘(i) APPLICATION
OF
SECONDARY 
PAYOR.—A prescription drug plan shall be 
secondary payor to any valid and collectible 
payment from a primary drug plan (as de-
fined in clause (iv)) until such time as such 
primary drug plan pays a final settlement, 
judgment, or award to an individual en-
rolled under the prescription drug plan 
with regard to an injury or illness involved 
or otherwise terminates its ongoing respon-
sibility for medical payments with respect 
to the individual. 
‘‘(ii) LIMITATION ON PARTIES MAKING 
PRESCRIPTION DRUG PLANS PRIMARY.—A 
primary drug plan (as defined in clause 
(iv), other than a group health plan or 
multiemployer or multiple employer plan 
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of, or contributed to by, an employer that 
has 20 or fewer employees for each work-
ing day in each of 20 or more calendar 
weeks in the calendar year involved or the 
preceding calendar year), a self-insured 
plan, a service benefit plan, a managed 
care organization, a pharmacy benefit 
manager, or other party that, by statute, 
contract, or agreement, is legally respon-
sible for payment of a claim for a covered 
outpatient drug, in enrolling an individual 
or in making any payments for benefits to 
the individual or on the individual’s behalf, 
may not take into account that the indi-
vidual is enrolled under a prescription drug 
plan under this part or is eligible for or is 
provided coverage for covered part D drugs 
under this part. 
‘‘(iii) LIMITATION
ON
SECRETARIAL 
CLAIMS
THROUGH
SUBROGATION.—The 
Secretary shall not assert any claim on be-
half or against a prescription drug plan, 
other than through the recovery from such 
a plan of amounts paid related to a cov-
ered part D drug event that has been re-
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paid to the plan through a subrogation ac-
tion or otherwise. 
‘‘(iv) 
PRIMARY
DRUG
PLAN
DE-
FINED.—In this paragraph, the term ‘pri-
mary drug plan’ means, with respect to 
benefits for covered part D drugs, a group 
health plan or large group health plan 
(other than a group health plan or multi-
employer or multiple employer plan of, or 
contributed to by, an employer that has 20 
or fewer employees for each working day in 
each of 20 or more calendar weeks in the 
calendar year involved or the preceding cal-
endar year), a workers’ compensation law 
or plan, an automobile or liability insur-
ance policy or plan (including a self-in-
sured plan) or no-fault insurance insofar 
as such a plan, law, policy, or insurance 
provides such benefits, insofar as, under 
the provisions of section 1862(b)(2), such 
coverage would be treated as a primary 
plan if benefits for covered part D drugs 
were treated as benefits under parts A and 
B. For purposes of this clause, an entity 
that engages in a business, trade, or pro-
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fession shall be deemed to have a self-in-
sured plan if it carries its own risk (wheth-
er by a failure to obtain insurance, or oth-
erwise) in whole or in part. 
‘‘(B) WAIVER.—A prescription drug plan 
may waive (in whole or in part) the provisions 
of this paragraph in the case of an individual 
claim if the plan determines that the waiver is 
in the best interests of the program established 
under this part. 
‘‘(C) RECOVERY.—A prescription drug 
plan shall be subrogated (to the extent of pay-
ment made under this part by the plan for any 
covered part D drug before the date the plan 
received notice pursuant to subparagraph (D)) 
to any right of an individual or any other entity 
to payment, with respect to such covered part 
D drug, under a primary drug plan. A subroga-
tion claim may not be asserted pursuant to this 
subparagraph by a prescription drug plan with 
respect to a payment for a covered part D drug 
after the date that is 3 years after the date 
such plan receives notice of a payment, with re-
spect to such covered part D drug, pursuant to 
subparagraph (D). Any such subrogation claim 
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shall be the exclusive legal remedy of the PDP 
sponsor of the plan and shall be reduced to take 
into account the cost of procuring the judgment 
or settlement with respect to such claim if an 
individual’s liability, workers’ compensation, or 
no-fault claim is disputed. Any costs or expense 
incurred by a prescription drug plan related to 
recoveries pursuant to this subparagraph shall 
not be considered an administrative cost or ex-
pense, as those terms are used in this part. 
‘‘(D) COORDINATION OF BENEFITS INFOR-
MATION.—Not later than 15 days after the date 
the Secretary receives information under para-
graph (7) or (8) of section 1862(b) relating to 
an individual enrolled in a prescription drug 
plan during an applicable time, the Secretary 
shall provide such information to such prescrip-
tion drug plan in a format convenient and ac-
cessible to such plans. The Secretary shall 
waive any requirements under this part that a 
prescription drug plan establish procedures for 
determining whether costs for part D eligible 
individuals are being reimbursed through insur-
ance or otherwise or identify payers that are 
primary to the program under subparagraph 
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(A)(ii) other than as required under this para-
graph. 
‘‘(E) COORDINATION
OF
BENEFITS.—A 
prescription drug plan shall, in the case of re-
ceipt of a notice pursuant to subparagraph (D) 
related to an enrollee for whom a primary drug 
plan has reported on ongoing responsibility for 
medical costs pursuant to paragraph (7) or (8) 
of section 1862(b), authorize the provider of 
such covered part D drug to charge, in accord-
ance with the charges allowed under the pre-
scription drug plan, such primary drug plan for 
such covered part D drug related to or arising 
out of the treatment accident or injury subject 
to such notice (other than payments subject to 
a claim under subparagraph (B) or (F)) for the 
period in which the enrollee remains enrolled in 
such plan through the date upon which such 
primary drug plan has terminated such ongoing 
responsibility for medical payments. 
‘‘(F) USE OF WEB SITE TO DETERMINE 
FINAL REIMBURSEMENT AMOUNT.— 
‘‘(i) NOTIFICATION
OF
PLANS.—Not 
later than 10 days after the date the Sec-
retary receives a notice under section 
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‘‘(bb) in the case that the 
prescription drug plan provides 
such statement by such date, 
with respect to any covered part 
D drug provided to such indi-
vidual which was not identified in 
the notice. 
‘‘(iii) INCLUSION OF INFORMATION ON 
WEB
SITE.—The Secretary shall include 
any covered part D drug identified by a 
prescription drug plan pursuant to clause 
(ii) within the Secretary’s statement of re-
imbursement amount on the Web site as 
described in section 1862(b)(2)(B)(vii). 
‘‘(iv) COLLECTION.—The Secretary 
may collect (on behalf of a prescription 
drug plan) the reimbursement amount for 
covered part D drugs, as identified pursu-
ant to clause (ii), from the individual in-
volved or the primary drug plan pursuant 
to the procedures set forth under section 
1862(b)(2)(B)(vii). Any such amounts col-
lected by the Secretary for covered part D 
drugs directly paid by the plan shall be re-
mitted directly by the Secretary to the ap-
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propriate prescription drug plan that en-
rolled the individual related to the notice 
during the applicable time period for which 
such individual was enrolled, and the Sec-
retary shall retain such amounts as were 
paid to the plan in subsidy for such 
drugs.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to drugs dispensed in years be-
ginning more than 6 months after the date of the enact-
ment of this Act. 
Æ 
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