(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to contract years beginning on 
or after January 1, 2007. 
SEC. 506. REMOVAL OF EXCLUSION OF BENZODIAZEPINES 
FROM REQUIRED COVERAGE UNDER THE 
MEDICARE PRESCRIPTION DRUG PROGRAM. 
(a) IN GENERAL.—Section 1860D–2(e)(2) of the So-
cial Security Act (42 U.S.C. 1395w–102(e)(2)) is amend-
ed— 
(1) by striking ‘‘subparagraph (E)’’ and insert-
ing ‘‘subparagraphs (E) and (J)’’; and 
(2) by inserting ‘‘and benzodiazepines’’ after 
‘‘smoking cessation agents’’. 
(b) REVIEW
OF BENZODIAZEPINE PRESCRIPTION 
POLICIES TO ASSURE APPROPRIATENESS AND TO AVOID 
ABUSE.—The Secretary of Health and Human Services 
shall review the policies of medicare prescription drug 
plans (and MA–PD plans) under parts C and D of title 
XVIII of the Social Security Act regarding the filling of 
prescriptions for benzodiazepine to ensure that these poli-
cies are consistent with accepted clinical guidelines, are 
appropriate to individual health histories, and are de-
signed to minimize long term use, guard against over-pre-
scribing, and prevent patient abuse. 
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(c) DEVELOPMENT
BY MEDICARE QUALITY IM-
PROVEMENT ORGANIZATIONS OF EDUCATIONAL GUIDE-
LINES
FOR PHYSICIANS REGARDING PRESCRIBING
OF 
BENZODIAZEPINES.—The 
Secretary 
of 
Health 
and 
Human Services shall provide, in contracts entered into 
with medicare quality improvement organizations under 
part B of title XI of the Social Security Act, for the devel-
opment by such organizations of appropriate educational 
guidelines for physicians regarding the prescribing of 
benzodiazepines. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall be effective as if included in the enact-
ment of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (Public Law 108–173). 
SEC. 507. STANDARDIZED FORMS AND PROCEDURES FOR 
RECONSIDERATIONS AND APPEALS. 
(a) IN GENERAL.—Section 1860D–4 of the Social 
Security Act (42 U.S.C. 1395w–104) is amended by add-
ing at the end the following new subsection: 
‘‘(l) STANDARDIZED FORMS AND PROCEDURES FOR 
RECONSIDERATIONS AND APPEALS.— 
‘‘(1) STANDARD ENROLLEE NOTICE.—The Sec-
retary shall develop a standard notice to be distrib-
uted by a prescription drug plan (or an MA–PD 
plan) to an enrollee when a covered part D drug pre-
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scribed for the enrollee is not covered, or the cov-
erage of such drug is otherwise restricted, by the 
plan. 
‘‘(2) STANDARDIZED PROCESS FOR RECONSID-
ERATIONS AND APPEALS.—The Secretary shall re-
quire prescription drug plans and MA–PD plans to 
follow the same standardized process for reconsider-
ations and redeterminations under subsections (g) 
and (h). Such process shall require that determina-
tions regarding medical necessity are based on pro-
fessional medical judgement, the medical condition 
of the enrollee, the treating physician’s recommenda-
tion, and other medical evidence.’’. 
(b) EFFECTIVE DATE.—The Secretary of Health and 
Human Services shall provide for the standard notice and 
the standardized process, and the application of such no-
tice and process, under the amendment made by sub-
section (a) by not later than January 1, 2007. 
SEC. 508. ELIMINATION OF MA REGIONAL STABILIZATION 
FUND (SLUSH FUND); ELIMINATION OF CER-
TAIN MA OVERPAYMENTS. 
(a) ELIMINATION OF SLUSH FUND.— 
(1) IN
GENERAL.—Subsection (e) of section 
1858 of the Social Security Act (42 U.S.C. 1395w– 
27a) is repealed. 
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(2) 
CONFORMING
AMENDMENT.—Section 
1858(f)(1) of the Social Security Act (42 U.S.C. 
1395w–27a(f)(1)) is amended by striking ‘‘subject to 
subsection (e),’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
the enactment of section 221(c) of the Medicare Pre-
scription Drug, Improvement, and Modernization 
Act of 2003 (Public Law 108–173; 117 Stat. 2181). 
(b) ELIMINATION OF CERTAIN MEDICARE ADVAN-
TAGE OVERPAYMENTS.— 
(1) IN GENERAL.—Section 1853(a)(1)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395w– 
23(a)(1)(C)(ii)), as added by section 5301 of the 
Deficit Reduction Act of 2005, is amended— 
(A) in the heading, by striking ‘‘DURING 
PHASE-OUT OF BUDGET NEUTRALITY FACTOR’’; 
(B) in the matter preceding subclause (I), 
by striking ‘‘through 2010’’ and inserting ‘‘and 
subsequent years’’; and 
(C) in subclause (II), by striking ‘‘only for 
2008, 2009, and 2010’’ and inserting ‘‘for 2008 
and subsequent years’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
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the enactment of section 5301 of the Deficit Reduc-
tion Act of 2005. 
TITLE 
VI—FAIR 
AND 
SPEEDY 
TREATMENT 
OF 
MEDICARE 
PRESCRIPTION DRUG CLAIMS 
SEC. 601. PROMPT PAYMENT BY MEDICARE PRESCRIPTION 
DRUG PLANS AND MA–PD PLANS UNDER 
PART D. 
(a) APPLICATION TO PRESCRIPTION DRUG PLANS.— 
Section 1860D–12(b) of the Social Security Act (42 
U.S.C. 1395w–112 (b)), as amended by section 301(b), 
is amended by adding at the end the following new para-
graph: 
‘‘(5) PROMPT PAYMENT OF CLEAN CLAIMS.— 
‘‘(A) PROMPT
PAYMENT.—Each contract 
entered into with a PDP sponsor under this 
subsection with respect to a prescription drug 
plan offered by such sponsor shall provide that 
payment shall be issued, mailed, or otherwise 
transmitted with respect to all clean claims sub-
mitted under this part within the applicable 
number of calendar days after the date on 
which the claim is received. 
‘‘(B) DEFINITIONS.—In this paragraph: 
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‘‘(i) CLEAN CLAIM.—The term ‘clean 
claim’ means a claim, with respect to a 
covered part D drug, that has no apparent 
defect or impropriety (including any lack 
of any required substantiating documenta-
tion) or particular circumstance requiring 
special treatment that prevents timely pay-
ment from being made on the claim under 
this part. 
‘‘(ii) APPLICABLE
NUMBER
OF
CAL-
ENDAR DAYS.—The term ‘applicable num-
ber of calendar days’ means— 
‘‘(I) with respect to claims sub-
mitted 
electronically, 
calendar 
days; and 
‘‘(II) with respect to claims sub-
mitted otherwise, 30 calendar days. 
‘‘(C) INTEREST PAYMENT.—If payment is 
not issued, mailed, or otherwise transmitted 
within the applicable number of calendar days 
(as defined in subparagraph (B)) after a clean 
claim is received, interest shall be paid at a rate 
used for purposes of section 3902(a) of title 31, 
United States Code (relating to interest pen-
alties for failure to make prompt payments), for 
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the period beginning on the day after the re-
quired payment date and ending on the date on 
which payment is made. 
‘‘(D) PROCEDURES INVOLVING CLAIMS.— 
‘‘(i) CLAIMS DEEMED TO BE CLEAN 
CLAIMS.— 
‘‘(I) IN GENERAL.—A claim for a 
covered part D drug shall be deemed 
to be a clean claim for purposes of 
this paragraph if the PDP sponsor in-
volved does not provide a notification 
of deficiency to the claimant by the 
10th day that begins after the date on 
which the claim is submitted. 
‘‘(II) NOTIFICATION
OF
DEFI-
CIENCY.—For purposes of subclause 
(II), the term ‘notification of defi-
ciency’ means a notification that 
specifies all defects or improprieties in 
the claim involved and that lists all 
additional information or documents 
necessary for the proper processing 
and payment of the claim. 
‘‘(ii) PAYMENT OF CLEAN PORTIONS 
OF CLAIMS.—A PDP sponsor shall, as ap-
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propriate, pay any portion of a claim for a 
covered part D drug that would be a clean 
claim but for a defect or impropriety in a 
separate portion of the claim in accordance 
with subparagraph (A). 
‘‘(iii) OBLIGATION TO PAY.—A claim 
for a covered part D drug submitted to a 
PDP sponsor that is not paid or contested 
by the provider within the applicable num-
ber of calendar days (as defined in sub-
paragraph (B)) shall be deemed to be a 
clean claim and shall be paid by the PDP 
sponsor in accordance with subparagraph 
(A). 
‘‘(iv) DATE OF PAYMENT OF CLAIM.— 
Payment of a clean claim under subpara-
graph (A) is considered to have been made 
on the date on which full payment is re-
ceived by the provider. 
‘‘(E) 
ELECTRONIC
TRANSFER
OF 
FUNDS.—A PDP sponsor shall pay all clean 
claims submitted electronically by an electronic 
funds transfer mechanism.’’. 
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(b) APPLICATION
TO
MA–PD PLANS.—Section 
1857(f) of such Act (42 U.S.C. 1395w–27) is amended 
by adding at the end the following new paragraph: 
‘‘(3) INCORPORATION
OF
CERTAIN
PRESCRIP-
TION DRUG PLAN CONTRACT REQUIREMENTS.—The 
provisions of section 1860D–12(b)(5) shall apply to 
contracts with a Medicare Advantage organization in 
the same manner as they apply to contracts with a 
PDP sponsor offering a prescription drug plan 
under part D.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contracts entered into or re-
newed on or after the date of the enactment of this Act. 
SEC. 602. RESTRICTION ON CO-BRANDING. 
(a) IN GENERAL.—Section 1860D–4(b)(2)(A) of the 
Social Security Act (42 U.S.C. 1395w–104(b)(2)(A)) is 
amended by adding at the end the following new sen-
tences: ‘‘It is unlawful for a PDP sponsor of a prescription 
drug plan to display on such a card the name, brand, or 
trademark of any pharmacy.’’ 
(b) EFFECTIVE DATE.—With respect to cards dis-
pensed before, on, or after the date of the enactment of 
this Act, the amendment made by this section shall apply 
to such cards on and after the date that is 90 days after 
such date of enactment. Any card dispensed before such 
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date that is 90 days after the date of enactment that vio-
lates the second sentence of section 1860D–4(b)(2)(A) of 
the Social Security Act, as added by subsection (a), shall 
be reissued by such 90-day date. 
SEC. 603. MINIMUM DISPENSING FEES FOR GENERIC COV-
ERED PART D DRUGS. 
(a) IN GENERAL.—Section 1860D–4(b)(1) of the So-
cial Security Act (42 U.S.C. 1395w–104(b)(1)) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(F) PAYMENT OF MINIMUM DISPENSING 
FEES
TO
ENCOURAGE
USE
OF
GENERIC 
DRUGS.— 
‘‘(i) IN GENERAL.—Subject to clauses 
(ii) and (iii), with respect to a generic cov-
ered part D drug that is therapeutically 
equivalent and bioequivalent to a brand 
name drug that is a covered part D drug 
dispensed through a participating phar-
macy, the amount of the dispensing fee 
paid to the pharmacy for the generic cov-
ered part D drug shall be an amount that 
is at least the greater of— 
‘‘(I) 50 percent greater than the 
amount of the dispensing fee for the 
brand name drug; or 
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‘‘(II) $10. 
‘‘(ii) SAFE HARBOR FOR BRAND NAME 
DRUG DISPENSING FEE AMOUNTS.— 
‘‘(I) IN GENERAL.—For purposes 
of clause (i) and subject to subclause 
(II), a prescription drug plan under 
this section shall not decrease the 
amount of the dispensing fee paid by 
the plan to a participating pharmacy 
for a brand name drug described in 
such clause to an amount that is less 
than the amount of the dispensing fee 
paid by such plan to such pharmacy 
for such drug on the date of the en-
actment of this subparagraph. 
‘‘(II) 
EXCEPTION.—The 
Sec-
retary may waive the prohibition 
under subclause (I) with respect to a 
dispensing fee paid by a prescription 
drug plan for a brand name drug, as 
the 
Secretary 
determines 
appro-
priate.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to prescriptions filled on or after 
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the date that is the first day of the first contract year 
after the date of the enactment of this Act. 
SEC. 604. PROVISION OF MEDICATION THERAPY MANAGE-
MENT SERVICES UNDER PART D. 
(a) PROVISION OF MEDICATION THERAPY MANAGE-
MENT SERVICES UNDER PART D.— 
(1) IN
GENERAL.—Section 1860D–4(c)(2) of 
the Social Security Act (42 U.S.C.1395w–104(c)(2)) 
is amended— 
(A) in subparagraph (A)— 
(i) in clause (i)— 
(I) by inserting ‘‘or other health 
care provider with advanced training 
in medication management’’ after 
‘‘furnished by a pharmacist’’; and 
(II) by striking ‘‘targeted bene-
ficiaries described in clause (ii)’’ and 
inserting ‘‘targeted beneficiaries speci-
fied under clause (ii)’’ 
(ii) by striking clause (ii) and insert-
ing the following: 
‘‘(ii) TARGETED
BENEFICIARIES.— 
The Secretary shall specify the population 
of part D eligible individuals appropriate 
for services under a medication therapy 
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management program based on the fol-
lowing characteristics: 
‘‘(I) Having a disease state in 
which evidence-based medicine has 
demonstrated the benefit of medica-
tion therapy management intervention 
based on objective outcome measures. 
‘‘(II) Taking multiple covered 
part D drugs or having a disease state 
in which a complex combination medi-
cation regimen is utilized. 
‘‘(III) Being identified as likely 
to incur annual costs for covered part 
D drugs that exceed a level specified 
by the Secretary or where acute or 
chronic decompensation of disease 
would likely increase expenditures 
under the Federal Hospital Insurance 
Trust Fund or the Federal Supple-
mentary Medical Insurance Trust 
Fund under sections 1817 and 1841, 
respectively, such as through the re-
quirement of emergency care or acute 
hospitalization.’’; 
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(B) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) ELEMENTS.— 
‘‘(i) MINIMUM DEFINED PACKAGE OF 
SERVICES.—The Secretary shall specify a 
minimum defined package of medication 
therapy management services that shall be 
provided to each enrollee. Such package 
shall be based on the following consider-
ations: 
‘‘(I) Performing necessary assess-
ments of the health status of each en-
rollee. 
‘‘(II) Providing medication ther-
apy review to identify, resolve, and 
prevent medication-related problems, 
including adverse events. 
‘‘(III) Increasing enrollee under-
standing to promote the appropriate 
use of medications by enrollees and to 
reduce the risk of potential adverse 
events associated with medications, 
through beneficiary and family edu-
cation, counseling, and other appro-
priate means. 
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‘‘(IV) Increasing enrollee adher-
ence with prescription medication 
regimens through medication refill re-
minders, special packaging, and other 
compliance programs and other appro-
priate means. 
‘‘(V) Promoting detection of ad-
verse drug events and patterns of 
overuse and underuse of prescription 
drugs. 
‘‘(VI) Developing a medication 
action plan which may alter the medi-
cation regimen, when permitted by the 
State licensing authority. This infor-
mation should be provided to, or ac-
cessible by, the primary health care 
provider of the enrollee. 
‘‘(VII) Monitoring and evaluating 
the response to therapy and evalu-
ating the safety and effectiveness of 
the therapy, which may include lab-
oratory assessment. 
‘‘(VIII) Providing disease-specific 
medication therapy management serv-
ices when appropriate. 
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‘‘(IX) Coordinating and inte-
grating medication therapy manage-
ment services within the broader scope 
of health care management services 
being provided to each enrollee. 
‘‘(ii) DELIVERY OF SERVICES.— 
‘‘(I) PERSONAL
DELIVERY.—To 
the extent feasible, face-to-face inter-
action shall be the preferred method 
of delivery of medication therapy man-
agement services. 
‘‘(II) 
INDIVIDUALIZED.—Such 
services shall be patient-specific and 
individualized and shall be provided 
directly to the patient by a pharmacist 
or other health care provider with ad-
vanced training in medication man-
agement. 
‘‘(III) DISTINCT
FROM
OTHER 
ACTIVITIES.—Such services shall be 
distinct from any activities related to 
formulary development and use, gen-
eralized patient education and infor-
mation activities, and any population- 
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focused quality assurance measures 
for medication use. 
‘‘(iii) OPPORTUNITY TO IDENTIFY PA-
TIENTS IN NEED OF MEDICATION THERAPY 
MANAGEMENT
SERVICES.—The program 
shall provide opportunities for health care 
providers to identify patients who should 
receive medication therapy management 
services.’’; 
(C) by striking subparagraph (E) and in-
serting the following: 
‘‘(E) PHARMACY FEES.— 
‘‘(i) IN GENERAL.—The PDP sponsor 
of a prescription drug plan shall pay phar-
macists and others providing services 
under the medication therapy management 
program under this paragraph based on 
the time and intensity of services provided 
to enrollees. 
‘‘(ii) SUBMISSION ALONG WITH PLAN 
INFORMATION.—Each such sponsor shall 
disclose to the Secretary upon request the 
amount of any such payments and shall 
submit a description of how such payments 
are calculated along with the information 
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submitted under section 1860D–11(b). 
Such description shall be submitted at the 
same time and in a similar manner to the 
manner in which the information described 
in paragraph (2) of such section is sub-
mitted.’’; and 
(D) by adding at the end the following new 
subparagraph: 
‘‘(F) 
PHARMACY
ACCESS
REQUIRE-
MENTS.—The PDP sponsor of a prescription 
drug plan shall secure the participation in its 
network of a sufficient number of retail phar-
macies to assure that enrollees have the option 
of obtaining services under the medication ther-
apy management program under this paragraph 
directly from community-based retail phar-
macies.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to medication therapy 
management services provided on or after January 
1, 2008. 
(b) MEDICATION
THERAPY
MANAGEMENT
DEM-
ONSTRATION PROGRAM.—Section 1860D–4(c) of the So-
cial Security Act (42 U.S.C.1395w–104(c)) is amended by 
adding at the end the following new paragraph: 
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‘‘(3) COMMUNITY-BASED MEDICATION THERAPY 
MANAGEMENT DEMONSTRATION PROGRAM.— 
‘‘(A) ESTABLISHMENT.— 
‘‘(i) IN GENERAL.—By not later than 
January 1, 2008, the Secretary shall es-
tablish a 2-year demonstration program, 
based on the recommendations of the Best 
Practices Commission established under 
subparagraph (B), with both PDP spon-
sors of prescription drug plans and Medi-
care Advantage Organizations offering 
MA–PD plans, to examine the impact of 
medication therapy management furnished 
by a pharmacist in a community-based or 
ambulatory-based setting on quality of 
care, spending under this part, and patient 
health. 
‘‘(ii) SITES.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), the Secretary shall 
designate not less than 10 PDP spon-
sors of prescription drug plans or 
Medicare Advantage organizations of-
fering MA–PD plans, none of which 
provide prescription drug coverage 
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under such plans in the same PDP or 
MA region, respectively, to conduct 
the demonstration program under this 
paragraph. 
‘‘(II) DESIGNATION CONSISTENT 
WITH
RECOMMENDATIONS
OF
BEST 
PRACTICES
COMMISSION.—The Sec-
retary shall ensure that the designa-
tion of sites under subclause (I) is 
consistent with the recommendations 
of the Best Practices Commission 
under subparagraph (B)(ii). 
‘‘(B) BEST PRACTICES COMMISSION.— 
‘‘(i) ESTABLISHMENT.—The Secretary 
shall establish a Best Practices Commis-
sion composed of representatives from 
pharmacy organizations, health care orga-
nizations, beneficiary advocates, chronic 
disease groups, and other stakeholders (as 
determined appropriate by the Secretary) 
for the purpose of developing a best prac-
tices model for medication therapy man-
agement. 
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‘‘(ii) RECOMMENDATIONS.—The Com-
mission shall submit to the Secretary rec-
ommendations on the following: 
‘‘(I) The minimum number of en-
rollees that should be included in the 
demonstration program, and at each 
demonstration program site, to deter-
mine the impact of medication ther-
apy management furnished by a phar-
macist in a community-based setting 
on quality of care, spending under 
this part, and patient health. 
‘‘(II) The number of urban and 
rural sites that should be included in 
the demonstration program to ensure 
that prescription drug plans and MA– 
PD plans offered in urban and rural 
areas are adequately represented. 
‘‘(III) A best practices model for 
medication therapy management to be 
implemented under the demonstration 
program under this paragraph. 
‘‘(C) REPORTS.— 
‘‘(i) INTERIM
REPORT.—Not later 
than 1 year after the commencement of the 
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demonstration 
program, 
the 
Secretary 
shall submit to Congress an interim report 
on such program. 
‘‘(ii) FINAL REPORT.—Not later than 
6 months after the completion of the dem-
onstration program, the Secretary shall 
submit to Congress a final report on such 
program, together with recommendations 
for such legislation and administrative ac-
tion as the Secretary determines appro-
priate. 
‘‘(D) WAIVER AUTHORITY.—The Secretary 
may waive such requirements of titles XI and 
XVIII as may be necessary for the purpose of 
carrying out the demonstration program under 
this paragraph.’’. 
Æ 
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