IB 
Union Calendar No. 29 
114TH CONGRESS 
1ST SESSION H. R. 1021 
[Report No. 114–46, Part I] 
To amend title XVIII of the Social Security Act to improve the integrity 
of the Medicare program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 24, 2015 
Mr. BRADY of Texas (for himself, Mr. MCDERMOTT, Mr. LEVIN, Mr. RANGEL, 
Mr. LEWIS, Mr. NEAL, Mr. SAM JOHNSON of Texas, Mr. DOGGETT, Mr. 
BLUMENAUER, Mr. DANNY K. DAVIS of Illinois, Mr. PASCRELL, Mr. 
TIBERI, Mr. NUNES, Ms. LINDA T. SA´NCHEZ of California, Mr. BOU-
STANY, Mr. REICHERT, Mr. BUCHANAN, Mr. ROSKAM, Mr. SMITH of Ne-
braska, Mr. REED, Mrs. BLACK, Mr. KELLY of Pennsylvania, Mr. 
RENACCI, Mr. MEEHAN, Mr. YOUNG of Indiana, Mr. HOLDING, and Mr. 
CARNEY) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
MARCH 18, 2015 
Additional sponsors: Mr. DIAZ-BALART, Mr. PAULSEN, Mrs. NOEM, Mr. 
RODNEY DAVIS of Illinois, and Mr. ROSS 
MARCH 18, 2015 
Reported from the Committee on Ways and Means with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
MARCH 18, 2015 
The Committee on Energy and Commerce discharged; committed to the Com-
mittee of the Whole House on the State of the Union and ordered to be 
printed 
[For text of introduced bill, see copy of bill as introduced on February 24, 2015] 
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A BILL 
To amend title XVIII of the Social Security Act to improve 
the integrity of the Medicare program, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Pro-
tecting the Integrity of Medicare Act of 2015’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Prohibition of inclusion of Social Security account numbers on Medicare 
cards. 
Sec. 3. Preventing wrongful Medicare payments for items and services furnished 
to incarcerated individuals, individuals not lawfully present, 
and deceased individuals. 
Sec. 4. Consideration of measures regarding Medicare beneficiary smart cards. 
Sec. 5. Modifying medicare durable medical equipment face-to-face encounter doc-
umentation requirement. 
Sec. 6. Reducing improper Medicare payments. 
Sec. 7. Improving senior Medicare patrol and fraud reporting rewards. 
Sec. 8. Requiring valid prescriber National Provider Identifiers on pharmacy 
claims. 
Sec. 9. Option to receive Medicare Summary Notice electronically. 
Sec. 10. Renewal of MAC contracts. 
Sec. 11. Study on pathway for incentives to States for State participation in 
medicaid data match program. 
Sec. 12. Programs to prevent prescription drug abuse under Medicare part D. 
Sec. 13. Guidance on application of Common Rule to clinical data registries. 
Sec. 14. Eliminating certain civil money penalties; gainsharing study and report. 
Sec. 15. Modification of Medicare home health surety bond condition of participa-
tion requirement. 
Sec. 16. Oversight of Medicare coverage of manual manipulation of the spine to 
correct subluxation. 
Sec. 17. National expansion of prior authorization model for repetitive scheduled 
non-emergent ambulance transport. 
Sec. 18. Repealing duplicative Medicare secondary payor provision. 
Sec. 19. Plan for expanding data in annual CERT report. 
Sec. 20. Removing funds for Medicare Improvement Fund added by IMPACT Act 
of 2014. 
Sec. 21. Rule of construction. 
SEC. 2. PROHIBITION OF INCLUSION OF SOCIAL SECURITY 
ACCOUNT NUMBERS ON MEDICARE CARDS. 
(a) IN GENERAL.—Section 205(c)(2)(C) of the Social 
Security Act (42 U.S.C. 405(c)(2)(C)) is amended— 
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(1) by moving clause (x), as added by section 
1414(a)(2) of the Patient Protection and Affordable 
Care Act, 6 ems to the left; 
(2) by redesignating clause (x), as added by sec-
tion 2(a)(1) of the Social Security Number Protection 
Act of 2010, and clause (xi) as clauses (xi) and (xii), 
respectively; and 
(3) by adding at the end the following new 
clause: 
‘‘(xiii) The Secretary of Health and Human Services, 
in consultation with the Commissioner of Social Security, 
shall establish cost-effective procedures to ensure that a So-
cial Security account number (or derivative thereof) is not 
displayed, coded, or embedded on the Medicare card issued 
to an individual who is entitled to benefits under part A 
of title XVIII or enrolled under part B of title XVIII and 
that any other identifier displayed on such card is not iden-
tifiable as a Social Security account number (or derivative 
thereof).’’. 
(b) IMPLEMENTATION.—In implementing clause (xiii) 
of section 205(c)(2)(C) of the Social Security Act (42 U.S.C. 
405(c)(2)(C)), as added by subsection (a)(3), the Secretary 
of Health and Human Services shall do the following: 
(1) IN GENERAL.—Establish a cost-effective proc-
ess that involves the least amount of disruption to, as 
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well as necessary assistance for, Medicare bene-
ficiaries and health care providers, such as a process 
that provides such beneficiaries with access to assist-
ance through a toll-free telephone number and pro-
vides outreach to providers. 
(2) CONSIDERATION OF MEDICARE BENEFICIARY 
IDENTIFIED.—Consider implementing a process, simi-
lar to the process involving Railroad Retirement 
Board beneficiaries, under which a Medicare bene-
ficiary identifier which is not a Social Security ac-
count number (or derivative thereof) is used external 
to the Department of Health and Human Services 
and is convertible over to a Social Security account 
number (or derivative thereof) for use internal to such 
Department and the Social Security Administration. 
(c) FUNDING FOR IMPLEMENTATION.—For purposes of 
implementing the provisions of and the amendments made 
by this section, the Secretary of Health and Human Serv-
ices shall provide for the following transfers from the Fed-
eral Hospital Insurance Trust Fund under section 1817 of 
the Social Security Act (42 U.S.C. 1395i) and from the 
Federal Supplementary Medical Insurance Trust Fund es-
tablished under section 1841 of such Act (42 U.S.C. 1395t), 
in such proportions as the Secretary determines appro-
priate: 
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(1) To the Centers for Medicare & Medicaid Pro-
gram Management Account, transfers of the following 
amounts: 
(A) For fiscal year 2015, $65,000,000, to be 
made available through fiscal year 2018. 
(B) For each of fiscal years 2016 and 2017, 
$53,000,000, to be made available through fiscal 
year 2018. 
(C) For fiscal year 2018, $48,000,000, to be 
made available until expended. 
(2) To the Social Security Administration Limi-
tation on Administration Account, transfers of the 
following amounts: 
(A) For fiscal year 2015, $27,000,000, to be 
made available through fiscal year 2018. 
(B) For each of fiscal years 2016 and 2017, 
$22,000,000, to be made available through fiscal 
year 2018. 
(C) For fiscal year 2018, $27,000,000, to be 
made available until expended. 
(3) To the Railroad Retirement Board Limita-
tion on Administration Account, the following 
amount: 
(A) For fiscal year 2015, $3,000,000, to be 
made available until expended. 
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(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Clause (xiii) of section 
205(c)(2)(C) of the Social Security Act (42 U.S.C. 
405(c)(2)(C)), as added by subsection (a)(3), shall 
apply with respect to Medicare cards issued on and 
after an effective date specified by the Secretary of 
Health and Human Services, but in no case shall 
such effective date be later than the date that is four 
years after the date of the enactment of this Act. 
(2) REISSUANCE.—The Secretary shall provide 
for the reissuance of Medicare cards that comply with 
the requirements of such clause not later than four 
years after the effective date specified by the Secretary 
under paragraph (1). 
SEC. 3. PREVENTING WRONGFUL MEDICARE PAYMENTS 
FOR ITEMS AND SERVICES FURNISHED TO IN-
CARCERATED 
INDIVIDUALS, 
INDIVIDUALS 
NOT LAWFULLY PRESENT, AND DECEASED IN-
DIVIDUALS. 
(a) REQUIREMENT FOR THE SECRETARY TO ESTAB-
LISH POLICIES AND CLAIMS EDITS RELATING TO INCAR-
CERATED
INDIVIDUALS, INDIVIDUALS
NOT
LAWFULLY 
PRESENT, AND DECEASED INDIVIDUALS.—Section 1874 of 
the Social Security Act (42 U.S.C. 1395kk) is amended by 
adding at the end the following new subsection: 
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‘‘(f) REQUIREMENT FOR THE SECRETARY TO ESTAB-
LISH POLICIES AND CLAIMS EDITS RELATING TO INCAR-
CERATED
INDIVIDUALS, INDIVIDUALS
NOT
LAWFULLY 
PRESENT, AND DECEASED INDIVIDUALS.—The Secretary 
shall establish and maintain procedures, including proce-
dures for using claims processing edits, updating eligibility 
information to improve provider accessibility, and con-
ducting recoupment activities such as through recovery 
audit contractors, in order to ensure that payment is not 
made under this title for items and services furnished to 
an individual who is one of the following: 
‘‘(1) An individual who is incarcerated. 
‘‘(2) An individual who is not lawfully present 
in the United States and who is not eligible for cov-
erage under this title. 
‘‘(3) A deceased individual.’’. 
(b) REPORT.—Not later than 18 months after the date 
of the enactment of this section, and periodically thereafter 
as determined necessary by the Office of Inspector General 
of the Department of Health and Human Services, such Of-
fice shall submit to Congress a report on the activities de-
scribed in subsection (f) of section 1874 of the Social Secu-
rity Act (42 U.S.C. 1395kk), as added by subparagraph (a), 
that have been conducted since such date of enactment. 
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SEC. 4. CONSIDERATION OF MEASURES REGARDING MEDI-
CARE BENEFICIARY SMART CARDS. 
To the extent the Secretary of Health and Human 
Services determines that it is cost effective and techno-
logically viable to use electronic Medicare beneficiary and 
provider cards (such as cards that use smart card tech-
nology, including an embedded and secure integrated cir-
cuit chip), as presented in the Government Accountability 
Office report required by the conference report accom-
panying the Consolidated Appropriations Act, 2014 (Public 
Law 113–76), the Secretary shall consider such measures 
as determined appropriate by the Secretary to implement 
such use of such cards for beneficiary and provider use 
under title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.). In the case that the Secretary considers meas-
ures under the preceding sentence, the Secretary shall sub-
mit to the Committees on Ways and Means and on Energy 
and Commerce of the House of Representatives, and to the 
Committee on Finance of the Senate, a report outlining the 
considerations undertaken by the Secretary under such sen-
tence. 
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SEC. 5. MODIFYING MEDICARE DURABLE MEDICAL EQUIP-
MENT 
FACE-TO-FACE 
ENCOUNTER 
DOCU-
MENTATION REQUIREMENT. 
(a) IN GENERAL.—Section 1834(a)(11)(B)(ii) of the 
Social Security Act (42 U.S.C. 1395m(a)(11)(B)(ii)) is 
amended— 
(1) by striking ‘‘the physician documenting 
that’’; and 
(2) by striking ‘‘has had a face-to-face encoun-
ter’’ and inserting ‘‘documenting such physician, phy-
sician assistant, practitioner, or specialist has had a 
face-to-face encounter’’. 
(b) IMPLEMENTATION.—Notwithstanding any other 
provision of law, the Secretary of Health and Human Serv-
ices may implement the amendments made by subsection 
(a) by program instruction or otherwise. 
SEC. 6. REDUCING IMPROPER MEDICARE PAYMENTS. 
(a) MEDICARE ADMINISTRATIVE CONTRACTOR IM-
PROPER
PAYMENT
OUTREACH
AND
EDUCATION
PRO-
GRAM.— 
(1) IN GENERAL.—Section 1874A of the Social 
Security Act (42 U.S.C. 1395kk–1) is amended— 
(A) in subsection (a)(4)— 
(i) by redesignating subparagraph (G) 
as subparagraph (H); and 
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(ii) by inserting after subparagraph 
(F) the following new subparagraph: 
‘‘(G) IMPROPER PAYMENT OUTREACH AND 
EDUCATION PROGRAM.—Having in place an im-
proper payment outreach and education pro-
gram described in subsection (h).’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(h) IMPROPER PAYMENT OUTREACH AND EDUCATION 
PROGRAM.— 
‘‘(1) IN GENERAL.—In order to reduce improper 
payments under this title, each medicare administra-
tive contractor shall establish and have in place an 
improper payment outreach and education program 
under which the contractor, through outreach, edu-
cation, training, and technical assistance or other ac-
tivities, shall provide providers of services and sup-
pliers located in the region covered by the contract 
under this section with the information described in 
paragraph (2). The activities described in the pre-
ceding sentence shall be conducted on a regular basis. 
‘‘(2) INFORMATION TO BE PROVIDED THROUGH 
ACTIVITIES.—The information to be provided under 
such payment outreach and education program shall 
include information the Secretary determines to be 
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appropriate which may include the following infor-
mation: 
‘‘(A) A list of the providers’ or suppliers’ 
most frequent and expensive payment errors over 
the last quarter. 
‘‘(B) Specific instructions regarding how to 
correct or avoid such errors in the future. 
‘‘(C) A notice of new topics that have been 
approved by the Secretary for audits conducted 
by recovery audit contractors under section 
1893(h). 
‘‘(D) Specific instructions to prevent future 
issues related to such new audits. 
‘‘(E) Other information determined appro-
priate by the Secretary. 
‘‘(3) PRIORITY.—A medicare administrative con-
tractor shall give priority to activities under such 
program that will reduce improper payments that are 
one or more of the following: 
‘‘(A) Are for items and services that have 
the highest rate of improper payment. 
‘‘(B) Are for items and service that have the 
greatest total dollar amount of improper pay-
ments. 
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‘‘(C) Are due to clear misapplication or 
misinterpretation of Medicare policies. 
‘‘(D) Are clearly due to common and inad-
vertent clerical or administrative errors. 
‘‘(E) Are due to other types of errors that 
the Secretary determines could be prevented 
through activities under the program. 
‘‘(4) INFORMATION
ON
IMPROPER
PAYMENTS 
FROM RECOVERY AUDIT CONTRACTORS.— 
‘‘(A) IN GENERAL.—In order to assist medi-
care administrative contractors in carrying out 
improper payment outreach and education pro-
grams, the Secretary shall provide each con-
tractor with a complete list of the types of im-
proper payments identified by recovery audit 
contractors under section 1893(h) with respect to 
providers of services and suppliers located in the 
region covered by the contract under this section. 
Such information shall be provided on a time 
frame the Secretary determines appropriate 
which may be on a quarterly basis. 
‘‘(B) INFORMATION.—The information de-
scribed in subparagraph (A) shall include infor-
mation such as the following: 
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‘‘(i) Providers of services and suppliers 
that have the highest rate of improper pay-
ments. 
‘‘(ii) Providers of services and sup-
pliers that have the greatest total dollar 
amounts of improper payments. 
‘‘(iii) Items and services furnished in 
the region that have the highest rates of im-
proper payments. 
‘‘(iv) Items and services furnished in 
the region that are responsible for the great-
est total dollar amount of improper pay-
ments. 
‘‘(v) Other information the Secretary 
determines would assist the contractor in 
carrying out the program. 
‘‘(5) COMMUNICATIONS.—Communications with 
providers of services and suppliers under an improper 
payment outreach and education program are subject 
to the standards and requirements of subsection (g).’’. 
(b) USE OF CERTAIN FUNDS RECOVERED BY RACS.— 
Section 1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) is amended— 
(1) in paragraph (2), by inserting ‘‘or para-
graph (10)’’ after ‘‘paragraph (1)(C)’’; and 
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(2) by adding at the end the following new para-
graph: 
‘‘(10) USE OF CERTAIN RECOVERED FUNDS.— 
‘‘(A) IN
GENERAL.—After application of 
paragraph (1)(C), the Secretary shall retain a 
portion of the amounts recovered by recovery 
audit contractors for each year under this section 
which shall be available to the program manage-
ment account of the Centers for Medicare & Med-
icaid Services for purposes of, subject to subpara-
graph (B), carrying out sections 1833(z), 
1834(l)(16), and 1874A(a)(4)(G), carrying out 
section 16(b) of the Protecting the Integrity of 
Medicare Act of 2015, and implementing strate-
gies (such as claims processing edits) to help re-
duce the error rate of payments under this title. 
The amounts retained under the preceding sen-
tence shall not exceed an amount equal to 15 
percent of the amounts recovered under this sub-
section, and shall remain available until ex-
pended. 
‘‘(B) LIMITATION.—Except for uses that 
support claims processing (including edits) or 
system 
functionality 
for 
detecting 
fraud, 
amounts retained under subparagraph (A) may 
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not be used for technological-related infrastruc-
ture, capital investments, or information sys-
tems. 
‘‘(C) NO REDUCTION IN PAYMENTS TO RE-
COVERY AUDIT CONTRACTORS.—Nothing in sub-
paragraph (A) shall reduce amounts available 
for payments to recovery audit contractors under 
this subsection.’’. 
SEC. 7. IMPROVING SENIOR MEDICARE PATROL AND FRAUD 
REPORTING REWARDS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall develop a plan to revise the incentive pro-
gram under section 203(b) of the Health Insurance Port-
ability and Accountability Act of 1996 (42 U.S.C. 1395b- 
5(b)) to encourage greater participation by individuals to 
report fraud and abuse in the Medicare program. Such plan 
shall include recommendations for— 
(1) ways to enhance rewards for individuals re-
porting under the incentive program, including re-
wards based on information that leads to an adminis-
trative action; and 
(2) extending the incentive program to the Med-
icaid program. 
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(b) PUBLIC
AWARENESS
AND
EDUCATION
CAM-
PAIGN.—The plan developed under subsection (a) shall also 
include recommendations for the use of the Senior Medicare 
Patrols authorized under section 411 of the Older Ameri-
cans Act of 1965 (42 U.S.C. 3032) to conduct a public 
awareness and education campaign to encourage participa-
tion in the revised incentive program under subsection (a). 
(c) SUBMISSION OF PLAN.—Not later than 180 days 
after the date of enactment of this Act, the Secretary shall 
submit to Congress the plan developed under subsection (a). 
SEC. 8. REQUIRING VALID PRESCRIBER NATIONAL PRO-
VIDER IDENTIFIERS ON PHARMACY CLAIMS. 
Section 1860D–4(c) of the Social Security Act (42 
U.S.C. 1395w–104(c)) is amended by adding at the end the 
following new paragraph: 
‘‘(4) REQUIRING VALID PRESCRIBER NATIONAL 
PROVIDER IDENTIFIERS ON PHARMACY CLAIMS.— 
‘‘(A) IN
GENERAL.—For plan year 2016 
and subsequent plan years, the Secretary shall 
require a claim for a covered part D drug for a 
part D eligible individual enrolled in a prescrip-
tion drug plan under this part or an MA-PD 
plan under part C to include a prescriber Na-
tional Provider Identifier that is determined to 
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be valid under the procedures established under 
subparagraph (B)(i). 
‘‘(B) PROCEDURES.— 
‘‘(i) VALIDITY
OF
PRESCRIBER
NA-
TIONAL PROVIDER IDENTIFIERS.—The Sec-
retary, in consultation with appropriate 
stakeholders, shall establish procedures for 
determining the validity of prescriber Na-
tional Provider Identifiers under subpara-
graph (A). 
‘‘(ii) INFORMING
BENEFICIARIES
OF 
REASON FOR DENIAL.—The Secretary shall 
establish procedures to ensure that, in the 
case that a claim for a covered part D drug 
of an individual described in subparagaph 
(A) is denied because the claim does not 
meet the requirements of this paragraph, the 
individual is properly informed at the point 
of service of the reason for the denial. 
‘‘(C) REPORT.—Not later than January 1, 
2018, the Inspector General of the Department of 
Health and Human Services shall submit to 
Congress a report on the effectiveness of the pro-
cedures established under subparagraph (B)(i).’’. 
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SEC. 9. OPTION TO RECEIVE MEDICARE SUMMARY NOTICE 
ELECTRONICALLY. 
(a) IN GENERAL.—Section 1806 of the Social Security 
Act (42 U.S.C. 1395b–7) is amended by adding at the end 
the following new subsection: 
‘‘(c) FORMAT OF STATEMENTS FROM SECRETARY.— 
‘‘(1) ELECTRONIC OPTION BEGINNING IN 2016.— 
Subject to paragraph (2), for statements described in 
subsection (a) that are furnished for a period in 2016 
or a subsequent year, in the case that an individual 
described in subsection (a) elects, in accordance with 
such form, manner, and time specified by the Sec-
retary, to receive such statement in an electronic for-
mat, such statement shall be furnished to such indi-
vidual for each period subsequent to such election in 
such a format and shall not be mailed to the indi-
vidual. 
‘‘(2) LIMITATION ON REVOCATION OPTION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary may determine a max-
imum number of elections described in para-
graph (1) by an individual that may be revoked 
by the individual. 
‘‘(B) MINIMUM
OF
ONE
REVOCATION
OP-
TION.—In no case may the Secretary determine 
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a maximum number under subparagraph (A) 
that is less than one. 
‘‘(3) NOTIFICATION.—The Secretary shall ensure 
that, in the most cost effective manner and beginning 
January 1, 2017, a clear notification of the option to 
elect to receive statements described in subsection (a) 
in an electronic format is made available, such as 
through the notices distributed under section 1804, to 
individuals described in subsection (a).’’. 
(b) ENCOURAGED EXPANSION OF ELECTRONIC STATE-
MENTS.—To the extent to which the Secretary of Health and 
Human Services determines appropriate, the Secretary 
shall— 
(1) apply an option similar to the option de-
scribed in subsection (c)(1) of section 1806 of the So-
cial Security Act (42 U.S.C. 1395b–7) (relating to the 
provision of the Medicare Summary Notice in an elec-
tronic format), as added by subsection (a), to other 
statements and notifications under title XVIII of such 
Act (42 U.S.C. 1395 et seq.); and 
(2) provide such Medicare Summary Notice and 
any such other statements and notifications on a 
more frequent basis than is otherwise required under 
such title. 
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SEC. 10. RENEWAL OF MAC CONTRACTS. 
(a) IN GENERAL.—Section 1874A(b)(1)(B) of the So-
cial Security Act (42 U.S.C. 1395kk–1(b)(1)(B)) is amend-
ed by striking ‘‘5 years’’ and inserting ‘‘10 years’’. 
(b) APPLICATION.—The amendments made by sub-
section (a) shall apply to contracts entered into on or after, 
and to contracts in effect as of, the date of the enactment 
of this Act. 
(c) CONTRACTOR PERFORMANCE TRANSPARENCY.— 
Section 1874A(b)(3)(A) of the Social Security Act (42 
U.S.C. 1395kk–1(b)(3)(A)) is amended by adding at the end 
the following new clause: 
‘‘(iv) 
CONTRACTOR
PERFORMANCE 
TRANSPARENCY.—To the extent possible 
without compromising the process for enter-
ing into and renewing contracts with medi-
care administrative contractors under this 
section, the Secretary shall make available 
to the public the performance of each medi-
care administrative contractor with respect 
to such performance requirements and 
measurement standards.’’. 
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SEC. 11. STUDY ON PATHWAY FOR INCENTIVES TO STATES 
FOR STATE PARTICIPATION IN MEDICAID 
DATA MATCH PROGRAM. 
Section 1893(g) of the Social Security Act (42 U.S.C. 
1395ddd(g)) is amended by adding at the end the following 
new paragraph: 
‘‘(3) INCENTIVES FOR STATES.—The Secretary 
shall study and, as appropriate, may specify incen-
tives for States to work with the Secretary for the 
purposes described in paragraph (1)(A)(ii). The ap-
plication of the previous sentence may include use of 
the waiver authority described in paragraph (2).’’. 
SEC. 12. PROGRAMS TO PREVENT PRESCRIPTION DRUG 
ABUSE UNDER MEDICARE PART D. 
(a) DRUG MANAGEMENT PROGRAM
FOR AT-RISK 
BENEFICIARIES.— 
(1) IN GENERAL.—Section 1860D–4(c) of the So-
cial Security Act (42 U.S.C. 1395w–10(c)), as amend-
ed by section 8, is further amended by adding at the 
end the following: 
‘‘(5) DRUG MANAGEMENT PROGRAM FOR AT-RISK 
BENEFICIARIES.— 
‘‘(A) AUTHORITY TO ESTABLISH.—A PDP 
sponsor may establish a drug management pro-
gram for at-risk beneficiaries under which, sub-
ject to subparagraph (B), the PDP sponsor may, 
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in the case of an at-risk beneficiary for prescrip-
tion drug abuse who is an enrollee in a prescrip-
tion drug plan of such PDP sponsor, limit such 
beneficiary’s access to coverage for frequently 
abused drugs under such plan to frequently 
abused drugs that are prescribed for such bene-
ficiary by a prescriber selected under subpara-
graph (D), and dispensed for such beneficiary by 
a pharmacy selected under such subparagraph. 
‘‘(B) REQUIREMENT FOR NOTICES.— 
‘‘(i) IN
GENERAL.—A PDP sponsor 
may not limit the access of an at-risk bene-
ficiary for prescription drug abuse to cov-
erage for frequently abused drugs under a 
prescription drug plan until such sponsor— 
‘‘(I) provides to the beneficiary an 
initial notice described in clause (ii) 
and a second notice described in clause 
(iii); and 
‘‘(II) verifies with the providers of 
the beneficiary that the beneficiary is 
an at-risk beneficiary for prescription 
drug abuse. 
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‘‘(ii) INITIAL NOTICE.—An initial no-
tice described in this clause is a notice that 
provides to the beneficiary— 
‘‘(I) notice that the PDP sponsor 
has identified the beneficiary as poten-
tially being an at-risk beneficiary for 
prescription drug abuse; 
‘‘(II) information describing all 
State and Federal public health re-
sources that are designed to address 
prescription drug abuse to which the 
beneficiary has access, including men-
tal health services and other counseling 
services; 
‘‘(III) notice of, and information 
about, the right of the beneficiary to 
appeal such identification under sub-
section (h) and the option of an auto-
matic escalation to external review; 
‘‘(IV) a request for the beneficiary 
to submit to the PDP sponsor pref-
erences for which prescribers and phar-
macies the beneficiary would prefer the 
PDP sponsor to select under subpara-
graph (D) in the case that the bene-
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ficiary is identified as an at-risk bene-
ficiary for prescription drug abuse as 
described in clause (iii)(I); 
‘‘(V) an explanation of the mean-
ing and consequences of the identifica-
tion of the beneficiary as potentially 
being an at-risk beneficiary for pre-
scription drug abuse, including an ex-
planation of the drug management 
program established by the PDP spon-
sor pursuant to subparagraph (A); 
‘‘(VI) clear instructions that ex-
plain how the beneficiary can contact 
the PDP sponsor in order to submit to 
the PDP sponsor the preferences de-
scribed in subclause (IV) and any 
other communications relating to the 
drug management program for at-risk 
beneficiaries established by the PDP 
sponsor; and 
‘‘(VII) contact information for 
other organizations that can provide 
the beneficiary with assistance regard-
ing such drug management program 
(similar to the information provided 
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by the Secretary in other standardized 
notices provided to part D eligible in-
dividuals enrolled in prescription drug 
plans under this part). 
‘‘(iii) SECOND NOTICE.—A second no-
tice described in this clause is a notice that 
provides to the beneficiary notice— 
‘‘(I) that the PDP sponsor has 
identified the beneficiary as an at-risk 
beneficiary for prescription drug abuse; 
‘‘(II) that such beneficiary is sub-
ject to the requirements of the drug 
management program for at-risk bene-
ficiaries established by such PDP spon-
sor for such plan; 
‘‘(III) of the prescriber and phar-
macy selected for such individual 
under subparagraph (D); 
‘‘(IV) of, and information about, 
the beneficiary’s right to appeal such 
identification under subsection (h) and 
the option of an automatic escalation 
to external review; 
‘‘(V) that the beneficiary can, in 
the case that the beneficiary has not 
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previously submitted to the PDP spon-
sor preferences for which prescribers 
and pharmacies the beneficiary would 
prefer the PDP sponsor select under 
subparagraph (D), submit such pref-
erences to the PDP sponsor; and 
‘‘(VI) that includes clear instruc-
tions that explain how the beneficiary 
can contact the PDP sponsor. 
‘‘(iv) TIMING OF NOTICES.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), a second notice de-
scribed in clause (iii) shall be provided 
to the beneficiary on a date that is not 
less than 60 days after an initial no-
tice described in clause (ii) is provided 
to the beneficiary. 
‘‘(II) EXCEPTION.—In the case 
that the PDP sponsor, in conjunction 
with the Secretary, determines that 
concerns identified through rulemaking 
by the Secretary regarding the health 
or safety of the beneficiary or regard-
ing significant drug diversion activi-
ties require the PDP sponsor to pro-
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vide a second notice described in clause 
(iii) to the beneficiary on a date that 
is earlier than the date described in 
subclause (II), the PDP sponsor may 
provide such second notice on such ear-
lier date. 
‘‘(C) AT-RISK BENEFICIARY FOR PRESCRIP-
TION DRUG ABUSE.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘at-risk beneficiary 
for prescription drug abuse’ means a part 
D eligible individual who is not an exempt-
ed individual described in clause (ii) and— 
‘‘(I) who is identified through the 
use of clinical guidelines developed by 
the Secretary in consultation with 
PDP sponsors and other stakeholders 
described in section 12(f)(2)(A) of the 
Protecting the Integrity of Medicare 
Act of 2015; or 
‘‘(II) with respect to whom the 
PDP sponsor of a prescription drug 
plan, upon enrolling such individual 
in such plan, received notice from the 
Secretary that such individual was 
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identified under this paragraph to be 
an at-risk beneficiary for prescription 
drug abuse under the prescription drug 
plan in which such individual was 
most recently previously enrolled and 
such identification has not been termi-
nated under subparagraph (F). 
‘‘(ii) 
EXEMPTED
INDIVIDUAL
DE-
SCRIBED.—An exempted individual de-
scribed in this clause is an individual 
who— 
‘‘(I) receives hospice care under 
this title; or 
‘‘(II) the Secretary elects to treat 
as an exempted individual for purposes 
of clause (i). 
‘‘(D) SELECTION OF PRESCRIBERS.— 
‘‘(i) IN
GENERAL.—With respect to 
each at-risk beneficiary for prescription 
drug abuse enrolled in a prescription drug 
plan offered by such sponsor, a PDP spon-
sor shall, based on the preferences submitted 
to the PDP sponsor by the beneficiary pur-
suant to clauses (ii)(IV) and (iii)(V) of sub-
paragraph (B), select— 
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