SPARC Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Secondary Payer Advancement, 
Rationalization, and Clarification Act'' or the ``SPARC Act''.

SEC. 2. CLARIFICATION AND RATIONALIZATION OF MEDICARE PRESCRIPTION DRUG 
              SECONDARY CLAIMS RESPONSIBILITY.

    (a) In General.--Section 1860D-2(a)(4) of the Social Security Act 
(42 U.S.C. 1395w-102(a)(4)) is amended 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 defined in clause (iv)) 
                        until such time as such primary drug plan pays 
                        a final settlement, judgment, or award to an 
                        individual enrolled under the prescription drug 
                        plan with regard to an injury or illness 
                        involved or otherwise terminates its ongoing 
                        responsibility 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 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 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 responsible 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 individual 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 behalf or against a 
                        prescription drug plan, other than through the 
                        recovery from such a plan of amounts paid 
                        related to a covered part D drug event that has 
                        been repaid to the plan through a subrogation 
                        action.
                            ``(iv) Primary drug plan defined.--In this 
                        paragraph, the term `primary 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 
                        multiemployer 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 calendar year), a 
                        workers' compensation law or plan, an 
                        automobile or liability insurance policy or 
                        plan (including a self-insured 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 
                        profession shall be deemed to have a self-
                        insured plan if it carries its own risk 
                        (whether by a failure to obtain insurance, or 
                        otherwise) in whole or in part.
                    ``(B) Recovery.--A prescription drug plan shall be 
                subrogated (to the extent of payment 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 subrogation 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 respect to such covered part D drug, pursuant to 
                subparagraph (D). Any such subrogation claim 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 expense, as 
                those terms are used in this part.
                    ``(C) 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.
                    ``(D) Coordination of benefits information.--Not 
                later than 15 days after the date the Secretary 
                receives information under paragraph (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 
                prescription drug plan in a format convenient and 
                accessible 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 insurance or otherwise or identify payers that 
                are primary to the program under subparagraph (A)(ii) 
                other than as required under this paragraph.
                    ``(E) Coordination of benefits.--A prescription 
                drug plan shall, in the case of receipt 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 accordance 
                with the charges allowed under the prescription 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 website to determine final 
                reimbursement amount.--
                            ``(i) Notification of plans.--Not later 
                        than 10 days after the date the Secretary 
                        receives a notice under section 
                        1862(b)(2)(B)(vii)(I) relating to an individual 
                        during the period the individual is enrolled in 
                        a prescription drug plan, the Secretary shall 
                        provide such notice to the plan.
                            ``(ii) Statement by plan.--
                                    ``(I) In general.--Not later than 
                                20 days after the date a plan receives 
                                a notice under clause (i), the plan may 
                                provide the Secretary with a statement 
                                of any covered part D drug for which 
                                the plan seeks reimbursement, including 
                                the amount of such reimbursement.
                                    ``(II) Failure to provide 
                                statement.--The prescription drug plan 
                                shall be deemed to have waived its 
                                rights under subparagraph (B)--
                                            ``(aa) in the case that the 
                                        prescription drug plan does not 
                                        provide such statement by such 
                                        date, with respect to any 
                                        covered part D drug provided to 
                                        such individual with respect to 
                                        such notice; and
                                            ``(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 
                                        individual which was not 
                                        identified in the notice.
                            ``(iii) Inclusion of information on 
                        website.--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 
                        reimbursement amount on the website 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 pursuant to clause (ii), 
                        from the individual involved or the primary 
                        drug plan pursuant to the procedures set forth 
                        under section 1862(b)(2)(B)(vii). Any such 
                        amounts collected by the Secretary for covered 
                        part D drugs shall be remitted directly by the 
                        Secretary to the appropriate prescription drug 
                        plan that enrolled the individual related to 
                        the notice during the applicable time period 
                        for which such individual was enrolled.''.
    (b) Clarification.--Section 1860D-2(b)(4)(D) of the Social Security 
Act (42 U.S.C. 1395w-102(b)(4)(D)), is amended by striking ``third-
party reimbursement.--'' and inserting ``third-party reimbursement.--
Solely for the purpose of applying the requirements of subparagraph 
(C)(ii):''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to drugs dispensed in years beginning more than 6 months after 
the date of the enactment of this Act.

Summary: Secondary Payer Advancement, Rationalization, and Clarification Act or the SPARC Act This bill amends title XVIII (Medicare) of the Social Security Act to specify recovery rules with respect to secondary claims responsibility under the Medicare prescription drug benefit. Under current law, secondary payor provisions apply under the benefit in the same manner as they apply with respect to Medicare Advantage plans.