To amend title 38, United States Code, to provide improved prescription drug benefits for veterans.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Prescription Drug Benefits 
Act of 2003''.

SEC. 2. PRESCRIPTION DRUG BENEFIT FOR VETERANS.

    (a) In General.--(1) Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1722A the following new section:



``Sec. 1722B. Prescription drug benefit program for medicare-eligible 
              veterans and Priority 1 veterans
    ``(a) Benefit.--The Secretary shall establish a prescription drug 
benefit program in accordance with this section. Under the program, the 
Secretary shall furnish to veterans who are participants in the program 
drugs and medicines ordered on prescription of a duly licensed 
physician or other authorized health care professional who is not an 
employee of the Department, subject to the payment of any applicable 
premium and copayment under this section.
    ``(b) Veterans Eligible for the Prescription Drug Benefit.--The 
following veterans are eligible to participate in the prescription drug 
benefit program under this section:
            ``(1) Priority 1 veterans.
            ``(2) Medicare-eligible veterans (other than Priority 1 
        veterans) who enroll in the program.
    ``(c) Enrollment.--(1) In order for a medicare-eligible veteran who 
is not a Priority 1 veteran to participate in the prescription drug 
benefit program, the veteran must enroll in the program. Such 
enrollment shall be carried out in such manner as may be prescribed by 
the Secretary by regulation. The status of a veteran as a medicare-
eligible veteran shall be verified by the Secretary of Health and Human 
Services upon request of the Secretary.
    ``(2) A medicare-eligible veteran who enrolls in the prescription 
drug benefit program is not eligible for enrollment in the patient 
enrollment system under section 1705 of this title. The Secretary shall 
inform any veteran applying for enrollment under this section that the 
veteran, while enrolled in the prescription drug benefit program, will 
not be eligible for health care provided by the Secretary.
    ``(3) Any medicare-eligible veteran who enrolls in the prescription 
drug benefit program under this section and who at the time of such 
enrollment is enrolled in the patient enrollment system under section 
1705 of this title shall, upon such enrollment under this section, be 
automatically disenrolled from that patient enrollment system.
    ``(4) The Secretary shall conduct an annual open enrollment period 
during the last two months of each fiscal year. During that period--
            ``(A) a medicare-eligible veteran who is not a Priority 1 
        veteran may enroll in the program under this section; and
            ``(B) such a veteran previously enrolled under this section 
        may disenroll.
    ``(5) During the first five fiscal years during which the 
prescription drug benefit program under this section is in effect, the 
Secretary may limit enrollment as determined necessary by the Secretary 
for administrative and fiscal reasons. All medicare-eligible veterans 
who apply for enrollment under this section during the first year that 
the program under this section is in effect shall be enrolled by the 
end of the fifth such year.
    ``(d) Annual Premium and Copayments.--(1) The Secretary shall by 
regulation establish an annual premium amount that must be paid to the 
United States by a veteran for drugs and medicines furnished under this 
section each year before such drugs and medicines are furnished to that 
veteran at the expense of the United States that year.
    ``(2) The Secretary shall by regulation establish an amount (known 
as a `copayment') that must be paid to the United States by a veteran 
for each 30-day supply of drugs and medicines furnished under this 
section. If the quantity of such drugs and medicines furnished is less 
than a 30-day supply, the amount of the copayment charge may not be 
reduced.
    ``(3) The Secretary may establish different copayment amounts for 
prescriptions depending on--
            ``(A) whether they are filled under a generic drug name or 
        by brand name;
            ``(B) whether or not they are available by mail; and
            ``(C) whether or not they are on the Department's National 
        Prescription Drug Formulary.
    ``(4) The amount of the copayment charged for any particular 
prescription--
            ``(A) may not be less than the amount in effect under 
        section 1722A of this title for the copayment for medications 
        furnished by the Department on prescription of Department 
        health-care professionals; and
            ``(B) subject to subparagraph (A), may not exceed the cost 
        to the Secretary of furnishing the drugs or medicine.
    ``(e) Disposition of Receipts.--(1) Any amount received under 
subsection (d) from a Priority 1 veteran shall be deposited in the 
Department of Veterans Affairs Medical Care Collections Fund.
    ``(2) Any amount received under subsection (d) from a medicare-
eligible veteran enrolled in the prescription drug benefit program 
under subsection (c) shall be transferred by the Secretary to the 
Federal Supplementary Medical Insurance Trust Fund established in 
section 1841 of the Social Security Act (42 U.S.C. 1395t).
    ``(f) Intergovernmental Reimbursement of Costs.--(1) The Secretary 
of Health and Human Services shall transfer to the Secretary, from the 
fund referred to in subsection (e)(2), amounts to reimburse the costs 
to the Department of furnishing drugs and medicine under the 
prescription drug benefit program under this section to medicare-
eligible veterans enrolled under subsection (c). Amounts to be included 
in such costs are the following:
            ``(A) The cost of such drugs and medicines to the 
        Department.
            ``(B) A reasonable charge for processing, filling, and 
        dispensing the prescription, including overhead costs such as 
        labor, equipment, space, and utilities.
            ``(C) Costs of postage, if furnished by mail.
    ``(2) To the extent the Secretary hires new personnel, purchases 
new equipment, or obtains additional facilities to carry out the 
prescription drug benefit program under this section, the Secretary 
shall document those expenses in charges to the Secretary of Health and 
Human Services that incorporate those expenses.
    ``(3) The Secretary of Health and Human Services shall make 
transfers of funds under this subsection periodically, as agreed upon 
by the two Secretaries, but not less often than weekly. Such payments 
shall be made upon receipt of a certification from the Secretary of 
Veterans Affairs of costs incurred by the Secretary under this section 
for the period with respect to which the certification is made.
    ``(4) Any amount received under this subsection shall be deposited 
in the Department of Veterans Affairs Medical Care Collections Fund.
    ``(5) The Secretary and the Secretary of Health and Human Services 
shall enter into an agreement for the methodology to be used for 
determining costs of the Department for purposes of this subsection.
    ``(g) Nonliability.--A health care professional may not be 
considered to be an agent or employee of the United States by reason of 
a prescription of that health care professional being furnished by the 
Secretary under this section.
    ``(h) Information Resources.--(1) The Secretary shall develop and 
maintain a database of veterans enrolled under subsection (c) and of 
persons who have applied for such enrollment.
    ``(2) The Secretary shall maintain records of the costs of the 
program under this section, including separate costs for Priority 1 
veterans and for veterans enrolled under subsection (c).
    ``(3) Not later than six years after the date of the enactment of 
this section, the Secretary shall implement a computerized patient 
profile system for participants in the prescription drug benefit plan 
under this section. The patient profile system shall have the 
capability, for each participant in the program, of identifying--
            ``(A) known drug interactions;
            ``(B) contraindicated drugs;
            ``(C) available `best value' treatment alternatives for 
        prescribed medications; and
            ``(D) patient safety issues.
    ``(i) Annual Report to Congress.--The Secretary shall submit to 
Congress an annual report on the operation of this section for each of 
the first five years this section is in effect. Each such report shall 
include the following:
            ``(1) The number of participants in the program during the 
        year covered by the report and, of that number, the number who 
        are enrolled under subsection (c), including the number who 
        were new enrollees during such year.
            ``(2) The number of veterans who have applied for such 
        enrollment and, as of the end of the year covered by the 
        report, are waiting for such enrollment.
            ``(3) The number of veterans who during the year covered by 
        the report were disenrolled from the patient enrollment system 
        under section 1705 of this title in order to enroll under 
        subsection (c).
            ``(4) The cost to the Department of the program under this 
        section during the year covered by the report.
            ``(5) The amount of funds transferred to the Secretary 
        during the year covered by the report under subsection (f).
            ``(6) The amount of resources added during the year covered 
        by the report to accommodate increased workloads by reason of 
        this section.
    ``(j) Regulations.--The Secretary shall prescribe regulations to 
carry out this section. Such regulations shall be prescribed in 
consultation with the Secretary of Health and Human Services.
    ``(k) Definitions.--For purposes of this section:
            ``(A) The term `medicare-eligible veteran' means a veteran 
        who is entitled to benefits under part A of title XVIII of the 
        Social Security Act (42 U.S.C. 1395c et seq.) and who is 
        enrolled under part B of that title (42 U.S.C. 1395j et seq.).
            ``(B) The term `Priority 1 veteran' means a veteran covered 
        by section 1705(a)(1) of this title.''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 1722A the 
following new item:

``1722B. Prescription drug benefit program for medicare-eligible 
                            veterans and Priority 1 veterans.''.
    (b) Effective Date.--Section 1722B of title 38, United States Code, 
as added by subsection (a), shall take effect on October 1, 2003. The 
initial enrollment period under subsection (c)(4) of such section shall 
be the period beginning on August 1, 2004, and ending on September 30, 
2004.

Summary: Veterans Prescription Drug Benefits Act of 2003 - Directs the Secretary of Veterans Affairs to establish a prescription drug benefit program under which drugs and medicines are furnished to eligible veterans on prescription of a duly licensed physician or other authorized health care professional who is not an employee of the Department of Veterans Affairs, subject to the payment of any required premium and copayment. Makes eligible for the program Priority 1 veterans (those with service-connected disabilities rated 50 percent or more) and Medicare-eligible veterans. Requires the Secretary of Health and Human Services to reimburse the Secretary for the costs of drugs and medicine furnished to the Medicare-eligible veterans under the program.Requires the Secretary to: (1) develop and maintain a database of veterans who enrolled in and applied for the program; and (2) implement a computerized patient profile system for program participants.