Title: CAPS for Prescriptions Act
Policy area: Health

Summary:
Capped Allowable Payments from Seniors for Prescriptions Act or the CAPS for Prescriptions Act
This bill limits out-of-pocket costs with respect to drugs covered under the Medicare prescription drug benefit or under Medicare medical services.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7001 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 7001

   To amend title XVIII of the Social Security Act to provide for a 
  combined Medicare part B and D drug out-of-pocket costs limitation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2018

Mr. O'Halleran introduced the following bill; which was referred to the 
 Committee on Energy and Commerce, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To amend title XVIII of the Social Security Act to provide for a 
  combined Medicare part B and D drug out-of-pocket costs limitation.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Capped Allowable Payments from 
Seniors for Prescriptions Act'' or the ``CAPS for Prescriptions Act''.

SEC. 2. LIMITING MEDICARE PART B AND D DRUG OUT-OF-POCKET COSTS.

    (a) Medicare Combined Part B and D Drug OOP Catastrophic Limit and 
Part D Subsidies.--Part D of title XVIII of the Social Security Act is 
amended by inserting after section 1860D-14A (42 U.S.C. 1395w-114a) the 
following new section:

``SEC. 1860D-14B. MEDICARE DRUG OUT-OF-POCKET LIMIT SUBSIDIES.

    ``(a) In General.--For plan year 2021 and each subsequent plan 
year, in the case of a part D eligible individual enrolled in a 
prescription drug plan under this part for such year--
            ``(1) if during such year such individual becomes a 
        catastrophic limit subsidy eligible individual, such individual 
        is entitled to the elimination of any beneficiary coinsurance 
        described in section 1860D-2(b)(2) for covered part D drugs 
        furnished to such individual during the remainder of such year; 
        and
            ``(2) the Secretary shall provide for payment to the PDP 
        sponsor that offers such prescription drug plan of a 
        catastrophic limit coverage subsidy (calculated under 
        subsection (b)) in accordance with this section for such 
        individual and remainder of such year.
    ``(b) Catastrophic Limit Coverage Subsidy Amount.--For purposes of 
this section, a catastrophic limit coverage subsidy, with respect to a 
catastrophic limit subsidy eligible individual enrolled for coverage 
under this part in a prescription drug plan for a plan year, shall be 
calculated as an amount (or amounts) equal to any cost-sharing amount 
that--
            ``(1) would otherwise apply without application of 
        subsection (a)(1) to such individual under such coverage for 
        covered part D drugs furnished to such individuals during such 
        year; but
            ``(2) does not apply to such individual with application of 
        subsection (a)(1).
Such subsidy may be paid in such manner and at such times as specified 
by the Secretary.
    ``(c) Catastrophic Limit Subsidy Eligible Individual.--For purposes 
of this section, the term `catastrophic limit subsidy eligible 
individual' means, with respect to a prescription drug plan under this 
part and plan year, a part D eligible individual enrolled in such plan 
for such year who has incurred out-of-pocket costs described in 
subsection (e) for eligible Medicare drugs furnished to such individual 
during such year above the OOP drug catastrophic limit specified in 
subsection (d) for such year.
    ``(d) OOP Drug Catastrophic Limit.--For purposes of this part, the 
OOP drug catastrophic limit specified in this subsection is--
            ``(1) for plan year 2021, $2,600; and
            ``(2) for a subsequent plan year, the dollar amount applied 
        under this subsection for the previous plan year, increased by 
        the annual percentage increase in average per capita aggregate 
        expenditures for covered part D drugs in the United States for 
        part D eligible individuals, as determined by the Secretary for 
        the 12-month period ending in July of the previous year using 
        such methods as the Secretary shall specify.
    ``(e) Out-of-Pocket Costs Described.--
            ``(1) In general.--For purposes of this section--
                    ``(A) incurred out-of-pocket costs shall only 
                include--
                            ``(i) costs incurred with respect to 
                        covered part D drugs for the annual deductible 
                        described in paragraph (1), for cost-sharing 
                        described in paragraph (2), and for amounts for 
                        which benefits are not provided because of the 
                        application of the initial coverage limit 
                        described in paragraph (3), but does not 
                        include any costs incurred for covered part D 
                        drugs which are not included (or treated as 
                        being included) in the plan's formulary; and
                            ``(ii) costs, determined based on submitted 
                        claims and without regard to any deductible 
                        under part B, incurred for cost-sharing under 
                        such part for part B drugs described in 
                        subsection (g)(1)(B);
                    ``(B) subject to subparagraph (C), such costs shall 
                be treated as incurred only if they are paid by the 
                part D eligible individual (or by another person, such 
                as a family member, on behalf of the individual) and 
                the part D eligible individual (or other person) is not 
                reimbursed through insurance or otherwise, a group 
                health plan, or other third-party payment arrangement 
                (other than under such section or such a Program) for 
                such costs; and
                    ``(C) such costs shall be treated as incurred and 
                shall not be considered to be reimbursed under 
                subparagraph (B) if such costs are borne or paid--
                            ``(i) under section 1860D-14;
                            ``(ii) under a State Pharmaceutical 
                        Assistance Program;
                            ``(iii) by the Indian Health Service, an 
                        Indian tribe or tribal organization, or an 
                        urban Indian organization (as defined in 
                        section 4 of the Indian Health Care Improvement 
                        Act); or
                            ``(iv) under an AIDS Drug Assistance 
                        Program under part B of title XXVI of the 
                        Public Health Service Act.
            ``(2) Information exchange.--The provisions of section 
        1860D-2(b)(4)(D) shall apply for purposes of this subsection in 
        the same manner as such provisions apply for purposes of 
        section 1860D-2(b)(4).
    ``(f) Coordination.--The Secretary shall provide for such 
procedures as is necessary, including by requiring submission of 
information from PDP sponsors, to implement the provisions of this 
section and apply the OOP drug catastrophic limit applicable to costs 
incurred for eligible Medicare drugs for purposes of coverage of such 
drugs under part B and this part.
    ``(g) Eligible Medicare Drugs.--
            ``(1) In general.--For purposes of this section, the term 
        `eligible Medicare drug' means any of the following:
                    ``(A) A covered part D drug.
                    ``(B) Subject to paragraph (2), a drug or 
                biological paid for under section 1833(t), 1847, 1847A, 
                or 1847B.
            ``(2) Exception.--A drug or biological described in 
        paragraph (1)(B) does not include a drug or biological 
        furnished as part of a grouping of items and services and paid 
        for as such a grouping in an ambulatory payment classification 
        under section 1833(t) (instead of separately payable under such 
        section).''.
    (b) Application of OOP Drug Catastrophic Limit Under Part B.--
Section 1833 of the Social Security Act--
            (1) in subsection (a)(1)(S), by inserting ``subject to 
        subsection (bb),'' before ``the amounts paid'';
            (2) by redesignating the subsection (z), relating to 
        medical review of spinal subluxation services, as subsection 
        (aa); and
            (3) by adding at the end the following new subsection:
    ``(bb) Application of OOP Drug Catastrophic Limit.--If an 
individual covered under this part incurs out-of-pocket costs described 
in subsection (e) of section 1860D-14B for eligible Medicare drugs (as 
defined in subsection (g) of such section) furnished to such individual 
during a year that equals the OOP drug catastrophic limit specified in 
subsection (d) of such section for such year, subsection (a)(1)(S) 
shall be applied with respect to expenses incurred for eligible 
Medicare drugs described in subsection (g)(1)(B) of such section 
furnished to such individual during the remainder of the year as if the 
reference in such subsection (a)(1)(S) to `80 percent' were a reference 
to `100 percent'.''.
    (c) Premium Hold Harmless.--
            (1) In general.--Section 1839(a)(1) of the Social Security 
        Act (42 U.S.C. 1395r(a)(1)) is amended by inserting ``, 
        payments under section 1860D-14B, additional payments by reason 
        of application of section 1833(bb),'' after ``section 
        1853(l)(3)''.
            (2) Payment.--Section 1844(a) of the Social Security Act 
        (42 U.S.C. 1395w(a)) is amended--
                    (A) in paragraph (3), by striking the period at the 
                end and inserting ``; plus''; and
                    (B) by inserting after paragraph (3) the following 
                new paragraph:
            ``(4) a Government contribution equal to the amount of 
        catastrophic limit coverage subsidies payable under section 
        1860D-14B and additional payments by reason of application of 
        section 1833(bb).''.
    (d) Conforming Amendments.--Section 1860D-2(b) of the Social 
Security Act--
            (1) in paragraph (2)(A), by inserting ``and section 1860D-
        14B'' after ``subparagraphs (C) and (D)'';
            (2) in paragraph (2)(C)(i), by inserting ``and subject to 
        section 1860D-14B'' after ``paragraph(4)'';
            (3) in paragraph (2)(D)(i), by inserting ``and subject to 
        section 1860D-14B'' after ``paragraph(4)'';
            (4) in paragraph (3)(A), by striking ``and (4)'' and 
        inserting ``and (4) and subject to section 1860D-14B''; and
            (5) in paragraph (4)(A)(i), by inserting ``subject to 
        section 1860D-14B,'' after ``subparagraph (B),''.
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