I 115th CONGRESS 2d Session H. R. 7001 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.

1. Short title This Act may be cited as the Capped Allowable Payments from Seniors for Prescriptions Act or the CAPS for Prescriptions Act . 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: 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), .