Source: https://www.law.cornell.edu/uscode/text/42/1395w-112
Timestamp: 2018-12-12 07:26:14
Document Index: 376821112

Matched Legal Cases: ['art 2', '§ 1395', '§ 1395', '§ 1860', '§ 101', '§ 171', '§ 181']

U.S. Code › Title 42 › Chapter 7 › Subchapter XVIII › Part D › Subpart 2 › § 1395w–112
42 U.S. Code § 1395w–112 - Requirements for and contracts with prescription drug plan (PDP) sponsors
(1) Licensure
Subject to subsection (c) of this section, the sponsor is organized and licensed under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each State in which it offers a prescription drug plan.
(2) Assumption of financial risk for unsubsidized coverage
Subject to subparagraph (B), to the extent that the entity is at risk the entity assumes financial risk on a prospective basis for benefits that it offers under a prescription drug plan and that is not covered under section 1395w–115 (b) of this title.
(B) Reinsurance permitted
(3) Solvency for unlicensed sponsors
In the case of a PDP sponsor that is not described in paragraph (1) and for which a waiver has been approved under subsection (c) of this section, such sponsor shall meet solvency standards established by the Secretary under subsection (d) of this section.
(2) Limitation on entities offering fallback prescription drug plans
(A) submitted a bid under section 1395w–111 (g) of this title for such year (as the first year of a contract period under such section) to offer a fallback prescription drug plan in any PDP region;
(B) offers a fallback prescription drug plan in any PDP region during the year; or
(C) offered a fallback prescription drug plan in that PDP region during the previous year.
(3) Incorporation of certain medicare advantage contract requirements
Except as otherwise provided, the following provisions of section 1395w–27 of this title shall apply to contracts under this section in the same manner as they apply to contracts under section 1395w–27 (a) of this title:
(A) Minimum enrollment
Paragraphs (1) and (3) of section 1395w–27 (b) of this title, except that—
(i) the Secretary may increase the minimum number of enrollees required under such paragraph (1) as the Secretary determines appropriate; and
(ii) the requirement of such paragraph (1) shall be waived during the first contract year with respect to an organization in a region.
(B) Contract period and effectiveness
Section 1395w–27 (c) of this title, except that in applying paragraph (4)(B) of such section any reference to payment amounts under section 1395w–23 of this title shall be deemed payment amounts under section 1395w–115 of this title.
(C) Protections against fraud and beneficiary protections
Section 1395w–27 (d) of this title.
(D) Additional contract terms
Section 1395w–27 (e) of this title; except that section 1395w–27 (e)(2) of this title shall apply as specified to PDP sponsors and payments under this part to an MA–PD plan shall be treated as expenditures made under part D. Notwithstanding any other provision of law, information provided to the Secretary under the application of section 1395w–27 (e)(1) of this title to contracts under this section under the preceding sentence—
(i) may be used for the purposes of carrying out this part, improving public health through research on the utilization, safety, effectiveness, quality, and efficiency of health care services (as the Secretary determines appropriate); and
(ii) shall be made available to Congressional [1] support agencies (in accordance with their obligations to support Congress as set out in their authorizing statutes) for the purposes of conducting Congressional [1] oversight, monitoring, making recommendations, and analysis of the program under this subchapter.
(E) Intermediate sanctions
Section 1395w–27 (g) of this title (other than paragraph (1)(F) of such section), except that in applying such section the reference in section 1395w–27 (g)(1)(B) of this title to section 1395w–24 of this title is deemed a reference to this part.
(F) Procedures for termination
Section 1395w–27 (h) of this title.
(4) Prompt payment of clean claims
(i) In general Each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan offered by such sponsor shall provide that payment shall be issued, mailed, or otherwise transmitted with respect to all clean claims submitted by pharmacies (other than pharmacies that dispense drugs by mail order only or are located in, or contract with, a long-term care facility) under this part within the applicable number of calendar days after the date on which the claim is received.
(ii) Clean claim defined In this paragraph, the term “clean claim” means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this part.
(iii) Date of receipt of claim In this paragraph, a claim is considered to have been received—
(I) with respect to claims submitted electronically, on the date on which the claim is transferred; and
(II) with respect to claims submitted otherwise, on the 5th day after the postmark date of the claim or the date specified in the time stamp of the transmission.
(B) Applicable number of calendar days defined
(i) with respect to claims submitted electronically, 14 days; and
(ii) with respect to claims submitted otherwise, 30 days.
(C) Interest payment
(i) In general Subject to clause (ii), if payment is not issued, mailed, or otherwise transmitted within the applicable number of calendar days (as defined in subparagraph (B)) after a clean claim is received, the PDP sponsor shall pay interest to the pharmacy that submitted the claim at a rate equal to the weighted average of interest on 3-month marketable Treasury securities determined for such period, increased by 0.1 percentage point for the period beginning on the day after the required payment date and ending on the date on which payment is made (as determined under subparagraph (D)(iv)). Interest amounts paid under this subparagraph shall not be counted against the administrative costs of a prescription drug plan or treated as allowable risk corridor costs under section 1395w–115 (e) of this title.
(ii) Authority not to charge interest The Secretary may provide that a PDP sponsor is not charged interest under clause (i) in the case where there are exigent circumstances, including natural disasters and other unique and unexpected events, that prevent the timely processing of claims.
(D) Procedures involving claims
(i) Claim deemed to be clean A claim is deemed to be a clean claim if the PDP sponsor involved does not provide notice to the claimant of any deficiency in the claim—
(I) with respect to claims submitted electronically, within 10 days after the date on which the claim is received; and
(II) with respect to claims submitted otherwise, within 15 days after the date on which the claim is received.
(ii) Claim determined to not be a clean claim
(I) In general If a PDP sponsor determines that a submitted claim is not a clean claim, the PDP sponsor shall, not later than the end of the period described in clause (i), notify the claimant of such determination. Such notification shall specify all defects or improprieties in the claim and shall list all additional information or documents necessary for the proper processing and payment of the claim.
(II) Determination after submission of additional information A claim is deemed to be a clean claim under this paragraph if the PDP sponsor involved does not provide notice to the claimant of any defect or impropriety in the claim within 10 days of the date on which additional information is received under subclause (I).
(iii) Obligation to pay A claim submitted to a PDP sponsor that is not paid or contested by the sponsor within the applicable number of days (as defined in subparagraph (B)) after the date on which the claim is received shall be deemed to be a clean claim and shall be paid by the PDP sponsor in accordance with subparagraph (A).
(iv) Date of payment of claim Payment of a clean claim under such subparagraph is considered to have been made on the date on which—
(I) with respect to claims paid electronically, the payment is transferred; and
(II) with respect to claims paid otherwise, the payment is submitted to the United States Postal Service or common carrier for delivery.
(E) Electronic transfer of funds
(F) Protecting the rights of claimants
(i) In general Nothing in this paragraph shall be construed to prohibit or limit a claim or action not covered by the subject matter of this section that any individual or organization has against a provider or a PDP sponsor.
(ii) Anti-retaliation Consistent with applicable Federal or State law, a PDP sponsor shall not retaliate against an individual or provider for exercising a right of action under this subparagraph.
(5) Submission of claims by pharmacies located in or contracting with long-term care facilities
(6) Regular update of prescription drug pricing standard
(c) Waiver of certain requirements to expand choice
(1) Authorizing waiver
In the case of an entity that seeks to offer a prescription drug plan in a State, the Secretary shall waive the requirement of subsection (a)(1) of this section that the entity be licensed in that State if the Secretary determines, based on the application and other evidence presented to the Secretary, that any of the grounds for approval of the application described in paragraph (2) have been met.
(B) Application of regional plan waiver rule
In addition to the waiver available under subparagraph (A), the provisions of section 1395w–27a (d) of this title shall apply to PDP sponsors under this part in a manner similar to the manner in which such provisions apply to MA organizations under part C of this subchapter, except that no application shall be required under paragraph (1)(B) of such section in the case of a State that does not provide a licensing process for such a sponsor.
(2) Grounds for approval
(i) subject to subparagraph (B), the grounds for approval described in subparagraphs (B), (C), and (D) of section 1395w–25 (a)(2) of this title; and
(ii) the application by a State of any grounds other than those required under Federal law.
(i) the ground of approval described in section 1395w–25 (a)(2)(B) of this title is deemed to have been met if the State does not have a licensing process in effect with respect to the PDP sponsor; and
(ii) for plan years beginning before January 1, 2008, if the State does have such a licensing process in effect, such ground for approval described in such section is deemed to have been met upon submission of an application described in such section.
(3) Application of waiver procedures
With respect to an application for a waiver (or a waiver granted) under paragraph (1)(A) of this subsection, the provisions of subparagraphs (E), (F), and (G) of section 1395w–25 (a)(2) of this title shall apply, except that clauses (i) and (ii) of such subparagraph (E) shall not apply in the case of a State that does not have a licensing process described in paragraph (2)(B)(i) in effect.
(4) References to certain provisions
In applying provisions of section 1395w–25 (a)(2) of this title under paragraphs (2) and (3) of this subsection to prescription drug plans and PDP sponsors—
(A) any reference to a waiver application under section 1395w–25 of this title shall be treated as a reference to a waiver application under paragraph (1)(A) of this subsection; and
(B) any reference to solvency standards shall be treated as a reference to solvency standards established under subsection (d) of this section.
(d) Solvency standards for non-licensed entities
(1) Establishment and publication
(2) Compliance with standards
A PDP sponsor that is not licensed by a State under subsection (a)(1) of this section and for which a waiver application has been approved under subsection (c) of this section shall meet solvency and capital adequacy standards established under paragraph (1). The Secretary shall establish certification procedures for such sponsors with respect to such solvency standards in the manner described in section 1395w–25 (c)(2) of this title.
(e) Licensure does not substitute for or constitute certification
The fact that a PDP sponsor is licensed in accordance with subsection (a)(1) of this section or has a waiver application approved under subsection (c) of this section does not deem the sponsor to meet other requirements imposed under this part for a sponsor.
(f) Periodic review and revision of standards
(2) Prohibition of midyear implementation of significant new regulatory requirements
(g) Prohibition of State imposition of premium taxes; relation to State laws
The provisions of sections 1395w–24 (g) and 1395w–26 (b)(3) of this title shall apply with respect to PDP sponsors and prescription drug plans under this part in the same manner as such sections apply to MA organizations and MA plans under part C of this subchapter.
(Aug. 14, 1935, ch. 531, title XVIII, § 1860D–12, as added Pub. L. 108–173, title I, § 101(a)(2),Dec. 8, 2003, 117 Stat. 2099; amended Pub. L. 110–275, title I, §§ 171(a), 172 (a)(1), 173 (a), 181,July 15, 2008, 122 Stat. 2578, 2580–2582.)
2008—Subsec. (b)(3)(D). Pub. L. 110–275, § 181, inserted at end “Notwithstanding any other provision of law, information provided to the Secretary under the application of section 1395w–27 (e)(1) of this title to contracts under this section under the preceding sentence—” and added cls. (i) and (ii).