[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1796 Introduced in House (IH)]
106th CONGRESS
1st Session
H. R. 1796
To amend part B of title XVIII of the Social Security Act to provide
for a chronic disease prescription drug benefit under the Medicare
Program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 13, 1999
Mr. Cardin (for himself, Mr. Coyne, Mr. Levin, Mr. Stark, and Mrs.
Thurman) introduced the following bill; which was referred to the
Committee on 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 part B of title XVIII of the Social Security Act to provide
for a chronic disease prescription drug benefit under the Medicare
Program.
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 ``Medicare Chronic Disease
Prescription Drug Benefit Act of 1999''.
SEC. 2. MEDICARE CHRONIC DISEASE PRESCRIPTION DRUG BENEFIT.
(a) Coverage.--
(1) In general.--Section 1832(a)(2) of the Social Security
Act (42 U.S.C. 1395k(a)(2)) is amended--
(A) by striking ``and'' at the end of subparagraph
(I);
(B) by striking the period at the end of
subparagraph (J) and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(K) subject to subsection (b), prescription drugs
for treatment of certain chronic conditions (as defined
in section 1861(uu)(1)).''.
(2) Provision of benefits through existing non-medicaid
state prescription drug benefit programs.--Section 1832 of such
Act (42 U.S.C. 1395k) is further amended--
(1) by redesignating subsection (b) as subsection
(c); and
(2) by inserting after subsection (a) the following
new subsection:
``(b)(1) Prescription drug benefits shall not be available under
subsection (a)(2)(K) to an individual to the extent that the individual
receives benefits for the prescription drugs under a State non-medicaid
prescription drug benefit program if the following requirements are
met:
``(A) The program is sponsored or financially underwritten
by a State, but Federal financial assistance under title XIX is
not available for expenditures under the program.
``(B) The program is in operation as of May 1, 1999.
``(C) The State elects to receive payment (described in
paragraph (2)) for providing benefits under this subsection.
``(D) The deductible and coinsurance applicable does not
exceed the deductible and coinsurance otherwise applicable to
the prescription drug benefit described in subsection
(a)(2)(K).
``(2) The Secretary shall provide for payment to a State that
operates a program that meets the requirements of paragraph (1) of an
amount (agreed to by the State) that does not exceed the Secretary's
estimate of the amount of payment that would have been made under this
part (taking into account the application of a deductible and
coinsurance) for prescription drugs for which coverage is provided
under such program, if this subsection did not apply.''.
(b) Definition of Benefit.--
(1) In general.--Section 1861 of such Act (42 U.S.C. 1395x)
is amended by adding at the end the following new subsection:
``Prescription Drugs for Treatment of Certain Chronic Conditions
``(uu)(1) The term `prescription drugs for treatment of certain
chronic conditions' means, subject to paragraph (3), prescription drugs
described in paragraph (2) that have been shown to have a demonstrable
effect in treating any of the following conditions (in the case of an
individual who has been diagnosed by a physician as having that
condition):
``(A) Hypertension.
``(B) Diabetes.
``(C) Congestive or ischemic heart disease.
``(D) Major depression.
``(E) Rheumatoid arthritis.
``(2) Prescription drugs described in this paragraph are--
``(A) a prescription drug that meets the requirement of
clause (i), (ii), or (iii) of section 1927(k)(2)(A);
``(B) a biological product described in section
1927(k)(2)(B); or
``(C) insulin described in section 1927(k)(2)(C).
``(3) The term `prescription drugs for treatment of certain chronic
conditions' does not include any product--
``(A) which may be distributed to individuals without a
prescription;
``(B) when furnished as part of, or as incident to, a
diagnostic service or any other item or service for which
payment may be made under this title;
``(C) that was covered under this title on the day before
the date of enactment of the Medicare Chronic Disease
Prescription Drug Benefit Act of 1999; or
``(D) that is a therapeutically equivalent replacement for
a product described in subparagraph (B) or (C), as determined
by the Secretary.''.
(2) Process for identification of covered drugs.--The
Secretary of Health and Human Services shall implement a
process for the timely identification of prescription drugs for
treatment of certain chronic conditions that should be covered
under section 1861(uu) of the Social Security Act, as added by
paragraph (1). Under such process--
(A) within 60 days after the date of the enactment
of this Act, the Agency for Health Care Policy and
Research shall complete an initial review of the
available data on the prevalence of conditions
described in such section in the population of medicare
beneficiaries, the adequacy of data demonstrating the
effectiveness of different prescription drugs in
treating such conditions, and the severity of potential
complications in using such drugs;
(B) within 6 months after the date of the enactment
of this Act, the Secretary shall specify by rule the
initial prescription drugs that shall be covered under
such section;
(C) thereafter the Secretary, taking into
consideration recommendations made under subsection
(e), may by rule change the prescription drugs that are
so covered; and
(D) the Secretary may, on an emergency basis,
provide for the replacement of a prescription drug on
the list if another drug (for the treatment of the same
condition) is recalled.
(3) Construction.--Nothing in this section (or the
amendments made by this section) shall be construed--
(A) as preventing medicare beneficiaries from
purchasing prescription drugs not identified under
paragraph (2), including through coverage under a group
health plan or medicare supplemental policy; and
(B) the coverage under a medicare supplemental
policy of prescription drugs for conditions not
specified on the list complied under paragraph (2)
shall not be considered to duplicate benefits under
title XVIII of such Act, for purposes of applying
section 1882(d)(3) of such Act (42 U.S.C.
1395ss(d)(3)).
(c) Selection of Entity To Provide Drug Benefit; Payment.--Part B
of title XVIII of the Social Security Act is amended by adding at the
end the following new section:
``SEC. 1849. SELECTION OF ENTITIES TO PROVIDE OUTPATIENT DRUG BENEFIT;
PAYMENT.
``(a) Establishment of Bidding Process.--
``(1) In general.--The Secretary shall establish procedures
under which the Secretary accepts bids from eligible entities
and awards contracts to such entities in order to provide
covered outpatient drugs to eligible beneficiaries in an area.
Such contracts may be awarded based on shared risk, capitation,
or performance.
``(2) Area.--
``(A) Regional basis.--The contract entered into
between the Secretary and an eligible entity shall
require the eligible entity to provide covered
outpatient drugs on a regional basis.
``(B) Determination.--In determining coverage areas
under this section, the Secretary shall take into
account the number of eligible beneficiaries in an area
in order to encourage participation by eligible
entities.
``(3) Submission of bids.--Each eligible entity desiring to
provide covered outpatient drugs under this section shall
submit a bid to the Secretary at such time, in such manner, and
accompanied by such information as the Secretary may reasonably
require. Such bids shall include the amount the eligible entity
will charge enrollees under subsection (e)(2) for covered
outpatient drugs under the contract.
``(4) Access.--The Secretary shall ensure that--
``(A) an eligible entity complies with the access
requirements described in subsection (f)(5);
``(B) if an eligible entity employs formularies
pursuant to subsection (f)(6)(A), such entity complies
with the requirements of subsection (f)(6)(B);
``(C) an eligible entity makes available to each
beneficiary covered under the contract at least one
drug in each therapeutic class from those approved by
the Secretary for the treatment of certain chronic
conditions and at least one generic equivalent for each
drug, if available; and
``(D) an eligible entity makes available to each
such beneficiary alternative prescription drugs for the
treatment of certain chronic conditions when a
physician certifies that, because of a drug allergy or
other documented medical condition, that none of the
drugs approved by the Secretary for the treatment of
these conditions can adequately treat the patient and
that these drugs are medically necessary.
``(5) Duration of contracts.--Each contract under this
section shall be for a term of at least 2 years but not more
than 5 years, as determined by the Secretary.
``(b) Enrollment.--
``(1) In general.--The Secretary shall establish a process
through which an eligible beneficiary shall make an election to
enroll with any eligible entity that has been awarded a
contract under this section and serves the geographic area in
which the beneficiary resides. In establishing such process,
the Secretary shall use rules similar to the rules for
enrollment and disenrollment with a Medicare+Choice plan under
section 1851.
``(2) Requirement of enrollment.--An eligible beneficiary
not enrolled in a Medicare+Choice plan under part C must enroll
with an eligible entity under this section in order to be
eligible to receive covered outpatient drugs under this title.
``(3) Enrollment in absence of election by eligible
beneficiary.--In the case of an eligible beneficiary that fails
to make an election pursuant to paragraph (1), the Secretary
shall provide, pursuant to procedures developed by the
Secretary, for the enrollment of such beneficiary with an
eligible entity that has a contract under this section that
covers the area in which such beneficiary resides.
``(4) Areas not covered by contracts.--The Secretary shall
develop procedures for the provision of covered outpatient
drugs under this title to eligible beneficiaries that reside in
an area that is not covered by any contract under this section.
``(5) Beneficiaries residing in different locations.--The
Secretary shall develop procedures to ensure that an eligible
beneficiary that resides in different regions in a year is
provided benefits under this section throughout the entire
year.
``(c) Providing Information to Beneficiaries.--The Secretary shall
provide for activities under this section to broadly disseminate
information to medicare beneficiaries on the coverage provided under
this section. Such activities shall be similar to the activities
performed by the Secretary under section 1851(d).
``(d) Payments to Eligible Entities.--The Secretary shall establish
procedures for making payments to an eligible entity under a contract.
``(e) Cost-Sharing.--
``(1) Annual deductible.--Benefits under this section shall
not begin in a year until the eligible beneficiary has met a
$250 deductible.
``(2) Copayment.--
``(A) In general.--Subject to subparagraph (B), the
eligible beneficiary shall be responsible for making
payments in an amount not greater than 20 percent of
the cost (as stated in the contract) of any covered
outpatient drug that is provided to the beneficiary.
Pursuant to subsection (a)(4)(B), an eligible entity
may reduce the payment amount that an eligible
beneficiary is responsible for making to the entity.
``(B) No copayment for generics.--The copayment
amount under subparagraph (A) shall be zero in the case
of a covered outpatient drug that is a drug approved
under section 505(j) of the Federal Food Drug and
Cosmetic Act.
``(f) Conditions for Awarding Contract.--The Secretary shall not
award a contract to an eligible entity under subsection (a) unless the
Secretary finds that the eligible entity is in compliance with such
terms and conditions as the Secretary shall specify, including the
following:
``(1) Quality and financial standards.--The eligible entity
meets quality and financial standards specified by the
Secretary.
``(2) Information.--The eligible entity provides the
Secretary with information that the Secretary determines is
necessary in order to carry out the bidding process under this
section, including data needed to implement subsection (a)(6)
and data regarding utilization, expenditures, and costs.
``(3) Education.--The eligible entity establishes
educational programs that meet the criteria established by the
Secretary pursuant to subsection (g)(1).
``(4) Procedures to ensure proper utilization and to avoid
adverse drug reactions.--The eligible entity has in place
procedures to ensure the--
``(A) appropriate utilization by eligible
beneficiaries of the benefits to be provided under the
contract; and
``(B) avoidance of adverse drug reactions among
eligible beneficiaries enrolled with the entity.
``(5) Access.--The eligible entity ensures that the covered
outpatient drugs are accessible and convenient to eligible
beneficiaries covered under the contract, including by offering
the services in the following manner:
``(A) Services during emergencies.--The offering of
services 24 hours a day and 7 days a week for
emergencies.
``(B) Contracts with retail pharmacies.--The
offering of services--
``(i) at a sufficient (as determined by the
Secretary) number of retail pharmacies; and
``(ii) to the extent feasible, at retail
pharmacies located throughout the eligible
entity's service area.
``(6) Rules relating to provision of benefits.--
``(A) Provision of benefits.--In providing benefits
under a contract under this section, an eligible entity
may--
``(i) employ mechanisms to provide benefits
economically, including the use of--
``(I) formularies (pursuant to
subparagraph (B));
``(II) alternative methods of
distribution; and
``(III) generic drug substitution;
and
``(ii) use incentives to encourage eligible
beneficiaries to select less costly means of
receiving drugs.
``(B) Formularies.--If an eligible entity uses a
formulary to contain costs under this Act--
``(i) the eligible entity shall--
``(I) ensure participation of
practicing physicians and pharmacists
in the development of the formulary;
``(II) include in the formulary at
least 1 drug from each therapeutic
class from the drugs identified under
section 2(b)(2) of the Medicare Chronic
Disease Prescription Drug Benefit Act
of 1999 and provide at least 1 generic
equivalent, if available;
``(III) provide for coverage of
otherwise covered non-formulary drugs
when recommended by prescribing
providers; and
``(IV) disclose to current and
prospective beneficiaries and to
providers in the service area the
nature of the formulary restrictions,
including information regarding the
drugs included in the formulary,
copayment amounts, and any difference
in the cost-sharing for different types
of drugs; but
``(ii) nothing shall preclude an entity
from--
``(I) requiring higher cost-sharing
for drugs provided under clause
(i)(III), subject to limits established
in subsection (e)(2)(A), except that an
entity shall provide for coverage of a
nonformulary drug on the same basis as
a drug within the formulary if such
nonformulary drug is determined by the
prescribing provider to be medically
indicated;
``(II) educating prescribing
providers, pharmacists, and
beneficiaries about medical and cost
benefits of formulary products; and
``(III) requesting prescribing
providers to consider a formulary
product prior to dispensing of a
nonformulary drug, as long as such
request does not unduly delay the
provision of the drug.
``(7) Procedures to compensate pharmacists for
counseling.--The eligible entity shall compensate pharmacists
for providing the counseling described in subsection (g)(2)(B).
``(8) Clinical outcomes.--
``(A) Requirement.--The eligible entity shall
comply with clinical quality standards as determined by
the Secretary.
``(B) Development of standards.--The Secretary, in
consultation with appropriate medical specialty
societies, shall develop clinical quality standards
that are applicable to eligible entities. Such
standards shall be based on current standards of care.
``(9) Procedures regarding denials of care.--The eligible
entity has in place procedures to ensure--
``(A) the timely review and resolution of denials
of care and complaints (including those regarding the
use of formularies under paragraph (6)) by enrollees,
or providers, pharmacists, and other individuals acting
on behalf of such individual (with the individual's
consent) in accordance with requirements (as
established by the Secretary) that are comparable to
such requirements for Medicare+Choice organizations
under part C;
``(B) that beneficiaries are provided with
information regarding the appeals procedures under this
section at the time of enrollment; and
``(C) that providers receive information on the
entity's procedures for coverage of otherwise covered
non-formulary and alternative prescription drugs for
treatment of certain chronic conditions.
``(g) Educational Requirements To Ensure Appropriate Utilization.--
``(1) Establishment of program criteria.--The Secretary
shall establish a model for comprehensive educational programs
in order to assure the appropriate--
``(A) prescribing and dispensing of covered
outpatient drugs under this section; and
``(B) use of such drugs by eligible beneficiaries.
``(2) Elements of model.--The model established under
paragraph (1) shall include the following elements:
``(A) On-line prospective review available 24 hours
a day and 7 days a week in order to evaluate each
prescription for drug therapy problems due to
duplication, interaction, or incorrect dosage or
duration of therapy.
``(B) Consistent with State law, guidelines for
counseling eligible beneficiaries enrolled under a
contract under this section regarding--
``(i) the proper use of prescribed covered
outpatient drugs; and
``(ii) interactions and contra-indications.
``(C) Methods to identify and educate providers,
pharmacists, and eligible beneficiaries regarding--
``(i) instances or patterns concerning the
unnecessary or inappropriate prescribing or
dispensing of covered outpatient drugs;
``(ii) instances or patterns of substandard
care;
``(iii) potential adverse reactions to
covered outpatient drugs;
``(iv) inappropriate use of antibiotics;
``(v) appropriate use of generic products;
and
``(vi) the importance of using covered
outpatient drugs in accordance with the
instruction of prescribing providers.
``(h) Protection of Patient Confidentiality.--Insofar as an
eligible organization maintains individually identifiable medical
records or other health information regarding enrollees under a
contract entered into under this section, the organization shall--
``(1) safeguard the privacy of any individually
identifiable enrollee information;
``(2) maintain such records and information in a manner
that is accurate and timely; and
``(3) assure timely access of such enrollees to such
records and information.
``(i) Definitions.--In this section:
``(1) Covered outpatient drug.--
``(A) In general.--Except as provided in
subparagraph (B), the term `covered outpatient drug'
means prescription drugs for treatment of certain
chronic conditions (as defined in section 1861(uu)(1)).
``(B) Exclusion.--The term `covered outpatient
drug' does not include any product--
``(i) which may be distributed to
individuals without a prescription;
``(ii) when furnished as part of, or as
incident to, a diagnostic service or any other
item or service for which payment may be made
under this title;
``(iii) that was covered under this title
on the day before the date of enactment of the
Medicare Chronic Disease Prescription Drug
Benefit Act of 1999; or
``(iv) that is a therapeutically equivalent
replacement for a product described in clause
(ii) or (iii), as determined by the Secretary.
``(2) Eligible beneficiary.--The term `eligible
beneficiary' means an individual that is enrolled under part B
of this title.
``(3) Eligible entity.--The term `eligible entity' means
any entity that the Secretary determines to be appropriate,
including--
``(A) pharmaceutical benefit management companies;
``(B) wholesale and retail pharmacist delivery
systems;
``(C) insurers;
``(D) other entities; or
``(E) any combination of the entities described in
subparagraphs (A) through (D).''.
(2) No application to regular part b deductible.--Section
1833(b) of such Act (42 U.S.C. 1395l(b)) is amended--
(A) in paragraph (1), by inserting ``or for
prescription drugs for treatment of certain chronic
conditions'' after ``section 1861(s)(10)(A)''; and
(B) in paragraph (2), by inserting ``and shall not
apply with respect to prescription drugs for treatment
of certain chronic conditions' after ``section
1861(kk)))''.
(3) Payment conforming amendment.--Section 1832(a) of such
Act (42 U.S.C. 1395k(a)) is amended--
(A) in paragraph (2)(A), by striking ``and (I)''
and inserting ``(I), and (K)'';
(B) by striking ``and'' at the end of paragraph
(8);
(C) by striking the period at the end of
subparagraph (9) and inserting ``; and''; and
(D) by adding at the end the following new
paragraph:
``(10) with respect to prescription drugs for treatment of
certain chronic conditions, the amounts provided under section
1849;''.
(d) Analysis of Benefit.--
(1) In general.--The Secretary of Health and Human Services
shall enter into an arrangement with the Institute of Medicine
of the National Academy of Sciences under which the Institute
on an ongoing basis collects and analyzes data, and submits
annual reports to the Secretary and Congress, on--
(A) the effectiveness of the benefits provided
under the amendments made by this section in reducing
demand for acute medical services;
(B) the annual cost of the benefits and the annual
savings in acute medical services; and
(C) additional diagnoses, and additional
prescription drugs, for which such benefits should be
provided, using the criteria described in section
2(b)(2)(A) of this Act.
(2) Consultation.--In carrying out paragraph (1)(C), the
Secretary shall establish a process through which health care
providers, advocacy groups, and other interested parties may
submit evidence to the Institute of Medicine and the Institute
shall consider such evidence.
(3) Considerations.--Analyses under this subsection shall
consider both the short term and long term benefits, and costs
to the medicare program of any change in benefits.
(4) Secretarial recommendations.--The Secretary, taking
into account the annual reports submitted under this
subsection, may submit to Congress recommendations regarding
changes in the chronic conditions for which prescription drug
coverage is available under the medicare program.
(5) Hearings.--The Committee on Ways and Means and the
Committee on Commerce of the House of Representatives and the
Committee on Finance of the Senate shall conduct hearings to
consider the reports and recommendations submitted under this
subsection before making any change in covered prescription
drug benefits under the medicare program.
(6) Funding.--From funds appropriated to the Department of
Health and Human Services for each fiscal year (beginning with
fiscal year 2000), the Secretary shall provide for such funding
as the Secretary determines necessary for the conduct of the
analyses conducted under this subsection.
(e) Effective Date.--Benefits shall first be made available under
the amendments made by this section for prescription drugs furnished on
or after January 1, 2001.
SEC. 3. MEDICAID COVERAGE OF MEDICARE PRESCRIPTION DRUG COST SHARING
FOR SLMBS.
Section 1902(a)(10)(E)(iii) of the Social Security Act (42 U.S.C.
1396a(a)(10)(E)(iii)) by inserting ``and medicare cost-sharing
described in subparagraphs (B) and (C) of section 1905(p)(3) with
respect to the deductible and copayment described in section 1849(e)''
after ``section 1905(p)(4),''.
<all>