[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 828 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 828
To amend title XVIII of the Social Security Act to expand coverage of
preventive services under the Medicare Program and to provide coverage
of outpatient prescription drugs under that program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 1, 2001
Mr. Grucci 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 subseqently 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 expand coverage of
preventive services under the Medicare Program and to provide coverage
of outpatient prescription drugs under that program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Senior's Health
Care Choice Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MEDICARE COVERAGE OF PREVENTIVE SERVICES
Sec. 101. Counseling for cessation of tobacco use.
Sec. 102. Screening for hypertension.
Sec. 103. Counseling for hormone replacement therapy.
Sec. 104. Screening for diminished visual acuity.
Sec. 105. Screening for hearing impairment.
Sec. 106. Screening and counseling for osteoporosis.
Sec. 107. Screening for cholesterol.
Sec. 108. Expansion of coverage of medical nutrition therapy services.
Sec. 109. Expansion of coverage of glaucoma screening.
Sec. 110. Routine annual physical checkups.
Sec. 111. Routine annual dental examinations and cleaning.
Sec. 112. Routine annual eye examinations.
TITLE II--MEDICARE PRESCRIPTION DRUG AND SUPPLEMENTAL BENEFIT PROGRAM
Sec. 201. Establishment of program.
``TITLE XXII--MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM
``Sec. 2201. Establishment of prescription drug and
supplemental benefit program.
``Sec. 2202. Enrollment under program.
``Sec. 2203. Election of a medicare prescription plus plan.
``Sec. 2204. Beneficiary information.
``Sec. 2205. Outpatient prescription drug and other
supplemental benefits.
``Sec. 2206. Beneficiary protections.
``Sec. 2207. Requirements for entities offering medicare
prescription plus plans.
``Sec. 2208. Submission of medicare prescription plus plans.
``Sec. 2209. Approval of medicare prescription plus plans.
``Sec. 2210. Payments to medicare prescription plus plans for
benefits.
``Sec. 2211. Computation and collection of beneficiary share of
premium.
``Sec. 2212. Additional prescription drug subsidies through
reinsurance.
``Sec. 2213. Plan fees for administrative costs.
``Sec. 2214. Medicare prescription drug account.
``Sec. 2215. Secondary payer provisions.
``Sec. 2216. Definitions; treatment of references to provisions
in medicare+choice program.
Sec. 202. Amendments to Federal Supplementary Medical Insurance Trust
Fund.
Sec. 203. Prescription drug coverage under the Medicare+Choice program.
Sec. 205. Medigap provisions.
TITLE I--MEDICARE COVERAGE OF PREVENTIVE SERVICES
SEC. 101. COUNSELING FOR CESSATION OF TOBACCO USE.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)), as amended by 102(a) and 105(a) of the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as
enacted into law by section 1(a)(6) of Public Law 106-554), is
amended--
(1) in subparagraph (U), by striking ``and'' at the end;
(2) in subparagraph (V), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(W) counseling for cessation of tobacco use (as defined
in subsection (vv)) for individuals who have a history of
tobacco use;''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C.
1395x), as amended by section 102(b) of the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into
law by section 1(a)(6) of Public Law 106-554), is amended by adding at
the end the following new subsection:
``Counseling for Cessation of Tobacco Use
``(vv)(1) Except as provided in paragraph (2), the term `counseling
for cessation of tobacco use' means diagnostic, therapy, and counseling
services for cessation of tobacco use which are furnished--
``(A) by or under the supervision of a physician; or
``(B) by any other health care professional who is legally
authorized to furnish such services under State law (or the
State regulatory mechanism provided by State law) of the State
in which the services are furnished, as would otherwise be
covered if furnished by a physician or as an incident to a
physician's professional service.
``(2) The term `counseling for cessation of tobacco use' does not
include coverage for drugs or biologicals that are not otherwise
covered under this title.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)), as amended by section 105(c) and
223(c) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law by
section 1(a)(6) of Public Law 106-554), is amended--
(A) by striking ``and'' before ``(U)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (V) with respect to counseling
for cessation of tobacco use (as defined in section
1861(vv)), the amount paid shall be 100 percent of the
lesser of the actual charge for the services or the
amount determined by a fee schedule established by the
Secretary for the purposes of this subparagraph''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) is amended--
(A) by striking ``and'' before ``(6)''; and
(B) by inserting before the period the following:
``, and (7) such deductible shall not apply with
respect to counseling for cessation of tobacco use (as
defined in section 1861(vv))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 102. SCREENING FOR HYPERTENSION.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) (as amended by section 101(a)) is amended--
(1) in subparagraph (V), by striking ``and'' at the end;
(2) in subparagraph (W), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(X) screening for hypertension (as defined in subsection
(ww)) not more frequently than once every 2 years for
individuals with normotensive blood pressure measurements and
annually for individuals with blood pressure measurements that
are not normotensive;''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C. 1395x)
(as amended by section 101(b)) is amended by adding at the end the
following new subsection:
``Screening for Hypertension
``(ww) The term `screening for hypertension' means diagnostic
services for hypertension which are furnished--
``(1) by or under the supervision of a physician; or
``(2) by any other health care professional who is legally
authorized to furnish such services under State law (or the
State regulatory mechanism provided by State law) of the State
in which the services are furnished, as would otherwise be
covered if furnished by a physician or as an incident to a
physician's professional service.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 101(c)(1))
is amended--
(A) by striking ``and'' before ``(V)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (W) with respect to screening
for hypertension (as defined in section 1861(ww)), the
amount paid shall be 100 percent of the lesser of the
actual charge for the services or the amount determined
by a fee schedule established by the Secretary for the
purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 101(c)(2)) is amended--
(A) by striking ``and'' before ``(7)''; and
(B) by inserting before the period the following:
``, and (8) such deductible shall not apply with
respect to screening for hypertension (as defined in
section 1861(ww))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 103. COUNSELING FOR HORMONE REPLACEMENT THERAPY.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) (as amended by section 102(a)) is amended--
(1) in subparagraph (W), by striking ``and'' at the end;
(2) in subparagraph (X), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(Y) counseling for hormone replacement therapy (as
defined in subsection (xx));''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C. 1395x)
(as amended by section 102(b)) is amended by adding at the end the
following new subsection:
``Counseling for Hormone Replacement Therapy
``(xx)(1) Except as provided in paragraph (2), the term `counseling
for hormone replacement therapy' means diagnostic, therapy, and
counseling services for hormone replacement which are furnished--
``(A) by or under the supervision of a physician; or
``(B) by any other health care professional who is legally
authorized to furnish such services under State law (or the
State regulatory mechanism provided by State law) of the State
in which the services are furnished, as would otherwise be
covered if furnished by a physician or as an incident to a
physician's professional service.
``(2) The term `counseling for hormone replacement therapy' does
not include coverage for drugs or biologicals that are not otherwise
covered under this title.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 102(c)(1))
is amended--
(A) by striking ``and'' before ``(W)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (X) with respect to counseling
for hormone replacement therapy (as defined in section
1861(xx)), the amount paid shall be 100 percent of the
lesser of the actual charge for the services or the
amount determined by a fee schedule established by the
Secretary for the purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 102(c)(2)) is amended--
(A) by striking ``and'' before ``(8)''; and
(B) by inserting before the period the following:
``, and (9) such deductible shall not apply with
respect to counseling for hormone replacement therapy
(as defined in section 1861(xx))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 104. SCREENING FOR DIMINISHED VISUAL ACUITY.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) (as amended by section 103(a)) is amended--
(1) in subparagraph (X), by striking ``and'' at the end;
(2) in subparagraph (Y), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(Z) screening for diminished visual acuity (as defined in
subsection (yy));''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C. 1395x)
(as amended by section 103(b)) is amended by adding at the end the
following new subsection:
``Screening for Diminished Visual Acuity
``(yy) The term `screening for diminished visual acuity' means
diagnostic services for screening for diminished visual acuity which
are furnished by or under the supervision of an optometrist or
ophthalmologist who is legally authorized to furnish such services
under State law (or the State regulatory mechanism provided by State
law) of the State in which the services are furnished, as would
otherwise be covered if furnished by a physician or as an incident to a
physician's professional service.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 103(c)(1))
is amended--
(A) by striking ``and'' before ``(X)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (Y) with respect to screening
for diminished visual acuity (as defined in section
1861(yy)), the amount paid shall be 100 percent of the
lesser of the actual charge for the services or the
amount determined by a fee schedule established by the
Secretary for the purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 103(c)(2)) is amended--
(A) by striking ``and'' before ``(9)''; and
(B) by inserting before the period the following:
``, and (10) such deductible shall not apply with
respect to screening for diminished visual acuity (as
defined in section 1861(yy))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 105. SCREENING FOR HEARING IMPAIRMENT.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) (as amended by section 104(a)) is amended--
(1) in subparagraph (Y), by striking ``and'' at the end;
(2) in subparagraph (Z), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(AA) screening for hearing impairment (as defined in
subsection (zz));''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C. 1395x)
(as amended by section 104(b)) is amended by adding at the end the
following new subsection:
``Screening for Hearing Impairment
``(zz) The term `screening for hearing impairment' means diagnostic
services for hearing impairment by use of periodic questions, otoscopic
examination and audio metric testing if such questions indicate
potential hearing impairment, and counseling about hearing aid devices
which are furnished--
``(1) by or under the supervision of a physician; or
``(2) by any other health care professional who is legally
authorized to furnish such services under State law (or the
State regulatory mechanism provided by State law) of the State
in which the services are furnished, as would otherwise be
covered if furnished by a physician or as an incident to a
physician's professional service.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 104(c)(1))
is amended--
(A) by striking ``and'' before ``(Y)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (Z) with respect to screening
for hearing impairment (as defined in section
1861(zz)), the amount paid shall be 100 percent of the
lesser of the actual charge for the services or the
amount determined by a fee schedule established by the
Secretary for the purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 104(c)(2)) is amended--
(A) by striking ``and'' before ``(10)''; and
(B) by inserting before the period the following:
``, and (11) such deductible shall not apply with
respect to screening for hearing impairment (as defined
in section 1861(zz))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 106. SCREENING AND COUNSELING FOR OSTEOPOROSIS.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) (as amended by section 105(a)) is amended--
(1) in subparagraph (Z), by striking ``and'' at the end;
(2) in subparagraph (AA), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(BB) screening and counseling for osteoporosis (as
defined in subsection (aaa)) for--
``(i) women; and
``(ii) men with fractures;''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C. 1395x)
(as amended by section 105(b)) is amended by adding at the end the
following new subsection:
``Screening and Counseling for Osteoporosis
``(aaa) The term `screening and counseling for osteoporosis' means
diagnostic and counseling services for osteoporosis in addition to a
bone mass measurement (as defined in subsection (rr)) which are
furnished in accordance with methods approved by the Food and Drug
Administration--
``(1) by or under the supervision of a physician; or
``(2) by any other health care professional who is legally
authorized to furnish such services under State law (or the
State regulatory mechanism provided by State law) of the State
in which the services are furnished, as would otherwise be
covered if furnished by a physician or as an incident to a
physician's professional service.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 105(c)(1))
is amended--
(A) by striking ``and'' before ``(Z)''; and
(B) by inserting before the semicolon at the end
and inserting the following: ``, and (AA) with respect
to screening and counseling for osteoporosis (as
defined in section 1861(aaa)), the amount paid shall be
100 percent of the lesser of the actual charge for the
services or the amount determined by a fee schedule
established by the Secretary for the purposes of this
subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 105(c)(2)) is amended--
(A) by striking ``and'' before ``(11)''; and
(B) by inserting before the period the following:
``, and (12) such deductible shall not apply with
respect to screening and counseling for osteoporosis
(as defined in section 1861(aaa))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 107. SCREENING FOR CHOLESTEROL.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) (as amended by section 106(a)) is amended--
(1) in subparagraph (AA), by striking ``and'' at the end;
(2) in subparagraph (BB), by inserting ``and'' at the end;
and
(3) by adding at the end the following new subparagraph:
``(CC) screening for cholesterol (as defined in subsection
(bbb)) for individuals between the ages of 65 and 75 that
exhibit major risk factors for coronary heart disease,
including smoking, hypertension, and diabetes;''.
(b) Services Described.--Section 1861 of such Act (42 U.S.C. 1395x)
(as amended by section 106(b)) is amended by adding at the end the
following new subsection:
``Screening for Cholesterol
``(bbb) The term `screening for cholesterol' means diagnostic
services for cholesterol that are furnished--
``(1) by or under the supervision of a physician; or
``(2) by any other health care professional who is legally
authorized to furnish such services under State law (or the
State regulatory mechanism provided by State law) of the State
in which the services are furnished, as would otherwise be
covered if furnished by a physician or as an incident to a
physician's professional service.''.
(c) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 106(c)(1))
is amended--
(A) by striking ``and'' before ``(AA)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (BB) with respect to screening
for cholesterol (as defined in section 1861(bbb)), the
amount paid shall be 100 percent of the lesser of the
actual charge for the services or the amount determined
by a fee schedule established by the Secretary for the
purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 106(c)(2)) is amended--
(A) by striking ``and'' before ``(12)''; and
(B) by inserting before the period the following:
``, and (13) such deductible shall not apply with
respect to screening and counseling for osteoporosis
(as defined in section 1861(bbb))''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2002.
SEC. 108. EXPANSION OF COVERAGE OF MEDICAL NUTRITION THERAPY SERVICES.
(a) Expansion of Medical Nutrition Therapy Services to
Beneficiaries with a Cardiovascular Disease.--Section 1861(s)(2)(V) of
the Social Security Act, as added by section 105(a) of the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(as enacted into law by section 1(a)(6) of Public Law 106-554), is
amended by inserting ``, a cardiovascular disease (including congestive
heart failure, arteriosclerosis, hyperlipidemia, hypertension, and
hypercholesterolemia),'' after ``diabetes''.
(b) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 107(c)(1))
is amended--
(A) by striking ``and'' before ``(BB)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (CC) with respect to medical
nutrition therapy services (as defined in section
1861(vv)(1)), the amount paid shall be 85 percent of
the lesser of the actual charge for the services or the
amount determined under the fee schedule established
under section 1848(b) for the same services if
furnished by a physician''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 107(c)(2)) is amended--
(A) by striking ``and'' before ``(13)''; and
(B) by inserting before the period the following:
``, and (14) such deductible shall not apply with
respect to nutrition therapy services (as defined in
section 1861(vv)(1))''.
(c) Effective Date.--The amendments made by this section apply to
services furnished on or after January 1, 2002.
SEC. 109. EXPANSION OF COVERAGE OF GLAUCOMA SCREENING.
(a) Expansion of Glaucoma Screening to Cover Individuals With
Myopia.--Section 1861(s)(2)(U) of the Social Security Act, as added by
section 101(a) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law by section
1(a)(6) of Public Law 106-554), is amended by inserting ``or myopia''
after ``diabetes''.
(b) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 108(b)(1) is
amended--
(A) by striking ``and'' before ``(BB)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (CC) with respect to screening
for glaucoma (as defined in section 1861(uu)), the
amount paid shall be 100 percent of the lesser of the
actual charge for the services or amount determined by
a fee schedule established by the Secretary for the
purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 108(b)(2)) is amended--
(A) by striking ``and'' before ``(14)''; and
(B) by inserting before the period the following:
``, and (15) such deductible shall not apply with
respect to screening for glaucoma (as defined in
section 1861(uu))''.
(c) Effective Date.--The amendments made by this section apply to
services furnished on or after January 1, 2002.
SEC. 110. ROUTINE ANNUAL PHYSICAL CHECKUPS.
(a) In General.--Section 1862 of the Social Security Act (42 U.S.C.
1395y) is amended--
(1) in subsection (a)(7), by inserting ``subject to
subsection (h),'' after ``(7)''; and
(2) by inserting after subsection (g) the following new
subsection:
``(h)(1) The exclusion under subsection (a)(7) shall not include
coverage of a routine annual physical checkup, including coverage of
related laboratory tests.''.
(b) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 109(b)(1))
is amended--
(A) by striking ``and'' before ``(CC)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (DD) with respect to routine
annual physical checkups described in section
1862(h)(1), the amount paid shall be 100 percent of the
lesser of the actual charge for the services or amount
determined by a fee schedule established by the
Secretary for the purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 109(b)(2)) is amended--
(A) by striking ``and'' before ``(15)''; and
(B) by inserting before the period the following:
``, and (16) such deductible shall not apply with
respect to routine annual physical checkups described
in section 1862(h)(1)''.
(c) Effective Date.--The amendments made by this section apply to
services furnished on or after January 1, 2002.
SEC. 111. ROUTINE ANNUAL DENTAL EXAMINATIONS AND CLEANING.
(a) In General.--Section 1862 of the Social Security Act (42 U.S.C.
1395y), as amended by section 110(a), is amended--
(1) in subsection (a)(2), by inserting ``subject to
subsection (h),'' after ``(7)''; and
(2) by adding at the end of subsection (h) the following
new paragraph:
``(2) The exclusion subsection (a)(12) shall not include coverage
of a routine annual dental examination and cleaning, including coverage
of oral gum disease screening.''.
(b) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 110(b)(1))
is amended--
(A) by striking ``and'' before ``(DD)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (EE) with respect to routine
annual dental examination and cleaning described in
section 1862(h)(2), the amount paid shall be 100
percent of the lesser of the actual charge for the services or amount
determined by a fee schedule established by the Secretary for the
purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 110(b)(2)) is amended--
(A) by striking ``and'' before ``(16)''; and
(B) by inserting before the period the following:
``, and (17) such deductible shall not apply with
respect to routine annual dental examination and
cleaning described in section 1862(h)(2)''.
(c) Effective Date.--The amendments made by this section apply to
services furnished on or after January 1, 2002.
SEC. 112. ROUTINE ANNUAL EYE EXAMINATIONS.
(a) In General.--Section 1862(h) of the Social Security Act (42
U.S.C. 1395y(h)), as inserted by section 111(a), is amended by adding
at the end the following new paragraph:
``(3) The exclusion under subsection (a)(7) shall not include
coverage of a routine annual eye examination, including a refraction,
and of coverage per year of 1 pair of glasses (or coverage of contract
or other correctible lenses, up to the financial equivalence of a pair
of glasses).''.
(b) Elimination of Cost-Sharing.--
(1) Elimination of coinsurance.--Section 1833(a)(1) of such
Act (42 U.S.C. 1395l(a)(1)) (as amended by section 111(b)(1))
is amended--
(A) by striking ``and'' before ``(EE)''; and
(B) by inserting before the semicolon at the end
the following: ``, and (FF) with respect to routine
annual eye examinations and coverage of eyeglasses (or
other lense equivalents) described in section
1862(h)(3), the amount paid shall be 100 percent of the
lesser of the actual charge for the services or amount
determined by a fee schedule established by the
Secretary for the purposes of this subparagraph;''.
(2) Elimination of deductible.--The first sentence of
section 1833(b) of such Act (42 U.S.C. 1395l(b)) (as amended by
section 111(b)(2)) is amended--
(A) by striking ``and'' before ``(17)''; and
(B) by inserting before the period the following:
``, and (18) such deductible shall not apply with
respect to routine annual eye examinations and coverage
of eyeglasses and other lenses described in section
1862(h)(3)''.
(c) Effective Date.--The amendments made by this section apply to
services furnished on or after January 1, 2002.
TITLE II--MEDICARE PRESCRIPTION DRUG AND SUPPLEMENTAL BENEFIT PROGRAM
SEC. 201. ESTABLISHMENT OF PROGRAM.
(a) In General.--The Social Security Act is amended by adding at
the end the following new title:
``TITLE XXII--MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM
``establishment of prescription drug and supplemental benefit program
``Sec. 2201. (a) Provision of Benefit.--The Secretary shall
establish a Prescription Drug and Supplemental Benefit Program under
which an eligible beneficiary may voluntarily enroll and receive access
to covered outpatient prescription drugs and other benefits through
enrollment in a Medicare Prescription Plus plan offered by a private
entity or a Medicare+Choice plan offered by a Medicare+Choice
organization.
``(b) Program To Begin in 2003.--The Secretary shall establish the
program under this part in a manner so that benefits are first provided
for months beginning with January 2003.
``(c) Voluntary Nature of Program.--Nothing in this part shall be
construed as requiring an eligible beneficiary to enroll in the program
under this part.
``(d) Financing.--The costs of providing benefits under this part
shall be payable from the Medicare Prescription Drug Account.
``(e) No Effect on Title XVIII Benefits.--The program under this
part shall have no effect on the entitlement to benefits under title
XVIII.
``enrollment under program
``Sec. 2202. (a) Establishment of Process.--
``(1) In general.--The Secretary shall establish a process
through which an eligible beneficiary (including an eligible
beneficiary enrolled in a Medicare+Choice plan offered by a
Medicare+Choice organization) may make an election to enroll
under the program under this part. Except as otherwise provided
in this section, such process shall be similar to the process
for enrollment in part B under section 1837.
``(2) Requirement of enrollment.--An eligible beneficiary
must enroll under this part in order to be eligible to receive
benefits under this part.
``(b) Enrollment Period.--
``(1) In general.--Except as provided in paragraph (2) or
(3), an eligible beneficiary may not enroll in the program
under this part during any period after the beneficiary's
initial enrollment period.
``(2) Open enrollment period for beneficiaries currently
covered.--In the case of an individual who is entitled to part
A of title XVIII and enrolled under part B of such title as of
November 1, 2002, there shall be an open enrollment period of 6
months beginning on that date.
``(3) Special enrollment period for beneficiaries that lose
other drug coverage.--
``(A) In general.--Subject to subparagraph (D), in
the case of an applicable eligible beneficiary, the
Secretary shall establish procedures for permitting
such beneficiary to enroll under the program under this
part.
``(B) Applicable eligible beneficiary.--For
purposes of this paragraph, the term `applicable
eligible beneficiary' means an eligible beneficiary
who--
``(i) had applicable drug coverage; and
``(ii) involuntarily lost such coverage.
``(C) Applicable drug coverage defined.--For
purposes of subparagraph (B), the term `applicable drug
coverage' means any of the following prescription drug coverage:
``(i) Medicaid prescription drug
coverage.--Prescription drug coverage under a
medicaid plan under title XIX, including
through the Program of All-inclusive Care for
the Elderly (PACE) under section 1934, through
a social health maintenance organization
(referred to in section 4104(c) of the Balanced
Budget Act of 1997), or through a
Medicare+Choice project that demonstrates the
application of capitation payment rates for
frail elderly medicare beneficiaries through
the use of a interdisciplinary team and through
the provision of primary care services to such
beneficiaries by means of such a team at the
nursing facility involved.
``(ii) Prescription drug coverage under
group health plan.--Any outpatient prescription
drug coverage under a group health plan,
including a health benefits plan under the
Federal Employees Health Benefit Plan under
chapter 89 of title 5, United States Code, and
a qualified retiree prescription drug plan (as
defined in section 2212(e)(1)).
``(iii) Prescription drug coverage under
certain medigap policies.--Coverage under a
medicare supplemental policy under section 1882
that provides benefits for prescription drugs
(whether or not such coverage conforms to the
standards for packages of benefits under
section 1882(p)(1)), but only if the policy was
in effect on January 1, 2003.
``(iv) State pharmaceutical assistance
program.--Coverage of prescription drugs under
a State pharmaceutical assistance program.
``(v) Veterans' coverage of prescription
drugs.--Coverage of prescription drugs for
veterans under chapter 17 of title 38, United
States Code.
``(D) Requirements.--The procedures established
under subparagraph (A) shall require that an applicable
eligible beneficiary--
``(i) seek to enroll under the program not
later than 63 days after the date that the
beneficiary lost applicable drug coverage; and
``(ii) submit evidence of the date that the
beneficiary lost such coverage along with the
application for enrollment in the program under
this part.
``(4) Study and report on permitting part b only
individuals to enroll in program.--
``(A) Study.--The Secretary shall conduct a study
on the need for rules relating to permitting
individuals who are enrolled under part B of title
XVIII but are not entitled to benefits under part A to
buy into the program under this part.
``(B) Report.--Not later than January 1, 2002, the
Secretary shall submit a report to Congress on the
study conducted under subparagraph (A), together with
any recommendations for legislation that the Secretary
determines to be appropriate as a result of such study.
``(c) Period of Coverage.--
``(1) In general.--Except as provided in paragraph (2) and
subject to paragraph (3), an eligible beneficiary's coverage
under the program under this part shall be effective for the
period provided in section 1838, as if that section applied to
the program under this part.
``(2) Enrollment during open and special enrollment.--
Subject to paragraph (3), an eligible beneficiary who enrolls
under the program under this part pursuant to paragraph (2) or
(3) of subsection (b) shall be entitled to the benefits under
this part beginning on the first day of the month following the
month in which such enrollment occurs.
``(3) Limitation.--Coverage under this part shall not begin
prior to January 1, 2003.
``(d) Program Coverage Terminated by Termination of Coverage Under
Parts A and B of Title XVIII.--
``(1) In general.--In addition to the causes of termination
specified in section 1838, the Secretary shall terminate an
individual's coverage under the program under this part if the
individual is no longer enrolled in both parts A and B of title
XVIII.
``(2) Effective date.--The termination described in
paragraph (1) shall be effective on the effective date of
termination of coverage under part A of title XVIII or (if
earlier) under part B of such title.
``(e) First Enrollment Period.--The Secretary shall ensure that
eligible beneficiaries are permitted to enroll under this part prior to
January 1, 2003, in order to ensure that coverage under this part is
effective as of such date.
``election of a medicare prescription plus plan
``Sec. 2203. (a) In General.--
``(1) Process.--
``(A) In general.--Subject to paragraph (2), the
Secretary shall establish a process through which an
eligible beneficiary who is enrolled under this part
shall make an annual election to enroll in a Medicare
Prescription Plus plan offered by an eligible entity
that serves the geographic area in which the
beneficiary resides.
``(B) Rules.--In establishing the process under
subparagraph (A), the Secretary shall use rules that
are consistent with the rules for enrollment and
disenrollment with a Medicare+Choice plan under section
1851, including--
``(i) annual, coordinated election periods,
which shall be coordinated with such periods
under part C of title XVIII;
``(ii) special election periods under
subsection (e)(4) of section 1851; and
``(iii) the guaranteed issue requirements
under subsection (g) of such section.
``(2) Medicare+choice enrollees.--An eligible beneficiary
who is enrolled under this part and enrolled in a
Medicare+Choice plan offered by a Medicare+Choice organization
shall receive coverage of benefits under this part through such
plan if such plan provides qualified prescription drug
coverage. If the Medicare+Choice plan in which the beneficiary
is enrolled does not provide such coverage, the beneficiary
shall receive such coverage through the election of a Medicare
Prescription Plus plan offered by an eligible entity under this
part.
``(b) Assuring Access to Prescription Drug Coverage in Areas With
No Medicare Prescription Plus Plan or Medicare+Choice Plan Providing
Drug Coverage Available.--The Secretary shall develop procedures for
the provision of the benefits required under section 2205(a) to each
eligible beneficiary that resides in an area where there are no
Medicare Prescription Plus plans or Medicare+Choice plans available
that provide qualified prescription drug coverage.
``beneficiary information
``Sec. 2204. (a) In General.--The Secretary shall conduct
activities that are designed to broadly disseminate information to
eligible beneficiaries (and prospective eligible beneficiaries)
regarding the coverage provided under this part.
``(b) Requirements.--The activities conducted under this subsection
shall be--
``(1) similar to the activities performed by the Secretary
under section 1851(d), including the dissemination of
comparative information; and
``(2) coordinated with the activities performed by the
Secretary under such section and under section 1804.
``outpatient prescription drug and other supplemental benefits
``Sec. 2205. (a) Requirements.--
``(1) In general.--For purposes of this part and part C of
title XVIII, the term `qualified prescription drug coverage'
means either of the following:
``(A) Standard coverage with access to negotiated
prices.--Standard coverage (as defined in subsection
(d)) and access to negotiated prices under subsection
(f).
``(B) Actuarially equivalent coverage with access
to negotiated prices.--Coverage of covered outpatient
drugs which meets the alternative coverage requirements
of subsection (e) and access to negotiated prices under
subsection (f).
``(2) Permitting additional outpatient prescription drug
coverage.--
``(A) In general.--Subject to subparagraph (B) and
section 2209(c)(2), nothing in this part shall be
construed as preventing qualified prescription drug
coverage from including coverage of covered outpatient
drugs that exceeds the coverage required under
paragraph (1).
``(B) Requirement.--An eligible entity may not
offer a Medicare Prescription Plus plan that provides
additional benefits pursuant to subparagraph (A) in an
area unless the eligible entity offering such plan also
offers a Medicare Prescription Plus plan in the area
that only provides the coverage of prescription drugs
that is required under subsection (a)(1).
``(3) Cost control mechanisms.--In providing qualified
prescription drug coverage, the entity offering the Medicare
Prescription Plus plan or the Medicare+Choice plan may use cost
control mechanisms that are customarily used in employer-
sponsored health care plans that offer coverage for outpatient
prescription drugs, including the use of formularies, tiered
copayments, selective contracting with providers of outpatient
prescription drugs, and mail order pharmacies.
``(b) Permitting Benefits in Addition to Outpatient Prescription
Drug Coverage.--
``(1) In general.--Subject to paragraph (2) and section
2209(c)(2), nothing in this part shall be construed as
preventing a Medicare Prescription Plus plan from including
coverage of benefits that are in addition to the benefits
available under title XVIII, including coverage of beneficiary
cost-sharing for benefits under such title.
``(2) Requirements.--An eligible entity may not offer a
Medicare Prescription Plus plan that provides additional
benefits pursuant to paragraph (1) in an area unless--
``(A) the eligible entity offering such plan also
offers a Medicare Prescription Plus plan in the area
that only provides the coverage of prescription drugs
that is required under subsection (a)(1); and
``(B) if the additional benefits include any of the
core group of basic benefits described in section
1882(p)(2)(B), the Medicare Prescription Plus plan
provides all of such core group of basic benefits.
``(c) Application of Secondary Payor Provisions.--The provisions of
section 1852(a)(4) shall apply under this part in the same manner as
they apply under part C of title XVIII.
``(d) Standard Coverage.--For purposes of this part and part C of
title XVIII, the `standard coverage' is coverage of covered outpatient
drugs that meets the following requirements:
``(1) Deductible.--The coverage has an annual deductible--
``(A) for 2003, that is equal to $250; or
``(B) for a subsequent year, that is equal to the
amount specified under this paragraph for the previous
year increased by the percentage specified in paragraph
(5) for the year involved.
Any amount determined under subparagraph (B) that is not a
multiple of $5 shall be rounded to the nearest multiple of $5.
``(2) Limits on cost-sharing.--The coverage has cost-
sharing (for costs above the annual deductible specified in
paragraph (1) and up to the initial coverage limit under
paragraph (3)) that is equal to 50 percent or that is
actuarially consistent (using processes established under
subsection (g)) with an average expected payment of 50 percent
of such costs.
``(3) Initial coverage limit.--Subject to paragraph (4),
the coverage has an initial coverage limit on the maximum costs
that may be recognized for payment purposes (above the annual
deductible)--
``(A) for 2003, that is equal to $2,100; or
``(B) for a subsequent year, that is equal to the
amount specified in this paragraph for the previous
year, increased by the annual percentage increase
described in paragraph (5) for the year involved.
Any amount determined under subparagraph (B) that is not a
multiple of $25 shall be rounded to the nearest multiple of
$25.
``(4) Limitation on out-of-pocket expenditures by
beneficiary.--
``(A) In general.--Notwithstanding paragraph (3),
the coverage provides benefits without any cost-sharing
after the individual has incurred costs (as described
in subparagraph (C)) for covered outpatient drugs in a
year equal to the annual out-of-pocket limit specified
in subparagraph (B).
``(B) Annual out-of-pocket limit.--For purposes of
this part, the `annual out-of-pocket limit' specified
in this subparagraph--
``(i) for 2003, is equal to $6,000; or
``(ii) for a subsequent year, is equal to
the amount specified in the subparagraph for
the previous year, increased by the annual
percentage increase described in paragraph (5)
for the year involved.
Any amount determined under clause (ii) that is not a
multiple of $100 shall be rounded to the nearest
multiple of $100.
``(C) Application.--In applying subparagraph (A)--
``(i) incurred costs shall only include
costs incurred for the annual
deductible (described in paragraph (1)), cost-sharing (described in
paragraph (2)), and amounts for which benefits are not provided because
of the application of the initial coverage limit described in paragraph
(3); but
``(ii) costs shall be treated as incurred
without regard to whether the individual or
another person, including a State program, has
paid for such costs, but shall not be counted
insofar as such costs are covered as benefits
under a Medicare Prescription Plus plan, a
Medicare+Choice plan, or other third-party
coverage.
``(5) Annual percentage increase.--For purposes of this
part, the annual percentage increase specified in this
paragraph for a year is equal to the annual percentage increase
in average per capita aggregate expenditures for covered
outpatient drugs in the United States for medicare
beneficiaries, as determined by the Secretary for the 12-month
period ending in July of the previous year.
``(e) Alternative Coverage Requirements.--A Medicare Prescription
Plus plan or Medicare+Choice plan may provide a different prescription
drug benefit design from the standard coverage described in subsection
(d) so long as the following requirements are met:
``(1) Assuring at least actuarially equivalent coverage.--
``(A) Assuring equivalent value of total
coverage.--The actuarial value of the total coverage
(as determined under subsection (g)) is at least equal
to the actuarial value (as so determined) of standard
coverage.
``(B) Assuring equivalent unsubsidized value of
coverage.--The unsubsidized value of the coverage is at
least equal to the unsubsidized value of standard
coverage. For purposes of this subparagraph, the
unsubsidized value of coverage is the amount by which
the actuarial value of the coverage (as determined
under subsection (g)) exceeds the actuarial value of
the reinsurance subsidy payments under section 2212
with respect to such coverage.
``(C) Assuring standard payment for costs at
initial coverage limit.--The coverage is designed,
based upon an actuarially representative pattern of
utilization (as determined under subsection (g)), to
provide for the payment, with respect to costs incurred
that are equal to the sum of the deductible under
subsection (d)(1) and the initial coverage limit under
subsection (d)(3), of an amount equal to at least such
initial coverage limit multiplied by the percentage
specified in subsection (d)(2).
Benefits other than qualified prescription drug coverage shall
not be taken into account for purposes of this paragraph.
``(2) Limitation on out-of-pocket expenditures by
beneficiaries.--The coverage provides the limitation on out-of-
pocket expenditures by beneficiaries described in subsection
(d)(4).
``(f) Access to Negotiated Prices.--Under qualified prescription
drug coverage offered by an eligible entity or a Medicare+Choice
organization, the entity or organization shall provide beneficiaries
with access to negotiated prices (including applicable discounts) used
for payment for covered outpatient drugs, regardless of the fact that
no benefits may be payable under the coverage with respect to such
drugs because of the application of cost-sharing or an initial coverage
limit (described in subsection (d)(3)). In providing such access, the
eligible entity or Medicare+Choice organization shall issue a card
pursuant to section 2206(b)(1).
``(g) Actuarial Valuation; Determination of Annual Percentage
Increases.--
``(1) Processes.--For purposes of this section, the
Secretary shall establish processes and methods--
``(A) for determining the actuarial valuation of
prescription drug coverage, including--
``(i) an actuarial valuation of standard
coverage and of the reinsurance subsidy
payments under section 2212;
``(ii) the use of generally accepted
actuarial principles and methodologies; and
``(iii) applying the same methodology for
determinations of alternative coverage under
subsection (e) as is used with respect to
determinations of standard coverage under
subsection (d); and
``(B) for determining annual percentage increases
described in subsection (d)(5).
``(2) Use of outside actuaries.--Under the processes under
paragraph (1)(A), eligible entities and Medicare+Choice
organizations may use actuarial opinions certified by
independent, qualified actuaries to establish actuarial values.
``beneficiary protections
``Sec. 2206. (a) Dissemination of Information.--
``(1) General information.--An eligible entity offering a
Medicare Prescription Plus plan shall disclose, in a clear,
accurate, and standardized form to each enrollee at the time of
enrollment and at least annually thereafter, the information
described in section 1852(c)(1) relating to such plan. Such
information includes the following:
``(A) Access to covered outpatient drugs.
``(B) How any formulary used by the entity
functions.
``(C) Co-payments, coinsurance, and deductible
requirements.
``(D) Grievance and appeals procedures.
``(2) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request of an
individual eligible to enroll in a Medicare Prescription Plus
plan, the eligible entity offering such plan shall provide the
information described in section 1852(c)(2) to such individual.
``(3) Response to beneficiary questions.--An eligible
entity offering a Medicare Prescription Plus plan shall have a
mechanism for providing specific information to enrollees upon request,
including information on specific changes in its formulary.
``(4) Claims information.--An eligible entity offering a
Medicare Prescription Plus plan must furnish to enrolled
individuals in a form easily understandable to such individuals
an explanation of benefits (in accordance with section 1806(a)
or in a comparable manner) and a notice of the benefits in
relation to initial coverage limit and annual out-of-pocket
limit for the current year, whenever prescription drug benefits
are provided under this part (except that such notice need not
be provided more often than monthly).
``(b) Access to Covered Outpatient Drugs.--
``(1) Access to negotiated prices for prescription drugs.--
An eligible entity offering a Medicare Prescription Plus plan
shall issue such a card that may be used by an enrolled
beneficiary to assure access to negotiated prices under section
2205(f) for the purchase of prescription drugs for which
coverage is not otherwise provided under the Medicare
Prescription Plus plan.
``(2) Requirements on development and application of
formularies.--Insofar as an eligible entity offering a Medicare
Prescription Plus plan uses a formulary with respect to
qualified prescription drug coverage, the following
requirements must be met:
``(A) Inclusion of drugs in all therapeutic
categories.--The formulary must include drugs within
all therapeutic categories and classes of covered
outpatient drugs (although not necessarily for all
drugs within such categories and classes).
``(B) Appeals and exceptions to application.--The
eligible entity must have, as part of the appeals
process under subsection (e)(2), a process for appeals
for denials of coverage based on such application of
the formulary.
``(c) Cost and Utilization Management.--
``(1) In general.--An eligible entity shall have in place--
``(A) an effective cost and drug utilization
management program, including appropriate incentives to
use generic drugs, when appropriate;
``(B) quality assurance measures to reduce medical
errors and adverse drug interactions, which may include
the measures described in paragraph (2); and
``(C) a program to control fraud, abuse, and waste.
``(2) Measures.--The measures described in this paragraph
are beneficiary education programs, counseling, medication
refill reminders, and special packaging.
``(d) Grievance Mechanism.--An eligible entity shall provide
meaningful procedures for hearing and resolving grievances between the
eligible entity (including any entity or individual through which the
eligible entity provides covered benefits) and enrollees in a Medicare
Prescription Plus plan offered by the eligible entity in accordance
with section 1852(f).
``(e) Coverage Determinations, Reconsiderations, and Appeals.--
``(1) In general.--An eligible entity shall meet the
requirements of section 1852(g) with respect to covered
benefits under the Medicare Prescription Plus plan it offers
under this part in the same manner as such requirements apply
to a Medicare+Choice organization with respect to benefits it
offers under a Medicare+Choice plan under part C of title
XVIII.
``(2) Appeals of formulary determinations.--Consistent with
the requirements of section 1852(g), an eligible entity shall
establish a process for appeals of formulary determinations.
``(f) Confidentiality and Accuracy of Enrollee Records.--An
eligible entity shall meet the requirements of section 1852(h) with
respect to enrollees under this part in the same manner as such
requirements apply to a Medicare+Choice organization with respect to
enrollees under part C of title XVIII.
``(g) Uniform Premium.--An eligible entity shall ensure that the
premium for a Medicare Prescription Plus plan charged under this
section is the same for all individuals enrolled in the plan in the
same service area.
``requirements for entities offering medicare prescription plus plans
``Sec. 2207. (a) General Requirements.--An eligible entity offering
a Medicare Prescription Plus plan shall meet the following
requirements:
``(1) Licensure.--Subject to subsection (c), the entity 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 Medicare Prescription Plus
plan.
``(2) Assumption of full financial risk.--
``(A) In general.--Subject to subparagraph (B), the
entity assumes full financial risk on a prospective
basis for the benefits that it offers under a Medicare
Prescription Plus plan and that is not covered under
reinsurance under section 2212.
``(B) Reinsurance permitted.--The entity may obtain
insurance or make other arrangements for the cost of
coverage provided to any enrolled member under this
part.
``(3) Solvency for unlicensed entities.--In the case of an
eligible entity that is not described in paragraph (1), the
entity shall meet solvency standards established by the
Secretary under subsection (d).
``(b) Contract Requirements.--The Secretary shall not permit an
eligible beneficiary to elect a Medicare Prescription Plus plan offered
by an eligible entity under this part, and the entity shall not be
eligible for payments under section 2210, 2211(e), or 2212, unless the
Secretary has entered into a contract under this subsection with the
entity with respect to the offering of such plan. Such a contract with
an entity may cover more than 1 Medicare Prescription Plus plan. Such
contract shall provide that the entity agrees to comply with the
applicable requirements and standards of this part and the terms and
conditions of payment as provided for in this part.
``(c) Waiver of Certain Requirements To Expand Choice.--
``(1) In general.--In the case of an eligible entity that
seeks to offer a Medicare Prescription Plus plan in a State,
the Secretary shall waive the requirement of subsection (a)(1)
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.
``(2) Grounds for approval.--The grounds for approval under
this paragraph are the grounds for approval described in
subparagraphs (B), (C), and (D) of section 1855(a)(2), and also
include the application by a State of any grounds other than
those required under Federal law.
``(3) Application of medicare+choice pso waiver
procedures.--With respect to an application for a waiver (or a
waiver granted) under this subsection, the provisions of
subparagraphs (E), (F), and (G) of section 1855(a)(2) shall
apply.
``(4) Licensure does not substitute for or constitute
certification.--The fact that an entity is licensed in
accordance with subsection (a)(1) does not deem the eligible
entity to meet other requirements imposed under this part for
an eligible entity.
``(5) References to certain provisions.--For purposes of
this subsection, in applying the provisions of section
1855(a)(2) under this subsection to Medicare Prescription Plus
plans and eligible entities--
``(A) any reference to a waiver application under
section 1855 shall be treated as a reference to a
waiver application under paragraph (1); and
``(B) any reference to solvency standards were
treated as a reference to solvency standards
established under subsection (d).
``(d) Solvency Standards for Non-Licensed Entities.--
``(1) Establishment.--The Secretary shall establish, by not
later than October 1, 2001, financial solvency and capital
adequacy standards that an entity that does not meet the
requirements of subsection (a)(1) must meet to qualify as an
eligible entity under this part.
``(2) Compliance with standards.--An eligible entity that
is not licensed by a State under subsection (a)(1) and for
which a waiver application has been approved under subsection
(c) shall meet solvency and capital adequacy standards
established under paragraph (1). The Secretary shall establish
certification procedures for such eligible entities with
respect to such solvency standards in the manner described in
section 1855(c)(2).
``(e) Other Standards.--The Secretary shall establish by regulation
other standards (not described in subsection (d)) for eligible entities
and Medicare Prescription Plus plans consistent with, and to carry out,
this part. The Secretary shall publish such regulations by October 1,
2001.
``(f) Relation to State Laws.--
``(1) In general.--The standards established under this
section shall supersede any State law or regulation (including
standards described in paragraph (2)) with respect to Medicare
Prescription Plus plans which are offered by eligible entities
under this part to the extent such law or regulation is
inconsistent with such standards, in the same manner as such
laws and regulations are superseded under section 1856(b)(3).
``(2) Standards specifically superseded.--State standards
relating to the following are superseded under this section:
``(A) Benefit requirements.
``(B) Requirements relating to inclusion or
treatment of providers.
``(C) Coverage determinations (including related
appeals and grievance processes).
``(3) Prohibition of state imposition of premium taxes.--No
State may impose a premium tax or similar tax with respect to
premiums paid to eligible entities for Medicare Prescription
Plus plans under this part, or with respect to any payments
made to such an entity by the Secretary under this part.
``submission of medicare prescription plus plans
``Sec. 2208. (a) In General.--Each eligible entity that intends to
offer a Medicare Prescription Plus plan in a year (beginning with 2003)
shall submit to the Secretary, at such time and in such manner as the
Secretary may specify, such information as the Secretary may require,
including the information described in subsection (b).
``(b) Information Described.--The information described in this
subsection includes information on each of the following:
``(1) A description of the benefits under the plan,
including any supplemental benefits pursuant to section
2205(b).
``(2) Information on the actuarial value of the qualified
prescription drug coverage.
``(3) Information on the monthly premium to be charged for
all benefits, including an actuarial certification of--
``(A) the actuarial basis for such premium;
``(B) the portion of such premium attributable to
benefits in excess of standard coverage; and
``(C) the reduction in such premium resulting from
the reinsurance subsidy payments provided under section
2212.
``(4) The service area for the plan.
``(5) Such other information as the Secretary may require
to carry out this part.
``approval of medicare prescription plus plans
``Sec. 2209. (a) In General.--The Secretary shall review the
information filed under section 2208 and shall approve or disapprove
the Medicare Prescription Plus plan.
``(b) Negotiation.--In exercising such authority, the Secretary
shall have the same authority to negotiate the terms and conditions of
the premiums submitted and other terms and conditions of plans as the
Director of the Office of Personnel Management has with respect to
health benefits plans under chapter 89 of title 5, United States Code.
``(c) Special Rules for Approval.--
``(1) Service area.--The Secretary may approve a service
area submitted under section 2208(b)(4) only if the Secretary
finds that--
``(A) the use of such an area is consistent with
the purposes of this part; and
``(B) the service area for the plan is not designed
so as to discriminate based on the health status,
economic status, or prior receipt of health care of
eligible beneficiaries.
``(2) Avoidance of favorable selection.--The Secretary may
approve a Medicare Prescription Plus plan submitted under
section 2208 only if the benefits under such plan--
``(A) include the required benefits under section
2205(a)(1); and
``(B) are not designed in such a manner that the
Secretary finds is likely to result in favorable
selection of eligible beneficiaries.
``payments to medicare prescription plus plans for benefits
``Sec. 2210. (a) In General.--Subject to subsection (b), for each
year (beginning with 2003), the Secretary shall pay to each eligible
entity offering a Medicare Prescription Plus plan in which an eligible
beneficiary is enrolled an amount equal to--
``(1) the full amount of the premium approved under section
2209 on behalf of each eligible beneficiary enrolled in such
plan for the year; minus
``(2) the amount of any fees imposed on the entity pursuant
to section 2213).
``(b) Payment Terms.--Payment under this section to an eligible
entity offering a Medicare Prescription Plus plan shall be made in a
manner determined by the Secretary and based upon the manner in which
payments are made under section 1853(a) (relating to payments to
Medicare+Choice organizations).
``computation and collection of beneficiary share of premium
``Sec. 2211. (a) Computation.--
``(1) Amount.--The annual beneficiary premium for
enrollment in a Medicare Prescription Plus plan providing
coverage under this part for a year shall be an amount equal
to--
``(A) an amount equal to the full amount of the
premium approved under section 2209 for the plan in
which the beneficiary is enrolled; minus
``(B) the amount of the discount determined under
subsection (b).
``(2) Collection of premium amount in same manner as part b
premium.--
``(A) In general.--The amount of the annual
beneficiary premium determined under paragraph (1)
shall be collected and credited to the Medicare
Prescription Drug Account in the same manner as the
monthly premium determined under section 1839 is
collected and credited to the Federal Supplementary
Medical Insurance Trust Fund under section 1840.
``(B) Information necessary for collection.--In
order to carry out subparagraph (A), the Secretary
shall transmit to the Secretary of Social Security--
``(i) at the beginning of each year, the
name, social security account number, and
annual beneficiary premium owed by
each individual enrolled in a Medicare Prescription Plus plan for each
month during the year; and
``(ii) periodically throughout the year,
information to update the information
previously transmitted under this paragraph for
the year.
``(b) Discounts for Required Drug Portion of Premium.--
``(1) Full premium discount and reduction of cost-sharing
for individuals with income below 135 percent of federal
poverty level.--In the case of a low-income individual (as
defined in paragraph (5)(A)) who is determined to have income
that does not exceed 135 percent of the Federal poverty level,
the individual is entitled under this section--
``(A) to a premium discount equal to 100 percent of
the amount described in subsection (c); and
``(B) subject to subsection (d), to the
substitution for the beneficiary cost-sharing described
in paragraphs (1) and (2) of section 2205(d) (up to the
initial coverage limit specified in paragraph (3) of
such section) of amounts that are nominal.
``(2) Sliding scale premium discount for individuals with
income above 135, but below 150 percent, of federal poverty
level.--In the case of a low-income individual who is
determined to have income that exceeds 135 percent, but does
not exceed 150 percent, of the Federal poverty level, the
individual is entitled under this section to a premium discount
determined on a linear sliding scale ranging from 100 percent
of the amount described in subsection (c) for individuals with
incomes at 135 percent of such level to 25 percent of such
amount for individuals with incomes at 150 percent of such
level.
``(3) Partial premium discount for individuals with income
above 150 percent of federal poverty level.--In the case of an
eligible beneficiary who is not a low-income individual, the
beneficiary is entitled under this section to a premium
discount equal to 25 percent of the amount described in
subsection (c).
``(4) Tax treatment of premium discount.--
``(A) In general.--For purposes of the Internal
Revenue Code of 1986, the premium discount determined
under this subsection for an eligible beneficiary for a
year shall be included in the gross income of the
beneficiary for the year.
``(B) Statement of taxable amount.--Not later than
January 31 of each year (beginning with 2004), the
Secretary shall provide--
``(i) each eligible beneficiary enrolled
under this part with a statement that describes
the amount of the discount that is required to
be included in the gross income of the
beneficiary for the previous year pursuant to
subparagraph (A); and
``(ii) the Secretary of the Treasury with
the information described in clause (i).
``(5) Determination of eligibility.--
``(A) Low-income individual defined.--For purposes
of this section, subject to subparagraph (D), the term
`low-income individual' means an individual who--
``(i) is eligible to enroll, and has
enrolled, under this part;
``(ii) has income below 150 percent of the
Federal poverty line; and
``(iii) meets the resources requirement
described in section 1905(p)(1)(C).
``(B) Determinations.--The determination of whether
an individual residing in a State is a low-income
individual and the amount of such individual's income
shall be determined under the State medicaid plan for
the State under section 1935(a). In the case of a State
that does not operate such a medicaid plan (either
under title XIX or under a statewide waiver granted
under section 1115), such determination shall be made
under arrangements made by the Secretary.
``(C) Income determinations.--For purposes of
applying this section--
``(i) income shall be determined in the
manner described in section 1905(p)(1)(B); and
``(ii) the term `Federal poverty line'
means the official poverty line (as defined by
the Office of Management and Budget, and
revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size
involved.
``(D) Treatment of territorial residents.--In the
case of an individual who is not a resident of the 50
States or the District of Columbia, the individual is
not eligible to be a low-income individual but may be
eligible for financial assistance with prescription
drug expenses under section 1935(e).
``(c) Premium Discount Amount.--The premium discount amount
described in this subsection for an eligible beneficiary residing in an
area is an amount equal to--
``(1) in the case of an individual enrolled in a Medicare
Prescription Plus plan, the actuarial value of the standard
drug coverage provided under the plan (determined without
regard to any premium discount under this section); and
``(2) in the case of an individual enrolled in a
Medicare+Choice plan that provides qualified prescription drug
coverage, the standard premium computed under section
1851(j)(5)(A)(iii).
``(d) Rules in Applying Cost-Sharing Subsidies.--
``(1) In general.--In applying subsection (b)(1)(B)--
``(A) the maximum amount of subsidy that may be
provided with respect to an enrollee for a year may not
exceed 95 percent of the maximum cost-sharing described
in such subsection that may be incurred for standard
coverage;
``(B) the Secretary shall determine what is
`nominal' taking into account the rules applied under
section 1916(a)(3); and
``(C) nothing in this part shall be construed as
preventing a plan or provider from waiving or reducing
the amount of cost-sharing otherwise applicable.
``(2) Limitation on charges.--In the case of a low-income
individual receiving cost-sharing subsidies under subsection
(b)(1)(B), the eligible entity may not charge more than a
nominal amount in cases in which the cost-sharing subsidy is
provided under such subsection.
``(e) Administration of Cost-Sharing Program.--The Secretary shall
provide a process whereby, in the case of a low-income individual who
is eligible for reduced cost-sharing under subsection (b)(1)(B) and is
enrolled in a Medicare Prescription Plus plan or a Medicare+Choice plan
under which qualified prescription drug coverage is provided--
``(1) the Secretary provides for a notification of the
eligible entity or Medicare+Choice organization involved that
the individual is eligible for such reduced cost-sharing;
``(2) the entity or organization involved reduces the cost-
sharing pursuant to this section and submits to the Secretary
information on the amount of such reduction; and
``(3) the Secretary periodically and on a timely basis
reimburses the entity or organization for the amount of such
reductions.
The reimbursement under paragraph (3) may be computed on a capitated
basis, taking into account the actuarial value of the reductions and
with appropriate adjustments to reflect differences in the risks
actually involved.
``(f) Relation to Medicaid Program.--
``(1) In general.--For provisions providing for eligibility
determinations, and additional financing, under the medicaid
program, see section 1935.
``(2) Medicaid providing wrap around benefits.--The
coverage provided under this part is primary payor to benefits
for prescribed drugs provided under the medicaid program under
title XIX.
``additional prescription drug subsidies through reinsurance
``Sec. 2212. (a) Reinsurance Subsidy Payment.--In order to reduce
premium levels applicable to qualified prescription drug coverage for
all medicare beneficiaries, to reduce adverse selection among Medicare
Prescription Plus plans and Medicare+Choice plans that provide
qualified prescription drug coverage, and to promote the participation
of eligible entities under this part, the Secretary shall provide in
accordance with this section for payment to a qualifying entity (as
defined in subsection (b)) of the reinsurance payment amount (as
defined in subsection (c)) for excess costs incurred in providing
qualified prescription drug coverage--
``(1) for individuals enrolled with a Medicare Prescription
Plus plan under this part;
``(2) for individuals enrolled with a Medicare+Choice plan
that provides qualified prescription drug coverage under part C
of title XVIII; and
``(3) for medicare secondary payer eligible individuals
(described in subsection (e)(3)(D)) who are enrolled in a
qualified retiree prescription drug plan.
This section constitutes budget authority in advance of appropriations
Acts and represents the obligation of the Secretary to provide for the
payment of amounts provided under this section.
``(b) Qualifying Entity Defined.--For purposes of this section, the
term `qualifying entity' means any of the following that has entered
into an agreement with the Secretary to provide the Secretary with such
information as may be required to carry out this section:
``(1) An eligible entity offering a Medicare Prescription
Plus plan under this part.
``(2) A Medicare+Choice organization that provides
qualified prescription drug coverage under a Medicare+Choice
plan under part C of title XVIII.
``(3) The sponsor of a qualified retiree prescription drug
plan (as defined in subsection (e)).
``(c) Reinsurance Payment Amount.--
``(1) In general.--Subject to subsection (e)(2) and
paragraph (4), the reinsurance payment amount under this
subsection for a qualified beneficiary (as defined in
subsection (f)(1)) for a coverage year (as defined in
subsection (f)(2)) is an amount equal to 80 percent of the
allowable costs attributable to the portion of the individual's
gross covered prescription drug costs for the year that exceeds
$7,050.
``(2) Allowable costs.--For purposes of this section, the
term `allowable costs' means, with respect to gross covered
prescription drug costs under a plan described in subsection
(b) offered by a qualifying entity, the part of such costs that
are actually paid under the plan, but in no case more than the
part of such costs that would have been paid under the plan if
the prescription drug coverage under the plan were standard
coverage.
``(3) Gross covered prescription drug costs.--For purposes
of this section, the term `gross covered prescription drug
costs' means, with respect to an enrollee with a qualifying
entity under a plan described in subsection (b) during a
coverage year, the costs incurred under the plan for covered
prescription drugs dispensed during the year, including costs
relating to the deductible, whether paid by the enrollee or
under the plan, regardless of whether the coverage under the
plan exceeds standard coverage and regardless of when the
payment for such drugs is made.
``(4) Indexing dollar amount.--
``(A) Amount for 2003.--The dollar amount applied
under paragraph (1) for 2003 shall be the dollar amount
specified in such paragraph.
``(B) For 2004.--The dollar amount applied under
paragraph (1) for 2004 shall be the dollar amount
specified in such paragraph increased by the annual
percentage increase described in section 2205(d)(5) for
2004.
``(C) For subsequent years.--The dollar amount
applied under paragraph (1) for a year after 2004 shall
be the dollar amount (under this paragraph) applied
under paragraph (1) for the preceding year increased by
the annual percentage increase described in section
2205(d)(5) for the year involved.
``(D) Rounding.--Any amount, determined under the
preceding provisions of this paragraph for a year,
which is not a multiple of $5 shall be rounded to the
nearest multiple of $5.
``(d) Payment Methods.--
``(1) In general.--Payments under this section shall be
based on such a method as the Secretary determines. The
Secretary may establish a payment method by which interim
payments of amounts under this section are made during a year
based on the Secretary's best estimate of amounts that will be
payable after obtaining all of the information.
``(2) Source of payments.--Payments under this section
shall be made from the Medicare Prescription Drug Account.
``(e) Qualified Retiree Prescription Drug Plan Defined.--
``(1) In general.--For purposes of this section, the term
`qualified retiree prescription drug plan' means employment-
based retiree health coverage (as defined in paragraph (3)(A))
if, with respect to an individual enrolled (or eligible to be
enrolled) under this part who is covered under the plan, the
following requirements are met:
``(A) Assurance.--The sponsor of the plan shall
annually attest, and provide such assurances as the
Secretary may require, that the coverage meets the
requirements for qualified prescription drug coverage.
``(B) Audits.--The sponsor (and the plan) shall
maintain, and afford the Secretary access to, such
records as the Secretary may require for purposes of
audits and other oversight activities necessary to
ensure the adequacy of prescription drug coverage, the
accuracy of payments made, and such other matters as
may be appropriate.
``(C) Other requirements.--The sponsor of the plan
shall comply with such other requirements as the
Secretary finds necessary to administer the program
under this section.
``(2) Limitation on benefit eligibility.--No payment shall
be provided under this section with respect to an individual
who is enrolled under a qualified retiree prescription drug
plan unless the individual is a medicare secondary payer
eligible individual who--
``(A) is covered under the plan; and
``(B) is eligible to obtain qualified prescription
drug coverage under this part but did not elect such
coverage (either through a Medicare Prescription Plus
plan or through a Medicare+Choice plan).
``(3) Definitions.--As used in this section:
``(A) Employment-based retiree health coverage.--
The term `employment-based retiree health coverage'
means health insurance or other coverage of health care
costs for medicare secondary payer eligible individuals
(or for such individuals and their spouses and
dependents) based on their status as former employees
or labor union members.
``(B) Employer.--The term `employer' has the
meaning given such term by section 3(5) of the Employee
Retirement Income Security Act of 1974 (except that
such term shall include only employers of 2 or more
employees).
``(C) Sponsor.--The term `sponsor' means a plan
sponsor, as defined in section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.
``(D) Medicare secondary payer individual.--The
term `medicare secondary payer eligible individual'
means, with respect to a plan, an individual who is
covered under the plan and with respect to whom the
plan is not a primary plan (as defined in section
1862(b)(2)(A)).
``(f) General Definitions.--For purposes of this section:
``(1) Qualified beneficiary.--The term `qualified
beneficiary' means an individual who--
``(A) is enrolled with a Medicare Prescription Plus
plan under this part;
``(B) is enrolled with a Medicare+Choice plan that
provides qualified prescription drug coverage under
part C of title XVIII; or
``(C) is covered as a medicare secondary payer
eligible individual under a qualified retiree
prescription drug plan.
``(2) Coverage year.--The term `coverage year' means a
calendar year in which covered outpatient drugs are dispensed
if a claim for payment is made under the plan for such drugs,
regardless of when the claim is paid.
``plan fees for administrative costs
``Sec. 2213. (a) In General.--The Secretary may levy on Medicare
Prescription Plus plans and Medicare+Choice plans that provide drug
coverage pursuant to this part an assessment sufficient to pay the
estimated expenses of the Secretary for administering the program under
this part.
``(b) Deposits and Use.--The assessments described in subsection
(a) shall be--
``(1) deposited into the Medicare Prescription Drug
Account; and
``(2) available for administering the program under this
part without regard to amounts provided for in advance by
appropriations Acts.
``medicare prescription drug account
``Sec. 2214. (a) Establishment.--There is created within the
Federal Supplementary Medical Insurance Trust Fund established under
section 1841 an account to be known as the `Medicare Prescription Drug
Account'.
``(b) Amounts in Account.--
``(1) In general.--The Medicare Prescription Drug Account
shall consist of--
``(A) such amounts as may be deposited in, or
appropriated to, such account as provided in this part;
and
``(B) such gifts and bequests as may be made as
provided in section 201(i)(1).
``(2) Separation of funds.--Funds provided under this part
to the Medicare Prescription Drug Account shall be kept
separate from all other funds within the Federal Supplemental
Medical Insurance Trust Fund.
``(c) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Medicare Prescription Drug Account such
amounts as the Secretary certifies are necessary to make the
payments provided for by this part, and the payments with
respect to administrative expenses in accordance with section
201(g).
``(2) Transfers to medicaid account for increased
administrative costs.--The Managing Trustee shall transfer from
time to time from the Account to the Grants to States for
Medicaid account amounts the Secretary certifies are
attributable to increases in payment resulting from the
application of a higher Federal matching percentage under
section 1935(b).
``(d) Deposits Into Account.--
``(1) Medicaid transfer.--There is hereby transferred to
the Account, from amounts appropriated for Grants to States for
Medicaid, amounts equivalent to the aggregate amount of the
reductions in payments under section 1903(a)(1) attributable to
the application of section 1935(c).
``(2) Appropriations to cover government contributions.--
There are authorized to be appropriated from time to time, out
of any moneys in the Treasury not otherwise appropriated, to
the Account, an amount equivalent to the amount of payments
made from the Account, reduced by--
``(1) the amount transferred to the Account under
paragraph (1);
``(2) the beneficiary premiums collected and
credited to the account under section 2211(b)(2); and
``(3) fees collected and credited to the account
under section 2213.
``secondary payer provisions
``Sec. 2215. The provisions of section 1862(b) shall apply to the
benefits provided under this part.
``definitions; treatment of references to provisions in medicare+choice
program
``Sec. 2216. (a) Definitions.--In this part:
``(1) Covered outpatient drug.--
``(A) In general.--Except as provided in this
subparagraph (B), the term `covered outpatient drug'
means--
``(i) a drug that may be dispensed only
upon a prescription and that is described in
clause (i) or (ii) of section 1927(k)(2)(A); or
``(ii) a biological product or insulin
described in subparagraph (B) or (C) of such
section.
``(B) Exclusions.--
``(i) In general.--The term `covered
outpatient drug' does not include drugs or
classes of drugs, or their medical uses, which
may be excluded from coverage or otherwise
restricted under section 1927(d)(2), other than
subparagraph (E) thereof (relating to smoking
cessation agents).
``(ii) Avoidance of duplicate coverage.--A
drug prescribed for an individual that would
otherwise be a covered outpatient drug under
this part shall not be so considered if payment
for such drug is available under part A or B of
title XVIII (but shall be so considered if such
payment is not available because benefits under
part A or B of title XVIII have been
exhausted), without regard to whether the
individual is entitled to benefits under such
part A or enrolled under such part B.
``(3) Eligible beneficiary.--The term `eligible
beneficiary' means an individual that is entitled to benefits
under part A of title XVIII and enrolled under part B of such
title.
``(4) Eligible entity.--The term `eligible entity' means
any risk-bearing entity that the Secretary determines to be
appropriate to provide eligible beneficiaries with the benefits
under a Medicare Prescription Plus plan, including--
``(A) a pharmaceutical benefit management company;
``(B) a wholesale or retail pharmacist delivery
system;
``(C) an insurer (including an insurer that offers
medicare supplemental policies under section 1882);
``(D) another entity; or
``(E) any combination of the entities described in
subparagraphs (A) through (D).
``(5) Initial coverage limit.--The term `initial coverage
limit' means the limit as established under section 2205(d)(3),
or, in the case of coverage that is not standard coverage, the
comparable limit (if any) established under the coverage.
``(6) Medicare+choice organization; medicare+choice plan.--
The terms `Medicare+Choice organization' and `Medicare+Choice
plan' have the meanings given such terms in subsections (a)(1)
and (b)(1), respectively, of section 1859 (relating to
definitions relating to Medicare+Choice organizations and
plans).
``(7) Medicare prescription drug account.--The term
`Medicare Prescription Drug Account' means the Medicare
Prescription Drug Account established under section 2214 and
located within the Federal Supplementary Medical Insurance
Trust Fund established under section 1841.
``(8) Medicare prescription plus plan.--The term `Medicare
Prescription Plus plan' means a health benefits plan that the
Secretary has approved under section 2209.
``(9) Standard coverage.--The term `standard coverage'
means the coverage described in section 2205(d).
``(b) Application of Medicare+Choice Provisions Under This Part.--
For purposes of applying provisions of part C of title XVIII under this
part with respect to a Medicare Prescription Plus plan and an eligible
entity, unless otherwise provided in this part such provisions shall be
applied as if--
``(1) any reference to a Medicare+Choice plan included a
reference to a Medicare Prescription Plus plan;
``(2) any reference to a provider-sponsored organization
included a reference to an eligible entity;
``(3) any reference to a contract under section 1857
included a reference to a contract under section 2207(b); and
``(4) any reference to part C of title XVIII included a
reference to this part.''.
(b) Submission of Legislative Proposal.--Not later than 6 months
after the date of enactment of this Act, the Secretary of Health and
Human Services shall submit to the appropriate committees of Congress a
legislative proposal providing for such technical and conforming
amendments in the law as are required by the provisions of this Act.
SEC. 202. AMENDMENTS TO FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST
FUND.
Section 1841 of the Social Security Act (42 U.S.C. 1395t) is
amended--
(1) in the last sentence of subsection (a)--
(A) by striking ``and'' after ``section
201(i)(1)''; and
(B) by inserting before the period the following:
``, and such amounts as may be deposited in, or
appropriated to, the Medicare Prescription Drug Account
established by section 2214'';
(2) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under the
Prescription Drug and Supplemental Benefit Program under title
XXII (in which case the payments shall come from the Medicare
Prescription Drug Account in the Supplementary Medical
Insurance Trust Fund),'';
(3) in the first sentence of subsection (h), by inserting
``(or the Secretary by reason of section 2215 (in which case
the payments shall come from the Medicare Prescription Drug
Account within such Trust Fund))'' after ``Human Services'';
and
(4) in the first sentence of subsection (i), by inserting
``(or the Secretary by reason of section 2215 (in which case
the payments shall come from the Medicare Prescription Drug
Account within such Trust Fund))'' after ``Human Services''.
SEC. 203. PRESCRIPTION DRUG COVERAGE UNDER THE MEDICARE+CHOICE PROGRAM.
(a) In General.--Section 1851 of the Social Security Act (42 U.S.C.
1395w-21) is amended by adding at the end the following new subsection:
``(j) Availability of Prescription Drug Benefits.--
``(1) In general.--A Medicare+Choice organization may not
offer prescription drug coverage (other than that required
under parts A and B) to an enrollee under a Medicare+Choice
plan unless such drug coverage is at least qualified
prescription drug coverage and unless the requirements of this
subsection with respect to such coverage are met.
``(2) Compliance with additional beneficiary protections.--
With respect to the offering of qualified prescription drug
coverage by a Medicare+Choice organization under a
Medicare+Choice plan, the organization and plan shall meet the
requirements of section 2206, including requirements relating
to information dissemination and grievance and appeals, in the
same manner as they apply to an eligible entity and a Medicare
Prescription Plus plan under title XXII. The Secretary shall
waive such requirements to the extent the Administrator
determines that such requirements duplicate requirements otherwise
applicable to the organization or plan under this part.
``(3) Treatment of coverage.--Except as provided in this
subsection, qualified prescription drug coverage offered under
this subsection shall be treated under this part in the same
manner as supplemental health care benefits described in
section 1852(a)(3)(A).
``(4) Availability of cost-sharing subsidies for low-income
enrollees and reinsurance subsidy payments for organizations.--
For provisions--
``(A) providing cost-sharing subsidies to low-
income individuals receiving qualified prescription
drug coverage through a Medicare+Choice plan, see
section 2211; and
``(B) providing a Medicare+Choice organization with
reinsurance subsidy payments for providing qualified
prescription drug coverage under this part, see section
2212.
``(5) Specification of separate and standard premium.--
``(A) In general.--For purposes of applying section
1854 and determining the premium discount under section
2211(c) with respect to qualified prescription drug
coverage offered under this subsection under a plan,
the Medicare+Choice organization shall compute and
publish the following:
``(i) Separate prescription drug premium.--
A premium for prescription drug benefits that
constitutes qualified prescription drug coverage that is separate from
other coverage under the plan.
``(ii) Portion of coverage attributable to
standard benefits.--The ratio of the actuarial
value of standard coverage to the actuarial
value of the qualified prescription drug
coverage offered under the plan.
``(iii) Portion of premium attributable to
standard benefits.--A standard premium equal to
the product of the premium described in clause
(i) and the ratio under clause (ii).
The premium under clause (i) shall be computed without
regard to any reduction in the premium permitted under
subparagraph (B).
``(B) Reduction of premiums allowed.--Nothing in
this subsection shall be construed as preventing a
Medicare+Choice organization from reducing the amount
of a premium charged for prescription drug coverage
because of the application of subsections (f)(1)(A) and
(i)(2)(A) of section 1854 to other coverage.
``(6) Transition in initial enrollment period.--
Notwithstanding any other provision of this part, the annual,
coordinated election period under subsection (e)(3)(B) for 2003
shall be the 6-month period beginning with November 2002.
``(7) Qualified prescription drug coverage; standard
coverage.--For purposes of this part, the terms `qualified
prescription drug coverage' and `standard coverage' have the
meanings given such terms in section 2205.''.
(b) Conforming Amendments.--Section 1851(a)(1) of such Act (42
U.S.C. 1395w-21(a)(1)) is amended--
(1) by inserting ``(other than qualified prescription drug
benefits)'' after ``benefits'';
(2) by striking the period at the end of subparagraph (B)
and inserting a comma; and
(3) by adding at the end the following flush language:
``and may elect qualified prescription drug coverage in
accordance with title XXII.''.
(c) Effective Date.--The amendments made by this section apply to
coverage provided on or after January 1, 2003.
SEC. 205. MEDIGAP PROVISIONS.
(a) In General.--Notwithstanding any other provision of law, no new
medicare supplemental policy that provides coverage of expenses for
prescription drugs may be issued under section 1882 of the Social
Security Act on or after January 1, 2003, to an individual unless it
replaces a medicare supplemental policy that was issued to that
individual and that provided some coverage of expenses for prescription
drugs.
(b) Issuance of Substitute Policies if Obtaining Prescription Drug
Coverage Through Medicare.--
(1) In general.--The issuer of a medicare supplemental
policy--
(A) may not deny or condition the issuance or
effectiveness of a medicare supplemental policy that
has a benefit package classified as ``A'', ``B'',
``C'', ``D'', ``E'', ``F'', or ``G'' (under the
standards established under subsection (p)(2) of
section 1882 of the Social Security Act (42 U.S.C.
1395ss)) and that is offered and is available for
issuance to new enrollees by such issuer;
(B) may not discriminate in the pricing of such
policy, because of health status, claims experience,
receipt of health care, or medical condition; and
(C) may not impose an exclusion of benefits based
on a preexisting condition under such policy,
in the case of an individual described in paragraph (2) who
seeks to enroll under the policy not later than 63 days after
the date of the termination of enrollment described in such
paragraph and who submits evidence of the date of termination
or disenrollment along with the application for such medicare
supplemental policy.
(2) Individual covered.--An individual described in this
paragraph is an individual who--
(A) enrolls in a Medicare Prescription Plus plan
under title XXII of the Social Security Act (as added
by section 201); and
(B) at the time of such enrollment was enrolled and
terminates enrollment in a medicare supplemental policy
which has a benefit package classified as ``H'', ``I'',
or ``J'' under the standards referred to in paragraph
(1)(A) or terminates enrollment in a policy to which
such standards do not apply but which provides benefits
for prescription drugs.
(3) Enforcement.--The provisions of paragraph (1) shall be
enforced as though such provisions were included in section
1882(s) of the Social Security Act (42 U.S.C. 1395ss(s)).
(4) Definitions.--For purposes of this subsection, the term
``medicare supplemental policy'' has the meaning given such
term in section 1882(g) of the Social Security Act (42 U.S.C.
1395ss(g)).
(c) Medigap Protections for Individuals Who Lose Medicare
Prescription Plus Plan Coverage.--Section 1882 of the Social Security
Act (42 U.S.C. 1395ss) is amended--
(1) in subsection (d)(3)--
(A) in subparagraph (A), by adding at the end the
following:
``(ix) Nothing in this subparagraph shall be construed as
preventing the sale of 1 medicare supplemental policy and 1 Medicare
Prescription Plus plan to an individual, except that the sale of such a
policy or plan may not duplicate any health benefits under any policy
or plan owned by the individual.''; and
(B) in subparagraph (B)(iii)--
(i) in subclause (I), by striking ``(II)
and (III)'' and inserting ``(II), (III), and
(IV)'';
(ii) by redesignating subclause (III) as
subclause (IV); and
(iii) by inserting after subclause (II) the
following:
``(III) If the statement required by clause (i) is obtained and
indicates that the individual is enrolled in 1 medicare supplemental
policy or 1 Medicare Prescription Plus plan, the sale of another policy
or plan is not in violation of clause (i) if such other policy or plan
does not duplicate health benefits under the policy or plan in which
the individual is enrolled.'';
(2) in subsection (g)(1), by inserting ``, Medicare
Prescription Plus plan,'' after ``Medicare+Choice plan''; and
(3) in subsection (s)(3)--
(A) in subparagraph (B)--
(i) in clause (ii), by inserting ``is
enrolled with an eligible entity under a
Medicare Prescription Plus plan under title
XXII or'' after ``section 1851(e)(4) or the
individual'';
(ii) in clause (v)(II), by inserting ``with
any eligible entity under a Medicare
Prescription Plus plan under title XXII,''
after ``under part C,''; and
(iii) in clause (vi), by inserting ``, in a
Medicare Prescription Plus plan under title
XXII,'' after ``under part C''; and
(B) in subparagraph (E)--
(i) in clause (i), by inserting ``(or, in
the case of an individual enrolled under a
Medicare Prescription Plus plan, the date on
which the individual was notified by the
eligible entity of the impending termination or
discontinuance of the Medicare Prescription
Plus plan) after ``it offers in the area''; and
(ii) in clause (ii), by inserting ``or
Medicare Prescription Plus plan'' after
``Medicare+Choice plan''.
<all>