[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1185 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1185
To amend title XVIII of the Social Security Act to assure access of
medicare beneficiaries to prescription drug coverage through the SPICE
drug benefit program.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 17, 2001
Mr. Wyden (for himself and Ms. Snowe) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to assure access of
medicare beneficiaries to prescription drug coverage through the SPICE
drug benefit 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 ``Seniors
Prescription Insurance Coverage Equity (SPICE) Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. SPICE drug benefit program.
``Part D--SPICE Drug Benefit Program
``Sec. 1860A. Establishment of SPICE drug benefit program.
``Sec. 1860B. SPICE prescription drug coverage.
``Sec. 1860C. Enrollment under SPICE drug benefit program.
``Sec. 1860D. Enrollment in a policy or plan.
``Sec. 1860E. Medicare Drug Plan for Noncompetitive Areas.
``Sec. 1860F. Selection of private entities to provide basic
coverage.
``Sec. 1860G. Providing information to beneficiaries.
``Sec. 1860H. Premiums.
``Sec. 1860I. Approval for entities offering SPICE prescription
drug coverage.
``Sec. 1860J. Payments to entities.
``Sec. 1860K. Financial assistance to obtain SPICE prescription
drug coverage.
``Sec. 1860L. Employer incentive program for employment-based
retiree drug coverage.
``Sec. 1860M. SPICE Board.
``Sec. 1860N. SPICE Prescription Drug Account in the Federal
Supplementary Medical Insurance Trust
Fund.''.
Sec. 3. SPICE prescription drug coverage under Medicare+Choice plans.
Sec. 4. Medigap revisions and transition provisions.
Sec. 5. Provision of information on SPICE drug benefit program under
health insurance information, counseling,
and assistance grants.
Sec. 6. Personal Digital Access Technology Demonstration Project.
SEC. 2. SPICE DRUG BENEFIT PROGRAM.
(a) In General.--Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) is amended by redesignating part D as part E and by
inserting after part C the following new part:
``Part D--SPICE Drug Benefit Program
``establishment of spice drug benefit program
``Sec. 1860A. (a) Access to SPICE Prescription Drug Coverage.--
``(1) In general.--Beginning in 2003, the SPICE Board
(established under section 1860M) shall provide for a SPICE
drug benefit program under which all eligible medicare
beneficiaries who voluntarily enroll under this part shall be
entitled to obtain SPICE prescription drug coverage (meeting
the terms and conditions under this part) as follows:
``(A) Medicare+choice plan.--If the eligible
medicare beneficiary is eligible to enroll in a
Medicare+Choice plan, the beneficiary may enroll in the
plan and obtain SPICE prescription drug coverage (as
defined in section 1860B(a)) through such plan.
``(B) Medicare supplemental policy.--If the
eligible medicare beneficiary is not enrolled in a
Medicare+Choice plan but is enrolled in a medicare
supplemental policy, the beneficiary may--
``(i) obtain SPICE prescription drug
coverage through such policy; or
``(ii) waive basic coverage (as defined in
section 1860B(b)) pursuant to section
1860C(a)(3) and obtain financial assistance
pursuant to section 1860K(c) for stop-loss
coverage (as defined in section 1860B(c))
provided under such policy.
``(C) Medicare drug plan for noncompetitive
areas.--If the eligible medicare beneficiary is not
enrolled in a Medicare+Choice plan, a medicare
supplemental policy, or a basic coverage plan under
section 1860F, and there is a Medicare Drug Plan for
Noncompetitive Areas available in the area in which the
beneficiary resides, the beneficiary may obtain SPICE
prescription drug coverage under this part through
enrollment in such plan.
``(D) Basic coverage only through a private
entity.--If the eligible medicare beneficiary is not
enrolled in a Medicare+Choice plan, a medicare
supplemental policy, or a Medicare Drug Plan for
Noncompetitive Areas, the beneficiary may obtain basic
coverage (including financial assistance for such
coverage under section 1860K(b) and access to
negotiated prices under section 1860B(d)) through
enrollment in a plan offered by a private entity with a
contract to offer such plan under section 1860F.
``(2) Voluntary nature of program.--Nothing in this part
shall be construed as requiring an eligible medicare
beneficiary to enroll in the program established under this
part.
``(3) Administration of benefits.--In providing SPICE
prescription drug coverage to an eligible medicare beneficiary
under this part, an entity offering a medicare supplemental
policy, a Medicare+Choice plan, a Medicare Drug Plan for
Noncompetitive Areas, or a basic coverage plan under section
1860F may--
``(A) directly administer the benefits under such
coverage; or
``(B) contract with an entity that meets the
applicable requirements under this part to administer
such benefits.
``(b) Access to Alternative Prescription Drug Coverage.--In the
case of an eligible medicare beneficiary who has creditable
prescription drug coverage (as defined in section 1860C(b)(4)) under a
policy or plan, such beneficiary--
``(1) may continue to receive such coverage under such
policy or plan and not enroll under this part; and
``(2) pursuant to section 1860C(b)(3), is permitted to
subsequently enroll under this part and obtain SPICE
prescription drug coverage without any penalty if such policy
or plan terminated, ceased to provide, or substantially reduced
the value of the prescription drug coverage under such plan or
policy.
``(c) Financial Assistance.--
``(1) Under spice drug benefit program.--Under the SPICE
drug benefit program, the SPICE Board shall provide financial
assistance, with such assistance varying depending upon the
income of such beneficiary, for any eligible medicare
beneficiary enrolled under this part who voluntarily obtains--
``(A) basic coverage (pursuant to subsection (b) of
section 1860K); or
``(B) stop-loss coverage (pursuant to subsection
(c) of such section).
``(2) Assistance to group health plans that provide
prescription drug coverage to eligible medicare
beneficiaries.--Pursuant to the Employer Incentive Program
established under section 1860L, the SPICE Board shall make
payments to employers and other sponsors of employment-based
health care coverage to encourage such employers and sponsors
to provide adequate prescription drug coverage to retired
individuals.
``(d) Eligible Medicare Beneficiary Defined.--For purposes of this
part, the term `eligible medicare beneficiary' means an individual who
is entitled to benefits under part A and enrolled under part B.
``(e) Financing.--The costs of providing benefits under this part
shall be payable from the SPICE Prescription Drug Account (as
established under section 1860N) within the Federal Supplementary
Medical Insurance Trust Fund under section 1841.
``spice prescription drug coverage
``Sec. 1860B. (a) In General.--For purposes of this part, the term
`SPICE prescription drug coverage' means coverage consisting of the
following:
``(1) Basic coverage.--Basic coverage (as defined in
subsection (b)) and access to negotiated prices under
subsection (d), except as waived pursuant to section
1860C(a)(3).
``(2) Stop-loss coverage.--Stop-loss coverage (as defined
in subsection (c)).
``(b) Basic Coverage.--For purposes of this part, the term `basic
coverage' means coverage of covered outpatient drugs (as defined in
subsection (e)) that meets the following requirements:
``(1) Deductible.--The coverage has an annual deductible--
``(A) for 2003, that is equal to $350; 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
(4) 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) Coinsurance.--The coverage has coinsurance (for the
cost of a covered outpatient drug above the annual deductible
specified in paragraph (1) for the year and up to the initial
coverage limit specified in paragraph (3) for the year) that
does not exceed 25 percent of the cost of such drug.
``(3) Initial coverage limit.--
``(A) In general.--The coverage has an initial
coverage limit for covered outpatient drugs in a year
that is reached when the eligible medicare beneficiary
has incurred the applicable amount of out-of-pocket
expenses in the year.
``(B) Applicable amount defined.--For purposes of
subparagraph (A), the term `applicable amount' means--
``(i) for 2003, $3,000; or
``(ii) for a subsequent year, the amount
specified in this subparagraph for the previous
year, increased by the annual percentage
increase described in paragraph (4) for the
year involved.
Any amount determined under clause (ii) that is not a
multiple of $25 shall be rounded to the nearest
multiple of $25.
``(C) Application.--In applying paragraph (1)--
``(i) incurred out-of-pocket expenses shall
only include expenses incurred for the annual
deductible (described in paragraph (1)) and
coinsurance (described in paragraph (2)); and
``(ii) such expenses shall be treated as
incurred without regard to whether the
individual or another person, including a State
program or other third-party coverage, has paid
for such expenses.
``(4) 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 benefits under
this title, as determined by the Secretary for the 12-month
period ending in July of the previous year.
``(c) Stop-Loss Coverage.--For purposes of this part, the term
`stop-loss coverage' means coverage of covered outpatient drugs in a
year without any coinsurance after the eligible medicare beneficiary
has reached the initial coverage limit specified in subsection (b)(3)
for the year.
``(d) Access to Negotiated Prices.--Under SPICE prescription drug
coverage offered under a policy or plan, the entity offering the policy
or plan (or the administering entity pursuant to subsection (a)(3)(B))
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 the
annual deductible.
``(e) Covered Outpatient Drugs Defined.--
``(1) In general.--Except as provided in this subsection,
for purposes of this part, the term `covered outpatient drug'
means--
``(A) a drug that may be dispensed only upon a
prescription and that is described in subparagraph
(A)(i) or (A)(ii) of section 1927(k)(2); or
``(B) a biological product described in clauses (i)
through (iii) of subparagraph (B) of such section or
insulin described in subparagraph (C) of such section,
and such term includes any use of a covered outpatient drug for
a medically accepted indication (as defined in section
1927(k)(6)).
``(2) Exclusions.--
``(A) In general.--Such term 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) and except to
the extent otherwise specifically provided by the SPICE
Board with respect to a drug in any of such classes.
``(B) 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 or would be available under part B but for
the application of a deductible under such part (but
shall be so considered if such payment is not available
because benefits under part A or B have been
exhausted).
``(3) Application of formulary restrictions.--A drug
prescribed for an individual that would otherwise be a covered
outpatient drug under this part shall not be so considered
under a policy or plan if the policy or plan excludes the drug
under a formulary that meets the requirements of section
1860I(c)(3) (including providing an appeal process).
``(4) Application of general exclusion provisions.--An
entity may exclude from SPICE prescription drug coverage any
covered outpatient drug--
``(A) for which payment would not be made if
section 1862(a) applied to part D; or
``(B) which are not prescribed in accordance with
the policy or plan or this part.
Such exclusions are determinations subject to reconsideration
and appeal pursuant to section 1860I(c)(6).
``enrollment under spice drug benefit program
``Sec. 1860C. (a) Establishment of Process.--
``(1) Establishment.--
``(A) In general.--The SPICE Board, in consultation
with the Secretary, the National Association of
Insurance Commissioners, issuers of medicare
supplemental policies, and Medicare+Choice
organizations, shall establish a process through which
an eligible medicare beneficiary (including an eligible
medicare beneficiary enrolled in a Medicare+Choice
plan) may enroll under this part.
``(B) Similar to part b.--
``(i) In general.--Except as provided in
clause (ii), the process established under
subparagraph (A) shall be similar to the
process for enrollment in part B under section
1837.
``(ii) Beneficiary must affirmatively
enroll.--Notwithstanding section 1837(f), such
process shall require that an eligible medicare
beneficiary affirmatively enroll under this
part rather than deeming the beneficiary to be
so enrolled if certain requirements are met.
``(2) Requirement of enrollment.--An eligible medicare
beneficiary must enroll under this part in order to be eligible
to receive SPICE prescription drug coverage, including
financial assistance for basic and stop-loss coverage under
section 1860K.
``(3) Waiver of basic coverage for medigap enrollees.--
``(A) In general.--The process established under
paragraph (1) shall permit a beneficiary enrolled under
this part and enrolled under a medicare supplemental
policy to--
``(i) waive the basic coverage available
under this part; and
``(ii) rescind such waiver in order to
obtain such coverage.
``(B) Rules.--If a beneficiary waives basic
coverage pursuant to subparagraph (A)(i), the following
rules shall apply:
``(i) Such waiver shall not effect the
stop-loss coverage that the beneficiary
receives under the medicare supplemental
policy, including the entitlement to financial
assistance under section 1860K(c) for such
coverage.
``(ii) The beneficiary shall not be liable
for the basic monthly premium under section
1860H(a).
``(iii) The beneficiary shall not receive
basic coverage but shall be entitled to
negotiated prices for covered outpatient drugs
as if the beneficiary had not waived such
coverage.
``(iv) If the beneficiary subsequently
rescinds such waiver pursuant to subparagraph
(A)(ii), the beneficiary shall be subject to
the late enrollment penalty under subsection
(b).
``(b) Late Enrollment Penalty.--
``(1) In general.--Subject to the succeeding provisions of
this subsection, in the case of an eligible medicare
beneficiary whose coverage period under this part began
pursuant to an enrollment after the beneficiary's initial
enrollment period under part B (determined pursuant to section
1837(d)) and not pursuant to the open enrollment period
described in subsection (c), the SPICE Board shall establish
procedures for increasing the amount of the basic monthly
premium under section 1860H(a) applicable to such beneficiary--
``(A) by an amount that is equal to 25 percent of
such premium for each full 12-month period (in the same
continuous period of eligibility) in which the eligible
medicare beneficiary could have been enrolled under
this part but was not so enrolled; or
``(B) if determined appropriate by the SPICE Board,
by an amount that the SPICE Board determines is
actuarily sound for each such period.
``(2) Periods taken into account.--For purposes of
calculating any 12-month period under paragraph (1), there
shall be taken into account--
``(A) the months which elapsed between the close of
the eligible medicare beneficiary's initial enrollment
period and the close of the enrollment period in which
the beneficiary enrolled;
``(B) in the case of an eligible medicare
beneficiary who reenrolls under this part, the months
which elapsed between the date of termination of a
previous coverage period and the close of the
enrollment period in which the beneficiary reenrolled;
and
``(C) in the case of an eligible medicare
beneficiary who is enrolled under this part but has
waived basic coverage pursuant to subsection (a)(3),
the months which elapsed between the effective date of
such waiver and the effective date of the rescission of
such waiver.
``(3) Periods not taken into account.--
``(A) In general.--For purposes of calculating any
12-month period under paragraph (1), subject to
subparagraph (B), there shall not be taken into account
months for which the eligible medicare beneficiary can
demonstrate that the beneficiary--
``(i) met such exceptional conditions
(including conditions recognized under section
1851(e)(4)(D)) as the SPICE Board may provide;
or
``(ii) had creditable prescription drug
coverage (as defined in paragraph (4)).
``(B) Application.--The exception described in
subparagraph (A)(ii) shall only apply with respect to a
coverage period the enrollment for which occurs before
the end of the 63-day period that begins on the first
day of the month which includes the date on which the
policy or plan involved terminates, ceases to provide,
or substantially reduces the value of the prescription
drug coverage under such policy or plan.
``(4) Prescription drug coverage.--For purposes of this
part, the term `creditable prescription drug coverage' means
any of the following:
``(A) 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.
``(B) 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 1860L(e)(3).
``(C) Prescription drug coverage under certain
medigap policies.--Coverage under a medicare
supplemental policy under section 1882 that provides
benefits for prescription drugs but only if the policy
was in effect on December 31, 2002, and only until the
date such coverage is terminated.
``(D) State pharmaceutical assistance program.--
Coverage of prescription drugs under a State
pharmaceutical assistance program.
``(E) Veterans' coverage of prescription drugs.--
Coverage of prescription drugs for veterans under
chapter 17 of title 38, United States Code.
``(5) Periods treated separately.--Any increase in an
eligible medicare beneficiary's basic monthly premium under
paragraph (1) with respect to a particular continuous period of
eligibility shall not be applicable with respect to any other
continuous period of eligibility which the beneficiary may
have.
``(6) Continuous period of eligibility.--
``(A) In general.--Subject to subparagraph (B), for
purposes of this subsection, an eligible medicare
beneficiary's `continuous period of eligibility' is the
period that begins with the first day on which the
beneficiary is eligible to enroll under section 1836
and this part and ends with the beneficiary's death.
``(B) Separate period.--Any period during all of
which an eligible medicare beneficiary satisfied
paragraph (1) of section 1836 and which terminated
during or before the month preceding the month in which
the beneficiary attained age 65 shall be a separate
`continuous period of eligibility' with respect to the
beneficiary (and each such period which terminates
shall be deemed not to have existed for purposes of
subsequently applying this subparagraph).
``(c) Open Enrollment Period for Current Beneficiaries in Which
Late Enrollment Procedures Do Not Apply.--The SPICE Board shall
establish an applicable period, which shall begin on the date on which
the SPICE Board first begins to accept enrollments under this part,
during which any eligible medicare beneficiary may enroll under this
part without the application of the late enrollment procedures
established under subsection (b)(1).
``(d) Period of Coverage.--
``(1) In general.--Except as provided in paragraph (2), an
eligible medicare 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) Open enrollment.--An eligible medicare beneficiary
who enrolls under the program under this part pursuant to
subsection (c) 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) Rescission of waiver.--The SPICE Board shall
establish procedures regarding coverage periods for an eligible
medicare beneficiary enrolled under this part who previously
waived basic coverage under subsection (a)(3) and now wishes to
rescind such waiver.
``(4) Limitation.--Coverage under this part shall not begin
prior to January 1, 2003.
``(e) Termination.--
``(1) In general.--The causes of termination specified in
section 1838 shall apply to this part in the same manner as
they apply to part B.
``(2) Coverage terminated by termination of coverage under
parts a and b.--
``(A) In general.--In addition to the causes of
termination described in paragraph (1), the SPICE Board
shall terminate an individual's coverage under this
part if the individual is no longer enrolled in either
part A or
B.
``(B) Effective date.--The termination described in
subparagraph (A) shall be effective on the effective
date of termination of coverage under part A or (if
earlier) under part B.
``(3) Procedures regarding termination of a beneficiary
under a plan or policy.--The SPICE Board shall establish
procedures for determining the status of an eligible medicare
beneficiary's enrollment under this part if the beneficiary's
enrollment in a medicare supplemental policy, a Medicare+Choice
plan, a Medicare Drug Plan for Noncompetitive Areas, or a basic
coverage plan under section 1860F is terminated by the entity
offering such policy or plan for cause (under the applicable
requirements established under this title).
``enrollment in a policy or plan
``Sec. 1860D. (a) Enrollment in Medicare Drug Plan for
Noncompetitive Areas.--The SPICE Board shall establish a process
through which an eligible medicare beneficiary who is enrolled under
this part (but not enrolled in a medicare supplemental policy, a
Medicare+Choice plan, or a basic coverage plan under section 1860F) and
resides in an area in which a Medicare Drug Plan for Noncompetitive
Areas is available may enroll in such plan. Such process shall include
rules for enrollment, disenrollment, and termination of enrollment in
such plan.
``(b) Enrollment in a Medicare Supplemental Policy or a
Medicare+Choice Plan.--Enrollment in a medicare supplemental policy or
a Medicare+Choice plan is subject to the rules for enrollment in such
policy or plan under sections 1882 and 1851, respectively.
``(c) Enrollment in a Basic Coverage Plan Offered by a Private
Entity With a Contract Under This Part.--The SPICE Board shall
establish a process through which an eligible medicare beneficiary who
is enrolled under this part (but not enrolled in a medicare
supplemental policy, a Medicare+Choice plan, or a Medicare Drug Plan
for Noncompetitive Areas) may enroll in a basic coverage plan offered
by a private entity with a contract under section 1860F to offer such
plan. Such process shall include rules for enrollment, disenrollment,
and termination of enrollment in such plan.
``(d) Coordination of Enrollments, Disenrollments, and Terminations
of Enrollments.--The SPICE Board shall establish procedures for
coordinating enrollments, disenrollments and terminations of
enrollments under plans described in subsections (a) and (c) with
enrollments, disenrollments and terminations of enrollments under part
C.
``medicare drug plan for noncompetitive areas
``Sec. 1860E. (a) In General.--The SPICE Board shall provide for a
Medicare Drug Plan for Noncompetitive Areas that--
``(1) provides enrollees with SPICE prescription drug
coverage; and
``(2) is available to eligible medicare beneficiaries
residing in an area that has been designated by the SPICE Board
as a noncompetition area.
``(b) Designation of Noncompetition Area.--
``(1) In general.--The SPICE Board shall establish
procedures for designating areas as noncompetition areas.
``(2) Noncompetition area defined.--
``(A) In general.--For purposes of this section,
the term `noncompetition area' means an area in which
only 1 or no medicare supplemental policy is available
to eligible medicare beneficiaries residing in the
area.
``(B) Construction regarding multiple policies
offered by single issuer.--If there is an entity that
offers more that 1 type of medicare supplemental policy
in an area, then that area is not a noncompetition area
for purposes of this section.
``(c) Contracts.--In order to provide the Medicare Drug Plan for
Noncompetitive Areas under this section, the SPICE Board shall do 1 of
the following:
``(1) Single contract that covers all noncompetition
areas.--Enter into a contract with 1 entity to administer and
deliver the benefits under the plan in every designated
noncompetition area.
``(2) Multiple contracts.--Enter into a contract with 1
entity to administer and deliver the benefits under the plan in
1 or more (but less than all) of the designated noncompetition
areas.
``(d) Bidding Process.--
``(1) In general.--The SPICE Board shall establish
procedures under which the SPICE Board accepts bids submitted
by entities and awards a contract (or contracts pursuant to
subsection (c)(2)) to an entity in order to administer and
deliver the benefits under the Medicare Drug Plan for
Noncompetitive Areas to eligible medicare beneficiaries.
``(2) Competitive procedures.--Competitive procedures (as
defined in section 4(5) of the Office of Federal Procurement
Policy Act (41 U.S.C. 403(5))) shall be used to enter into
contracts under this section.
``(e) Requirements for Entities.--
``(1) In general.--The SPICE Board may not award a contract
to an entity under this section unless the entity meets such
terms and conditions as the SPICE Board shall specify,
including the following:
``(A) The terms and conditions described in section
1860I(c).
``(B) The entity meets the quality and financial
standards specified by the SPICE Board.
``(C) The entity meets applicable State licensure
requirements.
``(2) Premiums.--The terms and conditions specified under
paragraph (1) shall--
``(A) permit an entity with a contract under this
section to require that beneficiaries enrolled in the
plan covered by the contract pay a premium for benefits
provided under the contract; and
``(B) except as provided in section 1860H(b)(3)
(relating to an increased premium for delayed
enrollment under this part), require that the amount of
any such premium is the same for all beneficiaries
enrolled in the plan.
``selection of private entities to provide basic coverage plans
``Sec. 1860F. (a) Selection of Entities.--
``(1) In general.--The SPICE Board shall establish
procedures under which the SPICE Board--
``(A) accepts bids submitted by private entities
for the basic coverage plans which such entities intend
to offer in an area established under subsection (b);
and
``(B) awards contracts to such entities to provide
such plans to eligible medicare beneficiaries in the
area.
``(2) Competitive procedures.--Competitive procedures (as
defined in section 4(5) of the Office of Federal Procurement
Policy Act (41 U.S.C. 403(5))) shall be used to enter into
contracts under this section.
``(b) Areas for Contracts.--
``(1) In general.--The SPICE Board shall determine the
areas to award contracts under this section.
``(2) No administrative or judicial review.--The
determination of contract areas under paragraph (1) shall not
be subject to administrative or judicial review.
``(3) Multiple contracts.--If determined appropriate, the
SPICE Board may award more than 1 contract in a contract area.
``(c) Requirements for Entities.--
``(1) In general.--The SPICE Board may not award a contract
to a private entity under this section unless the entity meets
such terms and conditions as the SPICE Board shall specify,
including the following:
``(A) The terms and conditions described in section
1860I(c).
``(B) The entity meets the quality and financial
standards specified by the SPICE Board.
``(C) The entity meets applicable State licensure
requirements.
``(D) Under the plan, the entity will provide basic
coverage with access to negotiated prices.
``(d) Private Entity Defined.--For purposes of this part, the term
`private entity' means any private entity that the SPICE Board
determines to be appropriate to provide basic coverage plans to
eligible medicare beneficiaries under this part, including--
``(1) a pharmacy benefit management company;
``(2) a retail pharmacy delivery system;
``(3) a health plan or insurer;
``(4) any other private entity approved by the SPICE Board;
or
``(5) any combination of the entities described in
paragraphs (1) through (4) approved by the SPICE Board.
``providing information to beneficiaries
``Sec. 1860G. (a) Activities.--
``(1) In general.--The SPICE Board shall provide for
activities that are designed to broadly disseminate information
to eligible medicare beneficiaries (and prospective eligible
medicare beneficiaries) on the SPICE drug benefit program under
this part.
``(2) Late enrollment penalties to be well publicized.--The
SPICE Board shall ensure that information on the sanctions for
delayed enrollment under section 1860C(b) and on the
possibility of increased premiums for stop-loss coverage under
section 1860H(b)(3) are well publicized.
``(3) Special rule for initial enrollment under the
program.--
``(A) Consultation.--The SPICE Board shall consult
with the Secretary, issuers of medicare supplemental
policies, State insurance commissioners,
Medicare+Choice organizations, and interested consumer
organizations in developing the activities described in
paragraph (1) that will be used to provide information
regarding the initial enrollment under this part during
the period described in section 1860C(c).
``(B) Timeframe.--The activities described in
paragraph (1) shall ensure that eligible medicare
beneficiaries (and prospective eligible medicare
beneficiaries) are provided with such information not
later that December 1, 2002, in order to ensure that
coverage under this part may be effective as of January
1, 2003.
``(4) Coordination with activities performed by the
secretary.--The SPICE Board shall work with the Secretary to
ensure that the activities provided under this subsection are
coordinated with the activities performed by the Secretary that
provide information with respect to benefits under this title
to eligible medicare beneficiaries and prospective eligible
medicare beneficiaries.
``(b) Requirements.--
``(1) In general.--The activities described in subsection
(a) shall--
``(A) be similar to the activities performed under
section 1851 (including the approval of policy
marketing materials and maintaining a toll-free number
and an Internet site); and
``(B) include provisions to ensure that consumer
counselors are available to provide face-to-face
counseling to eligible medicare beneficiaries (and
prospective eligible medicare beneficiaries) on the
SPICE drug benefit program under this part.
``(2) Contracts to provide consumer counseling.--The SPICE
Board may contract with private entities to provide the
consumer counseling described in paragraph (1)(B).
``(c) Coordination With Other Information.--The SPICE Board shall,
in cooperation with the Secretary, enter into such arrangements as may
be appropriate to disseminate the information referred to in subsection
(a) in coordination with materials distributed by the Secretary to
medicare beneficiaries, including the medicare handbook under section
1804 and materials distributed under section 1851(d).
``premiums
``Sec. 1860H. (a) Premium for Basic Coverage for All
Beneficiaries.--
``(1) Annual establishment of basic monthly premium
rates.--The SPICE Board shall, during September of each year
(beginning in 2002), determine and promulgate a basic monthly
premium rate for the succeeding year in accordance with the
provisions of this subsection.
``(2) Actuarial determinations.--
``(A) Determination of annual benefit and
administrative costs for basic coverage.--The SPICE
Board shall estimate annually for the succeeding year
the amount equal to the total of the benefits
(including financial assistance provided under
subsections (b) and (c) of section 1860K and payments
made to sponsors under section 1860L) and
administrative costs that will be payable from the
SPICE Prescription Drug Account within the Federal
Supplementary Medical Insurance Trust Fund for
providing benefits under this part in such calendar
year.
``(B) Determination of basic monthly premium
rates.--
``(i) In general.--The SPICE Board shall
determine the basic monthly premium rate for
such succeeding year, which shall be \1/12\ of
the amount determined under subparagraph (A),
divided by the average total number of
enrollees under this part who have not waived
basic coverage under section 1860C(a)(3) (as
estimated for the year), and rounded (if such
rate is not a multiple of 10 cents) to the
nearest multiple of 10 cents.
``(ii) Premium reduced by amount of
financial assistance.--The amount that shall be
charged a beneficiary for basic coverage under
this part is the basic monthly premium
determined under clause (i), reduced by the
amount of the financial assistance for basic
coverage determined for the beneficiary under
section 1860K(b).
``(3) Publication of assumptions.--The SPICE Board shall
publish, together with the promulgation of the basic monthly
premium rates for the succeeding year, a statement setting
forth the actuarial assumptions and bases employed in arriving
at the amounts and rates determined under paragraphs (1) and
(2).
``(4) Collection of premiums.--Any basic monthly premium
applicable to an eligible medicare beneficiary pursuant to this
subsection, after application of the reduction described in
paragraph (2)(B)(ii) and any increase for late enrollment under
section 1860C(b), shall be collected and credited to the SPICE
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) Premiums for Stop-Loss Coverage.--
``(1) Beneficiary responsible for making payment directly
to entity.--Subject to paragraph (2), any eligible medicare
beneficiary who is receiving stop-loss coverage, either through
enrollment in a medicare supplemental policy, a Medicare+Choice
plan, or a Medicare Drug Plan for Noncompetitive Areas, shall
be responsible for making payments for any premiums required
under the policy or plan for such coverage directly to the
entity offering such policy or plan.
``(2) Premium reduced by amount of financial assistance.--
The entity offering such policy or plan shall reduce the
premium described in paragraph (1) by the amount of the
financial assistance for stop-loss coverage determined for the
beneficiary under section 1860K(c).
``(3) Increase in premium for late enrollment or for lack
of continuous stop-loss coverage.--In the case of an eligible
medicare beneficiary who is subject to a late enrollment
penalty under section 1860C or who has not had continuous stop-
loss coverage under this part because the beneficiary was
enrolled in a basic coverage plan under section 1860F, the
entity offering the medicare supplemental policy, the
Medicare+Choice plan, or the Medicare Drug Plan for
Noncompetitive Areas in which the beneficiary is enrolled may,
notwithstanding any provision in this title, increase the
portion of the premium attributable to stop-loss coverage that
is otherwise applicable to such beneficiary for such enrollment
in a manner that reflects the additional actuarial risk
involved. Such a risk shall be established through an
appropriate actuarial opinion of the type described in
subparagraphs (A) through (C) of section 2103(c)(4).
``approval for entities offering spice prescription drug coverage
``Sec. 1860I. (a) Approval.--No payments may be made to an entity
offering a policy or plan that provides SPICE prescription drug
coverage under section 1860J unless the entity has been approved by the
SPICE Board.
``(b) Procedures.--
``(1) In general.--The SPICE Board shall establish
procedures for approving entities that offer policies and plans
that provide SPICE prescription drug coverage under this part,
including an entity with a contract under section 1860F.
``(2) Coordination.--The procedures established under
subparagraph (A) shall be coordinated with--
``(A) in the case of the approval of medicare
supplemental policies, the procedures for approval of
such policies under State law; and
``(B) in the case of the approval of
Medicare+Choice plans, the procedures established by
the Secretary for approval of such plans under part C.
``(c) Terms and Conditions.--The SPICE Board may not approve an
entity under subsection (b) unless the entity, with respect to such
policy or plan, meets such terms and conditions as the SPICE Board
shall specify, including the following:
``(1) Dissemination of information.--
``(A) General information.--The entity shall
disclose, in a clear, accurate, and standardized form
to each enrollee under the policy or plan at the time
of enrollment and at least annually thereafter, the
information described in section 1852(c)(1) relating to
such policy or plan. Such information shall include the
following:
``(i) Access to covered outpatient drugs,
including access through pharmacy networks.
``(ii) How any formulary used by the entity
functions.
``(iii) Coinsurance and deductible
requirements.
``(iv) Grievance and appeals procedures.
``(B) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request
of an individual eligible to enroll under the policy or
plan, the entity shall provide the information
described in section 1852(c)(2) (other than
subparagraph (D)) to such individual.
``(C) Response to beneficiary questions.--The
entity shall have a mechanism for providing specific
information regarding the policy or plan to enrollees
upon request and shall make available, through the
Internet website described in paragraph (7) and in
writing upon request, information on specific changes
in its formulary.
``(D) Claims information.--The entity shall furnish
to each enrollee under the plan or policy in a form
easily understandable to such enrollees an explanation
of benefits (in accordance with section 1806(a) or in a
comparable manner) and a notice regarding how close the
enrollee is to getting stop-loss coverage for the year,
whenever prescription drug benefits are provided under
this part (except that such notice need not be provided
more often than monthly).
``(2) Access to covered benefits.--
``(A) Assuring pharmacy access.--The entity shall
secure the participation of sufficient numbers of
pharmacies to ensure convenient access (including
adequate emergency access) for enrollees under the
policy or plan. Nothing in the preceding sentence shall
be construed as requiring the participation of all
pharmacies in any area under a policy or plan.
``(B) Access to negotiated prices for prescription
drugs.--The entity shall issue a card that may be used
by an enrollee under the policy or plan to assure
access to negotiated prices pursuant to section
1860B(d).
``(3) Formularies.--If an eligible entity uses a formulary
under the policy or plan, such entity shall--
``(A) establish the formulary based on the medical
needs of eligible medicare beneficiaries;
``(B) ensure that the formulary includes drugs
within all therapeutic categories and classes of
covered outpatient drugs (although not necessarily for
all drugs within such categories and classes);
``(C) have in place an appeals process--
``(i) under which any eligible medicare
beneficiary could receive any medically
necessary covered outpatient drug that is not
on the formulary;
``(ii) that does not impose a significant
financial burden on an eligible medicare
beneficiary or delay the provision of medically
necessary covered outpatient drugs to such a
beneficiary; and
``(iii) that provides for at least a level
of protection that is similar to or better than
the level of protection provided with respect
to benefits under Medicare+Choice plans under
part C; and
``(D) provide notification to enrollees of any
change in the formulary at least 60 days prior to such
change.
``(4) Cost and utilization management; quality assurance;
medication therapy management program.--
``(A) In general.--The entity shall have in place--
``(i) an effective cost and drug
utilization management program, including
appropriate incentives to use generic drugs
when appropriate;
``(ii) quality assurance measures and
systems to reduce medical errors and adverse
drug interactions, including a medication
therapy management program described in
subparagraph (B); and
``(iii) a program to control fraud, abuse,
and waste.
``(B) Medication therapy management program.--
``(i) In general.--A medication therapy
management program described in this
subparagraph is a program of drug therapy
management and medication administration that
is designed to assure that covered outpatient
drugs under the policy or plan are
appropriately used to achieve therapeutic goals
and reduce the risk of adverse events,
including adverse drug interactions.
``(ii) Elements.--Such program may
include--
``(I) enhanced beneficiary
understanding of such appropriate use
through beneficiary education,
counseling, and other appropriate
means; and
``(II) increased beneficiary
adherence with prescription medication
regimens through medication refill
reminders, special packaging, and other
appropriate means.
``(iii) Development of program in
cooperation with licensed pharmacists.--The
program shall be developed in cooperation with
licensed pharmacists and physicians.
``(iv) Considerations in pharmacy fees.--
The entity shall take into account, in
establishing fees for pharmacists and others
providing services under the medication therapy
management program, the resources and time used
in implementing the program.
``(C) Treatment of accreditation.--Section
1852(e)(4) (relating to treatment of accreditation)
shall apply to policies and plans under this part with
respect to the following requirements, in the same
manner as they apply to Medicare+Choice plans under
part C with respect to the requirements described in a
clause of section 1852(e)(4)(B):
``(i) Subparagraph (A) (including quality
assurance), including medication therapy
management program under subparagraph (B).
``(ii) Paragraph (2)(A) (relating to access
to covered benefits).
``(iii) Paragraph (8) (relating to
confidentiality and accuracy of enrollee
records).
``(5) Grievance mechanism.--The entity shall provide
meaningful procedures for hearing and resolving grievances
between the entity (including any entity or individual through
which the entity provides covered benefits) and enrollees of
the policy or plan under this part in accordance with section
1852(f).
``(6) Coverage determinations, reconsiderations, and
appeals.--The entity shall meet the requirements of section
1852(g) with respect to covered benefits under the policy or
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.
``(7) Provide information on the internet.--The entity
shall maintain a web site on the Internet that provides
eligible medicare beneficiaries with information regarding any
policy or plan offered by the entity that provides SPICE
prescription drug coverage.
``(8) Confidentiality and accuracy of enrollee records.--
The 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.
``(d) SPICE Board Models for Formularies.--
``(1) Model.--The SPICE Board may issue models for
formularies for use in providing covered outpatient drugs under
this part. Such models, and any revised models (pursuant to
paragraph (3)) shall meet the requirements of subparagraphs (A)
and (B) of subsection (c)(3).
``(2) Effect of compliance with a model.--If the SPICE
Board determines that a formulary used by an entity offering a
policy or plan that provides SPICE prescription drug coverage
is in compliance with a model formulary issued under paragraph
(1), or the revised model (as the case may be), then the entity
shall be deemed to meet the requirements of subparagraphs (A)
and (B) of subsection (c)(3).
``(3) Revisions of models.--
``(A) In general.--The SPICE Board may periodically
(but not more frequently than annually) revise any
model established under this subsection.
``(B) Period to comply with revision.--If the SPICE
Board revises a model formulary pursuant to
subparagraph (A), the SPICE Board shall provide for an
appropriate period of time for entities who were in
compliance with such model before such revision to
comply with the revised model.
``(e) Rule of Construction Regarding Cost-Effective Provision of
Benefits.--Nothing in this part shall be construed as preventing an
entity that provides SPICE prescription drug coverage under a policy or
plan from employing mechanisms to provide such coverage economically,
including the use of--
``(1) formularies (pursuant to subsection (c)(3));
``(2) alternative methods of distribution;
``(3) generic drug substitution;
``(4) pharmacy networks; and
``(4) mail order pharmacies.
``payments to entities
``Sec. 1860J. (a) Payments for Administering Basic Coverage.--
``(1) In general.--The SPICE Board shall establish
procedures for making payments to an entity offering a medicare
supplemental policy, a Medicare+Choice plan, a Medicare Drug
Plan for Noncompetitive Areas, or a basic coverage plan under
section 1860F for--
``(A) in accordance with the provisions of this
part, the costs of covered outpatient drugs provided
under basic coverage to eligible medicare
beneficiaries--
``(i) enrolled under such policy or plan
and under this part; and
``(ii) entitled to such coverage; and
``(B) pursuant to paragraph (2), administering the
basic coverage on behalf of beneficiaries described in
subparagraph (A).
``(2) Administrative fee.--
``(A) Procedures.--The procedures established
pursuant to paragraph (1) shall provide for payment to
the entity of an administrative fee for each
prescription filled by the entity for an eligible
medicare beneficiary enrolled in the policy or plan
offered by such entity. Subject to paragraph (3), the
entity shall not be at risk for providing basic
coverage for a beneficiary.
``(B) Amount.--The fee described in paragraph (1)
shall be--
``(i) negotiated by the SPICE Board; and
``(ii) consistent with such fees paid under
private sector pharmaceutical benefit
contracts.
``(C) Reduction of administrative costs.--The SPICE
Board shall work with entities receiving payments under
this section on ways to control the administrative
costs associated with providing basic coverage under
this part.
``(3) Risk corridors tied to performance measures and other
incentives for entity providing medicare drug plan for
noncompetitive areas.--In the case of payments to an entity
with a contract to provide a Medicare Drug Plan for
Noncompetitive Areas, the procedures established under
paragraph (1) may include the use of--
``(A) risk corridors tied to performance measures
that have been agreed to between the entity and the
SPICE Board under the contract; and
``(B) any other incentives that the SPICE Board
determines appropriate.
``(4) Secondary payer provisions.--The provisions of
section 1862(b) shall apply to basic coverage provided under
this part.
``(b) Payment of Financial Assistance to Entities for Provision of
Stop-Loss Coverage.--
``(1) In general.--The SPICE Board shall establish
procedures for making financial assistance payments for stop-
loss coverage to an entity offering a medicare supplemental
policy, a Medicare+Choice plan, or a Medicare Drug Plan for
Noncompetitive Areas on behalf of an eligible medicare
beneficiary enrolled in such policy or plan and under this
part.
``(2) Amount of financial assistance payment.--The amount
of the financial assistance payments on behalf of an eligible
medicare beneficiary for stop-loss coverage is equal to the
amount determined for the beneficiary under section 1860K(c).
``(3) Entity providing stop-loss coverage at risk.--The
entity providing stop-loss coverage, and not the SPICE Board,
shall be at risk for the provision of such coverage.
``financial assistance to obtain spice prescription drug coverage
``Sec. 1860K. (a) In General.--The SPICE Board shall provide
financial assistance, in accordance with this section, with respect to
eligible medicare beneficiaries who have SPICE prescription drug
coverage through enrollment in a medicare supplemental policy, a
Medicare+Choice plan, a Medicare Drug Plan for Noncompetitive Areas, or
a basic coverage plan under section 1860F.
``(b) Assistance for Basic Coverage.--
``(1) In general.--The amount of financial assistance with
respect to an eligible medicare beneficiary for basic coverage
is equal to the following percentage of the basic monthly
premium determined under subsection (a) of section 1860H
(without regard to any increase for late enrollment under
subsection (b) of such section):
``(A) 100 percent if income below 150 percent of
poverty.--In the case of an eligible medicare
beneficiary who applies for enhanced financial
assistance under subsection (d) and whose income (as
determined under such subsection) does not exceed 150
percent of the poverty line, the percentage is 100
percent.
``(B) Other percent if income between 150 and 175
percent of poverty.--In the case of an eligible
medicare beneficiary who applies for enhanced financial
assistance under subsection (d) and whose income (as
determined under such subsection) is greater than 150
percent, but does not exceed 175 percent, of the
poverty line, the SPICE Board shall specify the
percentage consistent with the following rules:
``(i) Range.--The percentage may not exceed
100 percent nor be less than 25 percent.
``(ii) Sliding scale.--The percentage may
not be higher for eligible medicare
beneficiaries whose income is higher.
``(C) 25 percent for other beneficiaries.--In the
case of any other eligible medicare beneficiary, the
percentage is 25 percent.
``(2) Form of assistance.--Financial assistance under this
subsection shall be provided in the form of a reduction of the
basic monthly premium pursuant to section 1860H(a)(2)(B)(ii).
``(c) Assistance for Stop-Loss Coverage.--
``(1) Amount.--
``(A) In general.--The amount of financial
assistance for stop-loss coverage with respect to an
eligible medicare beneficiary enrolled under this part
and in a medicare supplemental policy, a
Medicare+Choice plan, or a Medicare Drug Plan for
Noncompetitive Areas for stop-loss coverage is equal to
the following percentage of the national average
medigap stop-loss monthly premium for the region in
which the beneficiary resides (as determined under
paragraph (2)):
``(i) 100 percent if income below 150
percent of poverty.--In the case of an eligible
medicare beneficiary described in subsection
(b)(1)(A), the percentage is 100 percent.
``(ii) Other percent if income between 150
and 175 percent of poverty.--In the case of an
eligible medicare beneficiary described in
subsection (b)(1)(B), the SPICE Board shall
specify the percentage consistent with the
rules described in clauses (i) and (ii) of such
subsection.
``(iii) 25 percent for other
beneficiaries.--In the case of any other
eligible medicare beneficiary, the percentage
is 25 percent.
``(B) Form of assistance.--Financial assistance
under this subsection for beneficiaries shall be
provided in the form of a payment to the entity
offering the policy or plan in which the beneficiary is
receiving stop-loss coverage pursuant to section
1860J(b).
``(2) Establishment of national average medigap stop-loss
monthly premium.--
``(A) In general.--The SPICE Board shall, during
September of each year (beginning in 2002), estimate a
national average medigap stop-loss monthly premium for
each region (as determined by the Board) of the total
geographic area served by the programs under this part
that will be applicable for the succeeding year.
``(B) Definition of national average medigap stop-
loss monthly premium.--For purposes of subparagraph
(A), the term `national average medigap stop-loss
monthly premium' means, with respect to a region, the
average of the portion of the monthly premiums charged
by medicare supplemental policies in that region for
providing stop-loss coverage to beneficiaries enrolled
under this part.
``(3) Limitations.--
``(A) Financial assistance may not exceed
premium.--In the case of financial assistance provided
under this subsection with respect to stop-loss
coverage provided under a policy or plan, the amount of
the financial assistance may not exceed the amount of
the portion of the premium charged for enrollment in
the policy or plan that is related to the provision of
stop-loss coverage.
``(B) Entity must reduce premium.--No financial
assistance shall be made available with respect to
stop-loss coverage provided by an entity to an eligible
medicare beneficiary unless the entity provides
assurances satisfactory to the SPICE Board that the
entity shall reduce the amount otherwise charged the
beneficiary for such coverage by an amount equal to the
amount of such assistance.
``(d) Application for Enhanced Financial Assistance.--
``(1) In general.--The SPICE Board shall establish
procedures under which a beneficiary who desires enhanced
financial assistance under this section may voluntarily apply
for an income determination.
``(2) Requirements regarding information.--
``(A) Information from beneficiary.--The procedures
established under paragraph (1) shall require the
beneficiary to submit with the application for enhanced
financial assistance such information that the SPICE
Board determines necessary to make the income
determination with respect to such beneficiary.
``(B) Information from other government agencies.--
Under the procedures established under paragraph (1),
if an individual voluntarily applies for enhanced
financial assistance under this section, the individual
is deemed to have consented to the SPICE Board seeking
and using income-related information from other
Government agencies in order to make the income
determination with respect to such beneficiary.
``(C) Restriction on use of information.--
Information obtained under subparagraph (A) or (B) may
be used by officers and employees of the SPICE Board
only for the purposes of, and to the extent necessary
in, carrying out their responsibilities under this
part.
``(3) Periodic redeterminations.--Such income
determinations shall be valid for a period (of not less than 1
year) specified by the SPICE Board.
``(e) Income Determinations.--The SPICE Board shall establish
procedures for making income determinations under this section.
``(f) Poverty Line.--In this section, the term `poverty line' means
the income 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.
``employer incentive program for employment-based retiree drug coverage
``Sec. 1860L. (a) Program Authority.--The SPICE Board shall develop
and implement a program under this section to be known as the `Employer
Incentive Program' that encourages employers and other sponsors of
employment-based health care coverage to provide adequate prescription
drug benefits to retired individuals by subsidizing, in part, the
sponsor's cost of providing coverage under qualifying plans.
``(b) Sponsor Requirements.--In order to be eligible to receive an
incentive payment under this section with respect to coverage of an
individual under a qualified retiree prescription drug plan (as defined
in subsection (e)(3)), a sponsor shall meet the following requirements:
``(1) Assurances.--The sponsor shall--
``(A) annually attest, and provide such assurances
as the SPICE Board may require, that the coverage
offered by the sponsor is a qualified retiree
prescription drug plan, and will remain such a plan for
the duration of the sponsor's participation in the
program under this section; and
``(B) guarantee that it will give notice to the
SPICE Board and covered retirees--
``(i) at least 120 days before terminating
its plan; and
``(ii) immediately upon determining that
the actuarial value of the prescription drug
benefit under the plan falls below the
actuarial value of the basic coverage under the
SPICE prescription drug coverage under this
part.
``(2) Beneficiary information.--The sponsor shall report to
the SPICE Board, for each calendar quarter for which it seeks
an incentive payment under this section, the names and social
security numbers of all retirees (and their spouses and
dependents) covered under such plan during such quarter and the
dates (if less than the full quarter) during which each such
individual was covered.
``(3) Audits.--The sponsor and the employment-based retiree
health coverage plan seeking incentive payments under this
section shall agree to maintain, and to afford the SPICE Board
access to, such records as the SPICE Board may require for
purposes of audits and other oversight activities necessary to
ensure the adequacy of prescription drug coverage, the accuracy
of incentive payments made, and such other matters as may be
appropriate.
``(4) Other requirements.--The sponsor shall provide such
other information, and comply with such other requirements, as
the SPICE Board may find necessary to administer the program
under this section.
``(c) Incentive Payments.--
``(1) In general.--A sponsor that meets the requirements of
subsection (b) with respect to a quarter in a calendar year
shall be entitled to have payment made by the SPICE Board on a
quarterly basis (to the sponsor or, at the sponsor's direction,
to the appropriate employment-based health plan) of an
incentive payment, in the amount determined in paragraph (2),
for each retired individual (or spouse) who--
``(A) was covered under the sponsor's qualified
retiree prescription drug plan during such quarter; and
``(B) was eligible for, but was not enrolled in,
the SPICE drug benefit program under this part.
``(2) Amount of incentive.--The payment under this section
with respect to each individual described in paragraph (1) for
a month shall be equal to 25 percent of the basic monthly
premium amount payable by an eligible medicare beneficiary
enrolled under this part, as set for the calendar year pursuant
to section 1860H(a) and without application of and financial
assistance for such premium under section 1860K(b).
``(3) Payment date.--The incentive under this section with
respect to a calendar quarter shall be payable as of the end of
the next succeeding calendar quarter.
``(d) Civil Money Penalties.--A sponsor, health plan, or other
entity that the SPICE Board determines has, directly or through its
agent, provided information in connection with a request for an
incentive payment under this section that the entity knew or should
have known to be false shall be subject to a civil monetary penalty in
an amount up to 3 times the total incentive amounts under subsection
(c) that were paid (or would have been payable) on the basis of such
information.
``(e) Definitions.--In this section:
``(1) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance coverage or other coverage of health care costs for
retired individuals (or for such individuals and their spouses
and dependents) based on their status as former employees or
labor union members.
``(2) Employer.--The term `employer' has the meaning given
the term in 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).
``(3) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' means health
insurance coverage or other coverage of health care costs
included in employment-based retiree health coverage that--
``(A) provides coverage of the cost of prescription
drugs whose actuarial value (as defined by the SPICE
Board) to each retired beneficiary equals or exceeds
the actuarial value of the basic coverage provided to
an individual enrolled in the SPICE drug benefit
program under this part; and
``(B) does not deny, limit, or condition the
coverage or provision of prescription drug benefits for
retired individuals based on age or any health status-
related factor described in section 2702(a)(1) of the
Public Health Service Act.
``(4) Sponsor.--The term `sponsor' has the meaning given
the term `plan sponsor' in section 3(16)(B) of the Employer
Retirement Income Security Act of 1974.
``spice board
``Sec. 1860M. (a) Establishment.--There is established within the
Department of Health and Human Services, a Seniors Prescription
Insurance Coverage Equity Office, which shall be--
``(1) outside of the Centers for Medicare & Medicaid
Services; and
``(2) run by a board to be known as the SPICE Board.
``(b) Duties.--
``(1) Administration of spice drug benefit program.--
``(A) In general.--The SPICE Board shall administer
the SPICE drug benefit program under this part.
``(B) Noninterference.--In carrying out its duty
under subparagraph (A), the SPICE Board may not--
``(i) require a particular formulary or
institute a price structure for the
reimbursement of covered outpatient drugs;
``(ii) interfere in any way with
negotiations between entities providing SPICE
prescription drug coverage under part D and
drug manufacturers, wholesalers, or other
suppliers of covered outpatient drugs; and
``(iii) otherwise interfere with the
competitive nature of providing such coverage
through such entities.
``(2) Ongoing studies.--The SPICE Board shall conduct
ongoing studies of the following issues:
``(A) The administration of this part.
``(B) The provision of information about the
program under the health insurance information,
counseling, and assistance grants under section 4360 of
the Omnibus Budget Reconciliation Act of 1990.
``(C) Ways in which drug utilization can be used to
provide better overall care for eligible medicare
beneficiaries.
``(D) Savings and potential savings in Federal
health care programs which may occur, or can be
attributed to, eligible medicare beneficiary access to,
and utilization of, covered outpatient drugs.
``(E) Trends in premium increases and factors that
contribute to changes in premiums.
``(F) Integration of the SPICE drug benefit program
into a reformed medicare program.
``(G) The ability of eligible medicare
beneficiaries to afford SPICE prescription drug
coverage.
``(H) The impact of the program on the prescription
drug benefits offered under group health plans.
``(I) The appropriateness of the levels of
financial assistance provided under this part.
``(3) Annual report.--
``(A) In general.--Not later than June 1 of each
year (beginning with 2004), the SPICE Board shall
submit an annual report to Congress on the program
under this part.
``(B) Information on studies.--Such report shall
include a detailed statement on the issues studied
under paragraph (2).
``(C) Recommendations.--Such report shall include
such recommendations for legislation and administrative
actions as the SPICE Board considers appropriate.
``(4) Provision of recommendations and information to
secretary.--The SPICE Board shall provide recommendations and
necessary information regarding the SPICE drug benefit program
to the Secretary in order for the Secretary to--
``(A) integrate such information with information
regarding the other programs under this title; and
``(B) provide health insurance information,
counseling, and assistance grants under section 4360 of
the Omnibus Budget Reconciliation Act of 1990.
``(c) Demonstration Project Authority.--
``(1) In general.--Subject to paragraph (2), the SPICE
Board shall have the authority to conduct demonstration
projects for the purpose of demonstrating ways to improve the
quality of services provided under the SPICE drug benefit
program, including ways to reduce medical errors.
``(2) Consultation with secretary.--The SPICE Board shall
consult with the Secretary before conducting any demonstration
project.
``(d) Membership of SPICE Board.--
``(1) Number and appointment.--
``(A) In general.--The SPICE Board shall be
composed of 7 members appointed by the President, by
and with the advice and consent of the Senate.
``(B) Specific representatives.--In making
appointments under subparagraph (A), the President
shall ensure that the following groups are represented
on the SPICE Board:
``(i) Consumers.
``(ii) Private health plan insurers
(including insurers that offer fee-for-service
and managed care plans) with expertise in the
quality, scope, and marketing of health care
services.
``(iii) Certified geriatric pharmacists.
``(iv) The Centers for Medicare & Medicaid
Services.
``(v) State insurance commissioners.
``(C) Secretary of hhs.--In addition to the 7
members appointed under subparagraph (A), the Secretary
shall be a nonvoting, ex officio member of the SPICE
Board.
``(2) Deadline for initial appointment.--The initial
members of the SPICE Board shall be appointed by not later than
6 months after the date of enactment of this section.
``(3) Terms.--
``(A) In general.--The terms of the members of the
SPICE Board shall be for 6 years, except that of the
members first appointed--
``(i) three shall be appointed for terms of
6 years;
``(ii) two shall be appointed for terms of
4 years; and
``(iii) two shall be appointed for terms of
2 years.
``(B) Vacancies.--Any member appointed to fill a
vacancy occurring before the expiration of the term for
which the member's predecessor was appointed shall be
appointed only for the remainder of that term. A member
may serve after the expiration of that member's term
until a successor has taken office.
``(4) Chairperson.--The President shall designate the
chairperson of the SPICE Board, except that the representative
from the Centers for Medicare & Medicaid Services may not be
designated as chairperson.
``(e) Operation of the Board.--
``(1) Meetings.--The SPICE Board shall meet at the call of
the chairperson or upon the written request of a majority of
its members.
``(2) Quorum.--A majority of the members of the SPICE Board
shall constitute a quorum, but a lesser number of members may
hold hearings.
``(f) Powers of the SPICE Board.--
``(1) Hearings.--The SPICE Board may hold such hearings,
sit and act at such times and places, take such testimony, and
receive such evidence as the SPICE Board considers advisable to
carry out the purposes of this part.
``(2) Information from federal agencies.--Upon request of
the chairperson of the SPICE Board, the head of any Federal
department or agency shall furnish such information to the
SPICE Board as is necessary to carry out the functions of the
SPICE Board under this part.
``(3) Postal services.--The SPICE Board may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
``(4) Gifts.--The SPICE Board may accept, use, and dispose
of gifts or donations of services or property.
``(g) Board Personnel Matters.--
``(1) Members.--
``(A) Compensation.--Each member of the SPICE Board
who is not an officer or employee of the Federal
Government shall be compensated at a rate equal to the
daily equivalent of the annual rate of basic pay
prescribed for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, for each
day (including travel time) during which such member is
engaged in the performance of the duties of the SPICE
Board. All members of the SPICE Board who are officers
or employees of the United States shall serve without
compensation in addition to that received for their
services as officers or employees of the United States.
``(B) Travel expenses.--The members of the SPICE
Board shall be allowed travel expenses, including per
diem in lieu of subsistence, at rates authorized for
employees of agencies under subchapter I of chapter 57
of title 5, United States Code, while away from their
homes or regular places of business in the performance
of services for the SPICE Board.
``(C) Removal.--The President may remove a member
of the SPICE Board only for neglect of duty or
malfeasance in office.
``(2) Staff.--
``(A) In general.--The chairperson of the SPICE
Board may, without regard to the civil service laws and
regulations, appoint and terminate an executive
director and such other additional personnel as may be
necessary to enable the SPICE Board to perform its
duties. The employment of an executive director shall
be subject to confirmation by the SPICE Board.
``(B) Compensation.--The chairperson of the SPICE
Board may fix the compensation of the executive
director and other personnel without regard to the
provisions of chapter 51 and subchapter III of chapter
53 of title 5, United States Code, relating to
classification of positions and General Schedule pay
rates, except that the rate of pay for the executive
director and other personnel may not exceed the rate
payable for level V of the Executive Schedule under
section 5316 of such title.
``(C) Detail of government employees.--Any Federal
Government employee may be detailed to the SPICE Board
without further reimbursement, and such detail shall be
without interruption or loss of civil service status or
privilege.
``(D) Procurement of temporary and intermittent
services.--The chairperson of the SPICE Board may
procure temporary and intermittent services under
section 3109(b) of title 5, United States Code, at
rates for individuals which do not exceed the daily
equivalent of the annual rate of basic pay prescribed
for level V of the Executive Schedule under section
5316 of such title.
``spice prescription drug account in the federal supplementary medical
insurance trust fund
``Sec. 1860N. (a) Establishment.--
``(1) In general.--There is created within the Federal
Supplementary Medical Insurance Trust Fund established by
section 1841 an account to be known as the `SPICE Prescription
Drug Account' (in this section referred to as the `Account').
``(2) Funds.--The Account shall consist of such gifts and
bequests as may be made as provided in section 201(i)(1), and
such amounts as may be deposited in, or appropriated to, such
fund as provided in this part.
``(3) Separate from rest of trust fund.--Funds provided
under this part to the Account shall be kept separate from all
other funds within the Federal Supplementary Medical Insurance
Trust Fund.
``(b) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Account such amounts as the SPICE Board
certifies are necessary to make payments to operate the program
under this part, including payments to entities under section
1860J, payments to sponsors under section 1860L, and payments
with respect to administrative expenses under this part in
accordance with section 201(g).
``(2) Treatment in relation to part b premium.--Amounts
payable from the Account shall not be taken into account in
computing actuarial rates or premium amounts under section
1839.
``(c) Appropriations To Cover Government Contribution.--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 equal
to the amount by which the benefits and administrative costs of
providing the benefits under this part exceed the premiums collected
under section 1860H(a)(4).''.
(b) Conforming 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'' before ``such amounts'';
and
(B) by inserting before the period the following:
``, and such amounts as may be deposited in, or
appropriated to, the SPICE Prescription Drug Account
established by section 1860N''; and
(2) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under part D (in
which case the payments shall be made from the SPICE
Prescription Drug Account in the Trust Fund),''.
(c) Additional Conforming Changes.--
(1) Conforming references to previous part d.--Any
reference in law (in effect before the date of enactment of
this Act) to part D of title XVIII of the Social Security Act
is deemed a reference to part E of such title (as in effect
after such date).
(2) Secretarial 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. 3. SPICE PRESCRIPTION DRUG COVERAGE UNDER MEDICARE+CHOICE PLANS.
(a) Special Rules.--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) Rules for Provision of SPICE Prescription Drug Coverage.--
``(1) Plan required to provide coverage if beneficiary
enrolled in part d.--
``(A) In general.--In the case of an individual
that is enrolled in a Medicare+Choice plan and enrolled
under part D, the basic benefits required to be
provided under section 1852(a)(1)(A) shall include
SPICE prescription drug coverage (as defined in section
1860B(a)) under the terms and conditions for such
coverage established under part D, including the terms
and conditions described in section 1860I(c).
``(B) Voluntary enrollment in part D.--An
individual enrolled in a Medicare+Choice plan shall not
be required to enroll under part D.
``(2) Limitation on enrollee liability.--In the case of an
individual described in paragraph (1)(A), with respect to SPICE
prescription drug coverage, a Medicare+Choice organization may
not require that such individual pay a deductible or a
coinsurance percentage that exceeds the deductible or
coinsurance percentage applicable for such coverage pursuant to
part D.
``(3) Premium for stop-loss coverage.--
``(A) In general.--Subject to subparagraph (B), a
Medicare+Choice organization offering a Medicare+Choice
plan on behalf of an individual described in paragraph
(1)(A) may require the individual to pay a premium for
stop-loss coverage (as defined in section 1860B(c). Any
such premium shall be considered to be part of the
Medicare+Choice monthly basic premium (as defined in
section 1854(b)(2)(A)) that the individual is
responsible for.
``(B) Organization required to reduce premium by
amount of financial assistance.--A Medicare+Choice
organization receiving a payment for financial
assistance for stop-loss coverage on behalf of an
individual described in paragraph (1)(A) pursuant to
subsection (b) of section 1860J shall reduce any
premium described in subparagraph (A) by the amount of
such financial assistance.
``(4) Payments to organization for spice prescription drug
coverage pursuant to part d rules.--The SPICE Board
(established under section 1860M) shall make payments to a
Medicare+Choice organization offering a Medicare+Choice plan on
behalf of an individual described in paragraph (1)(A) pursuant
to the payment mechanisms described in subsections (a) and (b)
of section 1860J. Such payments shall be coordinated with
payments made to such organization under section 1853.
``(5) Coordinated enrollment.--The Secretary shall work
with the SPICE Board to coordinate enrollment under this part
with enrollment under part D.''.
(b) Effective Date.--The amendment made by this section shall apply
to items and services provided under a Medicare+Choice plan on or after
January 1, 2003.
SEC. 4. MEDIGAP REVISIONS AND TRANSITION PROVISIONS.
(a) Establishment of SPICE Medigap Policies.--Section 1882 of the
Social Security Act (42 U.S.C. 1395ss) is amended by adding at the end
the following new subsection:
``(v) SPICE Medigap Policies.--
``(1) Revision of benefit packages.--
``(A) In general.--Notwithstanding subsection (p),
the benefit packages established under such subsection
shall be revised so that--
``(i) if the policyholder is enrolled under
part D, basic coverage (as defined in section
1860B(b)) is available as part of each benefit
package;
``(ii) each benefit package includes stop-
loss coverage (as defined in section 1860B(c))
in the core group of basic benefits described
in subsection (p)(2)(B);
``(iii) no benefit package (including each
benefit package classified as `H', `I', or `J'
under the standards established by such
subsection (p)(2), and the benefit package
classified as `J' with a high deductible
feature described in subsection (p)(11))
includes prescription drug coverage other than
the basic coverage required under clause (i)
(if applicable), or the stop-loss coverage
required under clause (ii); and
``(iv) except as revised under the
preceding clauses or pursuant to subsection
(p)(1)(E), the benefit packages are identical
to the benefit packages that were available on
the date of enactment of the Seniors
Prescription Insurance Coverage Equity (SPICE)
Act of 2001.
``(B) Administration of benefits.--Pursuant to
section 1860A(a)(3), an issuer of a medicare
supplemental policy revised under such subparagraph may
directly administer the prescription drug benefits
required under the policy or may contract with an
entity that meets the applicable requirements under
part D to administer such benefits.
``(C) Manner of revision.--The benefit packages
revised under this section shall be revised in the
manner described in subparagraph (E) of subsection
(p)(1), except that for purposes of subparagraph (C) of
such subsection, the standards established under this
subsection shall take effect not later than January 1,
2003.
``(2) Guaranteed issuance and renewal of new policies.--The
provisions of subsections (q) and (s) shall apply to medicare
supplemental policies revised under this subsection in the same
manner as such provisions apply to medicare supplemental
policies issued under the standards established under
subsection (p).
``(3) Opportunity of current policyholders to purchase
revised policies.--
``(A) In general.--No medicare supplemental policy
of an issuer with a benefit package that is revised
under paragraph (1) shall be deemed to meet the
standards in subsection (c) unless the issuer--
``(i) provides written notice during the
60-day period immediately preceding the period
established under section 1860C(c), to each
policyholder or certificate holder of a
medicare supplemental policy issued by that
issuer (at the most recent available address)
of the offer described in clause (ii) and of
the fact that, so long as they retain coverage
under such policy, they are unable to obtain
SPICE prescription drug coverage (as defined in
section 1860B(a)) under part D; and
``(ii) offers the policyholder or
certificate holder under the terms described in
subparagraph (B), during at least the period
established under subsection (c) of section
1860C, institution of coverage effective for
the period described in subsection (d) of such
section, a medicare supplemental policy with
the benefit package that has been revised under
paragraph (1) of this subsection that the
Secretary determines is most comparable to the
policy in which the individual is enrolled.
``(B) Terms of offer described.--The terms
described under this subparagraph are terms which do
not--
``(i) deny or condition the issuance or
effectiveness of a medicare supplemental policy
described in subparagraph (A)(ii) that is
offered and is available for issuance to new
enrollees by such issuer;
``(ii) discriminate in the pricing of such
policy because of health status, claims
experience, receipt of health care, or medical
condition; or
``(iii) impose an exclusion of benefits
based on a preexisting condition under such
policy.
``(4) Opportunity of other eligible individuals to purchase
revised policies.--No medicare supplemental policy of an issuer
with a benefit package that is revised under paragraph (1)
shall be deemed to meet the standards in subsection (c) unless,
during at least the period established under section 1860C(c),
the issuer permits each eligible medicare beneficiary (as
defined in section 1860A(d), but who is not described in
paragraph (3)) to purchase any medicare supplemental policy
that has been revised under paragraph (1) with institution of
coverage effective for the period described in section 1860C(d)
under the terms of the offer described in paragraph (3)(B).
``(5) Grandfathering of current policyholders.--
``(A) In general.--Except as provided in
subparagraph (B), no person may sell, issue, or renew a
medicare supplemental policy with a benefit package
that has not been revised under this subsection on or
after January 1, 2003.
``(B) Grandfathering.--Each policyholder or
certificate holder of a medicare supplemental policy as
of December 31, 2002, may continue to receive benefits
under such policy and may renew such policy as if this
subsection had not been enacted, except that such
beneficiary shall not be eligible to enroll for SPICE
prescription drug coverage (as defined in section
1860B(a)) under part D during the period in which such
policy is in effect.
``(6) Penalties.--Each penalty under this section shall
apply with respect to policies revised under this subsection as
if such policies were issued under the standards established
under subsection (p), including the penalties under subsections
(a), (d), (p)(8), (p)(9), (q)(5), (r)(6)(A), (s)(4), and
(t)(2)(D).''.
(b) NAIC Study and Report.--
(1) Study.--The Secretary of Health and Human Services (in
this subsection referred to as the ``Secretary'') shall
contract with the National Association of Insurance
Commissioners (in this subsection referred to as the ``NAIC'')
to conduct a study--
(A) to determine whether the portion of the benefit
packages revised under section 1882(v) of the Social
Security Act (as added by subsection (a)) relating to
parts A and B of the medicare program should be revised
as a result of the establishment of SPICE prescription
drug coverage (as defined in section 1860B(a) of such
Act, as added by section 2) and whether the total
number of such benefit packages should be reduced;
(B) to identify methods to ensure that any
financial assistance paid to issuers of medicare
supplemental policies on behalf of enrollees for
providing stop-loss coverage (as defined in section
1860B(c) of the Social Security Act, as added by
section 2) made available under the benefit packages
revised under section 1882(v) of such Act (as so added)
is not used to subsidize any other benefits, including
the benefits relating to parts A and B of the medicare
program; and
(C) to assess the practicality and viability of
establishing a medicare supplemental policy that only
provides SPICE prescription drug coverage (as so
defined).
(2) Report.--Not later than 6 months after the date of
enactment of this Act, the NAIC shall submit to Congress and
the Secretary a report on the study conducted under paragraph
(1) together with such recommendations as the NAIC determines
appropriate.
SEC. 5. PROVISION OF INFORMATION ON SPICE DRUG BENEFIT PROGRAM UNDER
HEALTH INSURANCE INFORMATION, COUNSELING, AND ASSISTANCE
GRANTS.
Section 4360(b)(2)(A)(ii) of the Omnibus Budget Reconciliation Act
of 1990 (42 U.S.C. 1395b-4(b)(2)(A)(ii)) is amended by striking ``and
information'' and inserting ``, information regarding the SPICE drug
benefit program under part D of title XVIII of the Social Security Act,
and information''.
SEC. 6. PERSONAL DIGITAL ACCESS TECHNOLOGY DEMONSTRATION PROJECT.
(a) Demonstration Project.--
(1) In general.--The SPICE Board (established under section
1860M of the Social Security Act (as added by section 2)) shall
conduct a demonstration project for the purpose of increasing
the use of Personal Digital Access Technology in prescribing
covered outpatient drugs (as defined in section 1860B(e) (as so
added)) for eligible medicare beneficiaries receiving SPICE
prescription drug coverage under part D of title XVIII of such
Act (as so added).
(2) Aspects of project.--The demonstration project shall
address ways in which the use of Personal Digital Access
Technology can be used to--
(A) avoid adverse drug reactions among such
beneficiaries, including problems due to therapeutic
duplication, drug-disease contraindications, drug-drug
interactions (including serious interactions with
nonprescription or over-the-counter drugs), incorrect
drug dosage or duration of drug treatment, drug-allergy
interactions, and clinical abuse and misuse;
(B) transmit information about the coverage of
covered outpatient drugs under the policy or plan in
which such a beneficiary is receiving SPICE
prescription drug coverage to prescribing physicians;
(C) increase the use of generic drugs by such
beneficiaries; and
(D) increase the compliance of entities offering
policies or plans that provide SPICE prescription drug
coverage with the requirements under part D of title
XVIII of the Social Security Act (as added by section
2).
(3) Inclusion of providers.--In conducting the
demonstration project, the SPICE Board shall include--
(A) physicians;
(B) pharmacists;
(C) entities that offer policies or plans that
provide SPICE prescription drug coverage; and
(D) any entity (including a pharmacy benefits
management company) that contracts with an entity
described in subparagraph (C) to provide benefits under
such policies or plans.
(4) Duration of projects.--The demonstration project shall
be conducted over a 3-year period.
(b) Reports to Congress.--
(1) In general.--
(A) Initial report.--Not later than 18 months after
the SPICE Board implements the demonstration project,
the SPICE Board shall submit to Congress an initial
report on the demonstration project.
(B) Final report.--Not later that 6 months after
the conclusion of the project, the SPICE Board shall
submit to Congress a final report on the demonstration
project.
(2) Contents of reports.--The reports described in
paragraph (1) shall include the following:
(A) A detailed description of the demonstration
project.
(B) An evaluation of the demonstration project.
(C) Recommendations for legislation that the SPICE
Board determines to be appropriate as a result of the
demonstration project.
(D) Any other information regarding the
demonstration project that the SPICE Board determines
to be appropriate.
(c) Funding.--Expenditures made for carrying out the demonstration
project shall be made from funds otherwise appropriated to the
Secretary of Health and Human Services.
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