[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6281 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 6281

      To amend title XVIII of the Social Security Act to provide 
 comprehensive improvements to the Medicare prescription drug program, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2006

  Mr. Doggett (for himself, Mr. Rangel, Mr. Stark, Mr. McDermott, Mr. 
Lewis of Georgia, Mr. Neal of Massachusetts, Mr. McNulty, Mr. Becerra, 
Mrs. Jones of Ohio, Mr. Larson of Connecticut, Mr. Emanuel, Mr. Allen, 
    Mrs. Capps, Mrs. Davis of California, Ms. DeLauro, Mr. Frank of 
  Massachusetts, Mr. Al Green of Texas, Mr. Gene Green of Texas, Mr. 
  Grijalva, Mr. Hinchey, Ms. Jackson-Lee of Texas, Ms. Eddie Bernice 
    Johnson of Texas, Ms. Kaptur, Mr. Kennedy of Rhode Island, Ms. 
  Kilpatrick of Michigan, Mr. Langevin, Mrs. Lowey, Mrs. Maloney, Ms. 
     McCollum of Minnesota, Mr. McGovern, Mr. Meehan, Ms. Moore of 
Wisconsin, Mr. Moran of Virginia, Mr. Nadler, Mr. Oberstar, Mr. Ortiz, 
  Mr. Reyes, Ms. Schakowsky, Mr. Waxman, Mr. Weiner, and Ms. Woolsey) 
 introduced the following bill; which was referred to the Committee on 
   Energy and Commerce, and in addition to the Committee on Ways and 
 Means, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
      To amend title XVIII of the Social Security Act to provide 
 comprehensive improvements to the Medicare prescription drug program, 
                        and for other purposes.

    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 ``Medicare 
Prescription Drug Savings for Our Seniors (Medicare Prescription Drug 
SOS) Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
        TITLE I--MEDICARE OPERATED PRESCRIPTION DRUG PLAN OPTION

Sec. 101. Establishment of medicare operated prescription drug plan 
                            option.
             TITLE II--MEDICAID AND LOW-INCOME IMPROVEMENTS

Sec. 201. Change in base used in computing State clawback provision.
Sec. 202. Elimination of cost-sharing for certain full-benefit dual 
                            eligibles.
Sec. 203. Elimination of the indexing on the price-sharing for dual-
                            eligibles and qualifying low income 
                            beneficiaries.
Sec. 204. Expediting low-income subsidies under the Medicare 
                            prescription drug program.
Sec. 205. Increase in permitted resources to obtain low-income 
                            subsidies.
Sec. 206. Waiver of late enrollment penalty for subsidy eligible 
                            individuals for first 24 months of non-
                            enrollment.
                 TITLE III--FRAUD AND ABUSE PROVISIONS

Sec. 301. Criminal penalty for fraud in connection with enrollment 
                            under an MA plan or prescription drug plan.
Sec. 302. Recourse for slamming practices.
Sec. 303. Protection from loss of employment-based retiree health 
                            coverage upon enrollment for medicare 
                            prescription drug benefit during 2006.
Sec. 304. Required application of intermediate sanctions to protect 
                            against fraud and abuse.
Sec. 305. Repeal of special waiver authority for State licensure.
             TITLE IV--RELATION TO SOCIAL SECURITY BENEFITS

Sec. 401. Protection of Social Security benefits against decrease due 
                            to part D medicare premium increases.
               TITLE V--BENEFICIARY PROTECTION PROVISIONS

Sec. 501. Extension of open enrollment period; suspension of late 
                            enrollment penalties; allowing one-time 
                            change in plan during first year of 
                            enrollment.
Sec. 502. Counting expenditures under State drug assistance programs 
                            against true out-of-pocket costs.
Sec. 503. Price disclosure.
Sec. 504. Removal of covered part D drugs from the prescription drug 
                            plan formulary.
Sec. 505. Codification of requirement for coverage of all or 
                            substantially all of drugs within six 
                            categories of drugs.
Sec. 506. Removal of exclusion of benzodiazepines from required 
                            coverage under the medicare prescription 
                            drug program.
Sec. 507. Standardized forms and procedures for reconsiderations and 
                            appeals.
Sec. 508. Elimination of MA Regional Stabilization Fund (Slush Fund); 
                            elimination of certain MA overpayments.
   TITLE VI--FAIR AND SPEEDY TREATMENT OF MEDICARE PRESCRIPTION DRUG 
                                 CLAIMS

Sec. 601. Prompt payment by Medicare prescription drug plans and MA-PD 
                            plans under part D.
Sec. 602. Restriction on co-branding.
Sec. 603. Minimum dispensing fees for generic covered part D drugs.
Sec. 604. Provision of medication therapy management services under 
                            part D.

        TITLE I--MEDICARE OPERATED PRESCRIPTION DRUG PLAN OPTION

SEC. 101. ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION DRUG PLAN 
              OPTION.

    (a) In General.--Subpart 2 of part D of the Social Security Act is 
amended by inserting after section 1860D-11 the following new section:

           ``medicare operated prescription drug plan option

    ``Sec. 1860D-11A.  (a) In General.--Notwithstanding any other 
provision of this part, for each year (beginning with 2007), in 
addition to any plans offered under section 1860D-11, the Secretary 
shall offer one or more medicare operated prescription drug plans (as 
defined in subsection (c)) with a service area that consists of the 
entire United States and shall enter into negotiations with 
pharmaceutical manufacturers to reduce the purchase cost of covered 
part D drugs for eligible part D individuals in accordance with 
subsection (b).
    ``(b) Negotiations.--
            ``(1) In general.--Notwithstanding section 1860D-11(i), for 
        purposes of offering a medicare operated prescription drug plan 
        under this section, the Secretary shall negotiate with 
        pharmaceutical manufacturers with respect to the purchase price 
        of covered part D drugs and shall encourage the use of more 
        affordable therapeutic equivalents to the extent such practices 
        do not override medical necessity as determined by the 
        prescribing physician. To the extent practicable and consistent 
        with the previous sentence, the Secretary shall implement 
        strategies similar to those used by other Federal purchasers of 
        prescription drugs, and other strategies, to reduce the 
        purchase cost of covered part D drugs.
            ``(2) Permitting application of some or all of savings to 
        reduction in coverage gap.--Notwithstanding any other provision 
        of this part, the Secretary may increase the initial coverage 
        limit under section 1860D-2(b)(3) for a year, but only with 
        respect to the medicare operated prescription drug plan, by an 
        amount not to exceed the actuarial value of the reductions in 
        expenditures during such year resulting from the application of 
        paragraph (1).
    ``(c) Medicare Operated Prescription Drug Plan Defined.--For 
purposes of this part, the term `medicare operated prescription drug 
plan' means a prescription drug plan that offers qualified prescription 
drug coverage and access to negotiated prices described in section 
1860D-2(a)(1)(A). Such a plan may offer supplemental prescription drug 
coverage in the same manner as other qualified prescription drug 
coverage offered by other prescription drug plans.
    ``(d) Monthly Beneficiary Premium.--
            ``(1) Qualified prescription drug coverage.--The monthly 
        beneficiary premium for qualified prescription drug coverage 
        and access to negotiated prices described in section 1860D-
        2(a)(1)(A) to be charged under a medicare operated prescription 
        drug plan shall be uniform nationally. Such premium for months 
        in a year shall be based on the average monthly per capita 
        actuarial cost of offering the medicare operated prescription 
        drug plan for the year involved, including administrative 
        expenses, as determined by the Secretary and as certified by 
        the chief actuary of the Centers for Medicare & Medicaid 
        Services.
            ``(2) Supplemental prescription drug coverage.--Insofar as 
        a medicare operated prescription drug plan offers supplemental 
        prescription drug coverage, the Secretary may adjust the amount 
        of the premium charged under paragraph (1).''.
    (b) Auto-Enrollment of Subsidy Eligible Individuals in Medicare 
Operated Prescription Drug Plan.--Section 1860D-1(b)(1)(C) of such Act 
(42 U.S.C. 1395w-101(b)(1)(C)) is amended--
            (1) by designating the matter beginning with ``The process 
        established'' as a clause (i) with the heading ``Auto-
        enrollment for dual eligibles and certain other subsidy 
        eligible individuals'';
            (2) by inserting ``or who is a subsidy eligible individual 
        described in section 1860D-14(a)(1)'' after ``section 
        1935(c)(6))'';
            (3) by striking ``for the enrollment in'' and all that 
        follows through ``in the PDP region.'' and inserting ``for the 
        enrollment in the medicare operated prescription drug plan (as 
        defined in section 1860D-11A(c)).''; and
            (4) by adding at the end the following new clauses:
                            ``(ii) Application in case of premium 
                        increases or plan discontinuation.--The process 
                        under subparagraph (A) shall also provide for 
                        enrollment described in clause (i) in the case 
                        of such an individual who is enrolled in a 
                        prescription drug plan that has a monthly 
                        beneficiary premium that does not exceed the 
                        premium assistance available under section 
                        1860D-14(a)(1)(A)) if such plan is discontinued 
                        or the premium under such plan is increased so 
                        it exceeds such available premium assistance.
                            ``(iii) Notice.--
                                    ``(I) In general.--The Secretary 
                                shall provide for notice to each 
                                individual auto-enrolled under clause 
                                (i) or (ii) that the individual has the 
                                right and the opportunity to select 
                                another prescription drug plan (or MA-
                                PD plan) through which to obtain 
                                prescription drug coverage.
                                    ``(II) Additional notice.--In the 
                                case of an individual described in 
                                clause (ii), both the sponsor of the 
                                plan in which the individual is 
                                enrolled and the Secretary shall 
                                provide notice to the individual that 
                                enrollment in the plan will be 
                                discontinued or have a premium above 
                                the benchmark and, as a result, the 
                                individual will be enrolled in the 
                                medicare operated prescription drug 
                                plan for the following year unless the 
                                individual affirmatively acts 
                                otherwise.''.
    (c) Application of Monthly Premium for Premium Subsidy Purposes.--
Section 1860D-14(b)(1) of such Act (42 U.S.C. 1395ww-114(b)(1)) is 
amended by striking ``the amount specified in paragraph (3)'' and 
inserting ``the greater of the amount specified in paragraph (3) or the 
monthly premium amount specified in section 1860D-11A(d)(1)''.
    (d) Conforming Amendments, Including Elimination of Unnecessary 
Plan Requirement and Fallback Plan Provisions.--
            (1) Section 1860D-3 of such Act (42 U.S.C. 1395w-103) is 
        repealed.
            (2) Section 1860D-11 of such Act (42 U.S.C. 1395w-111) is 
        amended--
                    (A) by striking subsection (f), (g), and (h); and
                    (B) in subsection (i), by inserting ``except as 
                provided in section 1860D-11A(b),'' after ``in carrying 
                out this part,''.
            (3) Section 1860D-12(b) of such Act (42 U.S.C. 1395w-
        112(b)) is amended by striking paragraph (2).
            (4) Section 1860D-13(c) of such Act (42 U.S.C. 1395w-
        113(c)) is amended by striking paragraph (3).
            (5) Section 1860D-15 of such Act (42 U.S.C. 1395w-115) is 
        amended by striking subsection (g).
            (6) Section 1860D-16(b)(1) of such Act (42 U.S.C. 1395w-
        116(b)(1)) is amended by striking subparagraph (B) and 
        inserting the following:
                    ``(B) payments for expenses incurred with respect 
                to the operation of medicare operated prescription drug 
                plans under section 1860D-11A.''.
            (7) Section 1860D-41(a) of such Act (42 U.S.C. 1395ww-
        141(a)) is amended by striking paragraph (5) and inserting the 
        following:
            ``(5) Medicare operated prescription drug plan.--The term 
        `medicare operated prescription drug plan' has the meaning 
        given such term in section 1860D-11A(c).''.
            (8) Section 1860D-42(a) of such Act (42 U.S.C. 1395w-
        142(a)) is amended by striking ``, including section 1860D-
        3(a)(1),''.
    (e) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 101 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2071).

             TITLE II--MEDICAID AND LOW-INCOME IMPROVEMENTS

SEC. 201. CHANGE IN BASE USED IN COMPUTING STATE CLAWBACK PROVISION.

    (a) In General.--Section 1935(c) of the Social Security Act (42 
U.S.C. 1936u-5(c)) is amended--
            (1) in paragraph (2)(A)(ii), by inserting ``, subject to 
        paragraph (7),'' after ``increased for each year ('';
            (2) in paragraph (3), by inserting ``Subject to paragraph 
        (7)--'' after ``dual eligible individuals.--'' in the matter 
        before subparagraph (A); and
            (3) by adding at the end the following new paragraph:
            ``(7) Use of 2005 as base.--This subsection shall be 
        applied by substituting `2005' for `2003' each place it appears 
        in paragraph (3) if such substitution results in a reduced 
        amount under paragraph (1)(A) of this subsection and, in the 
        case of such substitution, the reference in paragraph 
        (2)(A)(ii) to `2004' is deemed a reference to `2006.'''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payments for calendar quarters beginning on or after January 
1, 2007.

SEC. 202. ELIMINATION OF COST-SHARING FOR CERTAIN FULL-BENEFIT DUAL 
              ELIGIBLES.

    (a) In General.--Section 1860D-14(a)(1)(D)(i) of the Social 
Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
            (1) in the heading, by striking ``Institutionalized 
        individuals.--In'' and inserting ``Elimination of cost-sharing 
        for certain full-benefit dual eligible individuals.--'' and the 
        following:
                                    ``(I) Institutionalized 
                                individuals.--In''; and
            (2) by adding at the end the following new subclauses:
                                    ``(II) Certain other individuals.--
                                In the case of an individual who is a 
                                full-benefit dual eligible individual 
                                and who receives services from a 
                                facility or program described in 
                                subclause (III), the elimination of any 
                                beneficiary coinsurance described in 
                                section 1860D-2(b)(2) (for all amounts 
                                through the total amount of 
                                expenditures at which benefits are 
                                available under section 1860D-2(b)(4)).
                                    ``(III) Facility described.--For 
                                purposes of subclause (II), a facility 
                                or program described in this subclause 
                                is a custodial care facility or group 
                                home (as such terms are defined by the 
                                Secretary) or any other facility or 
                                program that the Secretary determines 
                                provides services without which the 
                                individual would require long-term care 
                                in a medical or mental health 
                                institution or nursing facility.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        shall take effect as if included in the enactment of section 
        101 of the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003 (Public Law 108-173).
            (2) Reimbursement of cost-sharing payments.--The Secretary 
        shall provide for reimbursement of any beneficiary coinsurance 
        described in section 1860D-2(b)(2) of the Social Security Act 
        (42 U.S.C. 1395w-102(b)(2)) paid by or on behalf of an 
        individual described in section 1860D-14(a)(1)(D)(i)(II) of 
        such Act, as added by subsection (a), during the period 
        beginning on January 1, 2006, and ending on the date of 
        enactment of this Act.

SEC. 203. ELIMINATION OF THE INDEXING ON THE PRICE-SHARING FOR DUAL-
              ELIGIBLES AND QUALIFYING LOW INCOME BENEFICIARIES.

    (a) In General.--Section 1860D-14(a) of the Social Security Act (42 
U.S.C. 1395w-114(a)) is amended by striking paragraph (4).
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on enactment and apply to cost-sharing incurred on or after 
January 1, 2007.

SEC. 204. EXPEDITING LOW-INCOME SUBSIDIES UNDER THE MEDICARE 
              PRESCRIPTION DRUG PROGRAM.

    (a) In General.--Section 1860D-14 of the Social Security Act (42 
U.S.C. 1395w-114) is amended by adding at the end the following new 
subsection:
    ``(e) Expedited Application and Eligibility Process.--
            ``(1) Expedited process.--
                    ``(A) In general.--The Secretary shall provide for 
                an expedited process under this subsection for the 
                qualification for low-income assistance under this 
                section through a request by the Secretary to the 
                Secretary of the Treasury as provided in subparagraphs 
                (B) and (C) for information sufficient to identify 
                whether the individual involved is likely eligible for 
                subsidies under this section based on such information 
                and the amount of premium and cost-sharing subsidies 
                for which they would qualify based on such information. 
                Such process shall be conducted in cooperation with the 
                Commissioner of Social Security.
                    ``(B) Opt in for newly eligible individuals.--Not 
                later than 60 days after the date of the enactment of 
                this subsection, the Secretary shall ensure that, as 
                part of the Medicare enrollment process, enrolling 
                individuals--
                            ``(i) receive information describing the 
                        low-income subsidy provided under this section; 
                        and
                            ``(ii) are provided the opportunity to opt-
                        in to the expedited process described in this 
                        subsection by giving consent for the Secretary 
                        to screen the beneficiary for eligibility for 
                        such subsidy through a request to the Secretary 
                        of the Treasury under section 6103(l)(7) of the 
                        Internal Revenue Code of 1986.
                    ``(C) Transition for currently eligible 
                individuals.--In the case of any part D eligible 
                individual to which subparagraph (B) did not apply at 
                the time of such individual's enrollment, the Secretary 
                shall, as soon as practicable after implementation of 
                subparagraph (B), request in writing that the Secretary 
                of the Treasury disclose, pursuant to section 
                6103(l)(21) of the Internal Revenue Code of 1986, 
                whether such individual has either filed no income tax 
                return or whether such individual's income tax return 
                indicates likely eligibility for the low-income subsidy 
                provided under this section.
            ``(2) Notification of potentially eligible individuals.--
        Under such process, in the case of each individual identified 
        under paragraph (1) who has not otherwise applied for, or been 
        determined eligible for, benefits under this section (or who 
        has applied for and been determined ineligible for such 
        benefits based only on excess resources), the Secretary shall 
        send them a letter (using basic, uncomplicated language) 
        containing the following:
                    ``(A) Eligibility.--A statement that, based on the 
                information obtained under paragraph (1), the 
                individual is likely eligible for low-income subsidies 
                under this section.
                    ``(B) Amount of subsidies.--A description of the 
                amount of premium and cost-sharing subsidies under this 
                section for which the individual would likely be 
                eligible based on such information.
                    ``(C) Enrollment opportunity.--In case the 
                individual is not enrolled in a prescription drug plan 
                or MA-PD plan--
                            ``(i) a statement that--
                                    ``(I) the individual has the 
                                opportunity to enroll in a prescription 
                                drug plan or MA-PD plan for benefits 
                                under this part, but is not required to 
                                be so enrolled; and
                                    ``(II) if the individual has 
                                creditable prescription drug coverage, 
                                the individual need not so enroll;
                            ``(ii) a list of the prescription drug 
                        plans and MA-PD plans in which the individual 
                        is eligible to enroll;
                            ``(iii) an enrollment form that may be used 
                        to enroll in such a plan by mail and that 
                        provides that if the individual wishes to 
                        enroll but does not designate a plan, the 
                        Secretary is authorized to enroll the 
                        individual in the medicare operated 
                        prescription drug plan in accordance with 
                        section 1860D-1(b)(1)(C); and
                            ``(iv) a statement that the individual may 
                        also enroll online or by telephone, but, in 
                        order to qualify for low-income subsidies, the 
                        individual must complete the attestation 
                        described in subparagraph (D) or otherwise 
                        apply for such subsidies.
                    ``(D) Attestation.--A one-page application form 
                that provides for a signed attestation, under penalty 
                of law, as to the amount of income and assets of the 
                individual and constitutes an application for the low-
                income subsidies described in subparagraph (B). Such 
                form--
                            ``(i) shall not require the submittal of 
                        additional documentation regarding income or 
                        assets;
                            ``(ii) shall permit the appointment of a 
                        personal representative described in paragraph 
                        (6); and
                            ``(iii) may provide for the specification 
                        of a language (other than English) that is 
                        preferred for subsequent communications with 
                        respect to the individual under this part.
                    ``(E) Information on ship.--Information on how the 
                individual may contact the State Health Insurance 
                Assistance Program (SHIP) for the State in which the 
                individual is located in order to obtain assistance 
                regarding enrollment and benefits under this part.
        If a State is doing its own outreach to low-income seniors 
        regarding enrollment and low-income subsidies under this part, 
        such process shall be coordinated with the State's outreach 
        effort.
            ``(3) Follow-up communications.--If the individual does not 
        respond to the letter described in paragraph (2) either by 
        making an enrollment described in paragraph (2)(C), completing 
        an attestation described in paragraph (2)(D), or declining 
        either or both, the Secretary shall make additional attempts to 
        contact the individual to obtain such an affirmative response.
            ``(4) Hold-harmless.--Under such process, if an individual 
        in good faith and the absence of fraud executes an attestation 
        described in paragraph (2)(D) and is provided low-income 
        subsidies under this section on the basis of such attestation, 
        if the individual is subsequently found not eligible for such 
        subsidies, there shall be no recovery made against the 
        individual because of such subsidies improperly paid.
            ``(5) Use of authorized representative.--Under such 
        process, with proper authorization (which may be part of the 
        attestation form described in paragraph (2)(D)), an individual 
        may authorize another individual to act as the individual's 
        personal representative with respect to communications under 
        this part and the enrollment of the individual under a 
        prescription drug plan (or MA-PD plan) and for low-income 
        subsidies under this section.
            ``(6) Use of preferred language in subsequent 
        communications.--In the case an attestation described in 
        paragraph (2)(D) is completed and in which a language other 
        than English is specified under clause (iii) of such paragraph, 
        the Secretary shall provide that subsequent communications to 
        the individual under this part shall be in such language.
            ``(7) Construction.--Nothing in this subsection shall be 
        construed as precluding the Secretary from taking additional 
        outreach efforts to enroll eligible individuals under this part 
        and to provide low-income subsidies to eligible individuals.''.
    (b) Transitional Disclosure of Return Information for Purposes of 
Providing Low-Income Subsidies Under Medicare.--
            (1) In general.--Subsection (l) of section 6103 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new paragraph:
            ``(21) Transitional disclosure of return information for 
        purposes of providing low-income subsidies under medicare.--
                    ``(A) In general.--The Secretary, upon written 
                request from the Secretary of Health and Human Services 
                under section 1860D-14(e)(1) of the Social Security Act 
                for an individual described in subparagraph (C) of such 
                section, shall disclose to officers and employees of 
                the Department of Health and Human Services and the 
                Social Security Administration with respect to a 
                taxpayer for the applicable year--
                            ``(i)(I) whether the adjusted gross income, 
                        as modified in accordance with specifications 
                        of the Secretary of Health and Human Services 
                        for purposes of carrying out such section, of 
                        such taxpayer and, if applicable, such 
                        taxpayer's spouse, for the applicable year, 
                        exceeds the amounts specified by the Secretary 
                        of Health and Human Services as indicating 
                        likely eligibility for the low-income subsidy 
                        provided under section 1860D-14 of such Act,
                            ``(II) whether the return was a joint 
                        return, and
                            ``(III) the applicable year, or
                            ``(ii) if applicable, the fact that there 
                        is no return filed for such taxpayer for the 
                        applicable year.
                    ``(B) Definition of applicable year.--For the 
                purposes of this paragraph, the term `applicable year' 
                means the most recent taxable year for which 
                information is available in the Internal Revenue 
                Service's taxpayer data information systems, or, if 
                there is no return filed for such taxpayer for such 
                year, the prior taxable year.
                    ``(C) Restriction on use of disclosed 
                information.--Return information disclosed under this 
                paragraph may be used only for the purposes of 
                identifying eligible individuals for, and 
                administering--
                            ``(i) low-income subsidies under section 
                        1860D-14 of the Social Security Act, and
                            ``(ii) the Medicare Savings Program 
                        implemented under clauses (i), (iii), and (iv) 
                        of section 1902(a)(10)(E) of such Act.
                    ``(D) Termination.--Return information may not be 
                disclosed under this paragraph after the date that is 
                one year after the date of the enactment of this 
                paragraph.''.
            (2) Confidentiality.--Paragraph (3) of section 6103(a) of 
        such Code is amended by striking ``or (20)'' and inserting 
        ``(20), or (21)''.
            (3) Procedures and recordkeeping related to disclosures.--
        Paragraph (4) of section 6103(p) of such Code is amended by 
        striking ``or (20)'' each place it appears and inserting 
        ``(20), or (21)''.
            (4) Unauthorized disclosure or inspection.--Paragraph (2) 
        of section 7213(a) of such Code is amended by striking ``or 
        (20)'' and inserting ``(20), or (21)''.

SEC. 205. INCREASE IN PERMITTED RESOURCES TO OBTAIN LOW-INCOME 
              SUBSIDIES.

    (a) Increase in Resource Limits.--Subparagraph (E)(i) of section 
1860D-14(a)(3) of the Social Security Act (42 U.S.C. 1395ww-114(a)(3)) 
is amended--
            (1) in subclause (I), by striking ``for 2006'' and 
        inserting ``for months in 2006 before the first day of the 
        first month beginning after the date of the enactment of the 
        Medicare Prescription Drug Savings for Our Seniors (Medicare 
        Prescription Drug SOS) Act of 2006'' and by striking ``and'' at 
        the end;
            (2) by redesignating subclause (II) as subclause (III);
            (3) by inserting after subclause (I) the following new 
        subclause:
                                    ``(II) for months in 2006 beginning 
                                with the first month that begins after 
                                the date of the enactment of the 
                                Medicare Prescription Drug Savings for 
                                Our Seniors (Medicare Prescription Drug 
                                SOS) Act of 2006, $50,000 (or $100,000 
                                in the case of the combined value of 
                                the individual's assets or resources 
                                and the assets or resources of the 
                                individual's spouse); and''; and
            (4) in the last sentence, by striking ``subclause (II)'' 
        and inserting ``subclause (III)''.
    (b) Not Counting Value of Life Insurance as Resource.--Such section 
is further amended--
            (1) in subparagraphs (D) and (E), by inserting ``, except 
        as provided in subparagraph (G)'' after ``supplemental security 
        income program''; and
            (2) by adding at the end the following new subparagraph:
                    ``(G) Exclusion of life insurance in resources.--
                For purposes of subparagraphs (D) and (E), the value of 
                a life insurance policy shall not be counted as a 
                resource for months beginning after the date of the 
                enactment of this subparagraph.''.

SEC. 206. WAIVER OF LATE ENROLLMENT PENALTY FOR SUBSIDY ELIGIBLE 
              INDIVIDUALS FOR FIRST 24 MONTHS OF NON-ENROLLMENT.

    Section 1860D-13(b)(3)(B) of the Social Security Act (42 U.S.C. 
1395w-113(b)(3)(B)) is amended by inserting before the period at the 
end the following: ``, except that in the case of a subsidy eligible 
individual (as defined in section 1860D-14(a)(3)(A)) the first 24 
uncovered months shall not be counted''.

                 TITLE III--FRAUD AND ABUSE PROVISIONS

SEC. 301. CRIMINAL PENALTY FOR FRAUD IN CONNECTION WITH ENROLLMENT 
              UNDER AN MA PLAN OR PRESCRIPTION DRUG PLAN.

    (a) In General.--Section 1857 of the Social Security Act (42 U.S.C. 
1395w-27) is amended by adding at the end the following new subsection:
    ``(j) Criminal Penalty for Fraud in Connection With Enrollment 
Under an MA Plan or Prescription Drug Plan.--Whoever knowingly and 
willfully--
            ``(1) defrauds an individual in connection with the 
        enrollment (or nonenrollment) of the individual with a Medicare 
        Advantage plan under this part or a prescription drug plan 
        under part D; or
            ``(2) fraudulently or falsely represents an entity to be 
        such a plan for purposes of inducing enrollment in such entity;
shall be fined under title 18, United States Code, or imprisoned not 
less than 3 years and not more than 10 years, or both.''.
    (b) Conforming Reference in Part D.--Section 1860D-12(b) of such 
Act (42 U.S.C. 1395w-112(b)) is amended by adding at the end the 
following new paragraph:
            ``(4) Reference to penalty for fraud in connection with 
        enrollment under a prescription drug plan.--For provision 
        imposing a criminal penalty for defrauding an individual in 
        connection with the enrollment of such individual under a 
        prescription drug plan, see section 1857(j).''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to fraudulent acts and to fraudulent or false representations 
made on or after the date of the enactment of this Act.

SEC. 302. RECOURSE FOR SLAMMING PRACTICES.

    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) Sanctions Against Slamming Practices.--
            ``(1) In general.--The Secretary shall establish 
        procedures, consistent with this subsection and the complaint 
        processes otherwise available, under which Medicare Advantage 
        eligible individuals who have been enrolled into an MA-PD plan 
        without their informed consent may file a complaint with the 
        Secretary regarding such enrollment. Such a complaint shall be 
        signed and shall attest, under penalty of perjury, as to the 
        accuracy of the statements therein.
            ``(2) Response to the complaint.--If the Secretary finds 
        that the complaint is justified by the facts in the case, the 
        Secretary shall permit the individual to be enrolled under the 
        original medicare fee-for-service program and the medicare 
        operated prescription drug plan or under another MA plan in 
        which the individual was previously enrolled. An individual who 
        is dissatisfied with the Secretary's decision on the complaint 
        may have a hearing on the complaint before an administrative 
        law judge in a manner similar to the manner in which such a 
        hearing is permitted under this title with respect to other 
        determinations under this title.''.

SEC. 303. PROTECTION FROM LOSS OF EMPLOYMENT-BASED RETIREE HEALTH 
              COVERAGE UPON ENROLLMENT FOR MEDICARE PRESCRIPTION DRUG 
              BENEFIT DURING 2006.

    Section 1860D-22(a)(2) of the Social Security Act (42 U.S.C. 1395w-
132(a)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Protection from loss of employment-based 
                coverage.--The sponsor of the plan may not 
                involuntarily discontinue coverage of an individual 
                under a group health plan before January 1, 2008, based 
                upon the individual's decision to enroll in a 
                prescription drug plan or an MA-PD plan under this 
                part.''.

SEC. 304. REQUIRED APPLICATION OF INTERMEDIATE SANCTIONS TO PROTECT 
              AGAINST FRAUD AND ABUSE.

    (a) In General.--Section 1860D-12(b)(3)(E) of the Social Security 
Act (42 U.S.C. 1395w-112(b)(3)(E)) is amended by inserting ``and the 
reference to `may provide' in section 1857(g)(1) is deemed a reference 
to `shall provide''' after ``this part''.
    (b) Application to MA-PD Plans.--Section 1857(g)(1) of such Act (42 
U.S.C. 1395w-27(g)(1)) is amended by inserting ``(or in the case of an 
MA-PD plan or a prescription drug plan under part D, the Secretary 
shall provide)'' after ``may provide''.

SEC. 305. REPEAL OF SPECIAL WAIVER AUTHORITY FOR STATE LICENSURE.

    Subsection (d) of section 423.410 of title 42, Code of Federal 
Regulations, is repealed, and the Secretary of Health and Human 
Services has no authority to provide for a waiver of a State licensure 
requirement described in such subsection except pursuant to section 
1855(a)(2)(B) of the Social Security Act (42 U.S.C. 1395w-25(a)(2)(B)).

             TITLE IV--RELATION TO SOCIAL SECURITY BENEFITS

SEC. 401. PROTECTION OF SOCIAL SECURITY BENEFITS AGAINST DECREASE DUE 
              TO PART D MEDICARE PREMIUM INCREASES.

    (a) Protection Against Decrease in Social Security Benefits.--
            (1) Application to enrollees in prescription drug plans.--
        Section 1860D-13(a)(1) of the Social Security Act (42 U.S.C. 
        1395ww-113(a)(1)) is amended--
                    (A) in subparagraph (F), by striking ``(D) and 
                (E),'' and inserting ``(D), (E), and (F),'';
                    (B) by redesignating subparagraph (F) as 
                subparagraph (G); and
                    (C) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) Protection of social security benefits.--For 
                any calendar year, if an individual is entitled to 
                monthly benefits under section 202 or 223 or to a 
                monthly annuity under section 3(a), 4(a), or 4(f) of 
                the Railroad Retirement Act of 1974 for November and 
                December of the preceding year and was enrolled under a 
                prescription drug plan or MA-PD plan for such months, 
                the base beneficiary premium otherwise applied under 
                this paragraph for the individual for months in that 
                year shall be decreased by the amount (if any) by which 
                the sum of the amounts described in the following 
                clauses (i) and (ii) exceeds the amount of the increase 
                in such monthly benefits for that individual 
                attributable to section 215(i):
                            ``(i) Part d premium increase factor.--
                                    ``(I) In general.--Except as 
                                provided in this clause, the amount of 
                                the increase (if any) in the adjusted 
                                national average monthly bid amount (as 
                                determined under subparagraph (B)(iii)) 
                                for a month in the year over such 
                                amount for a month in the preceding 
                                year.
                                    ``(II) No application to full 
                                premium subsidy individuals.--In the 
                                case of an individual enrolled for a 
                                premium subsidy under section 1860D-
                                14(a)(1), zero.
                                    ``(III) Special rule for partial 
                                premium subsidy individuals.--In the 
                                case of an individual enrolled for a 
                                premium subsidy under section 1860D-
                                14(a)(2), a percent of the increase 
                                described in subclause (I) equal to 100 
                                percent minus the percent applied based 
                                on the linear scale under such section.
                            ``(ii) Part b premium increase factor.--If 
                        the individual is enrolled for such months 
                        under part B--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), the amount 
                                of the annual increase in premium 
                                effective for such year resulting from 
                                the application of section 1839(a)(3), 
                                as reduced (if any) under section 
                                1839(f).
                                    ``(II) No application to 
                                individuals participating in medicare 
                                savings program.--In the case of an 
                                individual who is enrolled for medical 
                                assistance under title XIX for medicare 
                                cost-sharing described in section 
                                1905(p)(3)(A)(ii), zero.''.
            (2) Application under medicare advantage program.--Section 
        1854(b)(2)(B) of such Act (42 U.S.C. 1395w-24(b)(2)(B)), as in 
        effect as of January 1, 2006, relating to MA monthly 
        prescription drug beneficiary premium, is amended by inserting 
        after ``as adjusted under section 1860D-13(a)(1)(B)'' the 
        following: ``and section 1860D-13(a)(1)(F)''.
            (3) Payment from medicare prescription drug account.--
        Section 1860D-16(b) of such Act (42 U.S.C. 1395w-116(b)) is 
        amended--
                    (A) in paragraph (1), as amended by section 
                101(c)(5)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (D);
                            (ii) by striking the period at the end of 
                        subparagraph (E) and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(F) payment under paragraph (5) of premium 
                reductions effected under section 1860D-13(a)(1)(F).''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
            ``(5) Payment for social security benefit protection 
        premium reductions.--
                    ``(A) In general.--In addition to payments provided 
                under section 1860D-15 to a PDP sponsor or an MA 
                organization, in the case of each part D eligible 
                individual who is enrolled in a prescription drug plan 
                offered by such sponsor or an MA-PD plan offered by 
                such organization and who has a premium reduced under 
                section 1860D-13(a)(1)(F), the Secretary shall provide 
                for payment to such sponsor or organization of an 
                amount equivalent to the amount of such premium 
                reduction.
                    ``(B) Application of provisions.--The provisions of 
                subsections (d) and (f) of section 1860D-15 (relating 
                to payment methods and disclosure of information) shall 
                apply to payment under subparagraph (A) in the same 
                manner as they apply to payments under such section.''.
    (b) Disregard of Premium Reductions in Determining Dedicated 
Revenues Under MMA Cost Containment.--Section 801(c)(3)(D) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173) is amended by adding at the end the following: 
``Such premiums shall also be determined without regard to any 
reductions effected under section 1839(f) or 1860D-13(a)(1)(F) of such 
title.''.
    (c) Effective Dates.--
            (1) Part d premium.--The amendments made by subsection (a) 
        apply to premiums for months beginning with January 2007.
            (2) MMA provision.--The amendment made by subsection (b) 
        shall take effect on the date of the enactment of this Act.

               TITLE V--BENEFICIARY PROTECTION PROVISIONS

SEC. 501. EXTENSION OF OPEN ENROLLMENT PERIOD; SUSPENSION OF LATE 
              ENROLLMENT PENALTIES; ALLOWING ONE-TIME CHANGE IN PLAN 
              DURING FIRST YEAR OF ENROLLMENT.

    (a) Extension of Open Enrollment Period for 2006.--Section 
1851(e)(3)(B) of the Social Security Act (42 U.S.C. 1395w-21(e)(3)(B)) 
is amended in clause (iii) by striking ``May 15, 2006'' and inserting 
``November 14, 2006''.
    (b) No Late Enrollment Penalties for Months Before January 2008.--
Section 1860D-13(b)(3)(B) of such Act (42 U.S.C. 1395w-113(b)(3)(B)) is 
amended by inserting ``(after December 2007)'' after ``any month''.
    (c) Change in Plan During First Year of Enrollment.--Section 1860D-
1(b)(1) of such Act (42 U.S.C. 1395w-101(b)(1)) is amended by adding at 
the end the following new subparagraph:
                    ``(D) Change in prescription drug plan allowed 
                during first year of enrollment.--
                            ``(i) In general.--Subject to clause (ii), 
                        at any time during the 12-month period 
                        beginning with the first month in which a part 
                        D eligible individual is enrolled in a 
                        prescription drug plan under this part, the 
                        individual may change the prescription drug 
                        plan in which the individual is enrolled.
                            ``(ii) Limitation of one change during 
                        period.--An individual may exercise the right 
                        under clause (i) only once during such 12-month 
                        period and the exercise of such right shall be 
                        in addition to the exercise of any other rights 
                        to change such an enrollment during such 
                        period.''.

SEC. 502. COUNTING EXPENDITURES UNDER STATE DRUG ASSISTANCE PROGRAMS 
              AGAINST TRUE OUT-OF-POCKET COSTS.

    Section 1860D-2(b)(4)(C)(ii) of the Social Security Act (42 U.S.C. 
1395w-102(b)(4)(C)(ii)) is amended by inserting ``, AIDS Drug 
Assistance Program, or other State drug assistance program'' after 
``State Pharmaceutical Assistance Program''.

SEC. 503. PRICE DISCLOSURE.

    (a) In General.--Section 1860D-2(d)(2) of the Social Security Act 
(42 U.S.C. 1395w-102(d)(2)) is amended--
            (1) in the first sentence, by striking ``which are passed 
        through'' and all that follows through ``other dispensers'';
            (2) in the second sentence, by inserting ``do not'' before 
        ``apply''; and
            (3) in the second sentence, by inserting before the period 
        at the end the following: ``and the Secretary shall make the 
        information described in the previous sentence available to the 
        public''.
    (b) Conforming Amendment.--Section 1927(b)(3)(D) of such Act (42 
U.S.C. 1396r-8(b)(3)(D)) is amended by striking the last sentence.

SEC. 504. REMOVAL OF COVERED PART D DRUGS FROM THE PRESCRIPTION DRUG 
              PLAN FORMULARY.

    Section 1860D-4(b)(3)(E) of the Social Security Act (42 U.S.C. 
1395w-104(b)(3)(E)) is amended to read as follows:
                    ``(E) Removing drug from formulary or changing 
                preferred or tier status of drug.--
                            ``(i) Limitation on removal or change.--
                        Beginning with 2006, except as provided in 
                        clause (iii), the PDP sponsor of a prescription 
                        drug plan may not--
                                    ``(I) remove a covered part D drug 
                                from the plan formulary;
                                    ``(II) change the preferred or 
                                tiered cost-sharing status of such a 
                                drug to a status less favorable to an 
                                enrollee; or
                                    ``(III) introduce a barrier, such 
                                as step therapy, prior authorization, 
                                or quantity limitation, to access to 
                                covered part D drugs,
                        unless advance notice under clause (ii) of such 
                        removal, change, or introduction has been 
                        provided and unless such removal, change, or 
                        introduction is only effective beginning on 
                        January 1 of the year following the year in 
                        which such notice is provided.
                            ``(ii) Notice.--The notice under this 
                        clause is an appropriate notice (such as under 
                        subsection (a)(3)) to the Secretary, affected 
                        enrollees, physicians, pharmacies, and 
                        pharmacists during the period beginning on 
                        September 1 and ending on October 31 of a year. 
                        Such notice shall ensure that such information 
                        is made available prior to the annual, 
                        coordinated open election period described in 
                        section 1851(e)(3)(B)(iii), as applied under 
                        section 1860D-1(b)(1)(B)(iii).
                            ``(iii) Exception.--Clause (i) shall not 
                        apply to a covered part D drug--
                                    ``(I) if it has been determined to 
                                be unsafe by the Food and Drug 
                                Administration; and
                                    ``(II) if, during a plan year, the 
                                drug changes from being a single source 
                                drug to a multiple source drug (as 
                                defined in section 1927(k)), and the 
                                prescription drug plan covers another 
                                bioequivalent multiple source drug at 
                                the same or lower cost-sharing to 
                                enrolled individuals.''.

SEC. 505. CODIFICATION OF REQUIREMENT FOR COVERAGE OF ALL OR 
              SUBSTANTIALLY ALL OF DRUGS WITHIN SIX CATEGORIES OF 
              DRUGS.

    (a) In General.--Section 1860D-4(b)(3) of the Social Security Act 
(42 U.S.C. 1395w-104(b)(3)) is amended--
            (1) in subparagraph (C)(i), by striking ``The formulary'' 
        and inserting ``Subject to subparagraph (G), the formulary''; 
        and
            (2) by inserting after subparagraph (F) the following new 
        subparagraph:
                    ``(G) Required inclusion of drugs in certain 
                categories and classes.--
                            ``(i) In general.--The formulary must 
                        include all or substantially all drugs in the 
                        following categories that are available as of 
                        April 17 of the prior year and shall include at 
                        least some drugs from each category without 
                        restrictions or limitations on coverage (such 
                        as through the application of a less-preferred 
                        cost-sharing tier or status, usage restriction, 
                        step therapy, prior authorization, or a 
                        quantity limitation):
                                    ``(I) Immunosuppressant.
                                    ``(II) Antidepressant.
                                    ``(III) Antipsychotic.
                                    ``(IV) Anticonvulsant.
                                    ``(V) Antiretroviral.
                                    ``(VI) Antineoplastic.
                            ``(ii) Substantially all defined.--For 
                        purposes of clause (i), the term `substantially 
                        all' means all drugs and unique dosage forms in 
                        the categories described in such clause, except 
                        for--
                                    ``(I) multi-source brands of the 
                                identical molecular structure;
                                    ``(II) extended release products 
                                when the immediate-release product is 
                                included on the formulary;
                                    ``(III) products that have the same 
                                active ingredient; and
                                    ``(IV) dosage forms that do not 
                                provide a unique route of 
                                administration, such as tablets and 
                                capsules.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to contract years beginning on or after January 1, 2007.

SEC. 506. REMOVAL OF EXCLUSION OF BENZODIAZEPINES FROM REQUIRED 
              COVERAGE UNDER THE MEDICARE PRESCRIPTION DRUG PROGRAM.

    (a) In General.--Section 1860D-2(e)(2) of the Social Security Act 
(42 U.S.C. 1395w-102(e)(2)) is amended--
            (1) by striking ``subparagraph (E)'' and inserting 
        ``subparagraphs (E) and (J)''; and
            (2) by inserting ``and benzodiazepines'' after ``smoking 
        cessation agents''.
    (b) Review of Benzodiazepine Prescription Policies to Assure 
Appropriateness and to Avoid Abuse.--The Secretary of Health and Human 
Services shall review the policies of medicare prescription drug plans 
(and MA-PD plans) under parts C and D of title XVIII of the Social 
Security Act regarding the filling of prescriptions for benzodiazepine 
to ensure that these policies are consistent with accepted clinical 
guidelines, are appropriate to individual health histories, and are 
designed to minimize long term use, guard against over-prescribing, and 
prevent patient abuse.
    (c) Development by Medicare Quality Improvement Organizations of 
Educational Guidelines for Physicians Regarding Prescribing of 
Benzodiazepines.--The Secretary of Health and Human Services shall 
provide, in contracts entered into with medicare quality improvement 
organizations under part B of title XI of the Social Security Act, for 
the development by such organizations of appropriate educational 
guidelines for physicians regarding the prescribing of benzodiazepines.
    (d) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173).

SEC. 507. STANDARDIZED FORMS AND PROCEDURES FOR RECONSIDERATIONS AND 
              APPEALS.

    (a) In General.--Section 1860D-4 of the Social Security Act (42 
U.S.C. 1395w-104) is amended by adding at the end the following new 
subsection:
    ``(l) Standardized Forms and Procedures for Reconsiderations and 
Appeals.--
            ``(1) Standard enrollee notice.--The Secretary shall 
        develop a standard notice to be distributed by a prescription 
        drug plan (or an MA-PD plan) to an enrollee when a covered part 
        D drug prescribed for the enrollee is not covered, or the 
        coverage of such drug is otherwise restricted, by the plan.
            ``(2) Standardized process for reconsiderations and 
        appeals.--The Secretary shall require prescription drug plans 
        and MA-PD plans to follow the same standardized process for 
        reconsiderations and redeterminations under subsections (g) and 
        (h). Such process shall require that determinations regarding 
        medical necessity are based on professional medical judgement, 
        the medical condition of the enrollee, the treating physician's 
        recommendation, and other medical evidence.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall provide for the standard notice and the standardized process, and 
the application of such notice and process, under the amendment made by 
subsection (a) by not later than January 1, 2007.

SEC. 508. ELIMINATION OF MA REGIONAL STABILIZATION FUND (SLUSH FUND); 
              ELIMINATION OF CERTAIN MA OVERPAYMENTS.

    (a) Elimination of Slush Fund.--
            (1) In general.--Subsection (e) of section 1858 of the 
        Social Security Act (42 U.S.C. 1395w-27a) is repealed.
            (2) Conforming amendment.--Section 1858(f)(1) of the Social 
        Security Act (42 U.S.C. 1395w-27a(f)(1)) is amended by striking 
        ``subject to subsection (e),''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the enactment of section 
        221(c) of the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2181).
    (b) Elimination of Certain Medicare Advantage Overpayments.--
            (1) In general.--Section 1853(a)(1)(C)(ii) of the Social 
        Security Act (42 U.S.C. 1395w-23(a)(1)(C)(ii)), as added by 
        section 5301 of the Deficit Reduction Act of 2005, is amended--
                    (A) in the heading, by striking ``during phase-out 
                of budget neutrality factor'';
                    (B) in the matter preceding subclause (I), by 
                striking ``through 2010'' and inserting ``and 
                subsequent years''; and
                    (C) in subclause (II), by striking ``only for 2008, 
                2009, and 2010'' and inserting ``for 2008 and 
                subsequent years''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the enactment of section 
        5301 of the Deficit Reduction Act of 2005.

   TITLE VI--FAIR AND SPEEDY TREATMENT OF MEDICARE PRESCRIPTION DRUG 
                                 CLAIMS

SEC. 601. PROMPT PAYMENT BY MEDICARE PRESCRIPTION DRUG PLANS AND MA-PD 
              PLANS UNDER PART D.

    (a) Application to Prescription Drug Plans.--Section 1860D-12(b) of 
the Social Security Act (42 U.S.C. 1395w-112 (b)), as amended by 
section 301(b), is amended by adding at the end the following new 
paragraph:
            ``(5) Prompt payment of clean claims.--
                    ``(A) Prompt payment.--Each contract entered into 
                with a PDP sponsor under this subsection with respect 
                to a prescription drug plan offered by such sponsor 
                shall provide that payment shall be issued, mailed, or 
                otherwise transmitted with respect to all clean claims 
                submitted under this part within the applicable number 
                of calendar days after the date on which the claim is 
                received.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Clean claim.--The term `clean claim' 
                        means a claim, with respect to a covered part D 
                        drug, that has no apparent defect or 
                        impropriety (including any lack of any required 
                        substantiating documentation) or particular 
                        circumstance requiring special treatment that 
                        prevents timely payment from being made on the 
                        claim under this part.
                            ``(ii) Applicable number of calendar 
                        days.--The term `applicable number of calendar 
                        days' means--
                                    ``(I) with respect to claims 
                                submitted electronically, 14 calendar 
                                days; and
                                    ``(II) with respect to claims 
                                submitted otherwise, 30 calendar days.
                    ``(C) Interest payment.--If payment is not issued, 
                mailed, or otherwise transmitted within the applicable 
                number of calendar days (as defined in subparagraph 
                (B)) after a clean claim is received, interest shall be 
                paid at a rate used for purposes of section 3902(a) of 
                title 31, United States Code (relating to interest 
                penalties for failure to make prompt payments), for the 
                period beginning on the day after the required payment 
                date and ending on the date on which payment is made.
                    ``(D) Procedures involving claims.--
                            ``(i) Claims deemed to be clean claims.--
                                    ``(I) In general.--A claim for a 
                                covered part D drug shall be deemed to 
                                be a clean claim for purposes of this 
                                paragraph if the PDP sponsor involved 
                                does not provide a notification of 
                                deficiency to the claimant by the 10th 
                                day that begins after the date on which 
                                the claim is submitted.
                                    ``(II) Notification of 
                                deficiency.--For purposes of subclause 
                                (II), the term `notification of 
                                deficiency' means a notification that 
                                specifies all defects or improprieties 
                                in the claim involved and that lists 
                                all additional information or documents 
                                necessary for the proper processing and 
                                payment of the claim.
                            ``(ii) Payment of clean portions of 
                        claims.--A PDP sponsor shall, as appropriate, 
                        pay any portion of a claim for a covered part D 
                        drug that would be a clean claim but for a 
                        defect or impropriety in a separate portion of 
                        the claim in accordance with subparagraph (A).
                            ``(iii) Obligation to pay.--A claim for a 
                        covered part D drug submitted to a PDP sponsor 
                        that is not paid or contested by the provider 
                        within the applicable number of calendar days 
                        (as defined in subparagraph (B)) shall be 
                        deemed to be a clean claim and shall be paid by 
                        the PDP sponsor in accordance with subparagraph 
                        (A).
                            ``(iv) Date of payment of claim.--Payment 
                        of a clean claim under subparagraph (A) is 
                        considered to have been made on the date on 
                        which full payment is received by the provider.
                    ``(E) Electronic transfer of funds.--A PDP sponsor 
                shall pay all clean claims submitted electronically by 
                an electronic funds transfer mechanism.''.
    (b) Application to MA-PD Plans.--Section 1857(f) of such Act (42 
U.S.C. 1395w-27) is amended by adding at the end the following new 
paragraph:
            ``(3) Incorporation of certain prescription drug plan 
        contract requirements.--The provisions of section 1860D-
        12(b)(5) shall apply to contracts with a Medicare Advantage 
        organization in the same manner as they apply to contracts with 
        a PDP sponsor offering a prescription drug plan under part 
        D.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contracts entered into or renewed on or after the date of the 
enactment of this Act.

SEC. 602. RESTRICTION ON CO-BRANDING.

    (a) In General.--Section 1860D-4(b)(2)(A) of the Social Security 
Act (42 U.S.C. 1395w-104(b)(2)(A)) is amended by adding at the end the 
following new sentences: ``It is unlawful for a PDP sponsor of a 
prescription drug plan to display on such a card the name, brand, or 
trademark of any pharmacy.''
    (b) Effective Date.--With respect to cards dispensed before, on, or 
after the date of the enactment of this Act, the amendment made by this 
section shall apply to such cards on and after the date that is 90 days 
after such date of enactment. Any card dispensed before such date that 
is 90 days after the date of enactment that violates the second 
sentence of section 1860D-4(b)(2)(A) of the Social Security Act, as 
added by subsection (a), shall be reissued by such 90-day date.

SEC. 603. MINIMUM DISPENSING FEES FOR GENERIC COVERED PART D DRUGS.

    (a) In General.--Section 1860D-4(b)(1) of the Social Security Act 
(42 U.S.C. 1395w-104(b)(1)) is amended by adding at the end the 
following new subparagraph:
                    ``(F) Payment of minimum dispensing fees to 
                encourage use of generic drugs.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), with respect to a generic covered 
                        part D drug that is therapeutically equivalent 
                        and bioequivalent to a brand name drug that is 
                        a covered part D drug dispensed through a 
                        participating pharmacy, the amount of the 
                        dispensing fee paid to the pharmacy for the 
                        generic covered part D drug shall be an amount 
                        that is at least the greater of--
                                    ``(I) 50 percent greater than the 
                                amount of the dispensing fee for the 
                                brand name drug; or
                                    ``(II) $10.
                            ``(ii) Safe harbor for brand name drug 
                        dispensing fee amounts.--
                                    ``(I) In general.--For purposes of 
                                clause (i) and subject to subclause 
                                (II), a prescription drug plan under 
                                this section shall not decrease the 
                                amount of the dispensing fee paid by 
                                the plan to a participating pharmacy 
                                for a brand name drug described in such 
                                clause to an amount that is less than 
                                the amount of the dispensing fee paid 
                                by such plan to such pharmacy for such 
                                drug on the date of the enactment of 
                                this subparagraph.
                                    ``(II) Exception.--The Secretary 
                                may waive the prohibition under 
                                subclause (I) with respect to a 
                                dispensing fee paid by a prescription 
                                drug plan for a brand name drug, as the 
                                Secretary determines appropriate.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to prescriptions filled on or after the date that is the first 
day of the first contract year after the date of the enactment of this 
Act.

SEC. 604. PROVISION OF MEDICATION THERAPY MANAGEMENT SERVICES UNDER 
              PART D.

    (a) Provision of Medication Therapy Management Services Under Part 
D.--
            (1) In general.--Section 1860D-4(c)(2) of the Social 
        Security Act (42 U.S.C.1395w-104(c)(2)) is amended--
                    (A) in subparagraph (A)--
                            (i) in clause (i)--
                                    (I) by inserting ``or other health 
                                care provider with advanced training in 
                                medication management'' after 
                                ``furnished by a pharmacist''; and
                                    (II) by striking ``targeted 
                                beneficiaries described in clause 
                                (ii)'' and inserting ``targeted 
                                beneficiaries specified under clause 
                                (ii)''
                            (ii) by striking clause (ii) and inserting 
                        the following:
                            ``(ii) Targeted beneficiaries.--The 
                        Secretary shall specify the population of part 
                        D eligible individuals appropriate for services 
                        under a medication therapy management program 
                        based on the following characteristics:
                                    ``(I) Having a disease state in 
                                which evidence-based medicine has 
                                demonstrated the benefit of medication 
                                therapy management intervention based 
                                on objective outcome measures.
                                    ``(II) Taking multiple covered part 
                                D drugs or having a disease state in 
                                which a complex combination medication 
                                regimen is utilized.
                                    ``(III) Being identified as likely 
                                to incur annual costs for covered part 
                                D drugs that exceed a level specified 
                                by the Secretary or where acute or 
                                chronic decompensation of disease would 
                                likely increase expenditures under the 
                                Federal Hospital Insurance Trust Fund 
                                or the Federal Supplementary Medical 
                                Insurance Trust Fund under sections 
                                1817 and 1841, respectively, such as 
                                through the requirement of emergency 
                                care or acute hospitalization.'';
                    (B) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) Elements.--
                            ``(i) Minimum defined package of 
                        services.--The Secretary shall specify a 
                        minimum defined package of medication therapy 
                        management services that shall be provided to 
                        each enrollee. Such package shall be based on 
                        the following considerations:
                                    ``(I) Performing necessary 
                                assessments of the health status of 
                                each enrollee.
                                    ``(II) Providing medication therapy 
                                review to identify, resolve, and 
                                prevent medication-related problems, 
                                including adverse events.
                                    ``(III) Increasing enrollee 
                                understanding to promote the 
                                appropriate use of medications by 
                                enrollees and to reduce the risk of 
                                potential adverse events associated 
                                with medications, through beneficiary 
                                and family education, counseling, and 
                                other appropriate means.
                                    ``(IV) Increasing enrollee 
                                adherence with prescription medication 
                                regimens through medication refill 
                                reminders, special packaging, and other 
                                compliance programs and other 
                                appropriate means.
                                    ``(V) Promoting detection of 
                                adverse drug events and patterns of 
                                overuse and underuse of prescription 
                                drugs.
                                    ``(VI) Developing a medication 
                                action plan which may alter the 
                                medication regimen, when permitted by 
                                the State licensing authority. This 
                                information should be provided to, or 
                                accessible by, the primary health care 
                                provider of the enrollee.
                                    ``(VII) Monitoring and evaluating 
                                the response to therapy and evaluating 
                                the safety and effectiveness of the 
                                therapy, which may include laboratory 
                                assessment.
                                    ``(VIII) Providing disease-specific 
                                medication therapy management services 
                                when appropriate.
                                    ``(IX) Coordinating and integrating 
                                medication therapy management services 
                                within the broader scope of health care 
                                management services being provided to 
                                each enrollee.
                            ``(ii) Delivery of services.--
                                    ``(I) Personal delivery.--To the 
                                extent feasible, face-to-face 
                                interaction shall be the preferred 
                                method of delivery of medication 
                                therapy management services.
                                    ``(II) Individualized.--Such 
                                services shall be patient-specific and 
                                individualized and shall be provided 
                                directly to the patient by a pharmacist 
                                or other health care provider with 
                                advanced training in medication 
                                management.
                                    ``(III) Distinct from other 
                                activities.--Such services shall be 
                                distinct from any activities related to 
                                formulary development and use, 
                                generalized patient education and 
                                information activities, and any 
                                population-focused quality assurance 
                                measures for medication use.
                            ``(iii) Opportunity to identify patients in 
                        need of medication therapy management 
                        services.--The program shall provide 
                        opportunities for health care providers to 
                        identify patients who should receive medication 
                        therapy management services.'';
                    (C) by striking subparagraph (E) and inserting the 
                following:
                    ``(E) Pharmacy fees.--
                            ``(i) In general.--The PDP sponsor of a 
                        prescription drug plan shall pay pharmacists 
                        and others providing services under the 
                        medication therapy management program under 
                        this paragraph based on the time and intensity 
                        of services provided to enrollees.
                            ``(ii) Submission along with plan 
                        information.--Each such sponsor shall disclose 
                        to the Secretary upon request the amount of any 
                        such payments and shall submit a description of 
                        how such payments are calculated along with the 
                        information submitted under section 1860D-
                        11(b). Such description shall be submitted at 
                        the same time and in a similar manner to the 
                        manner in which the information described in 
                        paragraph (2) of such section is submitted.''; 
                        and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(F) Pharmacy access requirements.--The PDP 
                sponsor of a prescription drug plan shall secure the 
                participation in its network of a sufficient number of 
                retail pharmacies to assure that enrollees have the 
                option of obtaining services under the medication 
                therapy management program under this paragraph 
                directly from community-based retail pharmacies.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to medication therapy management services provided 
        on or after January 1, 2008.
    (b) Medication Therapy Management Demonstration Program.--Section 
1860D-4(c) of the Social Security Act (42 U.S.C.1395w-104(c)) is 
amended by adding at the end the following new paragraph:
            ``(3) Community-based medication therapy management 
        demonstration program.--
                    ``(A) Establishment.--
                            ``(i) In general.--By not later than 
                        January 1, 2008, the Secretary shall establish 
                        a 2-year demonstration program, based on the 
                        recommendations of the Best Practices 
                        Commission established under subparagraph (B), 
                        with both PDP sponsors of prescription drug 
                        plans and Medicare Advantage Organizations 
                        offering MA-PD plans, to examine the impact of 
                        medication therapy management furnished by a 
                        pharmacist in a community-based or ambulatory-
                        based setting on quality of care, spending 
                        under this part, and patient health.
                            ``(ii) Sites.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Secretary shall 
                                designate not less than 10 PDP sponsors 
                                of prescription drug plans or Medicare 
                                Advantage organizations offering MA-PD 
                                plans, none of which provide 
                                prescription drug coverage under such 
                                plans in the same PDP or MA region, 
                                respectively, to conduct the 
                                demonstration program under this 
                                paragraph.
                                    ``(II) Designation consistent with 
                                recommendations of best practices 
                                commission.--The Secretary shall ensure 
                                that the designation of sites under 
                                subclause (I) is consistent with the 
                                recommendations of the Best Practices 
                                Commission under subparagraph (B)(ii).
                    ``(B) Best practices commission.--
                            ``(i) Establishment.--The Secretary shall 
                        establish a Best Practices Commission composed 
                        of representatives from pharmacy organizations, 
                        health care organizations, beneficiary 
                        advocates, chronic disease groups, and other 
                        stakeholders (as determined appropriate by the 
                        Secretary) for the purpose of developing a best 
                        practices model for medication therapy 
                        management.
                            ``(ii) Recommendations.--The Commission 
                        shall submit to the Secretary recommendations 
                        on the following:
                                    ``(I) The minimum number of 
                                enrollees that should be included in 
                                the demonstration program, and at each 
                                demonstration program site, to 
                                determine the impact of medication 
                                therapy management furnished by a 
                                pharmacist in a community-based setting 
                                on quality of care, spending under this 
                                part, and patient health.
                                    ``(II) The number of urban and 
                                rural sites that should be included in 
                                the demonstration program to ensure 
                                that prescription drug plans and MA-PD 
                                plans offered in urban and rural areas 
                                are adequately represented.
                                    ``(III) A best practices model for 
                                medication therapy management to be 
                                implemented under the demonstration 
                                program under this paragraph.
                    ``(C) Reports.--
                            ``(i) Interim report.--Not later than 1 
                        year after the commencement of the 
                        demonstration program, the Secretary shall 
                        submit to Congress an interim report on such 
                        program.
                            ``(ii) Final report.--Not later than 6 
                        months after the completion of the 
                        demonstration program, the Secretary shall 
                        submit to Congress a final report on such 
                        program, together with recommendations for such 
                        legislation and administrative action as the 
                        Secretary determines appropriate.
                    ``(D) Waiver authority.--The Secretary may waive 
                such requirements of titles XI and XVIII as may be 
                necessary for the purpose of carrying out the 
                demonstration program under this paragraph.''.
                                 <all>