1.Short title; table of
contents
(a)This Act may be cited
as the Medicare Prescription Drug
Simplification Act of 2006
.
(b)The table of
contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—Benefits simplification and improvement
Subtitle A—Simplification
Sec. 101. Establishment of national uniform part D benefit
packages.
Subtitle B—Formulary requirements and improvements
Sec. 111. Limitation on removal or change of coverage of
covered part D drugs under a formulary under a prescription drug plan or an
MA–PD plan.
Sec. 112. Formulary requirement with respect to certain
categories and classes of drugs.
Sec. 113. Certainty regarding excluded drugs.
Sec. 114. Pharmacy and therapeutic committee
improvements.
Subtitle C—Funding certain costs for administrative
improvements
Sec. 121. Additional funding for enrollment
assistance.
TITLE II—Beneficiary protection improvements
Sec. 201. Improved plan information.
Sec. 202. Standardized definition for cost and utilization
management tools and nomenclature for distinguishing between excluded and
nonformulary drugs.
Sec. 203. Standardized enrollee notice regarding coverage
determinations.
Sec. 204. Standardized and simplified processes for
reconsiderations, exceptions, and appeals.
Sec. 205. Standardized marketing and licensing protections;
State certification prior to waiver of licensure requirements.
Sec. 206. Authority to waive late enrollment penalty in certain
circumstances.
Sec. 207. Integrated application and enrollment process for
certain subsidy-eligible individuals.
Sec. 208. GAO study and report on cost and utilization
management tools used under prescription drug plans and MA–PD
plans.
TITLE III—Performance and quality
Sec. 301. Requirements for comparative information regarding
performance of plans under Medicare part
D.
Sec. 302. Required quality for approval of plan.
Sec. 303. MedPAC study and report regarding a value-based
purchasing program for plans offering part D
prescription drug coverage.
<enum>I</enum><header>Benefits simplification and
improvement</header>
<subtitle commented="no" id="id0DC5A4CB16E446D09D66775E9304F348" style="OLC"><enum>A</enum><header>Simplification</header>
<section commented="no" display-inline="no-display-inline" id="ID9D5C46ECC85347C5BB2DEEAC258F82A2" section-type="subsequent-section"><enum>101.</enum><header>Establishment of
national uniform part D benefit packages</header>
<subsection commented="no" display-inline="no-display-inline" id="ID244E1C927BA74790964854D23C8B7EE7"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–2 of
the <act-name parsable-cite="SSA">Social Security Act</act-name> (42 U.S.C.
1395w–102) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Social Security Act" display-inline="no-display-inline" id="IDCC763884573943A7B059B10FA10B0328" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID2CF9DD9712EC45AC9B81EC9F8DC70920"><enum>(f)</enum><header>Simplification
of coverage</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0957DE6A46464431B8059BDB1F463CD8"><enum>(1)</enum><header>Requirement</header><text display-inline="yes-display-inline">Beginning January 1, 2008, qualified
prescription drug coverage (other than coverage that is standard prescription
drug coverage (as defined in subsection (b)) may only be offered by a
prescription drug plan or an MA–PD plan through the benefit packages
established by the Secretary under paragraph (2).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5432684C382F45CAA55B8EC8EFC8E0E1"><enum>(2)</enum><header>Establishment
of national uniform benefit packages</header><text display-inline="yes-display-inline">The Secretary, in consultation with the
entities and individuals described in paragraph (5), shall establish 5 national
uniform benefit packages (that are in addition to standard prescription drug
coverage) as follows:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5C05F49A1E524F0E8D2C27C5B2138C09"><enum>(A)</enum><header>Three basic
packages</header>
<clause commented="no" display-inline="no-display-inline" id="IDA082B14A54B547B6A9CD82C93C5338EA"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">Three of the benefit
packages shall only provide basic prescription drug coverage described in
subsection (a)(3)(B).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC82B093D91E94F79870EB600647B7DB9"><enum>(ii)</enum><header>Specification</header><text display-inline="yes-display-inline">Of the benefit packages described in clause
(i)—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDB1B62187B6504601B473AA458CCB4135"><enum>(I)</enum><text display-inline="yes-display-inline">one package shall have no annual deductible
and coinsurance, specified by the Secretary, for costs up to the initial
coverage limit;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID11704DBEA32D4116878699EF65368EAC"><enum>(II)</enum><text display-inline="yes-display-inline">one package, other than the package
described in subclause (I), shall include a deductible that is equal to the
amount determined under section 1860D–2(b)(1)(A)(ii) and provide for copayment
amounts, specified by the Secretary, rather than coinsurance, for costs above
the annual deductible and up to the initial coverage limit; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id18A4E156B27A4ABCA1E3BDF97437249A"><enum>(III)</enum><text display-inline="yes-display-inline">one package, other than the packages
described in subclauses (I) and (II), shall have no deductible and provide for
copayment amounts, specified by the Secretary, rather than coinsurance, for
costs up to the initial coverage limit.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID68A127FEC5F9491B9210EDB8C5B4CD6B"><enum>(B)</enum><header>Two
supplemental packages</header>
<clause commented="no" display-inline="no-display-inline" id="IDA6196A41E1D94CBA82F179431764B86E"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">Two of the benefit
packages shall include supplemental prescription drug coverage described in
subsection (a)(2)(A).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA70F971F1748429F9B86B5B483A113AD"><enum>(ii)</enum><header>Specification</header><text display-inline="yes-display-inline">Of the benefit packages described in clause
(i)—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID8155690A25C044FAB01D883B5E4F04EA"><enum>(I)</enum><text display-inline="yes-display-inline">one package shall include a meaningful
level of coverage of costs incurred with respect to covered part D drugs after
the initial coverage limit has been reached but before the annual out-of-pocket
threshold has been reached; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID08218A716A1742F0B83183B9C566E61F"><enum>(II)</enum><text display-inline="yes-display-inline">one package, other than the package
described in subclause (I), shall include an increase in the initial coverage
limit with respect to covered part D drugs so that such limit is equal to the
annual out-of-pocket threshold.</text>
</subclause></clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5DFD96D611C5481092A854B244CB8F26"><enum>(3)</enum><header>Requirement for
actuarial value of packages</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id9CC9EF93E5994B13A4F18A795EDE0EC1"><enum>(A)</enum><header>Basic
packages</header><text display-inline="yes-display-inline">The Secretary shall
ensure that the 3 packages described in paragraph (2)(A) meet the following
requirements:</text>
<clause commented="no" display-inline="no-display-inline" id="id1BF7DDA118EB41158AA8D714F40DE8D9"><enum>(i)</enum><header>Assuring
equivalent value of total coverage</header><text display-inline="yes-display-inline">The actuarial value of the total coverage
is equal to the actuarial value of standard prescription drug coverage, as
estimated by the Chief Actuary of the Centers for Medicare & Medicaid
Services.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id51D7807EFAF5416FBCEF43A1D6AD246F"><enum>(ii)</enum><header>Assuring
equivalent unsubsidized value of coverage</header><text display-inline="yes-display-inline">The unsubsidized value of the coverage is
equal to the unsubsidized value of standard prescription drug coverage, as
estimated by the Chief Actuary of the Centers for Medicare & Medicaid
Services. For purposes of this subparagraph, the unsubsidized value of coverage
is the amount by which the actuarial value of the coverage exceeds the
actuarial value of the subsidy payments under section 1860D–15 with respect to
such coverage.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idDA95D9B6675E44438511A8A2B07F47B7"><enum>(iii)</enum><header>Assuring
standard payment for costs at initial coverage limit</header><text display-inline="yes-display-inline">The coverage is designed, based upon an
actuarially representative pattern of utilization, to provide for the payment,
with respect to costs incurred that are equal to the initial coverage limit
under subsection (b)(3) for the year, of an amount equal to the product
of—</text>
<subclause commented="no" display-inline="no-display-inline" id="id8AF49513EB94421BA1C01D5432AD8495"><enum>(I)</enum><text display-inline="yes-display-inline">the amount by which the initial coverage
limit described in subsection (b)(3) for the year exceeds the deductible
described in subsection (b)(1) for the year; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id30C721F2A085491D838F18EDA3BA674C"><enum>(II)</enum><text display-inline="yes-display-inline">100 percent minus the coinsurance
percentage specified in subsection (b)(2)(B).</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idF78A40078216482AA521D879FA422869"><enum>(B)</enum><header>Supplemental
packages</header><text display-inline="yes-display-inline">The Secretary shall
ensure that the 2 packages described in paragraph (2)(B) have actuarial values
that are progressively greater than the actuarial value of standard
prescription drug coverage, as estimated by the Chief Actuary of the Centers
for Medicare & Medicaid Services.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0E951CE80E434FA08FF27942D34A20CC"><enum>(4)</enum><header>Restriction on
number of tiers or levels of cost-sharing</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idA8241DE876734158A7BEA27E051F7E91"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to clause
(ii), a package described in paragraph (2) may not include more than 3 distinct
tiers or levels of cost-sharing.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id7748A0E0ADA74C9194F48DCB4D58F517"><enum>(B)</enum><header>Exception</header><text display-inline="yes-display-inline">A package described in paragraph (2) may
include a fourth distinct tier or level of cost-sharing that may only be used
for specialty or high cost covered part D drugs (as determined by the
Secretary) if the PDP sponsor of the prescription drug plan or the Medicare
Advantage organization offering the MA–PD plan has an exceptions process under
subsection (g) with respect to the 4th tier or level.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id6ABB3257968D4BD3B022719F186A80E6"><enum>(5)</enum><header>Balancing of
objectives</header><text display-inline="yes-display-inline">In establishing
the benefit packages under paragraph (2), the Secretary shall balance the
objectives of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID35A16646B4964D08992582DD04E82F86"><enum>(A)</enum><text display-inline="yes-display-inline">simplifying the benefit structures to
facilitate comparisons among plans;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID406775E883A54646950083499F17DA5C"><enum>(B)</enum><text display-inline="yes-display-inline">avoiding adverse selection;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4C0C9659FA3649028A5DA2F8E5606C4E"><enum>(C)</enum><text display-inline="yes-display-inline">ensuring meaningful differences between
benefit packages;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID94D924F4655A4A7BA27F1590F47F616D"><enum>(D)</enum><text display-inline="yes-display-inline">providing program stability; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID47FD8CDAF4EA47F28C0CB82D9FAA1C2A"><enum>(E)</enum><text display-inline="yes-display-inline">promoting competition among plans.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2D743A0C3FAE44D1B8F931485B517B99"><enum>(6)</enum><header>Standardized
language, nomenclature, definitions, and format</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id27CCF52F57A14AD4B34D717082861C33"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">In establishing the
benefit packages under paragraph (2), the Secretary shall develop—</text>
<clause commented="no" display-inline="no-display-inline" id="IDEDB592479D224A799E4A6498AB92FEB0"><enum>(i)</enum><text display-inline="yes-display-inline">standardized language, nomenclature, and
definitions to be used by the Secretary and PDP sponsors and MA–PD
organizations with respect to such benefit packages; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDD1FAF944BCB84758A8A4EB53E766DC12"><enum>(ii)</enum><text display-inline="yes-display-inline">a standardized format to be used by PDP
sponsors and MA–PD organizations with respect to such benefit packages.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id1E5E89CE7EC4407F90A81DDA87153BD7"><enum>(B)</enum><header>Requirement</header><text display-inline="yes-display-inline">In developing standardized language,
nomenclature, and definitions and a standardized format under subparagraph (A),
the Secretary shall ensure that such language, nomenclature, definitions, and
format clearly distinguishes between—</text>
<clause commented="no" display-inline="no-display-inline" id="id6DF81D1BA915491C82407491BDA081B2"><enum>(i)</enum><text display-inline="yes-display-inline">a plan that offers only basic prescription
drug coverage (as described in subsection (a)(3)) and a plan that offers
supplemental prescription drug coverage (as described in subsection
(a)(2)(A));</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id2A48C41C173B40FD9F098314817A3780"><enum>(ii)</enum><text display-inline="yes-display-inline">a plan that offers coinsurance and a plan
that offers flat copayments;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idD20099AAE93F4E7DA17018FC9B2BCEF6"><enum>(iii)</enum><text display-inline="yes-display-inline">a plan that covers all covered part D drugs
and a plan that covers less than all such drugs; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idA59288E3D63B459DA44629E92643935A"><enum>(iv)</enum><text display-inline="yes-display-inline">prescription drug plans and MA–PDs,
especially on terms of how enrollment in those plans would affect access to
items and services under the original medicare fee-for-service program under
parts A and B.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3E29DBB05F084BB8A36617CE3F0AD922"><enum>(7)</enum><header>Advisory
committee</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id87AFA05CA68C470794D835466866D3AB"><enum>(A)</enum><header>Establishment</header><text display-inline="yes-display-inline">The Secretary shall establish a Benefit
Advisory Committee (in this paragraph referred to as the Committee).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idD0F456E57CDC409C9B01F7EDFDA109BA"><enum>(B)</enum><header>Membership</header><text display-inline="yes-display-inline">The Committee shall be composed of 15
members to be appointed by the Secretary. The Secretary shall ensure that the
following individuals are appointed to the Committee:</text>
<clause commented="no" display-inline="no-display-inline" id="IDC5469947FCCA4034AFA75DD0CFA02EBD"><enum>(i)</enum><text display-inline="yes-display-inline">Two representatives appointed upon
recommendation of the National Association of Insurance Commissioners.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idBC4E0C70BF4B48628CECC4CF75B9C531"><enum>(ii)</enum><text display-inline="yes-display-inline">The Chief Actuary of the Centers for
Medicare & Medicaid Services.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id2F973190142F455F8474AA55BAF22394"><enum>(iii)</enum><text display-inline="yes-display-inline">Two individuals with expertise in consumer
choice.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id19B37A93F0884C0DB9BD2C6B41BF5313"><enum>(iv)</enum><text display-inline="yes-display-inline">Two individuals with expertise in health
economics.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id2AF018AE412C483F89614BA9C6BD6912"><enum>(v)</enum><text display-inline="yes-display-inline">Two individuals with expertise in actuarial
sciences.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id86E79A1563F24082A5534249659A7467"><enum>(vi)</enum><text display-inline="yes-display-inline">Two individuals with expertise in pharmacy
benefit management.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id5F911E1D4FB4478A97C1AFE54D9F46C8"><enum>(vii)</enum><text display-inline="yes-display-inline">Two representatives of health insurers,
health care providers, and consumers.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idA6A2F5D42FE84AED8CD04482BCAE9649"><enum>(viii)</enum><text display-inline="yes-display-inline">Two other individuals or entities
determined appropriate by the Secretary.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id29FDF802D23B41A087214136FC94CA30"><enum>(C)</enum><header>Consultation</header><text display-inline="yes-display-inline">In establishing the benefit packages under
paragraph (2) (including determinations under paragraph (3)), the Secretary
shall consult with the Committee.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB58AF01E173F4FCBA4989B800AFCBDEB"><enum>(8)</enum><header>Updating of
benefit packages</header><text display-inline="yes-display-inline">Not less
than once every 3 years, the Secretary shall review the benefit packages
established under this subsection, and, subject to the requirements under
paragraph (2), shall update the content of such packages as appropriate.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id30C5B2EE00E444E48B14CF14F596F046"><enum>(9)</enum><header>No effect on
requirement to offer a plan that only provides basic prescription drug
coverage</header><text display-inline="yes-display-inline">Nothing in this
subsection shall be construed to effect the requirement under subsection
(a)(2)(B).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID589D860958FF4A52A3C02010B832487D"><enum>(b)</enum><header>Conforming
amendments</header><text display-inline="yes-display-inline">Section 1860D–2 of
the <act-name parsable-cite="SSA">Social Security Act</act-name> (42 U.S.C.
1395w–102) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID9BACBB6881394FF58FFC8CAED3F19C55"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id01A163DF717440749EED3CBF25D01AA3"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (1)—</text>
<clause commented="no" display-inline="no-display-inline" id="id5430E567301240C585EED5289C50E2CB"><enum>(i)</enum><text display-inline="yes-display-inline">in the matter preceding subparagraph (A),
by striking <quote>For purposes</quote> and inserting <quote>Subject to
subsection (f), for purposes</quote>;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id2C4D1F16357B4F4695D6843E58F1CF87"><enum>(ii)</enum><text display-inline="yes-display-inline">in subparagraph (B), by striking
<quote>which meets the alternative</quote> and all that follows through the
period at the end and inserting the following: “which—</text>
<quoted-block display-inline="no-display-inline" id="id6714823E66914AAF8D68F9678394448D" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="idF0FC5BADB299436ABB0AB72EE2262230"><enum>(i)</enum><text display-inline="yes-display-inline">with respect to plan years beginning prior
to January 1, 2008, meets the alternative prescription drug requirements of
subsection (c) and access to negotiated prices under subsection (d), but only
if the benefit design of such coverage is approved by the Secretary, as
provided under subsection (c); or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idDF2E0E91F511467B8A7CD008C0C286A1"><enum>(ii)</enum><text display-inline="yes-display-inline">with respect to plan years beginning on or
after January 1, 2008, meets the requirements of subsection (f) and access to
negotiated prices under subsection (d), but only if the benefit design of such
coverage is approved by the Secretary, in accordance with subsection
(f).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID423A8D37F4E14DA2834262F690797DAC"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (2)(A), in the matter
preceding clause (i), by inserting <quote>and subsection (f)</quote> after
<quote>subparagraph (B)</quote>;</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD624B293BA0D41368C81E514F5A7FE07"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (b), by striking paragraph
(2) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="id3C80248CE6E34BE383325F08C8568096" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id005EC1CEBE3047C49A0B99BE8F43CACB"><enum>(2)</enum><header>25 percent
coinsurance</header><text display-inline="yes-display-inline">The coverage has
coinsurance (for costs above the annual deductible specified in paragraph (1)
and up to the initial coverage limit under paragraph (3)) that is—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idFD20DBAACC1D4294912E12CFFEFB93A3"><enum>(A)</enum><text display-inline="yes-display-inline">prior to January 1, 2008—</text>
<clause commented="no" display-inline="no-display-inline" id="id144EFF8CAED44FE9B1642A3EDCE92B8D"><enum>(i)</enum><text display-inline="yes-display-inline">equal to 25 percent; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idBB285ABA717E41ABB63601DED391744C"><enum>(ii)</enum><text display-inline="yes-display-inline">actuarially equivalent (using processes and
methods established under section 1860D–11(c)) to an average expected payment
of 25 percent of such costs; or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id15DEE084390E402EAB32593495A555CB"><enum>(B)</enum><text display-inline="yes-display-inline">beginning on January 1, 2008, is equal to
25
percent.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section></subtitle><subtitle commented="no" id="id84341C6B5FCE40F78199E023372DF3BA" style="OLC"><enum>B</enum><header>Formulary requirements and
improvements</header>
<section commented="no" display-inline="no-display-inline" id="id39C1286A17864C1380D8C94850EDF7E1" section-type="subsequent-section"><enum>111.</enum><header>Limitation on
removal or change of coverage of covered part D drugs under a formulary under a
prescription drug plan or an MA–PD plan</header>
<subsection commented="no" display-inline="no-display-inline" id="idFB9591E4A3DA4EB2ABB22C5B754257B9"><enum>(a)</enum><header>Limitation on
removal or change</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="idA1626941FA6E460EA34933AE1975A896" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="idCD5BD65E388C49E49F0FAFDF7FAD5658"><enum>(E)</enum><header>Removing or
changing a drug on a formulary</header>
<clause commented="no" display-inline="no-display-inline" id="idDC6CC90A34A743F29FAE5EF4AB60AE9A"><enum>(i)</enum><header>Limitation</header><text display-inline="yes-display-inline">Subject to clause (ii), with respect to
plan years beginning on or after January 1, 2007, the PDP sponsor of a
prescription drug plan may not remove a covered part D drug from the plan
formulary, apply a cost or utilization management tool that imposes a
restriction or limitation on the coverage of such a drug (such as through the
application of a preferred status, usage restriction, step therapy, prior
authorization, or quantity limitation), or increase the cost-sharing of such a
drug (such as through placement of a drug on a tier that would result in higher
cost-sharing for a beneficiary) other than the date on which PDP sponsors may
begin marketing their plans with respect to the immediately succeeding plan
year, as determined by the Secretary.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id92000BEA893241C0A9F01E5D9DDD666B"><enum>(ii)</enum><header>Exceptions to
limitation on removal</header><text display-inline="yes-display-inline">Subject
to clause (iii), clause (i) shall not apply with respect to a covered part D
drug that—</text>
<subclause commented="no" display-inline="no-display-inline" id="idB80714AB5ACF422ABEF7683C55706AE3"><enum>(I)</enum><text display-inline="yes-display-inline">is a brand name drug for which there is a
generic drug approved under section 505(j) of the Food and Drug Cosmetic Act
that is placed on the market during the period in which there are limitations
on removal or change in the formulary under clause (i);</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id2A6B03E8BDE04F3386E9C311525A52D0"><enum>(II)</enum><text display-inline="yes-display-inline">is a drug for which the Commissioner of
Food and Drugs issues a safety warning that would impose a restriction on the
drug or require a drug label warning during the plan year;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idC28483BD8EBC459180BF623818FAC128"><enum>(III)</enum><text display-inline="yes-display-inline">is a drug that the Pharmacy and Therapeutic
Committee of the plan determines, based directly on evidence from peer-reviewed
research, has a lower safety profile than is appropriate or is ineffective;
or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idBEB2E05F552C45CA8CF0E35CD4B45353"><enum>(IV)</enum><text display-inline="yes-display-inline">for which the Secretary establishes a
specific exception through the promulgation of regulations relating to plan
formularies.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="id4C9B7D5C0D9346D182A9C48D21A243E2"><enum>(iii)</enum><header>Limited
application of exceptions to drugs in certain categories and
classes</header><text display-inline="yes-display-inline">For 2007 and 2008,
subclauses (I), (II), (IV), and (V) of clause (ii) shall not apply to a drug in
a category or class described in section 1860D–4(b)(3)(H)(i).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idD143F913FBE141F685D689F8CCAD294B"><enum>(iv)</enum><header>Notice of
removal under application of exception to limitation</header><text display-inline="yes-display-inline">The PDP sponsor of a prescription drug plan
shall provide appropriate notice (such as under subsection (a)(3) and includes
the annual notice under subsection (a)(5)) of any removal or change under
clause (ii) to the Secretary, affected enrollees, physicians, pharmacies, and
pharmacists.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HC370516593EC4902BCD3000DD41C020"><enum>(b)</enum><header>Notice for change
in formulary and other restrictions or limitations on coverage</header>
<paragraph commented="no" display-inline="no-display-inline" id="H7D63637B1CEF446989D7950091113E21"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–4(a) of
such Act (42 U.S.C. 1395w–104(a)) is amended by adding at the end the following
new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H6B846766037B4E7799D857B3AB7EF64D" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="H6D89C58BAFCB48240088DC23032FEDDB"><enum>(5)</enum><header>Annual notice of
changes in formulary and other restrictions or limitations on
coverage</header><text display-inline="yes-display-inline">Each PDP sponsor
offering a prescription drug plan shall furnish to each enrollee at the time of
each annual coordinated election period (referred to in section
1860D–1(b)(1)(B)(iii)) for a plan year a notice of any changes in the formulary
or other restrictions or limitations on coverage of any covered part D drug
under the plan that will take effect for the plan
year.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HFFAF6B01454A4543A5EAFA5065BEC59"><enum>(2)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendment made by
paragraph (1) shall apply to annual coordinated election periods beginning on
or after November 15, 2006.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID93B1C2CCE52442D4B5DEA34297974CD9" section-type="subsequent-section"><enum>112.</enum><header>Formulary
requirement with respect to certain categories and classes of drugs</header>
<subsection commented="no" display-inline="no-display-inline" id="ID22833698A6564427842425F528E2DD9D"><enum>(a)</enum><header>Required
Inclusion</header><text display-inline="yes-display-inline">Section
1860D–4(b)(3) of the <act-name parsable-cite="SSA">Social Security
Act</act-name> (42 U.S.C. 1395w–104(b)(3)) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="idD7699ACD38AF4C85874DD5027440DCBC"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (C)(i), by striking
<quote>The formulary</quote> and inserting <quote>Subject to subparagraph (G),
the formulary</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idCD3C890DABE14E9591CFC19B97772851"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting after subparagraph (F) the
following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id5E41E110A2AD4AD7942C70A7EB32B5AC" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id00D0513DAE5E43B7BA48BD53B1A38D7C"><enum>(G)</enum><header>Required
inclusion of drugs in certain categories and classes</header>
<clause commented="no" display-inline="no-display-inline" id="idC9A8559CCD784EFD9E813CF0E21D472B"><enum>(i)</enum><header>For 2007 and
2008</header><text display-inline="yes-display-inline">For 2007 and 2008, the
formulary must include all or substantially all drugs in the following 6
categories that are available as of June 1 of the prior year:</text>
<subclause commented="no" display-inline="no-display-inline" id="id09746FA0D3E44D2D87BC15B1A45815C9"><enum>(I)</enum><text display-inline="yes-display-inline">Immunosuppressant.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idE88495160233494898BDD271658A2AF0"><enum>(II)</enum><text display-inline="yes-display-inline">Antidepressant.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id36C36BBB0D8D44078316AE362E64171C"><enum>(III)</enum><text display-inline="yes-display-inline">Antipsychotic.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idB78C9206D98F493C8E9300930F090C02"><enum>(IV)</enum><text display-inline="yes-display-inline">Anticonvulsant.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idC4A6A2B068EA4112B4169F6CE42A2E5A"><enum>(V)</enum><text display-inline="yes-display-inline">Antiretroviral.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id39309A65935C43DBB51BECB28FF14788"><enum>(VI)</enum><text display-inline="yes-display-inline">Antineoplastic.</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">A PDP sponsor of a prescription drug
plan may not apply a utilization management tool, such as prior authorization
or step therapy, to a drug required to be included on the formulary pursuant to
the preceding sentence with respect to an enrollee if the enrollee was taking
such drug prior to the application of such tool.</continuation-text></clause><clause commented="no" display-inline="no-display-inline" id="id5256504EE09D475ABE3B1B6F2EB3B196"><enum>(ii)</enum><header>Substantially
all defined</header><text display-inline="yes-display-inline">For purposes of
clause (i), the term <quote>substantially all</quote> means all drugs and
unique dosage forms in the categories described in such clause except
for—</text>
<subclause commented="no" display-inline="no-display-inline" id="id8F48084952AF44B5951FC47D0A22885F"><enum>(I)</enum><text display-inline="yes-display-inline">multi-source brands of the identical
molecular structure;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id828B06B5C48240039DBBA02B6A6709E9"><enum>(II)</enum><text display-inline="yes-display-inline">extended release products when the
immediate-release product is included on the formulary;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idB5BAFF0AC34741108A9DDC19E49C7BC3"><enum>(III)</enum><text display-inline="yes-display-inline">products that have the same active
ingredient; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idD2240C04E1F04348BB0F590047EA50BC"><enum>(IV)</enum><text display-inline="yes-display-inline">multiple dosage forms that do not provide a
unique route of administration, such as tablets and capsules.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="idE747B96FF96140908883AE5F83E22F4D"><enum>(iii)</enum><header>For 2009 and
subsequent years</header>
<subclause commented="no" display-inline="no-display-inline" id="id6A767FABB3334592A9755A78AA910592"><enum>(I)</enum><header>Authority</header><text display-inline="yes-display-inline">Beginning with the plan year beginning on
January 1, 2009, the Secretary, taking into account the results of the study
conducted under section 113(b) of the <short-title>Medicare Prescription Drug Simplification Act of
2006</short-title>, may require that the formulary include coverage of covered
part D drugs within certain categories or classes of drugs.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id2BCADE88F29D419DA8C1A891DFE66679"><enum>(II)</enum><header>Requirement
for use of authority</header><text display-inline="yes-display-inline">The
Secretary shall promulgate regulations to exercise the authority under
subclause (I) and may not exercise such authority through program
guidance.</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB8ED31ED14004DE79142E562469ACAA7"><enum>(b)</enum><header>Institute of
Medicine study and report on protected categories and classes of drugs</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDBFBD510E1BFB4CE69372C58D6A619200"><enum>(1)</enum><header>Study</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idF88E07D51B0648398BFE49C081B5684D"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Not later than the
date that is 2 months after the date of the enactment of this Act, the
Secretary of Health and Human Services (in this subsection referred to as the
<quote>Secretary</quote>) shall enter into an arrangement under which the
Institute of Medicine of the National Academy of Sciences (in this subsection
referred to as the <quote>Institute</quote>) shall conduct a study on issues
related to requiring any formulary used under prescription drug plans under
part D of title XVIII of the Social Security Act or under MA–PD plans under
part C of such title to cover drugs within certain categories or
classes.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4EF6787A435B423C88AD25B3E75E83EE"><enum>(B)</enum><header>Required items
to be evaluated</header><text display-inline="yes-display-inline">The study
conducted under subparagraph (A) shall include an evaluation of—</text>
<clause commented="no" display-inline="no-display-inline" id="IDD6F5B4EFD0254CF8A69CC6173FE20BE4"><enum>(i)</enum><text display-inline="yes-display-inline">whether all or substantially all drugs
within certain drug categories or classes of drugs should be required by the
Secretary on any formulary used under a prescription drug plan or an MA–PD plan
in order to protect enrollees from undue medical risk and complication,
including life threatening interruptions in, or lack of access to, medication
therapy, and if so, what the protected categories or classes should be;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idEEB0D8E2A5DE4379945B30D9FD0624DF"><enum>(ii)</enum><text display-inline="yes-display-inline">options for processes by which the
Secretary could reevaluate requirements with respect to the matters described
in clause (i) on an ongoing basis.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFFD38DA6C0C4488DB9821EBE338B6753"><enum>(2)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than the date that is 12 months
after the Secretary enters into the arrangement with the Institute under
paragraph (1), the Institute shall submit to the Secretary and to Congress a
report on the study conducted under such paragraph.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDECA830F3AAE447668A6621028C9F6100"><enum>(3)</enum><header>Factors for IOM
to consider</header><text display-inline="yes-display-inline">In conducting the
study required by this subsection, the Institute shall consider—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2D5F0934674D4668A0E783B61099A292"><enum>(A)</enum><text display-inline="yes-display-inline">the existing regulatory and statutory
framework for beneficiary protections under part D of title XVIII of the Social
Security Act, including the coverage determination and appeals processes under
such part;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id0E67E822CDCD429FB3664CD2774E668E"><enum>(B)</enum><text display-inline="yes-display-inline">the role of Pharmacy and Therapeutic
Committees in selecting drugs to be included on the formulary of a prescription
drug plan or an MA–PD plan; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID69E3A305D96A4ECB856757001CC9406C"><enum>(C)</enum><text display-inline="yes-display-inline">the implications of the presence or absence
of such drug/drug category or class protections on spending under the Medicare
program, including spending on non-drug services, such as hospital and
physician care.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id876FD37531BB4A37A3A5E3C92CACE69E"><enum>(4)</enum><header>Committee</header><text display-inline="yes-display-inline">The committee appointed by the Institute to
conduct the study and prepare the report required by this subsection shall
include individuals with expertise in economics, clinical pharmacology,
actuarial sciences, pharmacy benefit design, and medicine.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7CFE76D529D048C4AC036C88F2AFC485"><enum>(5)</enum><header>Authorization
of Appropriations</header><text display-inline="yes-display-inline">There are
authorized to be appropriated such sums as may be necessary for purposes of
conducting the study and preparing the report required by this
subsection.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="idC7039B1645E7461A89BF67135F9FDF24" section-type="subsequent-section"><enum>113.</enum><header>Certainty regarding
excluded drugs</header><text display-inline="no-display-inline">Section
1860D–2(e) of the Social Security Act (42 U.S.C. 1395w–102(e)) is amended by
adding at the end the following new paragraphs:</text>
<quoted-block display-inline="no-display-inline" id="idD9375C9F6F3346E18091832284946F06" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idC70F76AD391749BFAFB0B1E272F21C6B"><enum>(4)</enum><header>Annual
publication</header><text display-inline="yes-display-inline">By not later than
April 1 of each year (beginning with 2007), the Secretary shall identify and
cause to have published in the Federal Register the list of drugs that are
excluded under paragraph (2)(A) for the subsequent year. Such list shall
describe the drugs by National Drug Code Directory level.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idC553510A0C3A42849D354219B8A13282"><enum>(5)</enum><header>Beneficiary
notice</header><text display-inline="yes-display-inline">With respect to
activities conducted under section 1860D–1(c)(1) for each plan year (beginning
with plan year 2007), the Secretary shall inform eligible part D individuals
(and prospective part D eligible individuals) of the types of drugs excluded
under paragraph (2)(A) in conducting such
activities.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section commented="no" display-inline="no-display-inline" id="idDE4C5091DE384A78A54183C4DFF76BA3" section-type="subsequent-section"><enum>114.</enum><header>Pharmacy and
therapeutic committee improvements</header>
<subsection commented="no" display-inline="no-display-inline" id="id8954A8AB45AB41658CF6CC46CC34FE4D"><enum>(a)</enum><header>Disclosure of
conflicts of interest for members of pharmacy and therapeutic
committee</header><text display-inline="yes-display-inline">Section
1860D–4(b)(3)(A) of the <act-name parsable-cite="SSA">Social Security
Act</act-name> (42 U.S.C. 1395w–104(b)(3)(A)) is amended by adding at the end
the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="id2DA5C2A919CA407EB3E4C1349EB4CC6A" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="idA648E710C2D44DF7B582C440AE38ECED"><enum>(iii)</enum><header>Disclosure</header><text display-inline="yes-display-inline">Beginning November 1, 2006, such committee
shall annually disclose to the Secretary, and, upon request, to the public, any
conflict of interest members have with a pharmaceutical company, an insurer, a
PDP sponsor or an MA organization, or any other relevant
entity.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id102ADA82D1994A3EA6F93BE7123F43F7"><enum>(b)</enum><header>Disclosure of
decisions and bases for decisions</header><text display-inline="yes-display-inline">Section 1860D–4(b)(3)(B) of the
<act-name parsable-cite="SSA">Social Security Act</act-name> (42 U.S.C.
1395w–104(b)(3)(B)) is amended by adding at the end the following flush
sentence:</text>
<quoted-block display-inline="no-display-inline" id="id9134DE09B2224F9298ECF9552FF64FDE" style="OLC">
<quoted-block-continuation-text commented="no" quoted-block-continuation-text-level="subparagraph">With respect to decisions made by
such Committee regarding the formulary for plan years beginning on or after
January 1, 2007, the committee shall disclose such decisions (and the bases for
such decisions) to the Secretary, and, upon request, to the
public.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section></subtitle><subtitle commented="no" id="id9E30C7C91BAC4FFDB7311BC84B3E689F" style="OLC"><enum>C</enum><header>Funding certain costs for administrative
improvements</header>
<section commented="no" display-inline="no-display-inline" id="idBFE32624550B48C39FEC1EF67AE70521" section-type="subsequent-section"><enum>121.</enum><header>Additional funding
for enrollment assistance</header>
<subsection commented="no" display-inline="no-display-inline" id="idA28AA51CE8694AA9B26D096782989633"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">There are
appropriated, to be transferred from the Federal Supplementary Medical
Insurance Trust Fund, not to exceed $120,000,000 for the Centers for Medicare
& Medicaid Services, for the purpose of ensuring that individuals have
adequate access to impartial advice and assistance in enrolling in the
prescription drug program under part D of title XVIII of the Social Security
Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id89D8AC2952054FB9BFED93F3BB7ED969"><enum>(b)</enum><header>Use of
funds</header><text display-inline="yes-display-inline">Amounts provided under
subsection (a) shall be used for the following purposes:</text>
<paragraph commented="no" display-inline="no-display-inline" id="id2D20A557B3004273A08911B7A2095904"><enum>(1)</enum><header>Grants to State
health insurance assistance programs</header><text display-inline="yes-display-inline">To provide additional grants to State
health insurance counseling programs (receiving assistance under section 4360
of the Omnibus Reconciliation Act of 1990) to broaden their capacity to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id264625ED436946AD82C3F57B922A981F"><enum>(A)</enum><text display-inline="yes-display-inline">provide personal and impartial assistance
to individuals seeking to enroll in a prescription drug plan or an MA–PD plan
under such program;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id14617DCA8DEE4996A9CC671791F72223"><enum>(B)</enum><text display-inline="yes-display-inline">educate and assist individuals in applying
for a low-income subsidy under section 1860D–14 of such Act (42 U.S.C.
1395w–114); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id1866B6FA419441D6A16B0C42F8B63B0A"><enum>(C)</enum><text display-inline="yes-display-inline">assist individuals in accessing benefits
under such a prescription drug plan or such an MA–PD plan once they are
enrolled in a plan.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id880098072F494A7A8AD64DDFB5F5D9CC"><enum>(2)</enum><header>Grants for
innovative programs</header><text display-inline="yes-display-inline">To
provide grants to eligible States to conduct innovative programs that provide
any of the services described in subparagraphs (A), (B), and (C) of paragraph
(1). A State is eligible for a grant under this paragraph if the level of
enrollment in the State in the prescription drug program under such part is
below the national average.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id719787F5EA76410C88210AFC269C07AD"><enum>(3)</enum><header>Promotion</header><text display-inline="yes-display-inline">To widely promote and disseminate
information about the existence of, and services provided by, State health
insurance counseling programs.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id0404DFCAD9B24C93AF81802A73135A79"><enum>(c)</enum><header>Priority</header><text display-inline="yes-display-inline">In awarding grants under paragraphs (1) and
(2) of subsection (b), priority shall be given to States, and State health
insurance counseling programs located in States, with the lowest percentage of
part D eligible individuals enrolled in such prescription drug program.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id2ABE339AB3054A038AC05F3918BF90E6"><enum>(d)</enum><header>Availability</header><text display-inline="yes-display-inline">Amounts provided under subsection (a) shall
remain available until December 31, 2010.</text>
</subsection></section></subtitle><enum>II</enum><header>Beneficiary protection improvements</header>
<section commented="no" display-inline="no-display-inline" id="id20CD0AFF2194449AB31CCC3F41FA754F" section-type="subsequent-section"><enum>201.</enum><header>Improved plan
information</header>
<subsection commented="no" display-inline="no-display-inline" id="idDC8C1327CCF546A4908BFD31244A5D9E"><enum>(a)</enum><header>Comparative
information provided by the Secretary</header>
<paragraph commented="no" display-inline="no-display-inline" id="id2D7934DBA09146099441A33F3111A292"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–1(c)(3)
of the Social Security Act (42 U.S.C. 1395w–101(c)(3)) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id51190E5BC1F94FA0AD71BA4978F559FB"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (A), by adding at the end
the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="id7EC67BE73F69483AA4AEA3A8D1311D2C" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="id76552BE09B3B4A47AE81DA9FBC737C7D"><enum>(vi)</enum><header>Cost and
utilization management tools</header><text display-inline="yes-display-inline">A clear and prominent display of the cost
and utilization management tools used under the plan to impose a restriction or
limitation on the coverage of a drug on the formulary of the
plan.</text>
</clause><after-quoted-block>; and
</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idB5DBEF852A3742999AEF9AE5535D12FA"><enum>(B)</enum><text display-inline="yes-display-inline">by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idD130D16C30A14241A3CA5360D1B22C38" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id704CAB9544C0401DA6959E5EB3A386D2"><enum>(C)</enum><header>Requirements</header><text display-inline="yes-display-inline">In disseminating comparative information
under paragraph (2)(A), the Secretary shall—</text>
<clause commented="no" display-inline="no-display-inline" id="idBC51D6108CEB43E3BF43425036150367"><enum>(i)</enum><text display-inline="yes-display-inline">ensure that such information clearly
distinguishes between—</text>
<subclause commented="no" display-inline="no-display-inline" id="id31983D8E10F6418E99541DD7406A99AC"><enum>(I)</enum><text display-inline="yes-display-inline">plans that offer only basic prescription
drug coverage and plans that offer supplemental prescription drug
coverage;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id324099AA15D6419D9E44145AAA6729AD"><enum>(II)</enum><text display-inline="yes-display-inline">plans that offer coinsurance and plans that
offer flat copayments; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id43FE3E28DF994555AEEE7EEA523E8A1B"><enum>(III)</enum><text display-inline="yes-display-inline">plans that cover all covered part D drugs
and plans that cover less than all such drugs;</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="idD0A52814744A45D0A46289D07EFD6090"><enum>(ii)</enum><text display-inline="yes-display-inline">to the extent that comparative information
is linked on the Internet to an Internet website of a prescription drug plan or
an MA–PD plan, ensure that the information, including information relating to
the formulary of the plan, is directly linked to the relevant page of the plan
Internet website and not the homepage of such website; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idC872C66770AF455C9B2272837EAB3F1D"><enum>(iii)</enum><text display-inline="yes-display-inline">use the standardized definitions,
nomenclature, language, and format developed under sections 1860D–2(f)(4) and
1860D–4(l).</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id41753C2DB0B5439E9A7FFC779BA5EAFA"><enum>(2)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this subsection shall apply with respect to comparative information
disseminated with respect to plan years beginning on or after January 1,
2007.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id3099DFEE144646FCB0D5C7554BC593D9"><enum>(b)</enum><header>Information
provided by plans</header>
<paragraph commented="no" display-inline="no-display-inline" id="id04AD001EA0A14730B96C4651C2216A05"><enum>(1)</enum><header>Drug specific
information</header><text display-inline="yes-display-inline">Section
1860D–4(a)(1) of the Social Security Act (42 U.S.C. 1395w–104(a)(1)) is
amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idF0F69F58F18349D3AFD41512342EBC6C"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (A), by striking
<quote>subparagraph (B)</quote> and inserting <quote>subparagraphs (B), (C),
(D), and (E)</quote>;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id0202EC7C63194B8FB191913E43A19754"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (B), by striking clauses
(ii) and (iii) and inserting the following new clauses:</text>
<quoted-block display-inline="no-display-inline" id="idA360A1EFA5A44742ADDA7215A03AFF19" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="id90331F3E5B904F3DADE5B11484A49041"><enum>(ii)</enum><text display-inline="yes-display-inline">How any formulary used by the sponsor
functions, including, using the standard definitions developed under subsection
(l), how any cost and utilization management tools used to impose a restriction
or limitation on the coverage of a drug on the formulary (such as through the
application of the tools described in such subsection) functions.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id041C81A092114991996C4BE3B1B433AE"><enum>(iii)</enum><text display-inline="yes-display-inline">Beneficiary cost-sharing requirements,
including the tiered or other copayment level applicable for each drug (or
class of drugs).</text>
</clause><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id2A78C23B9EE9409B92709B03708C141B"><enum>(C)</enum><text display-inline="yes-display-inline">by adding at the end the following new
subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="idAC9FF965226843C8864078C67624AA8A" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="IDcf49b7ab027a4dda813d1bf5671b90be"><enum>(C)</enum><header>Benefit process
information</header><text display-inline="yes-display-inline">The information
described in this subparagraph is information concerning the benefit process
under the plan, including an explanation of what a coverage determination is
and how to file a grievance, reconsideration, exception, and appeal.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID114f00123740483ab5fc40a51b115300"><enum>(D)</enum><header>Contact
information</header><text display-inline="yes-display-inline">The information
described in this subparagraph is the plan’s toll-free customer call line and
Internet website and the name, address, and phone number of the plan
administrator.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE90E780524874BC580711D8C1573434D"><enum>(E)</enum><header>Specific
information</header><text display-inline="yes-display-inline">The information
described in this subparagraph is a description of—</text>
<clause commented="no" display-inline="no-display-inline" id="id5D2D25C7AC34479CB08210037D6B597E"><enum>(i)</enum><text display-inline="yes-display-inline">the specific information, including the
information described in paragraph (2)(A), an enrollee can request of the PDP
sponsor under the mechanism described in paragraph (3)(A); and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id53A962F419F04375AA8D43A63305CD28"><enum>(ii)</enum><text display-inline="yes-display-inline">how the enrollee can make such a
request.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idCB2D05D895494E2382D9CCBC74733E10"><enum>(2)</enum><header>Disclosure upon
request of certain information</header><text display-inline="yes-display-inline">Section 1860D–4(a)(2) of the Social
Security Act (42 U.S.C. 1395w–104(a)(2)) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="IDCE67FE2697574E219CCD0E31C9476F27" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID44F9B551A6124FC595408C68327CA075"><enum>(2)</enum><header>Disclosure upon
request of certain information</header><text display-inline="yes-display-inline">Upon request of a part D eligible
individual who is eligible to enroll in a prescription drug plan, the PDP
sponsor offering such plan shall provide such individual with—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD67E84F0773F48DABA72362E4B0E4C46"><enum>(A)</enum><text display-inline="yes-display-inline">information similar (as determined by the
Secretary) to the information described in subparagraphs (A) and (C) of section
1852(c)(2); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID75B303EB589148949DE6953A4AC8258F"><enum>(B)</enum><text display-inline="yes-display-inline">information disclosed to enrollees under
paragraphs (1) and (5).</text>
</subparagraph></paragraph><after-quoted-block>.
</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idDA41269EADCB43C99749BB5C5A1DC15A"><enum>(3)</enum><header>Standardized
format for information</header><text display-inline="yes-display-inline">Section 1860D–4(a) of the Social Security
Act (42 U.S.C. 1395w–104(a)), as amended by section 111(b), is amended by
adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id2601DEB739AB432D830049C5505A74C3" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idDEC16F5FC5A445FDBC9582673E6EDCCF"><enum>(6)</enum><header>Standardized
information</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idE530A37459414040A87E036519C1F0AC"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
standardize the format of the presentation of information by PDP sponsors of a
prescription drug plan to enrollees pursuant to this subsection, including the
covered part D drugs covered under the plan's formulary and the cost and
utilization management tools used under the plan.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id550BBCD98D1A4D928D062973808ADD7D"><enum>(B)</enum><header>Written and
electronic information</header><text display-inline="yes-display-inline">Such
standardized format shall apply to information presented in writing and
electronically.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idAF630D3F2F11476AA0B5CFA8EE2B158A"><enum>(4)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this subsection shall apply with respect to information provided with respect
to plan years beginning on or after January 1, 2007.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="idCEAF41ADCBA84A5FB930492AD610B520" section-type="subsequent-section"><enum>202.</enum><header>Standardized
definition for cost and utilization management tools and nomenclature for
distinguishing between excluded and nonformulary drugs</header>
<subsection commented="no" display-inline="no-display-inline" id="idFF7ACD236252431196A440808C79A6A4"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="id77D99E527459452CB86DFD56AD322B99" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="idE53ECE40D0FB4BD393514935AF633CBA"><enum>(l)</enum><header>Standardized
definitions and nomenclature</header><text display-inline="yes-display-inline">The Secretary shall develop, and require
PDP sponsors offering a prescription drug plan to use, the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="id5F8038E7780C49D7829E5FD2938C02E6"><enum>(1)</enum><header>Definition of
cost and utilization management tools</header><text display-inline="yes-display-inline">A standard definition for any cost and
utilization management tools used under the plan to impose a restriction or
limitation on the coverage of a drug on the formulary (such as through the
application of a preferred status or tiered formulary structure, usage
restriction, step therapy, prior authorization, or quantity limitation).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id2DCD83CFA3F04B87B5A30765265C240D"><enum>(2)</enum><header>Nomenclature
for excluded and nonformulary drugs</header><text display-inline="yes-display-inline">A standard nomenclature for referring to,
and distinguishing between—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id276C1AE086394586AF4EF11668D84CBE"><enum>(A)</enum><text display-inline="yes-display-inline">drugs excluded from the definition of a
covered part D drug pursuant to section 1860D–2(e)(2); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id76008B728C10476CB8845B6199CD1080"><enum>(B)</enum><text display-inline="yes-display-inline">drugs not included on the formulary under
the
plan.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3D14238C0986414C99ECC5D03901C9D1"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The Secretary of Health
and Human Services shall provide for the standard definitions and nomenclature,
and the required use of such definitions and nomenclature, under the amendment
made by subsection (a) by not later than January 1, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id2ED37C83DF3D4A5390A93291E36470B3" section-type="subsequent-section"><enum>203.</enum><header>Standardized
enrollee notice regarding coverage determinations</header>
<subsection commented="no" display-inline="no-display-inline" id="id92DE5D68B0ED4CF3B397E1D687ABFA5E"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–4 of
the Social Security Act (42 U.S.C. 1395w–104), as amended by section 202(a), is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id8CFCA36B0318412F85ED4426EEE97133" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id72E501F183534D70AF155B4F409C9854"><enum>(m)</enum><header>Standardized
enrollee notice</header>
<paragraph commented="no" display-inline="no-display-inline" id="idF8437C1009754417BEC5FCFC24127E8C"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
develop a standard notice that PDP sponsors and Medicare Advantage
organizations shall ensure is distributed by each pharmacy that dispenses a
covered part D drug to an enrollee in a prescription drug plan or an MA–PD plan
when—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id6A5642A3BBA049F382418660384E78A4"><enum>(A)</enum><text display-inline="yes-display-inline">a covered part D drug prescribed for the
enrollee is not covered, or the coverage of such drug is otherwise restricted,
by the plan; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id8FA13EE306A24F5997FC21B751EBA30C"><enum>(B)</enum><text display-inline="yes-display-inline">if the plan uses a tiered formulary
structure, a covered part D drug prescribed for the enrollee is on a
nonpreferred or specialty tier.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id7057B7736E1A4B459A04B671130267E8"><enum>(2)</enum><header>Requirement for
notice</header><text display-inline="yes-display-inline">The standard notice
required under paragraph (1) shall include—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idA248E82BBDDC43299DD20FBAA2AC475C"><enum>(A)</enum><text display-inline="yes-display-inline">an explanation of the coverage
decision;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idC79FB90E4AEA4CD587BD62EB5C6A20B9"><enum>(B)</enum><text display-inline="yes-display-inline">information on how to request a
reconsideration and an exception under subsection (g) and how to file an appeal
under subsection (h); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id501210C4366D4405BD0B129B9EEA4C25"><enum>(C)</enum><text display-inline="yes-display-inline">the contact name, address, and phone number
for the PDP sponsor of the plan or the Medicare Advantage organization offering
the plan.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idE67BE9BDCE37494290F450210A9C5C61"><enum>(3)</enum><header>Required
information to pharmacies</header><text display-inline="yes-display-inline">A
PDP sponsor of a prescription drug plan shall have in place procedures to
provide pharmacies with the information necessary for the pharmacy to
distribute the appropriate notice required under paragraph (1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id08B882E530944C52A661509FC78C6E1F"><enum>(4)</enum><header>Reimbursement
of pharmacy costs</header><text display-inline="yes-display-inline">A PDP
sponsor of a prescription drug plan shall provide appropriate reimbursement to
pharmacies for the costs of the pharmacy in distributing the appropriate notice
required under paragraph
(1)</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id236ECEB98831448494FD5A8AB9325D4D"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The Secretary of Health
and Human Services shall provide for the standard notice, and the use of such
notice, under the amendment made by subsection (a) by not later than January 1,
2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idD8A7FFDE2EE44A3F81A5A9B96BBA25A6" section-type="subsequent-section"><enum>204.</enum><header>Standardized and
simplified processes for reconsiderations, exceptions, and appeals</header>
<subsection commented="no" display-inline="no-display-inline" id="HCB3A020F414A45229BDA9B72B5152476"><enum>(a)</enum><header>Standardized
forms and processes for reconsiderations and exceptions</header><text display-inline="yes-display-inline">Section 1860D–4 of the Social Security Act
(42 U.S.C. 1395w–104), as amended by section 203, is amended by adding at the
end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H8EB63093830A42849C163654AE22FC75" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="H5B42DB4CDF8E4C7B00D610F3D6270064"><enum>(n)</enum><header>Standardized
forms and processes for reconsiderations and exceptions</header>
<paragraph commented="no" display-inline="no-display-inline" id="H945FEB1279BA4D4D995E6F2333FFC984"><enum>(1)</enum><header>Standardized
forms</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id3404C812761D4A5D86B2C1F21B800178"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
develop standardized forms to be used under a prescription drug plan to request
a reconsideration or an exception under subsection (g), with the goal of making
such reconsideration and exceptions process more simple, transparent, and
efficient for enrollees and providers.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id71CD2C1AA4A9409EA8188BF1857EED52"><enum>(B)</enum><header>Required use by
plans</header><text display-inline="yes-display-inline">If a PDP sponsor of a
prescription drug plan requires a request for a reconsideration or an exception
to be in writing, the sponsor shall use the standardized forms developed under
subparagraph (A).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H83B92C0E13EF4025958676F2F2F5288"><enum>(2)</enum><header>Standardized
processes for reconsiderations and exceptions</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idDF772F0C58DB450A9D5EB5A28460776C"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
develop, and require PDP sponsors of prescription drug plans to use, a
standardized process for reconsiderations and exceptions under subsection
(g).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id92C2F6C81F7244FCAA295EBCA70695A2"><enum>(B)</enum><header>Requirement</header><text display-inline="yes-display-inline">The process developed in subparagraph
(A)—</text>
<clause commented="no" display-inline="no-display-inline" id="id9E36D8B30C374B9EB31B57FF7DF87C9B"><enum>(i)</enum><text display-inline="yes-display-inline">shall require that determinations regarding
medical necessity are based on professional medical judgement, the medical
condition of the enrollee, the treating provider's recommendation, and other
medical evidence; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id02F1DA4380E54B6F80C8876D1B171CD3"><enum>(ii)</enum><text display-inline="yes-display-inline">may not require an enrollee or a provider
to submit extraneous information beyond the standardized form described in
paragraph (1) as a condition for the plan to make a reconsideration or
exception but shall permit the enrollee or provider to provide additional
information to the request if they so
choose.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idAF4D34FEB257431C8ECFCA4194E89376"><enum>(b)</enum><header>Improved
appeals process for nonformulary drugs</header><text display-inline="yes-display-inline">Section 1860D–4(h)(2) of the Social
Security Act (42 U.S.C. 1395w–104(h)(2)) is amended by striking <quote>only
if</quote> and all that follows through the period and inserting the following:
“only if the prescribing physician determines at least one of the following
applies:</text>
<quoted-block display-inline="no-display-inline" id="idE0609A1F2A6F4300B4B68B558341BFDA" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id05C2D8C85E344EA0B363A500E165AA07"><enum>(A)</enum><text display-inline="yes-display-inline">That all covered part D drugs on any tier
of the formulary for treatment of the same condition would not be as effective
for the individual.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idA3FD9CF9BAED4913A2732A75D6CF400C"><enum>(B)</enum><text display-inline="yes-display-inline">That all covered part D drugs on any tier
of the formulary for treatment of the same condition would have adverse effects
for the individual.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id383EBA0858024453A92AD748EF3D18B2"><enum>(C)</enum><text display-inline="yes-display-inline">That the covered part D drug that is not on
the formulary under the plan is the most effective drug for the individual and
that the individual would destabilize if coverage of the drug is not
provided.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HE69D9CB9A5C34E5B006BBFF000B57212"><enum>(c)</enum><header>Effective
date</header><paragraph commented="no" display-inline="yes-display-inline" id="id7FC4F3096E9440B38C5E9617B00555C5"><enum>(1)</enum><text display-inline="yes-display-inline">The Secretary of Health and Human Services
shall provide for the standard notice and the standardized process, and the use
of such notice and process, under the amendment made by paragraph (1) by not
later than January 1, 2007.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9848900B52B84006BD533978F08E86EA" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">The amendment made by subsection (b) shall
apply to drugs dispensed on or after January 1, 2007.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="id3E638EDBD820449BB02750C168B09C7B" section-type="subsequent-section"><enum>205.</enum><header>Standardized
marketing and licensing protections; State certification prior to waiver of
licensure requirements</header>
<subsection commented="no" display-inline="no-display-inline" id="id49EDDC4F91BA4F83B0E7CF555452BB5D"><enum>(a)</enum><header>Standardized
marketing requirements</header>
<paragraph commented="no" display-inline="no-display-inline" id="id614AA471550149EF8AB72E1B300032E6"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–1 of
the Social Security Act (42 U.S.C. 1395w–101) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id550FFB20D8534DB385D9811C64559C3C"><enum>(A)</enum><text display-inline="yes-display-inline">in subsection (b)(1)(B)(vi), by striking
<quote>Section</quote> and inserting <quote>Subject to subsection (d),
section</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idFD8E2E785FDC405AA01192F3DA1EA7A4"><enum>(B)</enum><text display-inline="yes-display-inline">by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id328998F672B745C3AEDFA10DD97BC81A" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="idD1F7DB94FE6244A7B28D540921835F3B"><enum>(d)</enum><header>Standardized
marketing requirements</header>
<paragraph commented="no" display-inline="no-display-inline" id="idB92DD1B8995543AEAA9C21552D143927"><enum>(1)</enum><header>Development by
the NAIC</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id677DE15EB97841C392B4ECBB65358C6E"><enum>(A)</enum><header>Requirements</header><text display-inline="yes-display-inline">The Secretary shall request the National
Association of Insurance Commissioners (in this subsection referred to as the
<quote>NAIC</quote>) to—</text>
<clause commented="no" display-inline="no-display-inline" id="id55A186D7A3F24B5AA7314DF051ECB386"><enum>(i)</enum><text display-inline="yes-display-inline">develop standardized marketing requirements
for prescription drug plans and MA–PD plans; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id276EC8A594064915B63E8073B5FD1762"><enum>(ii)</enum><text display-inline="yes-display-inline">submit a report on such requirements to the
Secretary by not later than April 1, 2007.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id66F0EBEF7E574D1BABC38BCF3EA1DBBD"><enum>(B)</enum><header>Prohibited
activities</header><text display-inline="yes-display-inline">Such requirements
shall prohibit the following:</text>
<clause commented="no" display-inline="no-display-inline" id="id27BEB7BDD1F943E282629A6884B18F48"><enum>(i)</enum><text display-inline="yes-display-inline">Cross-selling of non-Medicare products or
services with products or services offered by a prescription drug plan under
this part or an MA–PD plan under part C.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id47F8EA5917174E318C1765401965689F"><enum>(ii)</enum><text display-inline="yes-display-inline">Up-selling from prescription drug plans to
MA–PD plans.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id8112AD71F1344D7D866E98265684253D"><enum>(iii)</enum><text display-inline="yes-display-inline">Telemarketing (including cold calling)
conducted by a prescription drug plan or MA–PD plan (or agent of such
plan).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE0669103595049E0BD32580CEC2921CA"><enum>(C)</enum><header>Other
activities to address</header><text display-inline="yes-display-inline">Such
requirements shall address the conduct of agents engaged in on-site promotion
at a facility of an organization with which the PDP sponsor or Medicare
Advantage organization has a cobranding relationship and any other marketing
practices that are determined to be inappropriate for the eligible part D
individual population.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id5DE5032BF8AE42A585101E64178CDEE5"><enum>(2)</enum><header>Implementation
of requirements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idCB3EAEBEE8D64DF78577CC3F1B30B6A1"><enum>(A)</enum><header>Requirements
based on NAIC recommendations</header><text display-inline="yes-display-inline">If the NAIC develops standardized marketing
requirements and submits the report pursuant to paragraph (1), the Secretary
shall promulgate regulations for standardized marketing requirements for
prescription drug plans and MA–PD plans that are based on the NAIC
recommendations contained in such report. The Secretary shall ensure that such
regulations take effect not later than July 31, 2007.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idDABC7B5F9F3B47C0934FEB0C036FB0F5"><enum>(B)</enum><header>Requirements if
NAIC does not submit report</header><text display-inline="yes-display-inline">If the NAIC does not develop standardized
marketing requirements and submit the report pursuant to paragraph (1), the
Secretary shall promulgate regulations for standardized marketing requirements
for prescription drug plans and MA–PD plans. Such regulations shall prohibit
the conduct described in paragraph (1)(B) and address the conduct described in
paragraph (1)(C). The Secretary shall ensure that such regulations take effect
not later than July 31, 2007.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id878A2C5BCD3C46119DC18EC02A2452E3"><enum>(3)</enum><header>State authority
to enforce standardized marketing requirements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id5350AE482DE44950A64C698BFF431A30"><enum>(A)</enum><header>State
enforcement against agents of prescription drug plans</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law,
if a State provides for the adoption of the standardized marketing requirements
under the regulations under subparagraph (A) or (B) of paragraph (2), the State
may provide for the enforcement of such requirements with respect to agents of
prescription drug plans or MA–PD plans that are licensed within the
State.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idC6ED8D21EBFE480CA0790826DFEC43FF"><enum>(B)</enum><header>Memorandum of
understanding providing enforcement against prescription drug
plans</header><text display-inline="yes-display-inline">Notwithstanding any
other provision of law, the Secretary may enter into a memorandum of
understanding with a State that provides for State enforcement of such
standardized marketing requirements with respect to prescription drug plans and
MA–PD plans that are licensed within the State.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idD850857F56E2431894FABD6154A85DE6"><enum>(C)</enum><header>State reporting
of violations of standardized marketing requirements</header><text display-inline="yes-display-inline">The Secretary shall request that States
report any violations of such standardized marketing requirements to national
and regional offices of the Centers for Medicare & Medicaid
Services.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id70DF3D96C7C144BCAB48B7A086596509"><enum>(D)</enum><header>Report</header><text display-inline="yes-display-inline">The Secretary shall submit an annual report
to Congress on the enforcement of such standardized marketing requirements,
together with such recommendations as the Secretary determines appropriate.
Such report shall include—</text>
<clause commented="no" display-inline="no-display-inline" id="id53DC65D3313448D6B781553B6D5EB89A"><enum>(i)</enum><text display-inline="yes-display-inline">a list of any alleged violations of such
requirements reported to the Secretary by a State, a PDP sponsor, or a Medicare
Advantage organization; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id71D8A3E8336C48318E70840568034E19"><enum>(ii)</enum><text display-inline="yes-display-inline">the disposition of such reported
violations.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id708DEBFC541C4BCC864542049E8CF85E"><enum>(2)</enum><header>Required
compliance with standardized marketing requirements for prescription drug plans
and MA–PD plans</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id2E1E1B1A32624E7394513264FA78C2B0"><enum>(A)</enum><header>Prescription
drug plans</header><text display-inline="yes-display-inline">Section
1860D–12(b) of the Social Security Act (42 U.S.C. 1395w–112(b)) is amended by
adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idCCDCE11F55F54EF583760668B0550330" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idCA072AD91AAE422B9621A81828B96518"><enum>(4)</enum><header>Standardized
marketing requirements</header><text display-inline="yes-display-inline">With
respect to plan years beginning on or after January 1, 2008, each contract
entered into with a PDP sponsor under this section with respect to a
prescription drug plan offered by such sponsor shall provide that the plan (or
agents of such plan) shall comply with the standardized marketing requirements
under section
1860D–1(d)(2).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idD6440087ACEA4710B88A4A376C2F8B11"><enum>(B)</enum><header>MA–PD
plans</header><text display-inline="yes-display-inline">Section 1857(f) of the
Social Security Act (42 U.S.C. 1395w–27) is amended by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idE77BFF8FD0D0475F82174F3D1079FB12" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id14BE38E8469F402DB4631FCC94E07ABE"><enum>(3)</enum><header>Incorporation
of prescription drug plan contract requirement regarding
marketing</header><text display-inline="yes-display-inline">The provisions of
section 1860D–12(b)(4) shall apply to a contract with a Medicare Advantage
organization offering an MA–PD plan in the same manner as they apply to a
contract with a PDP sponsor offering a prescription drug plan under part
D.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idE9DCF2DFE96A446CAE74887E8C0E409A"><enum>(b)</enum><header>State
certification prior to waiver of licensure requirements</header>
<paragraph commented="no" display-inline="no-display-inline" id="id92BF05D9EDFC47B989909E0CED88E9F1"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–12(c)
of the Social Security Act (42 U.S.C. 1395w–112(c)) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id9A799DF428ED4796858D5A77D5861781"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (1)(A), by striking <quote>In
the case</quote> and inserting <quote>Subject to paragraph (5), in the
case</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id417914E5D38F4E559CC36E31D79F32CE"><enum>(B)</enum><text display-inline="yes-display-inline">by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idD2642C4D06D840308CA4B1F6DA5591B6" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id2F8FBF30330646B98D53F2C0015F4645"><enum>(5)</enum><header>State
certification required</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id59319204D1BF49B4BB1480673DE25A24"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary may
only grant a waiver under paragraph (1)(A) if the Secretary has received a
certification from the State insurance commissioner that the prescription drug
plan has a substantially complete application pending in the State.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idB8AAA6D3BA4C4577B686D40634C8EA9E"><enum>(B)</enum><header>Revocation of
waiver upon finding of fraud and abuse</header><text display-inline="yes-display-inline">The Secretary shall revoke a waiver granted
under paragraph (1)(A) if the State insurance commissioner submits a
certification to the Secretary that the recipient of such a waiver has—</text>
<clause commented="no" display-inline="no-display-inline" id="id3424BC62BCCC41DFBB1F62078DCDFDA2"><enum>(i)</enum><text display-inline="yes-display-inline">committed fraud or abuse with respect to
such waiver;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id73389CBF0B29436E8105B1664CEBCD1F"><enum>(ii)</enum><text display-inline="yes-display-inline">failed to make a good faith effort to
satisfy State licensing requirements; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idC6049E0F142341C5B8D285BEFC4E716A"><enum>(iii)</enum><text display-inline="yes-display-inline">was determined ineligible for licensure by
the
State</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id93DBD3647955401DAF305D60D839617B"><enum>(2)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
paragraph (1) shall apply with respect to plan years beginning on or after
January 1, 2007.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="idEA2FBF521F214D9F9506EF30A9F86E35" section-type="subsequent-section"><enum>206.</enum><header>Authority to waive
late enrollment penalty in certain circumstances</header>
<subsection commented="no" display-inline="no-display-inline" id="id5A304FD8484344D09B1ADB9E2B3FAF44"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1860D–13(b)
of the Social Security Act (42 U.S.C. 1395w–113(b)) is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id1881E87567AC47729C9F564B3AB72CEB" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id3E6692E60F894A8A97EA2DB63E73B69A"><enum>(8)</enum><header>Authority to
waive penalty</header><text display-inline="yes-display-inline">If the
Secretary finds that a part D eligible individual's nonenrollment in a
prescription drug plan, an MA–PD plan, or another plan with creditable
prescription drug coverage is based on exceptional circumstances, such as an
individual receiving erroneous information regarding the program under this
part, the Secretary may waive the application of this subsection with respect
to the individual (or a category of individuals) as may be necessary to
eliminate the effects of such
nonenrollment.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idA9F19147479B4DB3A3FF5635EC441796"><enum>(b)</enum><header>Conforming
amendment to special enrollment periods</header><text display-inline="yes-display-inline">Section 1860D–1(b)(3)(C) of the Social
Security Act (42 U.S.C. 1395w–101(b)(3)(C)) is amended by inserting <quote>,
including the circumstances described in section 1860D–13(b)(8)</quote> before
the period at the end.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id5840935CF38C439CAD6512ADBA3155B9"><enum>(c)</enum><header>Effective
Date</header><text display-inline="yes-display-inline">The amendments made by
this section shall take effect on the date of enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id06B2130B42154CA5B266297D41889BD2" section-type="subsequent-section"><enum>207.</enum><header>Integrated
application and enrollment process for certain subsidy-eligible
individuals</header>
<subsection commented="no" display-inline="no-display-inline" id="idB3B2F64675B148338E285EF33D1DF410"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section
1860D–14(a)(3) of the Social Security Act (42 U.S.C. 1395w–114(a)(3)) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id43D46B4965FF4C05BF15CDE5AAAA1DA1" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id1D08D13DA01449CD913F5E75C2DC8312"><enum>(G)</enum><header>Integrated
application and enrollment process</header><text display-inline="yes-display-inline">The Secretary, jointly with the
Commissioner of Social Security, shall work to integrate processes and
beneficiary information for applying for a subsidy under this section and
enrolling in a prescription drug plan or an MA–PD plan under section 1860D–1(b)
in order to simplify steps for part D eligible individuals who wish to
participate in
both.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idC7D1D897C18343BF8588F76664B1B0E4"><enum>(b)</enum><header>Effective
Date</header><text display-inline="yes-display-inline">The amendments made by
this section shall take effect on the date of enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id4C5FCD0321EC431A80EE1080324EA8AB" section-type="subsequent-section"><enum>208.</enum><header>GAO study and report
on cost and utilization management tools used under prescription drug plans and
MA–PD plans</header>
<subsection commented="no" display-inline="no-display-inline" id="id36AA6A18ABD24480810B91B1A3E45D37"><enum>(a)</enum><header>Study</header>
<paragraph commented="no" display-inline="no-display-inline" id="id4E67274AC951451292231EE986232E22"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Comptroller
General of the United States shall conduct a study on the cost and utilization
management tools used under prescription drug plans under part D of title XVIII
of the Social Security Act and MA–PD plans under part C of such title to impose
a restriction or limitation on the coverage of a drug on the formulary (such as
through the application of a preferred status or tiered formulary structure,
usage restriction, step therapy, prior authorization, or quantity
limitation).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idED968A5EF3704B359FA62FCF3EBF7FD9"><enum>(2)</enum><header>Requirements</header><text display-inline="yes-display-inline">The study conducted under paragraph (1)
shall include—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID98b0391023654fd498099a7827f21823"><enum>(A)</enum><text display-inline="yes-display-inline">a comparison of such prescription drug
plans and MA–PD plans regarding the range and extent of cost and utilization
management tools used under such plans;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6B949DD960B54108ABC680975A6946EE"><enum>(B)</enum><text display-inline="yes-display-inline">a comparison of cost and utilization
management tools used under such plans with the cost and utilization tools used
by private insurance plans in the commercial market and by plans under the
Federal Employees Health Benefits Program under chapter 89 of title 5, United
States Code;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idF9A542D5C74145978B0E2D602B0BB233"><enum>(C)</enum><text display-inline="yes-display-inline">an assessment of the impact of the cost and
utilization management tools used under such prescription drug plans and MA–PD
plans on—</text>
<clause commented="no" display-inline="no-display-inline" id="idEC66927CBCFF469090E5A891CDE26FCC"><enum>(i)</enum><text display-inline="yes-display-inline">enrollee access to recommended
medications;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idC047897971C345928C7E409B75C21509"><enum>(ii)</enum><text display-inline="yes-display-inline">enrollee health;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id44DA5FE7C6F7446BB55CDC9B23D9DCDD"><enum>(iii)</enum><text display-inline="yes-display-inline">providers; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idBC9C3196F8ED466EA24C650B0E4F32FE"><enum>(iv)</enum><text display-inline="yes-display-inline">pharmacists;</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id9EDAEA7392E041938B25B0F1902B56FC"><enum>(D)</enum><text display-inline="yes-display-inline">an assessment of the cost-effectiveness of
the cost and utilization management tools used under such plans in general, as
well as the relative cost-savings and burden of specific tools; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idAC5ECDA0D9274D36BCE0406DE5174415"><enum>(E)</enum><text display-inline="yes-display-inline">an assessment of the feasibility,
advantages, and disadvantages of implementing standardized cost and utilization
management tools under such plans and standardized criteria for the use of such
tools.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id7EA4078AA23D40B79166D20BD3C972AA"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than September 1, 2007, the
Comptroller General shall submit a report to Congress on the study conducted
under subsection (a) together with such recommendations for legislation as the
Comptroller General considers appropriate.</text>
</subsection></section><enum>III</enum><header>Performance and quality</header>
<section commented="no" display-inline="no-display-inline" id="IDF9E5D0ADA0184C719B168D28F8C025C2" section-type="subsequent-section"><enum>301.</enum><header>Requirements for
comparative information regarding performance of plans under Medicare part
<enum-in-header>D</enum-in-header></header>
<subsection commented="no" display-inline="no-display-inline" id="ID49AF763F64054E5696F9582099986429"><enum>(a)</enum><header>In
General</header><text display-inline="yes-display-inline">Section 1860D–1(c)(3)
of the <act-name parsable-cite="SSA">Social Security Act</act-name> (42 U.S.C.
1395w–101(c)(3)), as amended by section 201(a), is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID2BDAD66E022B456DB877C224DAF66BDB"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (A), in the matter
preceding clause (i), by striking <quote>subparagraph (B)</quote> and inserting
<quote>subparagraphs (B) and (D)</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB0C53DDB163F4A55B0C04C848BDD9910"><enum>(2)</enum><text display-inline="yes-display-inline">by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="IDC690383A538B4F7B97D9448A8D63DDF0" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID299C73C480704DC79C87CEF00D708DA2"><enum>(D)</enum><header>Requirements
for comparative information regarding performance under the plan</header><text display-inline="yes-display-inline">The comparative information regarding
performance under the plan under subparagraph (A)(iii) shall include a
comparison of the following:</text>
<clause commented="no" display-inline="no-display-inline" id="IDE66000BA436B4254B2AA8CFD0D6EB321"><enum>(i)</enum><text display-inline="yes-display-inline">The number of enrollees in the plan as of
September 1 of the year prior to the plan year for which the information under
this paragraph applies.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5A623621F8984ACBB32E1A2136E7ED94"><enum>(ii)</enum><text display-inline="yes-display-inline">The percentage of all drugs dispensed under
the plan that were generic drugs.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2CFE417B61AE4727ABD9422E4AF29EBE"><enum>(iii)</enum><text display-inline="yes-display-inline">The total number of grievances received
under the plan.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7080C303649F41F29EDD9439B00860D3"><enum>(iv)</enum><text display-inline="yes-display-inline">The total number of appeals received under
the plan and the percentage of such appeals in which the appeal was
successful.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id1A69C8086DC3449F9AD9228066F75041"><enum>(v)</enum><text display-inline="yes-display-inline">The total number of calls received at
customer service call centers.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID17F0C75BA58044B49971DED2BBAA4B77"><enum>(vi)</enum><text display-inline="yes-display-inline">The average time on hold at customer
service call centers under the plan.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8DDC45EB7D6E4EB1A68BA9E0BC5D6E8F"><enum>(vii)</enum><text display-inline="yes-display-inline">The percentage of drugs dispensed under the
plan that required prior authorization.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID38947CBAB3D844B1960DC88E4CC500A5"><enum>(viii)</enum><text display-inline="yes-display-inline">The percentage of drugs dispensed under the
plan that required step therapy.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE4BFC799F6234FB9B843692EBB4E79D2"><enum>(ix)</enum><text display-inline="yes-display-inline">Any additional information regarding
performance under the plan determined appropriate by the Secretary.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">With respect to the information
described in clauses (ii) through (viii), the Secretary shall specify the time
period to be used for compiling the
information.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID0E848B9D25CB477EB7CFB28119B726B4"><enum>(b)</enum><header>Requirement
that enrollment and appeals information be included in comparative information
beginning with the second plan year</header><text display-inline="yes-display-inline">Section 1860D–1(c)(3)(B)(ii) of the
<act-name parsable-cite="SSA">Social Security Act</act-name> (42 U.S.C.
1395w–101(c)(3)(B)(ii)) is amended by striking <quote>for</quote> and inserting
<quote>except with respect to the comparative information under clauses (i),
(v), (vi), (vii), and (viii) of subparagraph (D), for</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID10AEB684A97A48D1BE8A9FE28324C01C"><enum>(c)</enum><header>Effective
Date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to comparative information disseminated with respect
to plan years beginning on or after January 1, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id316C83E3713B4B718D372011A1615012" section-type="subsequent-section"><enum>302.</enum><header>Required quality for
approval of plan</header><text display-inline="no-display-inline">Section
1860D–11(e)(2) of the Social Security Act (42 U.S.C. 1395W–111(e)(2)) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id39668B66FD35430AAEBF809D44228BA2" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id1422E44C348046E28B0D7AEE01A5F16A"><enum>(E)</enum><header>Quality
Performance</header>
<clause commented="no" display-inline="no-display-inline" id="id8DFFFB28155F47E28590FB10BC9BDB5D"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">With respect to plan
years beginning on or after January 1, 2007, the plan and the PDP sponsor
demonstrate satisfactory quality of performance, as determined by the
Secretary.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id06BD91A2B5994448A3C70EF3101FE317"><enum>(ii)</enum><header>Determination</header><text display-inline="yes-display-inline">In making the determination under clause
(i), the Secretary shall consider—</text>
<subclause commented="no" display-inline="no-display-inline" id="id92AEAFF5873E4E61835ACEDDBBDA6A25"><enum>(I)</enum><text display-inline="yes-display-inline">indicators of consumer service (including
grievances and appeals, calls to customer service call centers, errors in
transition plans, and errors in charges to enrollees) in the prior year;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idF7EA11EA9396493280FF6525C5482270"><enum>(II)</enum><text display-inline="yes-display-inline">indicators of compliance with pharmacy
service (including delays in payment) in the prior year;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id0B7A491F05014CFD8DD5F21372B6FC0C"><enum>(III)</enum><text display-inline="yes-display-inline">incorporation by the plan of reports on
treatment effectiveness developed by the Agency for Healthcare Research and
Quality;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idAE14E763F6CB4485BF001BB8C656D398"><enum>(IV)</enum><text display-inline="yes-display-inline">adverse consequences to the health of
enrollees as a consequence of formulary, utilization management, or transition
policies in the prior year;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id0C0073E63A754FB19760036DF03622AB"><enum>(V)</enum><text display-inline="yes-display-inline">indicators resulting from the study
conducted under section 303 of the <short-title>Medicare
Prescription Drug Simplification Act of 2006</short-title>;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id6FCDF09C90C14EE5ADC54C00D84CEF60"><enum>(VI)</enum><text display-inline="yes-display-inline">the negligent provision to the Secretary of
inaccurate formulary information for inclusion in the comparative information
disseminated under section 1860D–1(c); and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id2A56F65BD5C8447FA7BF1DE01689427A"><enum>(VII)</enum><text display-inline="yes-display-inline">clinical quality indicators determined
appropriate by the
Secretary.</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section commented="no" display-inline="no-display-inline" id="IDDFB3449FA84D48878AE0CC6CA79E0A6C" section-type="subsequent-section"><enum>303.</enum><header>MedPAC study and
report regarding a value-based purchasing program for plans offering part
<enum-in-header>D</enum-in-header> prescription drug coverage</header>
<subsection commented="no" display-inline="no-display-inline" id="ID76469753A9F34430BF9431EFE48EB289"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Medicare Payment Advisory Commission
shall conduct a study on the establishment and implementation of a value-based
purchasing program under the Medicare program under title XVIII of the
<act-name parsable-cite="SSA">Social Security Act</act-name> with respect to
the provision of prescription drug coverage under part D of such title under
prescription drug plans and fallback prescription drug plans under such part D,
under Medicare Advantage plans under part C of such title, and under reasonable
cost contracts under section 1876(h) of such Act (42 U.S.C. 1395mm). Such study
shall include an analysis of potential clinical quality indicators and options
for aligning payments to such plans with performance with respect to the
provision of prescription drug coverage under such part D.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE17376C98360409998B23B6E33F54741"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than June 1, 2007, the Commission
shall submit a report to Congress and the Secretary on the study conducted
under subsection (a) together with recommendations for such legislation and
administrative actions as the Commission considers appropriate.</text>
</subsection></section>