II 109th CONGRESS 2d Session S. 2723 IN THE SENATE OF THE UNITED STATES May 4, 2006 Mr. Lautenberg (for himself and Mrs. Clinton) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to require the sponsor of a prescription drug plan or an organization offering an MA–PD plan to promptly pay claims submitted under part D, and for other purposes.

1.

Short title

This Act may be cited as the Pharmacists Medicare Relief Act of 2006.

2.

Prompt payment by prescription drug plans and MA–PD plans under part D

(a)

Prompt payment by prescription drug plans

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: (4)

Prompt payment of clean claims

(A)

Prompt payment

(i)

In general

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 payment shall be issued, mailed, or otherwise transmitted with respect to all clean claims submitted under this part within the applicable number of calendar days after the date on which the claim is received. (ii)

Clean claim defined

In this paragraph, the term clean claim means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this part. (B)

Applicable number of calendar days defined

In this paragraph, the term applicable number of calendar days means— (i)with respect to claims submitted electronically, 14 days; and (ii)with respect to claims submitted otherwise, 30 days. (C)

Interest payment

If payment is not issued, mailed, or otherwise transmitted within the applicable number of calendar days (as defined in subparagraph (B)) after a clean claim is received, interest shall be paid at a rate equal to the weighted average of interest on 3-month marketable Treasury securities determined for such period, increased by 0.1 percentage point for the period beginning on the day after the required payment date and ending on the date on which payment is made. (D)

Procedures involving claims

(i)

In general

A contract entered into with a PDP sponsor under this section with respect to a prescription drug plan offered by such sponsor shall provide that, not later than 10 days after the date on which a clean claim is submitted, the PDP sponsor shall provide the claimant with a notice that acknowledges receipt of the claim by such sponsor. Such notice shall be considered to have been provided on the date on which the notice is mailed or electronically transferred. (ii)

Claim deemed to be clean

A claim is deemed to be a clean claim if the PDP sponsor involved does not provide notice to the claimant of any deficiency in the claim within 10 days of the date on which the claim is submitted. (iii)

Claim determined to not be a clean claim

(I)

In general

If a PDP sponsor determines that a submitted claim is not a clean claim, the PDP sponsor shall, not later than the end of the period described in clause (ii), notify the claimant of such determination. Such notification shall specify all defects or improprieties in the claim and shall list all additional information or documents necessary for the proper processing and payment of the claim. (II)

Determination after submission of additional information

A claim is deemed to be a clean claim under this paragraph if the PDP sponsor involved does not provide notice to the claimant of any defect or impropriety in the claim within 10 days of the date on which additional information is received under subclause (I). (III)

Payment of clean portion of a claim

A PDP sponsor shall, as appropriate, pay any portion of a claim that would be a clean claim but for a defect or impropriety in a separate portion of the claim in accordance with subparagraph (A). (iv)

Obligation to pay

A claim submitted to a PDP sponsor that is not paid or contested by the provider within the applicable number of days (as defined in subparagraph (B)) shall be deemed to be a clean claim and shall be paid by the PDP sponsor in accordance with subparagraph (A). (v)

Date of payment of claim

Payment of a clean claim under such subparagraph is considered to have been made on the date on which full payment is received by the provider. (E)

Private right of action

(i)

In general

Nothing in this paragraph shall be construed to prohibit or limit a claim or action not covered by the subject matter of this section that any individual or organization has against a provider or a PDP sponsor. (ii)

Anti-retaliation

Consistent with applicable Federal or State law, a PDP sponsor shall not retaliate against an individual or provider for exercising a right of action under this subparagraph. . (b)

Prompt payment by MA–PD plans

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: (3)

Incorporation of certain prescription drug plan contract requirements

The provisions of section 1860D–12(b)(4) shall apply to contracts with a Medicare Advantage organization in the same manner as they apply to contracts with a PDP sponsor offering a prescription drug plan under part D. . (c)

Effective date

The amendments made by this section shall apply to contracts entered into or renewed on or after the date of the enactment of this Act.

3.

Restriction on co-branding

(a)

In general

Section 1860D–4 of the Social Security Act (42 U.S.C. 1395w–104) is amended— (1)in subsection (b)(2)(A), by striking The PDP sponsor and inserting Subject to subsection (l), the PDP sponsor; and (2)by adding at the end the following new subsection: (l)

Co-branding prohibited

A card that is issued under subsection (b)(2)(A) for use under a prescription drug plan offered by a PDP sponsor or an MA–PD plan offered by a Medicare Advantage organization and any marketing materials distributed with respect to such a plan shall not display the name or brand of any pharmacy. . (b)

Penalty

Section 1128B of the Social Security Act (42 U.S.C. 1320a–7b) is amended by adding at the end the following new subsection: (g)Whoever knowingly and willfully engages in co-branding prohibited under section 1860D–4(l) with respect to a prescription drug plan offered by a PDP sponsor under part D of title XVIII or a Medicare Advantage plan offered by a Medicare Advantage organization under part C of such title, shall be guilty of a felony and upon conviction thereof shall be fined not more than $25,000 or imprisoned for not more than five years, or both. . (c)

Effective date

The amendments made by this section shall apply to cards and marketing materials distributed on or after the date that is 90 days after the date of the enactment of this Act.