[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1954 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1954

 To amend title XVIII of the Social Security Act to improve access to 
                        pharmacies under part D.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 2, 2007

 Mr. Baucus (for himself, Mr. Grassley, Mrs. Lincoln, Mr. Roberts, Mr. 
Conrad, Mr. Enzi, Mr. Schumer, Mr. Cochran, Mr. Salazar, Mr. Smith, Mr. 
Bingaman, and Ms. Snowe) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend title XVIII of the Social Security Act to improve access to 
                        pharmacies under part D.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pharmacy Access Improvement (PhAIm) 
Act of 2007''.

SEC. 2. STRENGTHENING STANDARDS FOR ACCESS TO PHARMACIES.

    (a) In General.--Section 1860D-4(b)(1)(C) of the Social Security 
Act (42 U.S.C. 1395w-104(b)(1)(C)) is amended--
            (1) in clause (i)--
                    (A) by inserting ``that are accessible to the 
                general public (not including closed pharmacies, such 
                as pharmacies that dispense drugs by mail order only or 
                are located in a hospital or nursing home, except that 
                a closed pharmacy shall be included if the pharmacy is 
                operated by the Indian Health Service, an Indian tribe 
                or tribal organization, or an urban Indian organization 
                (as defined in section 4 of the Indian Health Care 
                Improvement Act))'' after ``sufficient number of 
                pharmacies''; and
                    (B) by striking ``(other than by mail order)''; and
            (2) in clause (ii), by adding at the end the following new 
        sentence: ``If the PDP sponsor of a prescription drug plan 
        designates in-network pharmacies as either preferred or non-
        preferred pharmacies (or any designation other than preferred 
        or any other distinction between or among pharmacies with 
        respect to participation status), only in-network preferred 
        pharmacies shall be counted in determining if the requirements 
        of such rules are met.''.
    (b) Expanding Participation by Any Willing Pharmacy.--Section 
1860D-4(b)(1)(A) of the Social Security Act (42 U.S.C. 1395w-
104(b)(1)(A)) is amended--
            (1) by striking ``Pharmacy.--A prescription drug plan'' and 
        inserting ``pharmacy.--
                            ``(i) In general.--Subject to clause (ii), 
                        a prescription drug plan'';
            (2) in clause (i), as added by paragraph (1), by adding at 
        the end the following new sentence: ``A previous refusal by a 
        pharmacy of an offer to participate, or the expiration of such 
        an offer, shall not be grounds to exclude a pharmacy from 
        participation under this subparagraph.''; and
            (3) by adding at the end the following new clause:
                            ``(ii) Participation of 340b entities.--
                                    ``(I) In general.--A prescription 
                                drug plan shall not exclude a pharmacy 
                                from participation solely on the basis 
                                that such pharmacy is a covered entity 
                                under section 340B of the Public Health 
                                Service Act.
                                    ``(II) Reasonable terms and 
                                conditions for 340b entities.--In the 
                                case of a pharmacy that is a covered 
                                entity under such section 340B, if such 
                                an entity requests that the terms and 
                                conditions of the appropriate version 
                                (as determined by the Secretary) of the 
                                Model Safety Net Pharmacy Addendum to 
                                Pharmacy Contract apply to a contract 
                                to dispense covered part D drugs under 
                                such plan, subject to subclause (III), 
                                the terms and conditions of such 
                                contract shall be the terms and 
                                conditions for participation of such 
                                pharmacy under clause (i).
                                    ``(III) Permitting waiver of cost-
                                sharing.--In the case of a pharmacy 
                                that is a covered entity under such 
                                section 340B, if such an entity 
                                requests that the terms and conditions 
                                of a contract to dispense covered part 
                                D drugs under such plan permit the 
                                pharmacy to waive or reduce cost-
                                sharing under this part, consistent 
                                with the requirements of section 
                                1128B(b)(3)(G), such permission shall 
                                be included in the terms and conditions 
                                for participation of such pharmacy 
                                under clause (i).''.
    (c) Strengthening Convenient Access Standards.--
            (1) Access in long-term care facilities and to pharmacies 
        serving indians.--Section 1860D-4(b)(1)(C) of the Social 
        Security Act (42 U.S.C. 1395w-104(b)(1)(C)) is amended by 
        striking clause (iv) and inserting the following new clauses:
                            ``(iv) Convenient access in long-term care 
                        facilities.--Such rules shall include standards 
                        with respect to access for enrollees who are 
                        residing in long-term care facilities to ensure 
                        that such enrollees have access to a long-term 
                        care network pharmacy.
                            ``(v) Convenient access to pharmacies 
                        serving indians.--Such rules may include 
                        standards with respect to access for enrollees 
                        to pharmacies operated by the Indian Health 
                        Service, Indian tribes and tribal 
                        organizations, and urban Indian organizations 
                        (as defined in section 4 of the Indian Health 
                        Care Improvement Act.''.
            (2) Convenient access to extended supplies at retail 
        pharmacies.--Section 1860D-4(b)(1)(C) of the Social Security 
        Act (42 U.S.C. 1395w-104(b)(1)(C)), as amended by paragraph 
        (1), is amended--
                    (A) in clause (ii), by striking ``The Secretary'' 
                and inserting ``Subject to clause (vi), the 
                Secretary''; and
                    (B) by adding at the end the following new clause:
                            ``(vi) The Secretary shall establish rules 
                        for convenient access to in-network pharmacies 
                        under this subparagraph that dispense extended 
                        supplies of covered part D drugs that are 
                        modeled after the rules for convenient access 
                        to pharmacies included in the statement of work 
                        described in clause (ii).''.
    (d) Disclosure of Maximum Allowable Cost Pricing.--Section 1860D-
4(b)(1) of the Social Security Act (42 U.S.C. 1395w-104(b)(1)) is 
amended by adding at the end the following new subparagraph:
                    ``(F) Disclosure of maximum allowable cost 
                pricing.--If a contract for a pharmacy to dispense 
                covered part D drugs under a prescription drug plan 
                references maximum allowable cost lists or pricing, the 
                PDP sponsor of such plan shall disclose, through (at a 
                minimum) an Internet website and a toll-free telephone 
                number--
                            ``(i) any such lists or pricing to the 
                        pharmacy at the time of offering such contract; 
                        and
                            ``(ii) information updated not less 
                        frequently than every 7 days on such lists or 
                        pricing to pharmacies that have entered into 
                        such a contract.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date that is 180 days after the date of enactment of this 
Act.

SEC. 3. 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 part 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 by 
                        pharmacies (other than pharmacies that dispense 
                        drugs by mail order only or are located in, or 
                        contract with, a long-term care facility) 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, the PDP sponsor 
                shall pay interest to the pharmacy that submitted the 
                claim 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 (as determined under subparagraph 
                (D)(iv)). Interest amounts paid under this subparagraph 
                shall not be counted against the administrative costs 
                of a prescription drug plan or treated as allowable 
                risk corridor costs under section 1860D-15(e).
                    ``(D) Procedures involving claims.--
                            ``(i) 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.
                            ``(ii) 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 (i), 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).
                            ``(iii) Obligation to pay.--A claim 
                        submitted to a PDP sponsor that is not paid or 
                        contested by the sponsor 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).
                            ``(iv) Date of payment of claim.--Payment 
                        of a clean claim under such subparagraph is 
                        considered to have been made on the date on 
                        which--
                                    ``(I) with respect to claims paid 
                                electronically, the payment is 
                                transferred; and
                                    ``(II) with respect to claims paid 
                                otherwise, the payment is submitted to 
                                the United States Postal Service or 
                                common carrier for delivery.
                    ``(E) Electronic transfer of funds.--A PDP sponsor 
                shall pay all clean claims submitted electronically by 
                electronic transfer of funds if the pharmacy so 
                requests or has so requested previously. In the case 
                where such payment is made electronically, remittance 
                may be made by the PDP sponsor electronically as well.
                    ``(F) Protecting the rights of claimants.--
                            ``(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.
                    ``(G) Rule of construction.--A determination under 
                this paragraph that a claim submitted by a pharmacy is 
                a clean claim shall not be construed as a positive 
                determination regarding eligibility for payment under 
                this title, nor is it an indication of government 
                approval of, or acquiescence regarding, the claim 
                submitted. The determination shall not relieve any 
                party of civil or criminal liability with respect to 
                the claim, nor does it offer a defense to any 
                administrative, civil, or criminal action with respect 
                to the claim.''.
    (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 following provisions 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:
                    ``(A) Prompt payment.--Section 1860D-12(b)(4).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of enactment of this 
Act.

SEC. 4. MEDICARE PART D INFORMATIONAL RESOURCES AND CUSTOMER SERVICE.

    (a) Health and Human Services Pharmacy Hotline.--The Secretary of 
Health and Human Services shall--
            (1) establish a toll-free telephone number that is 
        dedicated to providing information regarding the Medicare 
        prescription drug benefit under part D of title XVIII of the 
        Social Security Act to pharmacists and pharmacy staff; and
            (2) staff such telephone number in order to ensure that the 
        toll-free number is available to answer calls 24-hours each 
        day.
    (b) Customer Service Provided by Prescription Drug Plans and MA-PD 
Plans.--
            (1) In general.--Section 1860D-4 of the Social Security Act 
        (42 U.S.C. 1395w-104) is amended by adding at the end the 
        following new subsection:
    ``(l) Customer Service.--
            ``(1) Pharmacy hotline.--A PDP sponsor of a prescription 
        drug plan shall--
                    ``(A) establish a toll-free telephone number that 
                is dedicated to providing information regarding the 
                plan to pharmacists and pharmacy staff; and
                    ``(B) staff such telephone number in order to 
                ensure compliance with customer service standards (as 
                established by the Secretary).
            ``(2) Physician and provider hotline.--A PDP sponsor of a 
        prescription drug plan shall--
                    ``(A) establish a toll-free telephone number that 
                is dedicated to providing information regarding the 
                plan to physicians and providers; and
                    ``(B) staff such telephone number in order to 
                ensure compliance with customer service standards (as 
                established by the Secretary).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning on or after January 1, 
        2008.

SEC. 5. RESTRICTIONS ON PHARMACY CO-BRANDING BY PRESCRIPTION DRUG PLANS 
              AND MA-PD PLANS.

    (a) In General.--Section 1860D-4 of the Social Security Act (42 
U.S.C. 1395w-104), as amended by section 4(b), is amended by adding at 
the end the following new subsection:
    ``(m) Co-Branding.--
            ``(1) Prohibition of co-branding on prescription drug 
        card.--A card that is issued under subsection (b)(2)(A) for use 
        under a prescription drug plan offered by a PDP sponsor shall 
        not display the name, brand, logo, or trademark of any 
        pharmacy.
            ``(2) Marketing materials.--Marketing materials distributed 
        by a PDP sponsor that has a co-branding relationship with a 
        pharmacy with respect to such a plan shall include a disclaimer 
        in large, off-set, bold-face type of the following: Other 
        pharmacies are also available in our network.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to cards and marketing materials distributed on or after the date 
that is 60 days after the date of enactment of this Act.

SEC. 6. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR CONTRACTING 
              WITH LONG-TERM CARE FACILITIES.

    (a) Submission of Claims by Pharmacies Located in or Contracting 
With Long-Term Care Facilities.--
            (1) Submission of claims to prescription drug plans.--
        Section 1860D-12(b) of the Social Security Act (42 U.S.C. 
        1395w-112(b)), as amended by section 3(a), is amended by adding 
        at the end the following new paragraph:
            ``(5) Submission of claims by pharmacies located in or 
        contracting with long-term care facilities.--Each contract 
        entered into with a PDP sponsor under this part with respect to 
        a prescription drug plan offered by such sponsor shall provide 
        that a pharmacy located in, or having a contract with, a long-
        term care facility shall have not less than 30 days (but not 
        more than 90 days) to submit claims to the sponsor for 
        reimbursement under the plan.''.
            (2) Submission of claims to ma-pd plans.--Section 
        1857(f)(3) of the Social Security Act, as added by section 
        3(b), is amended by adding at the end the following new 
        subparagraph:
                    ``(B) Submission of claims by pharmacies located in 
                or contracting with long-term care facilities.--Section 
                1860D-12(b)(5).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2008.

SEC. 7. OIG STUDY AND REPORT ON DISPENSING FEES.

    (a) Study.--The Inspector General of the Department of Health and 
Human Services shall conduct an analysis of the cost of dispensing 
covered part D drugs (as defined in section 1860D-2(e) of the Social 
Security Act (42 U.S.C. 1395w-102(e)) under a prescription drug plan 
under part D of title XVIII of such Act or an MA-PD plan under part C 
of such title that takes into consideration the following:
            (1) Any reasonable costs associated with a pharmacist's 
        time in--
                    (A) checking for information about an individual's 
                coverage; and
                    (B) performing necessary clinical review and 
                quality assurance activities, such as activities to 
                identify and reduce the frequency of patterns of fraud, 
                abuse, gross overuse, or inappropriate or medically 
                unnecessary care, among physicians, pharmacists, and 
                patients, or associated with specific drugs or groups 
                of drugs, as well as potential and actual severe 
                adverse reactions to drugs including education on 
                therapeutic appropriateness, overutilization and 
                underutilization, appropriate use of generic products, 
                therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions, incorrect 
                drug dosage or duration of drug treatment, drug-allergy 
                interactions, and clinical abuse/misuse, and any other 
                clinical review and quality assurance activities 
                required under Federal or State law.
            (2) Costs incurred by the pharmacist that are associated 
        with--
                    (A) the measurement or mixing of a covered part D 
                drug;
                    (B) filling the container for such a drug;
                    (C) physically providing the completed prescription 
                to an individual enrolled in such a plan;
                    (D) delivery;
                    (E) special packaging;
                    (F) overhead related to the pharmacy, or the 
                section of the facility that is devoted to a pharmacy, 
                and its maintenance (including the equipment necessary 
                to operate such pharmacy or such section and the 
                salaries of pharmacists and other pharmacy workers); 
                and
                    (G) geographic factors that impact operational 
                costs.
            (3) The variation in costs described in paragraph (2) based 
        on--
                    (A) whether the pharmacist is dispensing a standard 
                or extended supply of a covered part D drug;
                    (B) whether the pharmacy is an independent or chain 
                pharmacy;
                    (C) whether a product dispensed is a specialty 
                pharmacy product; and
                    (D) whether the pharmacy is located in, or 
                contracts with, a long-term care facility.
            (4) The increase in dispensing fees, taking into 
        consideration the costs described in paragraphs (1), (2), and 
        (3), that is sufficient to create an incentive for a pharmacist 
        to promote the substitution of covered general alternative 
        therapies.
    (b) Report.--Not later than December 1, 2008, the Inspector General 
of the Department of Health and Human Services shall submit a report to 
the Secretary of Health and Human Services on the study conducted under 
subsection (a). The report shall include the following:
            (1) The average cost to dispense a prescription drug under 
        part D of title XVIII of the Social Security Act determined 
        with respect to the area in which a prescription drug plan or 
        an MA-PD plan is offered, including with respect to each PDP 
        region (as determined under section 1860D-11(a)(2) of such Act 
        (42 U.S.C. 1395w-111(a)(2)) and each MA region (as determined 
        under section 1858(a) of such Act (42 U.S.C. 1395w-27(a)).
            (2) The findings of the study conducted under subsection 
        (a) with respect to--
                    (A) the variation in costs studied under 
                subparagraphs (A) through (D) of paragraph (3) of such 
                subsection; and
                    (B) the increase in dispensing fees studied under 
                paragraph (4) of such subsection.

SEC. 8. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD REQUIRED.

    (a) Requirement for Prescription Drug Plans.--Section 1860D-12(b) 
of the Social Security Act (42 U.S.C. 1395w-112(b)), as amended by 
section 6(a)(1), is amended by adding at the end the following new 
paragraph:
            ``(6) Regular update of prescription drug pricing 
        standard.--If the PDP sponsor of a prescription drug plan uses 
        a standard for reimbursement of pharmacies based on the cost of 
        a drug, each contract entered into with such sponsor under this 
        part with respect to the plan shall provide that the sponsor 
        shall update such standard not less frequently than once every 
        7 days, beginning with an initial update on January 1 of each 
        year, to accurately reflect the market price of acquiring the 
        drug.''.
    (b) Requirement for MA-PD Plans.--Section 1857(f)(3) of the Social 
Security Act, as amended by section 6(a)(2), is amended by adding at 
the end the following new subparagraph:
                    ``(C) Regular update of prescription drug pricing 
                standard.--Section 1860D-12(b)(6).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2008.
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