[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 904 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 904

 To amend title XIX of the Social Security Act to reduce the costs of 
prescription drugs for enrollees of Medicaid managed care organizations 
 by extending the discounts offered under fee-for-service Medicaid to 
                          such organizations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 2009

Mr. Stupak (for himself and Mr. Ryan of Ohio) introduced the following 
    bill; which was referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
 To amend title XIX of the Social Security Act to reduce the costs of 
prescription drugs for enrollees of Medicaid managed care organizations 
 by extending the discounts offered under fee-for-service Medicaid to 
                          such organizations.

    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 ``Medicaid Prescription Drug Rebate 
Equalization Act of 2009''.

SEC. 2. EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO ENROLLEES OF 
              MEDICAID MANAGED CARE ORGANIZATIONS.

    (a) In General.--Section 1903(m)(2)(A) of the Social Security Act 
(42 U.S.C. 1396b(m)(2)(A)) is amended--
            (1) in clause (xi), by striking ``and'' at the end;
            (2) in clause (xii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                            ``(xiii) such contract provides that (I) 
                        payment for covered outpatient drugs dispensed 
                        to individuals eligible for medical assistance 
                        who are enrolled with the entity shall be 
                        subject to the same rebate required by the 
                        agreement entered into under section 1927 as 
                        the State is subject to, and (II) capitation 
                        rates paid to the entity shall be based on 
                        actual cost experience related to rebates and 
                        subject to the Federal regulations requiring 
                        actuarially sound rates.''.
    (b) Conforming Amendments.--Section 1927 of the Social Security Act 
(42 U.S.C. 1396r-8) is amended--
            (1) in subsection (d)--
                    (A) in paragraph (1), by adding at the end the 
                following:
                    ``(C) Notwithstanding subparagraphs (A) and (B)--
                            ``(i) a Medicaid managed care organization 
                        with a contract under section 1903(m) may 
                        exclude or otherwise restrict coverage of a 
                        covered outpatient drug on the basis of 
                        policies or practices of the organization, such 
                        as those affecting utilization management, 
                        formulary adherence, and cost sharing or 
                        dispute resolution, in lieu of any State 
                        policies or practices relating to the exclusion 
                        or restriction of coverage of such drugs, 
                        provided, however, that any such exclusions and 
                        restrictions of coverage shall be subject to 
                        any contractual requirements and oversight by 
                        the State. As contained in the Medicaid managed 
                        care organization's contract with the State, 
                        the State shall maintain approval authority 
                        over the formulary used by the Medicaid managed 
                        care organization; and
                            ``(ii) nothing in this section or paragraph 
                        (2)(A)(xiii) of section 1903(m) shall be 
                        construed as requiring a Medicaid managed care 
                        organization with a contract under such section 
                        to maintain the same such policies and 
                        practices as those established by the State for 
                        purposes of individuals who receive medical 
                        assistance for covered outpatient drugs on a 
                        fee-for-service basis.''; and
                    (B) in paragraph (4), by inserting after 
                subparagraph (E) the following:
                    ``(F) Notwithstanding the preceding subparagraphs 
                of this paragraph, any formulary established by a 
                Medicaid managed care organization with a contract 
                under section 1903(m) may be based on the positive 
                inclusion of drugs selected by a formulary committee 
                consisting of physicians, pharmacists, and other 
                individuals with appropriate clinical experience as 
                long as drugs excluded from the formulary are available 
                through prior authorization, as described in paragraph 
                (5).''; and
            (2) in subsection (j), by striking paragraph (1) and 
        inserting the following:
            ``(1) Covered outpatients drugs are not subject to the 
        requirements of this section if such drugs are--
                    ``(A) dispensed by health maintenance 
                organizations, including Medicaid managed care 
                organizations that contract under section 1903(m); and
                    ``(B) subject to discounts under section 340B of 
                the Public Health Service Act.''.
    (c) Reporting.--On a quarterly basis, the States shall report to 
the Department of Health and Human Services the total amount of rebates 
in dollars and volume received from pharmacy manufacturers for drugs 
provided to individuals enrolled with Medicaid managed care 
organizations that contract under section 1903(m) of the Social 
Security Act (42 U.S.C. 1396b(m)) as a result of this section for both 
brand-name and generic drugs. This report shall be made publicly 
available.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and apply to rebate 
agreements entered into or renewed under section 1927 of the Social 
Security Act (42 U.S.C. 1396r-8) on or after such date.
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