[Congressional Record Volume 153, Number 59 (Thursday, April 12, 2007)]
[Senate]
[Pages S4442-S4445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Smith, Mr. Kohl, Ms. Snowe, 
        Mrs. Lincoln, and Mr. Kerry):
  S. 1102. A bill to amend title XVIII of the Social Security Act to 
expedite the application and eligibility process for low-income 
subsidies under the Medicare prescription drug program and to revise 
the resource standards used to determine eligibility for an income-
related subsidy, and for other purposes; to the Committee on Finance.
  By Mr. BINGAMAN (for himself, Mr. Smith, and Mr. Kerry):
  S. 1103. A bill to amend title XVIII of the Social Security At to 
include costs incurred by the Indian Health Service, a Federally 
qualified health center, an AIDS drug assistance program, certain 
hospitals, or a pharmaceutical manufacturer patient assistance program 
in providing prescription drugs toward the annual out of pocket 
threshold under part D of the Medicare program; to the Committee on 
Finance.

[[Page S4443]]

  Mr. BINGAMAN. Mr. President, I rise today with my colleague Senator 
Smith to introduce two pieces of vitally important, bipartisan 
legislation that will ensure that low-income seniors have full access 
to the benefits available to them under the Medicare Drug Benefit. The 
first piece of legislation makes critical improvements in the Medicare 
Part D Low-Income Subsidy (LIS) available to assist these individuals 
in meeting cost sharing, premium, and deductible requirements under 
Part D. The second will ensure that low-income seniors don't get caught 
in the Medicare Part D coverage gap, or ``doughnut hole,'' simply 
because of where they purchase their Part D pharmaceuticals.
  These bills were developed in close collaboration with Senator Smith, 
who also will be introducing two bills today to achieve other, critical 
improvements in the Medicare program for low-income seniors. Together, 
we believe this package of four bills will provide the reforms 
necessary to ensure that the Medicare program and the LIS function as 
they were intended, to ensure access to life-saving drug coverage for 
some of the most vulnerable members of our society.
  Data indicates that a shockingly low number of seniors eligible for 
the LIS benefit are actually receiving the benefit. According to the 
January 2007 report by the National Council on Aging (NCOA), The Next 
Steps: Strategies to Improve the Medicare Part D Low-Income Subsidy, 
only 35 percent to 42 percent of beneficiaries who could have 
successfully applied for the LIS in 2006 were actually receiving it. 
Exacerbating this problem, NCOA also reports that overall LIS 
enrollment rates are slowing. In total for 2007, NCOA estimates that 
between 3.4 and 4.4 million beneficiaries still must be identified and 
enrolled in the LIS. Furthermore, data indicates that certain LIS 
requirements result in many low-income seniors that should be eligible 
for the benefit being denied enrollment in LIS. I believe the modest 
policy changes created by the legislation I and Senator Smith are 
introducing will ensure that all low-income beneficiaries have access 
to the LIS.
  The single most significant barrier to LIS eligibility is the asset 
test, which accounts for approximately 41 percent of LIS denials. As 
reported by NCOA, the asset test penalizes low income retirees who may 
have very modest savings. For example, approximately half of the people 
that failed the asset test have excess assets of $35,000 or less. These 
people tend to be older, female, widowed, and living alone. In addition 
the asset test is inherently discriminatory against certain categories 
of people, e.g., people who rent their homes.
  My legislation, the Part D Equity for Low-Income Seniors Act, will 
dramatically improve this inequity by raising the asset test limits to 
$27,500 for an individual and $55,000 for a couple. This will capture 
about half of individuals and two-thirds of couples who have been 
denied LIS because of excess resources.
  As recommended by OIG in fall 2006, this legislation also allows the 
Internal Revenue Service (IRS) to transfer tax filing information to 
the Social Security Administration (SSA) so they can better target 
beneficiaries who might be eligible for the LIS. In addition, this 
legislation creates an expedited LIS application process for pre-
screened beneficiaries, prohibits the reporting of retirement account 
balances, life-insurance policies and in-kind contributions when 
determining a beneficiary's resource level, and prohibits LIS benefits 
from being counted as resources for the purposes of determining 
eligibility for other federal programs.
  I also am introducing the Low-Income True Out-Of Pocket (TrOOP) 
Expense under Part D Assistance bill, which ensures that low-income 
Americans do not get ``stuck'' in the Part D ``doughnut hole'' simply 
because of where they choose to purchase Part D pharmaceuticals.
  Unbelievably, under current regulation and guidance, individuals who 
are in the doughnut hole and receive Part D drugs from commercial 
pharmacies are permitted to count waivers or reductions in Part D cost-
sharing to count towards their TrOOP. However, low-income individuals 
who tend to receive Part D drugs from safety-net pharmacies and other 
safety-net providers are not permitted to count similar waivers or 
reductions in Part D cost-sharing by safety-net providers towards their 
TrOOP. Thus, current law penalizes low-income individuals and makes it 
easier for them to get stuck in the doughnut hole--never accessing the 
catastrophic coverage to which they are entitled.
  My legislation would undo this inequity and permit waivers and 
reductions for beneficiaries receiving care from safety-net providers 
to count towards beneficiaries' TrOOP. Specifically, the legislation 
will count waivers and reductions by certain safety-net hospitals and 
pharmacies, Federally Qualified Health Centers (FQHCs), AIDS Drug 
Assistance Programs (ADAPs), Pharmacy Assistance Programs (PAPs), and 
the Indian Health Service (IRS) toward TrOOP.
  In closing, I would also like to offer my strong support for the two 
bills on which we worked very closely with Senator Smith and that he is 
introducing today. The first is the Medicare Part D Outreach and 
Enrollment Enhancement Act, which creates a permanent 90-day special 
enrollment period for any beneficiary who becomes eligible for the LIS. 
It also requires CMS to provide such beneficiaries facilitated 
enrollment into the plans allowing, within 90 days, the beneficiary to 
be enrolled into the most appropriate plan for his or her needs. The 
legislation also waives the late enrollment penalty for LIS 
beneficiaries, provides a $1 per beneficiary authorization for State 
Health Insurance Programs, and funds the National Center on Senior 
Benefits and Outreach, which was created last year in the Older 
Americans Act.
  The second piece of legislation creates important equity between 
institutionalized Part D beneficiaries dually eligible for Medicare and 
Medicaid and those dual eligibles who avoid initialization through a 
Home and Community Based Waiver (HCBW). Currently under Federal law, 
Part D cost-sharing requirements are waived for dual-eligible 
individuals that are institutionalized but are not waived for 
individuals in HCBWs. Senator Smith's legislation would make an 
important change to Federal law to all allow cost sharing under Part D 
to be waived for dual eligibles regardless of whether they are 
institutionalized or receiving care through HCBWs.
  I also would like to express my gratitude for the assistance of 
several key senior citizen advocates in crafting all four important 
pieces of legislation, including: Paul Cotton and Kristen Sloan from 
the American Association of Retired Persons, Howard Bedlin and Sara 
Duda from the National Council on Aging, Lena O'Rourke and Marc 
Steinberg from Families USA, Patricia Nemore and Vicki Gottlich from 
the Center for Medicare Advocacy and Paul Precht, from the Medicare 
Rights Center. I would also like to thank the Staff at the Social 
Security Administration (SSA) for their prompt feedback and invaluable 
assistance.
  I urge my colleagues to join me in supporting these important pieces 
of legislation, which will ensure that life saving pharmaceuticals are 
available to low-income Americans.
  I ask unanimous consent that the National Council on Aging Report, 
and the text of these bills to be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 The Next Steps: Strategies To Improve the Medicare Part D Low-Income 
                                Subsidy

       The passage of the Medicare Modernization Act (MMA) was the 
     largest expansion of the Medicare program since its inception 
     in 1965 and over 90 percent of Medicare beneficiaries now 
     have prescription drug coverage due to unprecedented efforts 
     by the public and private sectors. However, millions of those 
     in greatest need have still not signed up for the Low-Income 
     Subsidy (LIS or Extra Help) program, which provides generous 
     financial assistance to beneficiaries with limited income and 
     resources, including coverage through the ``donut hole.'' HHS 
     has estimated that at least 75% of the Medicare beneficiaries 
     still without any prescription drug coverage are eligible for 
     the Low-Income Subsidy.
       The challenge of finding and enrolling people with limited 
     means in needs-based programs is not new. After forty years, 
     take-up rates remain low for many federal means-tested 
     benefits. As a result of unprecedented efforts by the public, 
     non-profit and private sectors in the first year of the 
     program, NCOA estimates that 35% to 42% of beneficiaries who 
     could have successfully applied for the LIS in 2006 are 
     actually receiving it. While the LIS take-up rate so far is 
     on a par

[[Page S4444]]

     with historic enrollment rates in other federal, needs-based 
     programs (especially after the first year of effort), there 
     are signs that overall enrollment rates are slowing. We 
     estimate that there are between 3.4 and 4.4 million 
     beneficiaries that we still need to find and sign up for the 
     program in 2007.
       These are people who would benefit most from the coverage 
     that Part D and the LIS can offer them. With targeted 
     investments and modest policy changes, significantly higher 
     participation rates can be achieved in 2007.
       This paper identifies recommended legislative, 
     administrative, and regulatory reforms that should be made to 
     the LIS to improve access to the program for seniors and 
     people with disabilities with limited means. Some of the key 
     legislative reforms recommended include: (1) eliminating the 
     asset test, as it is the single-most significant barrier to 
     Part D LIS eligibility; (2) enacting legislation to make the 
     LIS Special Enrollment Period (SEP) permanent and eliminate 
     the late enrollment premium penalty for this population; and 
     (3) establishing and funding a dedicated, nationwide network 
     of enrollment centers through the new National Center on 
     Senior Benefits Outreach and Enrollment in order to find and 
     enroll remaining LIS eligibles.
       There are also significant administrative and regulatory 
     reforms recommended in this paper. Some of the reforms 
     include having the Social Security Administration (SSA): (1) 
     designate at least one dedicated worker in each field office 
     who is assigned specifically to process LIS applications 
     where practical; (2) amend the LIS application to allow 
     applicants to designate a third party to assist them through 
     the LIS application process and interact with SSA on their 
     behalf; and (3) maintain a link from the online LIS 
     application to a webpage that provides seniors and people 
     with disabilities--as well as their family members, friends, 
     or advocates--with state-specific information on other public 
     benefits for which they may be eligible.
       In addition to implementing reforms to the Part D LIS 
     program, Prescription Drug Plans (PDPs) and Medicare 
     Advantage-Prescription Drug plans (MAPDs) should be required 
     to screen their member lists for individuals who are 
     potentially eligible for the Low- Income Subsidy. We estimate 
     that up to 1.1 million more people in plans could enroll in 
     the LIS if they knew they were eligible for the program and 
     received application assistance. PDPs and MA-PDs could 
     partner with nonprofit organizations to help screen their 
     members for LIS eligibility.
       We commend CMS for its recent decisions to permit low-
     income beneficiaries to sign up for LIS and enroll in a plan 
     throughout the remainder of 2007 without penalty. This action 
     is necessary, but not sufficient in itself to achieve higher 
     LIS enrollments in 2007. To reach the remaining LIS 
     eligibles, additional investment in proven strategies that 
     work is needed, along with progress on the other 
     recommendations included in this paper.
       With the beginning of the second year of this program, the 
     Access to Benefits Coalition and NCOA call on the 
     Administration, foundations, corporations and advocacy groups 
     to renew their commitment to outreach and enrollment efforts 
     and to invest in effective strategies to help seniors and 
     people with disabilities in greatest need to receive the 
     important benefits available to them.
                                  ____


                                S. 1102

       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 ``Part D Equity for Low-Income 
     Seniors Act of 2007''.

     SEC. 2. EXPEDITING LOW-INCOME SUBSIDIES UNDER THE MEDICARE 
                   PRESCRIPTION DRUG PROGRAM.

       (a) In General.--Section 1860D-14 of the Social Security 
     Act (42 U.S.C. 1395w-114) is amended by adding at the end the 
     following new subsection:
       ``(e) Expedited Application and Eligibility Process.--
       ``(1) Expedited process.--
       ``(A) In general.--The Commissioner of Social Security 
     shall provide for an expedited process under this subsection 
     for the qualification for low-income assistance under this 
     section through a request to the Secretary of the Treasury as 
     provided in subparagraph (B) for information described in 
     section 6103(l)(21) of the Internal Revenue Code of 1986. 
     Such process shall be conducted in cooperation with the 
     Secretary.
       ``(B) Currently eligible individuals.--The Commissioner of 
     Social Security shall, as soon as practicable after 
     implementation of subparagraph (A), screen such individual 
     for eligibility for the low-income subsidy provided under 
     this section through such a request to the Secretary of the 
     Treasury.
       ``(2) Notification of potentially eligible individuals.--
     Under such process, in the case of each individual identified 
     under paragraph (1) who has not otherwise applied for, or 
     been determined eligible for, benefits under this section (or 
     who has applied for and been determined ineligible for such 
     benefits based only on excess resources), the Commissioner of 
     Social Security shall send a notification that the individual 
     is likely eligible for low-income subsidies under this 
     section. Such notification shall include the following:
       ``(A) Application information.--Information on how to apply 
     for such low-income subsidies.
       ``(B) Description of the lis benefit.--A description of the 
     low-income subsidies available under this section.
       ``(C) Information on state health insurance programs.--
     Information on--
       ``(i) the State Health Insurance Assistance Program for the 
     State in which the individual is located; and
       ``(ii) how the individual may contact such Program in order 
     to obtain assistance regarding enrollment and benefits under 
     this part.
       ``(D) Attestation.--An application form that provides for a 
     signed attestation, under penalty of law, as to the amount of 
     income and assets of the individual and constitutes an 
     application for the low-income subsidies under this section. 
     Such form--
       ``(i) shall not require the submittal of additional 
     documentation regarding income or assets;
       ``(ii) shall permit the appointment of a personal 
     representative described in paragraph (4); and
       ``(iii) shall allow for the specification of a language 
     (other than English) that is preferred by the individual for 
     subsequent communications with respect to the individual 
     under this part.
     If a State is doing its own outreach to low-income seniors 
     regarding enrollment and low-income subsidies under this 
     part, such process shall be coordinated with the State's 
     outreach effort.
       ``(3) Hold-harmless.--Under such process, if an individual 
     in good faith and in the absence of fraud executes an 
     attestation described in paragraph (2)(D) and is provided 
     low-income subsidies under this section on the basis of such 
     attestation, if the individual is subsequently found not 
     eligible for such subsidies, there shall be no recovery made 
     against the individual because of such subsidies improperly 
     paid.
       ``(4) Use of authorized representative.--Under such 
     process, with proper authorization (which may be part of the 
     attestation form described in paragraph (2)(D)), an 
     individual may authorize another individual to act as the 
     individual's personal representative with respect to 
     communications under this part and the enrollment of the 
     individual under a prescription drug plan (or MA-PD plan) and 
     for low-income subsidies under this section.
       ``(5) Use of preferred language in subsequent 
     communications.--In the case an attestation described in 
     paragraph (2)(D) is completed and in which a language other 
     than English is specified under clause (iii) of such 
     paragraph, the Commissioner of Social Security shall provide 
     that subsequent communications to the individual under this 
     part shall be in such language.
       ``(6) Construction.--Nothing in this subsection shall be 
     construed as precluding the Commissioner of Social Security 
     or the Secretary from taking additional outreach efforts to 
     enroll eligible individuals under this part and to provide 
     low-income subsidies to eligible individuals.''.
       (b) Disclosure of Return Information for Purposes of 
     Determining Individuals Eligible for Subsidies Under Medicare 
     Part D.--
       (1) In general.--Subsection (l) of section 6103 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(21) Disclosure of return information to carry out 
     medicare part d subsidies.--
       ``(A) In general.--The Secretary shall, upon written 
     request from the Commissioner of Social Security under 
     section 1860D-14(e)(1) of the Social Security Act, disclose 
     to officers and employees of the Social Security 
     Administration return information of a taxpayer who 
     (according to the records of the Secretary) may be eligible 
     for a subsidy under section 1860D-14 of the Social Security 
     Act. Such return information shall be limited to--
       ``(i) taxpayer identity information with respect to such 
     taxpayer,
       ``(ii) the filing status of such taxpayer,
       ``(iii) the gross income of such taxpayer,
       ``(iv) such other information relating to the liability of 
     the taxpayer as is prescribed by the Secretary by regulation 
     as might indicate the eligibility of such taxpayer for a 
     subsidy under section 1860D-14 of the Social Security Act, 
     and
       ``(v) the taxable year with respect to which the preceding 
     information relates.
       ``(B) Restriction on use of disclosed information.--Return 
     information disclosed under this paragraph may be used by 
     officers and employees of the Social Security Administration 
     only for the purposes of identifying eligible individuals 
     for, and, if applicable, administering--
       ``(i) low-income subsidies under section 1860D-14 of the 
     Social Security Act, and
       ``(ii) the Medicare Savings Program implemented under 
     clauses (i), (iii), and (iv) of section 1902(a)(10)(E) of 
     such Act.
       ``(C) Termination.--Return information may not be disclosed 
     under this paragraph after the date that is one year after 
     the date of the enactment of this paragraph.''.
       (2) Conforming amendments.--Paragraph (4) of section 
     6103(p) of the Internal Revenue Code of 1986 is amended--
       (A) by striking ``(14) or (17)'' in the matter preceding 
     subparagraph (A) and inserting ``(14), (17), or (21)''; and
       (B) by striking ``(15) or (17)'' in subparagraph (F)(ii) 
     and inserting ``(15), (17), or (21)''.

[[Page S4445]]

     SEC. 3. MODIFICATION OF RESOURCE STANDARDS FOR DETERMINATION 
                   OF ELIGIBILITY FOR LOW-INCOME SUBSIDY.

       (a) Increasing the Alternative Resource Standard.--Section 
     1860D-14(a)(3)(E)(i) of the Social Security Act (42 U.S.C. 
     1395w-114(a)(3)(E)(i)) is amended--
       (1) in subclause (I), by striking ``and'' at the end;
       (2) in subclause (II)--
       (A) by striking ``a subsequent year'' and inserting 
     ``2007'';
       (B) by striking ``in this subclause (or subclause (I)) for 
     the previous year'' and inserting ``in subclause (I) for 
     2006'';
       (C) by striking the period at the end and inserting a 
     semicolon; and
       (D) by inserting before the flush sentence at the end the 
     following new subclauses:

       ``(III) for 2008, $27,500 (or $55,000 in the case of the 
     combined value of the individual's assets or resources and 
     the assets or resources of the individual's spouse); and
       ``(IV) for a subsequent year the dollar amounts specified 
     in this subclause (or subclause (III)) for the previous year 
     increased by the annual percentage increase in the consumer 
     price index (all items; U.S. city average) as of September of 
     such previous year.''; and

       (3) in the flush sentence at the end, by inserting ``or 
     (IV)'' after ``subclause (II)''.
       (b) Exemptions From Resources.--Section 1860D-14(a)(3) of 
     the Social Security Act (42 U.S.C. 1395w-114(a)(3)) is 
     amended--
       (1) in subparagraph (D), in the matter preceding clause 
     (i), by inserting ``subject to the additional exclusions 
     provided under subparagraph (G)'' before ``)'';
       (2) in subparagraph (E)(i), in the matter preceding 
     subclause (I), by inserting ``subject to the additional 
     exclusions provided under subparagraph (G)'' before ``)''; 
     and
       (3) by adding at the end the following new subparagraph:
       ``(G) Additional exclusions.--In determining the resources 
     of an individual (and their eligible spouse, if any) under 
     section 1613 for purposes of subparagraphs (D) and (E) the 
     following additional exclusions shall apply:
       ``(i) Life insurance policy.--No part of the value of any 
     life insurance policy shall be taken into account.
       ``(ii) In-kind contributions.--No in-kind contribution 
     shall be taken into account.
       ``(iii) Pension or retirement plan.--No balance in any 
     pension or retirement plan shall be taken into account.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

     SEC. 4. INDEXING DEDUCTIBLE AND COST-SHARING ABOVE ANNUAL 
                   OUT-OF-POCKET THRESHOLD FOR INDIVIDUALS WITH 
                   INCOME BELOW 150 PERCENT OF POVERTY LINE.

       (a) Indexing Deductible.--Section 1860D-14(a)(4)(B) of the 
     Social Security Act (42 U.S.C. 1395w-114(a)(4)(B)) is 
     amended--
       (1) in clause (i), by striking ``or'';
       (2) in clause (ii)--
       (A) by striking ``a subsequent year'' and inserting 
     ``2008'';
       (B) by striking ``this clause (or clause (i)) for the 
     previous year'' and inserting ``clause (i) for 2007''; and
       (C) by striking ``involved.'' and inserting ``involved; 
     and'';
       (3) by adding after clause (ii) the following new clause:
       ``(iii) for 2008 and each succeeding year, the amount 
     determined under this subparagraph for the previous year 
     increased by the annual percentage increase in the consumer 
     price index (all items; U.S. city average) as of September of 
     such previous year.''; and
       (4) in the flush sentence at the end, by striking ``clause 
     (i) or (ii)'' and inserting ``clause (i), (ii), or (iii)''.
       (b) Indexing Cost-Sharing.--Section 1860D-14(a) of the 
     Social Security Act (42 U.S.C. 1395w-114(a)) is amended-
       (1) in paragraph (1)(D)(iii), by striking ``exceed the 
     copayment amount'' and all that follows through the period at 
     the end and inserting ``exceed--

       ``(I) for 2006 and 2007, the copayment amount specified 
     under section 1860D-2(b)(4)(A)(i)(I) for the drug and year 
     involved; and
       ``(II) for 2008 and each succeeding year, the amount 
     determined under this subparagraph for the previous year 
     increased by the annual percentage increase in the consumer 
     price index (all items; U.S. city average) as of September of 
     such previous year.''; and

       (2) in paragraph (2)(E), by striking ``exceed the copayment 
     or coinsurance amount'' and all that follows through the 
     period at the end and inserting ``exceed--
       ``(i) for 2006 and 2007, the copayment or coinsurance 
     amount specified under section 1860D-2(b)(4)(A)(i)(I) for the 
     drug and year involved; and
       ``(ii) for 2008 and each succeeding year, the amount 
     determined under this clause for the previous year increased 
     by the annual percentage increase in the consumer price index 
     (all items; U.S. city average) as of September of such 
     previous year.''.

     SEC. 5. NO IMPACT ON ELIGIBILITY FOR BENEFITS UNDER OTHER 
                   PROGRAMS.

       (a) In General.--Section 1860D-14(a)(3) of the Social 
     Security Act (42 U.S.C. 1395w-114(a)(3)), as amended by 
     section 3(c)(3), is amended--
       (1) in subparagraph (A), in the matter preceding clause 
     (i), by striking ``subparagraph (F)'' and inserting 
     ``subparagraphs (F) and (H)''; and
       (2) by adding at the end the following new subparagraph:
       ``(H) No impact on eligibility for benefits under other 
     programs.--The availability of premium and cost-sharing 
     subsidies under this section shall not be treated as benefits 
     or otherwise taken into account in determining an 
     individual's eligibility for, or the amount of benefits 
     under, any other Federal program.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.
                                  ____


                                S. 1103

       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 ``Helping Fill the Medicare Rx 
     Gap Act of 2007''.

     SEC. 2. INCLUDING COSTS INCURRED BY THE INDIAN HEALTH 
                   SERVICE, A FEDERALLY QUALIFIED HEALTH CENTER, 
                   AN AIDS DRUG ASSISTANCE PROGRAM, CERTAIN 
                   HOSPITALS, OR A PHARMACEUTICAL MANUFACTURER 
                   PATIENT ASSISTANCE PROGRAM IN PROVIDING 
                   PRESCRIPTION DRUGS TOWARD THE ANNUAL OUT OF 
                   POCKET THRESHOLD UNDER PART D.

       (a) In General.--Section 1860D-2(b)(4)(C) of the Social 
     Security Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii)--
       (A) by striking ``such costs shall be treated as incurred 
     only if'' and inserting ``subject to clause (iii), such costs 
     shall be treated as incurred if'';
       (B) by striking ``, under section 1860D-14, or under a 
     State Pharmaceutical Assistance Program'';
       (C) by striking ``(other than under such section or such a 
     Program)''; and
       (D) by striking the period at the end and inserting ``; 
     and''; and
       (3) by inserting after clause (ii) the following new 
     clause:
       ``(iii) such costs shall be treated as incurred and shall 
     not be considered to be reimbursed under clause (ii) if such 
     costs are borne or paid--

       ``(I) under section 1860D-14;
       ``(II) under a State Pharmaceutical Assistance Program;
       ``(III) 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);
       ``(IV) by a Federally qualified health center (as defined 
     in section 1861(aa)(4));
       ``(V) under an AIDS Drug Assistance Program under part B of 
     title XXVI of the Public Health Service Act;
       ``(VI) by a subsection (d) hospital (as defined in section 
     1886(d)(1)(B)) that meets the requirements of clauses (i) and 
     (ii) of section 340B(a)(4)(L) of the Public Health Service 
     Act; or
       ``(VII) by a pharmaceutical manufacturer patient assistance 
     program, either directly or through the distribution or 
     donation of covered part D drugs, which shall be valued at 
     the negotiated price of such covered part D drug under the 
     enrollee's prescription drug plan or MA-PD plan as of the 
     date that the drug was distributed or donated.''.

       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to costs incurred on or after January 1, 2008.
                                 ______