[Senate Report 118-121]
[From the U.S. Government Publishing Office]


                                                  Calendar No. 265

118th Congress}                                           { Report
                                 SENATE
  1st Session }                                           { 118-121

======================================================================
 
   THE BETTER MENTAL HEALTH CARE, LOWER-COST DRUGS, AND EXTENDERS ACT

                                _______
                                

                December 7, 2023.--Ordered to be printed

                                _______
                                

   Mr. Wyden, from the Committee on Finance, submitted the following

                              R E P O R T

                         [To accompany S. 3430]

    The Committee on Finance, having considered an original 
bill (S. 3430) to amend titles XVIII and XIX of the Social 
Security Act to expand the mental health care workforce and 
services, reduce prescription drug costs, and extend certain 
expiring provisions under Medicare and Medicaid, and for other 
purposes, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. LEGISLATIVE BACKGROUND...........................................1
 II. EXPLANATION OF THE BILL..........................................8
III. BUDGET EFFECTS OF THE BILL......................................36
 IV. VOTES OF THE COMMITTEE..........................................37
  V. REGULATORY IMPACT AND OTHER MATTERS.............................37
 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........38

                       I. LEGISLATIVE BACKGROUND

    The Committee on Finance, having considered S. 3430, a bill 
to amend titles XVIII and XIX of the Social Security Act to 
expand mental health care workforce and services, reduce 
prescription drug costs, and extend certain expiring provisions 
under Medicare and Medicaid, and for other purposes, reports 
favorably thereon that the bill as modified by the Committee do 
pass.

Background on Medicare and Medicaid Mental Health Care and Prescription 
        Drug Coverage

    Medicare is a federal program that provides health 
insurance coverage for individuals aged 65 and older, certain 
individuals under the age of 65 who have disabilities, and 
those with end-stage renal disease (ESRD). Medicare also pays 
for certain services for individuals dually eligible for both 
Medicare and Medicaid. Medicare consists of four parts: Part A 
covers inpatient hospital and other facility-based services; 
Part B covers physician visits and other outpatient-based care, 
including physician-administered prescription drugs; Part C, or 
Medicare Advantage (MA), covers the same Part A and Part B 
services (and some supplemental services) through private 
insurance companies; and Part D covers prescription drugs 
through private prescription drug plan sponsors. Medicare pays 
for health care services and items that are ``reasonable and 
necessary.''
    Traditional Medicare covers certain mental health services 
delivered in inpatient and outpatient settings. Medicare Part A 
covers inpatient mental health services furnished in a distinct 
psychiatric unit of a general hospital. Medicare Part A also 
allows a beneficiary to receive up to 190 days of mental health 
care services furnished in a psychiatric hospital during their 
lifetime. Medicare Part B covers a range of outpatient mental 
health services that can be provided in different settings, 
including a physician's office, hospital outpatient department, 
or community mental health center. These services include 
psychotherapy, family counseling, annual depression screening, 
psychiatric evaluation, medication management, partial 
hospitalization, outpatient substance use disorder services, 
among other services. Part B covers mental health services 
provided by psychiatrists and other physicians, clinical 
psychologists, clinical social workers, clinical nurse 
specialists, nurse practitioners, and physician assistants. 
Starting on January 1, 2024, Medicare Part B will also cover 
mental health services delivered by marriage and family 
therapists and mental health counselors. Medicare Advantage 
plans are required to cover the same set of mental health 
services covered under traditional Medicare.
    Medicare provides a voluntary outpatient prescription drug 
benefit, known as the Part D program, in which beneficiaries 
can receive covered, medically necessary outpatient drugs 
prescribed by a physician or other qualified clinician. The 
Part D program uses private insurers offering prescription drug 
plans (PDPs) to provide prescription drug benefits to 
beneficiaries. Insurers bear risk for enrollees' drug spending 
and, in general, the federal government subsidizes about 75% of 
total premium costs. Insurers manage costs, typically through 
contracts with pharmacy benefit managers (PBMs) that use 
formularies to negotiate rebates from drug manufacturers, pay 
pharmacies for dispensing drugs to beneficiaries, and develop 
networks of preferred pharmacies.
    Medicaid is a joint federal-state program that finances the 
delivery of primary and acute medical services, as well as 
long-term services and supports, for a diverse low-income 
population. Each state has a Medicaid state plan that describes 
how the state will administer its program. The benefits covered 
under Medicaid include both mandatory and optional services. 
Mandatory services include inpatient hospital services, 
outpatient hospital services, and a range of services for 
infants and children under the early and periodic screening, 
diagnostic, and treatment (EPSDT) benefit. Optional services 
include certain non-mandatory categories of services, which may 
include certain types of residential treatment, therapy, and 
counseling services as well as prescription drugs.
    State Medicaid programs are required to cover medically 
necessary mental health services for adults provided in 
hospitals, rural health clinics, nursing homes, home health 
settings, and physician offices. Medicaid programs have the 
option of covering additional mental health services for 
adults, including prescription drugs; medication management; 
case management; occupational, physical, or speech therapies; 
clinic services; licensed clinical social worker services; and 
peer support services. Medicaid programs also have the option 
to cover services delivered in institutions for mental diseases 
(IMD) for specific subpopulations for specific lengths of time, 
as well as health services in school-based settings, including 
services provided by mental health counselors. Infants and 
children covered under Medicaid access mental health services 
necessary to correct or ameliorate a mental health condition 
under the mandatory EPSDT benefit.
    Every state Medicaid program offers an outpatient 
prescription drug benefit. State Medicaid programs receive 
federal funding for drugs manufactured by companies that 
participate in the Medicaid Drug Rebate Program. Covered 
outpatient drugs are generally dispensed at the pharmacy 
counter, though they may also include physician-administered 
drugs. State Medicaid programs reimburse statutorily defined 
retail community pharmacies for covered outpatient drugs 
dispensed to Medicaid beneficiaries. The payment to retail 
community pharmacies has two components: (1) an amount to cover 
the cost of acquiring the drug (ingredient cost); and (2) an 
amount for the pharmacist's professional services in filling a 
prescription (dispensing fee).

Background on the Need to Expand Mental Health Care and Address 
        Pharmacy Benefit Manager Practices under Medicare and Medicaid

    Nearly one in four U.S. adults, or 59.3 million people, 
live with a mental illness.\1\ Nearly 22 million adults with a 
substance use disorder (SUD) also had a co-occurring mental 
health condition.\2\ While private insurance and Medicare 
covers the majority of adults, more Medicaid beneficiaries 
experience mental illness (30%) than people with private health 
insurance (21%) or those who are uninsured (20%).\3\ About one 
in five adult Medicaid beneficiaries have a substance use 
disorder, compared to 16% of adults with private health 
insurance.\4\ Young Americans are experiencing significant 
mental health challenges, with one in three teenage girls 
reporting
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    \1\Highlights for the 2022 National Survey on Drug Use and Health, 
Substance Abuse and Mental Health Services Administration, November 
2023, available at https://www.samhsa.gov/data/sites/default/files/
reports/rpt42731/2022-nsduh-main-highlights.pdf.
    \2\Id.
    \3\Demographics and Health Insurance Coverage of Nonelderly Adults 
with Mental Illness and Substance Use Disorder in 2020, Heather 
Saunders and Robin Rudowitz, Kaiser Family Foundation, June 2022, 
available at https://www.kff.org/mental-health/issue-brief/
demographics-and-health-insurance-coverage-of-nonelderly-adults-with-
mental-illness-and-substance-use-disorders-in-2020/.
    \4\Id.
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having seriously contemplated suicide in 2021.\5\ Mental health 
conditions have been exacerbated by the COVID-19 pandemic, 
which contributed to increased isolation and loneliness, grief, 
and financial insecurity. At the same time, behavioral health 
providers have reported increasing demand with decreasing staff 
sizes.
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    \5\U.S. Teen Girls Experiencing Increased Sadness and Violence, 
Centers for Disease Control and Prevention, February 2023, available at 
https://www.cdc.gov/media/releases/2023/p0213-yrbs.html.
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    Despite the prevalence of behavioral health conditions in 
the U.S., nearly half of adults with mental illness do not 
receive treatment, often due to barriers to comprehensive and 
affordable mental health care.\6\
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    \6\Highlights for the 2022 National Survey on Drug Use and Health, 
Substance Abuse and Mental Health Services Administration, November 
2023, available at https://www.samhsa.gov/data/sites/default/files/
reports/rpt42731/2022-nsduh-main-highlights.pdf.
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    In addition, delayed access to mental health care can be 
exacerbated by inaccurate provider directories published by 
health plans. Health plan provider directories serve two 
purposes: (1) to assist consumers who are choosing a plan; and 
(2) to assist consumers who are seeking specific health care 
providers. Currently, MA organizations are required by 
regulation to maintain accurate provider directories. However, 
CMS audits have found that MA provider directories were 
inaccurate about 50% of the time.\7\
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    \7\Online Provider Directory Review Report, Round 3, 2018, Online 
Provider Directory Review Report, Round 2, 2018, Online Provider 
Directory Review Report, Round 1, 2017, Centers for Medicare and 
Medicaid Services (CMS).
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    Escalating costs of prescription drugs are placing pressure 
on federal health care programs and the individuals they serve. 
The Office of the Inspector General of the Department of Health 
and Human Services (HHS) finds that Medicare and Medicaid 
account for 41% of total national spending on prescription 
drugs.\8\ Between 2018 and 2021, gross Medicare Part D spending 
on prescription drugs increased from $166 billion to $216 
billion, with spending on the top 10 drugs increasing from $22 
billion to $48 billion.\9\ Medicaid has also experienced 
increases in prescription drug spending net of rebates over the 
same time frame.\10\
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    \8\Drug Spending, U.S. Department of Health and Human Services 
Office of the Inspector General, November 2023, available at https://
oig.hhs.gov/reports-and-publications/featured-topics/drug-spending/
index.asp.
    \9\A Small Number of Drugs Account for a Large Share of Medicare 
Part D Spending, Juliette Cubanski and Tricia Neuman, Kaiser Family 
Foundation, July 2023, available at https://www.kff.org/medicare/issue-
brief/a-small-number-of-drugs-account-for-a-large-share-of-medicare-
part-d-spending/.
    \10\Trends in Medicaid Drug Spending and Rebates, available at 
https://www.macpac.gov/
publication/trends-in-medicaid-drug-spending-and-rebates/
#::text=In%20FY%202021%2C%
20Medicaid%20spent,percent%20of%20Medicaid%20benefit%20spending.
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    Finance Committee investigations as well as other research 
have found that entities within the prescription drug supply 
chain may be contributing to price increases for federal health 
programs and patients at the pharmacy counter through a complex 
network of financial relationships.11}12 Middlemen 
like PBMs negotiate discounts on behalf of payers, like the 
federal government, states, and PDP and MA plans, as well as on 
behalf of patients, yet PBM discounts are not always passed on 
to payers or patients at the pharmacy counter. In Medicare, 
seniors' cost sharing is often based on an amount that more 
closely approximates the list price of a drug, not the PBM's 
net price that includes discounts. Several state Medicaid 
programs have found some PBMs mark up the price of drugs paid 
by Medicaid--costing one state more than $200 million a 
year.\13\
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    \11\A Tangled Web: An Examination of the Drug Supply and Payment 
Chains, Minority Staff of the U.S. Senate Committee on Finance, June 
2018, available at https://www.finance.senate.gov/imo/media/doc/
A%20Tangled%20Web.pdf.
    \12\A Tangled Web: An Examination of the Drug Supply and Payment 
Chains, Minority Staff of the U.S. Senate Committee on Finance, June 
2018, available at https://www.finance.senate.gov/imo/media/doc/
A%20Tangled%20Web.pdf.
    \13\Pharmacy Benefit Managers, Rebates, and Drug Prices: Conflicts 
of Interest in the Market for Prescription Drugs, Joanna Shepherd, The 
Yale Law and Policy Review, January 2019, available at https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=3313828.
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    Experts have noted that payments from drug manufacturers to 
PBMs may create conflicts of interest between PBMs and their 
health plan clients. Furthermore, linking PBM payment to a 
drug's list price could create incentives for PBMs to drive 
utilization of higher-priced drugs, rather than lower-priced, 
clinically equivalent alternatives, to achieve higher rebates 
and higher administrative fees.14}15
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    \14\Perverse Incentives: Why Everyone Prefers High Drug Prices--
Except for Those Who Pay the Bills, Robin Feldman, Harvard Journal on 
Legislation, 2020, available at https://repository.uchastings.edu/cgi/
viewcontent.cgi?article=2773&context=faculty_scholarship.
    \15\Pharmacy Benefit Tactics Drive Up Drug Prices, Limit Access, 
Contribute to Health Risks, Purchaser Business Group on Health, 
December 2022, available at https://www.pbgh.org/wp-content/uploads/
2022/12/Pharmacy-Benefit-Tactics-Drive-Up-Drug-Prices-Limit-Access-
Contribute-to-Health-Risks.pdf.
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    Evidence suggests that some PBMs also engage in a practice 
known as ``spread pricing,'' which occurs when PBMs charge 
their health plan clients a higher amount than what the PBM 
actually reimburses the pharmacy for the same dispensed drug--
with the PBM retaining the difference.\16\ Across markets, PBM 
clients often lack line of sight into the extent of such 
spreads. Spread pricing has been widely documented in Medicaid. 
For example, a 2018 audit of Ohio's Medicaid program found that 
PBMs were charging the state an average 9% spread across all 
drugs, with some spreads in excess of 30% for certain 
generics.\17\ Similar behavior has been documented in other 
state Medicaid programs, prompting several state lawmakers and 
regulators to intervene.\18\ Spread pricing is less common in 
Medicare Part D.\19\
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    \16\Costs and Savings under Federal Policy Approaches to Address 
Medicaid Prescription Drug Spending, Rachel Garfield, Rachel Dolan, and 
Elizabeth Williams, Kaiser Family Foundation, June 22, 2021, available 
at https://www.kff.org/medicaid/issue-brief/costs-and-savings-under-
federal-policy-approaches-to-address-medicaid-prescription-drug-
spending.
    \17\Ohio Cracks Down on PBM Contracts After Audit Shows Egregious 
Spread Pricing in Medicaid, Rose Meltzer, Fierce Healthcare, August 16, 
2018, available at https://www.fiercehealthcare.com/regulatory/ohio-
takes-action-after-finding-pbms-engaged-egregious-spread-pricing-
medicaid.
    \18\Arkansas, Delaware, Georgia, Kentucky, Louisiana, Maine, 
Michigan, Minnesota, New York, Oklahoma, and Virginia have all passed 
laws seeking to curb spread pricing.
    \19\Medicare Part D: Use of Pharmacy Benefit Managers and Efforts 
to Manage Drug Expenditures and Utilization., GAO, July 2019, available 
at https://www.gao.gov/assets/gao-19-498.pdf.
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Senate Finance Committee's Work to Improve Access to Mental Health Care 
        and Address Pharmacy Benefit Manager Practices under Medicare 
        and Medicaid

    In 2021, Finance Committee Chairman Ron Wyden and Ranking 
Member Mike Crapo launched a bipartisan process to examine 
behavioral health care needs and assess factors contributing to 
gaps in mental health care. Chairman Wyden and Ranking Member 
Crapo sent a letter to all Committee members asking for data-
driven policy proposals designed to improve access to 
behavioral health care services for individuals enrolled in 
Medicare, Medicaid, the Children's Health Insurance Program 
(CHIP), and the Affordable Care Act (ACA) marketplaces. In 
September 2021, the Finance Committee requested information 
from public- and private-sector health care stakeholders to 
help the Committee better understand how to address mental 
health challenges. The Committee received over 300 responses 
from organizations and more than 200 responses from individuals 
on issues related to the workforce, parity, telehealth, care 
integration and coordination, and youth mental health.
    In addition, the Finance Committee held a series of mental 
health care hearings to analyze system inadequacies and 
identify potential policy solutions. From 2021 through 2023, 
the Finance Committee held five hearings on mental health, 
including ``Mental Health Care in America: Addressing Root 
Causes and Identifying Policy Solutions,'' ``Protecting Youth 
Mental Health: Part I--An Advisory and Call to Action,'' 
``Protecting Youth Mental Health: Part II--Identifying and 
Addressing Barriers to Care,'' ``Behavioral Health Care When 
Americans Need It: Ensuring Parity and Care Integration,'' and 
``Barriers to Mental Health Care: Improving Provider Directory 
Accuracy to Reduce the Prevalence of Ghost Networks.'' At these 
hearings, the Committee heard testimony from experts and 
impacted individuals including the United States Surgeon 
General, physician leaders, mental health advocates, patients, 
and the Government Accountability Office (GAO).
    After gathering input on how to address gaps in mental 
health care, the Committee released five bipartisan mental 
health discussion drafts on workforce, telehealth, youth mental 
health, primary care and behavioral health care integration, 
and mental and physical health parity. These drafts included 47 
provisions.
    On May 3, 2023, Chairman Wyden released findings of a 
secret shopper study conducted by the committee majority 
staff.\20\ This report was part of the Finance Committee's 
efforts to understand the prevalence of ghost networks, which 
are inaccurate health provider directories that can prevent 
Americans from obtaining health care, including mental health 
care. In reviewing directories from 12 MA plans in a total of 6 
states and calling 10 providers from each plan, 33% of provider 
directory information was inaccurate, non-working numbers, or 
unreturned calls. Staff could only make appointments for an 
initial mental health visit 18% of the time.
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    \20\Majority Study Findings: Medicare Advantage Plan Directories 
Haunted by Ghost Networks, U.S. Senate Committee on Finance, May 3, 
2023, available at https://www.finance.senate.gov/imo/media/doc/
050323%20Ghost%20Network%20Hearing%20-
%20Secret%20Shopper%20Study%20Report.pdf.
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    Congress enacted several provisions from the Finance 
Committee's bipartisan mental health care drafts in subsequent 
legislative packages. The Bipartisan Safer Communities Act, 
enacted in June 2022, included provisions from the Committee's 
drafts to improve the mental health of children and adolescents 
and bolster the workforce. Specifically, the bill expanded the 
certified community behavioral health clinic (CCBHC) 
demonstration model, authorized for up to eight states in the 
Protecting Access to Medicare Act of 2014 and subsequently 
expanded by Congress to include all interested states. It also 
required the Centers for Medicare and Medicaid Services (CMS) 
to issue guidance, provide technical assistance, and award 
planning grants to states to expand mental health through 
schools using Medicaid dollars; to conduct comprehensive and 
regular oversight of states' implementation of Medicaid's EPSDT 
benefit to strengthen children's access to comprehensive mental 
health care services; and to provide guidance to states on how 
they can increase access to behavioral health services through 
telehealth under Medicaid and CHIP.
    The Consolidated Appropriations Act, 2023, enacted in 
December 2022, also included a number of mental health 
provisions developed through the bipartisan Committee process, 
including: establishing Medicare coverage for marriage and 
family therapist (MFT) and mental health counselor services; 
adding 200 additional Medicare-funded graduate medical 
education (GME) residency positions and dedicating 100 of these 
residency slots to psychiatry specialties; increasing Medicare 
payments for crisis psychotherapy services when they are 
provided by a mobile unit; requiring states to provide justice-
involved youth Medicaid coverage for 30 days prior to their 
release; increasing flexibility for states to allow youth to 
maintain Medicaid/CHIP coverage when they are detained in jail 
settings prior to adjudication; implementing stronger 
requirements on Medicaid health plans to publish searchable and 
updated directories of the health providers in their networks; 
and directing GAO to study whether mental health and substance 
use disorder benefits are covered at parity with physical 
health services in MA and mental health and substance use 
disorder services in traditional Medicare.
    Over the past eight years, the Finance Committee has worked 
to bring more transparency to prescription drug pricing and 
predatory practices within a highly complex prescription drug 
supply chain. In 2015, then-Ranking Member Ron Wyden and senior 
Finance Committee member (and then-Chairman of the Judiciary 
Committee) Chuck Grassley conducted an 18-month investigation 
into the pricing of Sovaldi and Harvoni, Gilead's breakthrough 
hepatitis C drugs. In 2018, then-Ranking Member Wyden released 
``A Tangled Web: Examination of the Drug Supply and Payment 
Chains,'' a report which examined how financial arrangements 
between different entities in the pharmaceutical delivery 
system have continually pushed drug prices higher. In 2021, 
then-Chairman Grassley and then-Ranking Member Wyden released 
``Insulin: Examining the Factors Behind the Rising Cost of a 
Century Old Drug,'' a report based on an investigation into how 
contracts and financial transactions between insulin 
manufacturers and PBMs influence prescription drug prices and 
drug spending.
    In addition, the Finance Committee held a series of 
hearings on prescription drug pricing and the supply chain. In 
2019, the Committee held three hearings, including a hearing in 
which executives from the nation's five largest PBMs testified. 
On March 30, 2023, Chairman Wyden and Ranking Member Crapo 
convened a hearing entitled ``Pharmacy Benefit Managers and the 
Prescription Drug Supply Chain: Impact on Patients and 
Taxpayers,'' building on the Committee's years-long 
consideration of practices across the prescription drug supply 
chain. Witnesses at these hearings provided testimony that 
demonstrated PBMs have become highly concentrated and 
vertically integrated with pharmacy and health plan businesses, 
enabling certain PBM practices to raise drug prices, patient 
out-of-pocket costs, and total drug spending across federal 
health programs under the Committee's jurisdiction. In 
addition, testimony revealed PBM market concentration has 
allowed PBMs to engage in predatory contracting with community 
pharmacies that can undermine the financial viability and 
competitiveness of community pharmacies.
    On April 20, 2023, Chairman Wyden and Ranking Member Crapo 
released the ``Bipartisan Framework for Reducing Prescription 
Drug Costs by Modernizing the Supply Chain and Ensuring 
Meaningful Relief at the Pharmacy Counter.'' The framework 
outlined four key challenges facing federal prescription drug 
programs, including: (1) misaligned incentives that drive up 
drug prices and costs; (2) insufficient transparency that 
distorts the market; (3) hurdles to pharmacy access; and (4) 
behind-the-scenes practices that impede market competition and 
increase costs throughout the pharmaceutical supply chain. The 
framework also identified potential legislative solutions to 
modernize and enhance federal prescription drug programs and to 
help address these concerns.
    On July 26, 2023, the Finance Committee held a markup of 
the ``Modernizing and Ensuring PBM Accountability Act'' that 
contained bipartisan provisions addressing PBM practices that 
increased spending under the Medicare and Medicaid program. 
This Act was voted favorably out of the Committee on a 26-1 
vote.

Background on Congressional Extensions of Provisions of the Medicare 
        and Medicaid Programs That Expire

    Congress has enacted multiple, separate health care 
provisions that modify the Medicare and Medicaid program yet 
that have not been made permanent. One reason for not making 
provisions permanent is that while these health care programs 
are essential for patients, health care providers, and other 
stakeholders, modifications can be expensive to enact on a 
permanent basis. As result, Congress has on numerous occasions 
acted to extend certain statutory provisions that would 
otherwise expire. According to the Congressional Research 
Service, the Senate Finance Committee has jurisdiction over at 
least 10 temporary health care provisions that fall under the 
Medicare and Medicaid programs that expire in 2023 or on 
January 19, 2024.\21\
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    \21\Health Care-Related Expiring Provisions of the 118th Congress, 
First Session, Katherine Kehres and Phoenix Voorhies, Congressional 
Research Service, June 2023, available at https://www.crs.gov/reports/
pdf/R47604/R47604.pdf.
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    On November 6, 2023, Finance Committee Chairman Wyden 
released a Chairman's Mark entitled the ``Better Mental Health 
Care, Lower-Cost Drugs, and Extenders Act'' that contained 
bipartisan provisions addressing mental health care, 
prescription drug costs that are higher as result of PBM 
practices, and health extenders. The provisions, in addition to 
further proposals and modifications contained in the November 
8, 2023, Modification to the Chairman's Mark, comprise the 
reported bill described below.

                      II. EXPLANATION OF THE BILL


               SECTION 1. SHORT TITLE; TABLE OF CONTENTS

    This section sets out the name of the bill--the ``Better 
Mental Health Care, Lower-Cost Drugs, and Extenders Act''--and 
lists the Table of Contents of the legislation.

  TITLE 1--EXPANDING MENTAL HEALTH CARE WORKFORCE AND SERVICES UNDER 
                         MEDICARE AND MEDICAID

 SECTION 101. EXPANDING ELIGIBILITY FOR INCENTIVES UNDER THE MEDICARE 
   HEALTH PROFESSIONAL SHORTAGE AREA BONUS PROGRAM TO PRACTITIONERS 
      FURNISHING MENTAL HEALTH AND SUBSTANCE USE DISORDER SERVICES

Current Law

    On a quarterly basis, Medicare makes incentive payments to 
physicians for Part B professional services delivered to 
Medicare beneficiaries within a Health Resources and Services 
Administration (HRSA)-designated health professional shortage 
area (HPSA). The Medicare statute sets these bonus payments at 
10%, the amount paid by the program to the physician for 
qualifying services. Under current law, only physicians are 
eligible for bonuses. Additionally, only psychiatrists can 
receive bonus payments for professional services furnished 
within a geographic mental health HPSA that is not also a 
primary medical care HPSA.

Provision

    The provision would extend eligibility for HPSA bonuses to 
certain mental health and substance use disorder services 
furnished in mental health HPSAs by applicable non-physician 
health care professionals, including: (1) physician assistants, 
nurse practitioners, or clinical nurse specialists; (2) 
clinical social workers; (3) clinical psychologists; (4) 
marriage and family therapists; and (5) mental health 
counselors.
    The provision would also increase bonus payments from 10% 
to 15% for mental health and substance use disorder services 
furnished in mental health HPSAs by eligible providers. These 
provisions would apply to services furnished on or after 
January 1, 2026.

   SECTION 102. IMPROVED ACCESS TO MENTAL HEALTH SERVICES UNDER THE 
                            MEDICARE PROGRAM

Current Law

    Medicare covers certain behavioral health services, which 
include mental health and substance use disorder services, 
furnished by licensed or certified clinical social workers 
(CSW) for the diagnosis and treatment of mental health illness. 
CSWs bill for such services under Part B. Medicare does not 
currently cover health behavior assessment and intervention 
services provided by CSWs, although CMS included a proposal to 
enable CSWs and certain other non-physician practitioners to 
bill the program for these services in the ``Calendar Year (CY) 
2024 Medicare Physician Fee Schedule Proposed Rule,'' published 
on July 13, 2023.
    Medicare pays for eligible skilled nursing facility (SNF) 
care under Medicare Part A through a prospective payment system 
(PPS), which excluded psychiatrists' and psychologists' 
services when the SNF PPS methodology was implemented, but did 
include clinical social worker services. Because of this, SNF 
patients are unable to receive Medicare-compensated care from 
CSWs who bill under Medicare Part B. The prohibition of 
additional payments under Part B is due to potential double-
billing from what is paid to SNFs by Medicare in the SNF PPS.

Provision

    The provision would, beginning January 1, 2026, modify the 
definition of clinical social worker services covered under 
Medicare Part B to include services for health behavior 
assessment and intervention, identified by specific current and 
successor Healthcare Common Procedure Coding System (HCPCS) 
codes, furnished in an outpatient setting. The provision would 
also exclude clinical social worker services from the Part A 
Medicare SNF PPS. The provision would ensure that the required 
payment adjustment in Section 1888(e)(4)(G)(iii) of the Social 
Security Act (SSA) applies for the furnished CSW services that 
are removed from the SNF PPS per diem payment bundle, 
preventing provider double-billing.

  SECTION 103. CLARIFYING COVERAGE OF OCCUPATIONAL THERAPY UNDER THE 
                            MEDICARE PROGRAM

Current Law

    No current law.

Provision

    Within one year of enactment, the provision would require 
the HHS Secretary to provide education and outreach to 
stakeholders about the availability of substance use disorder 
or mental health disorder services furnished by occupational 
therapists to Medicare beneficiaries.

SECTION 104. MEDICARE INCENTIVES FOR BEHAVIORAL HEALTH INTEGRATION WITH 
                              PRIMARY CARE

Current Law

    Medicare, under Medicare Part B, covers eligible care 
management for behavioral health conditions (e.g., depression, 
anxiety, or another mental health condition) and pays health 
care providers using the Psychiatric Collaborative Care Model, 
a set of integrated behavioral health services that include 
care management support such as care planning for behavioral 
health conditions, ongoing assessment, medication support, 
counseling, and other treatments.

Provision

    Beginning in 2026, this provision would increase the 
payment amount under the Medicare physician fee schedule (MPFS) 
for certain behavioral health integration services (identified 
in the legislation by specific service codes), and then phase 
down that increase in 2027 and 2028. For 2026, the payment for 
the codes would be 175% of the MPFS amount; for 2027, the 
payment would be 150%; and for 2028, it would be 125%. The 
increase and phase-down in payments under this provision would 
not be included in the MPFS's budget neutrality calculations.

SECTION 105. ESTABLISHMENT OF MEDICARE INCIDENT TO MODIFIER FOR MENTAL 
              HEALTH SERVICES FURNISHED THROUGH TELEHEALTH

Current Law

    During the coronavirus public health emergency (PHE), the 
Coronavirus Aid, Relief, and Economic Security Act (CARES, Pub. 
L. 116-136) gave the HHS Secretary authority to modify or waive 
many of the statutory restrictions on Medicare telehealth 
services. The Secretary used these flexibilities to expand 
access to behavioral health services (substance use disorder 
and mental health services) delivered via telehealth, including 
for services furnished incident to care provided by a physician 
or non-physician practitioner. Subsequently, the Consolidated 
Appropriations Act, 2021 (Pub. L. 116-260) made this new 
modification permanent.

Provision

    This provision would direct the Secretary to establish 
requirements within two years of enactment of this Act related 
to the use of a code or modifier identifying claims for certain 
telehealth services furnished by auxiliary personnel incident 
to a physician's or non-physician practitioner's services.

  SECTION 106. GUIDANCE ON FURNISHING BEHAVIORAL HEALTH SERVICES VIA 
   TELEHEALTH TO INDIVIDUALS WITH LIMITED ENGLISH PROFICIENCY UNDER 
                            MEDICARE PROGRAM

Current Law

    No current law.

Provision

    This provision would require the HHS Secretary to issue and 
disseminate guidance on best practices (1) for providers to 
work with interpreters to furnish behavioral health services 
via video-based and audio-only telehealth, when video-based 
telehealth is not an option; (2) on integrating the use of 
video platforms that enable multi-person video calls into 
behavioral health services furnished via telehealth; (3) on 
teaching patients, especially those with limited English 
proficiency, to use video-based telehealth platforms; and (4) 
for providing patient materials, communications, and 
instructions in multiple languages, including text message 
appointment reminders and prescription information.

  SECTION 107. ENSURING TIMELY COMMUNICATION REGARDING TELEHEALTH AND 
                   INTERSTATE LICENSURE REQUIREMENTS

Current Law

    No current law.

Provision

    This provision would require the HHS Secretary to provide 
information on licensure requirements for furnishing telehealth 
services under Medicare and Medicaid, including updates to 
guidance and other information that clarifies the extent to 
which licenses through the interstate license compact pathway 
can qualify as valid and full licenses for the purposes of 
meeting licensure requirements under Titles XVIII and XIX of 
the SSA.

SECTION 108. FACILITATING ACCESSIBILITY FOR BEHAVIORAL HEALTH SERVICES 
                      FURNISHED THROUGH TELEHEALTH

Current Law

    No current law.

Provision

    This provision would require the HHS Secretary to provide 
updates to guidance to facilitate the accessibility of 
behavioral health services furnished through telehealth for the 
visually and hearing impaired.

  SECTION 109. REQUIRING ENHANCED AND ACCURATE LISTS OF (REAL) HEALTH 
                             PROVIDERS ACT

Current Law

    Section 1852(c)(1)(C) requires MA Organizations to disclose 
in a clear, accurate, and standardized form the number, mix, 
and distribution of plan providers. Under its statutory 
authority, CMS requires MA organizations to provide enrollees 
with plan directories by October 15th each year, within 10 days 
of enrollment, and at the request of an enrollee. MA 
organizations are required to include printable and searchable 
copies of plan directories listing providers on plan websites 
and maintain a publicly accessible standards-based Application 
Programming Interface that must provide a complete and accurate 
directory of the MA plan's network of contracted providers. CMS 
guidelines state that MA plans should contact contracted 
providers on a quarterly basis to update provider directory 
information including the ability to accept new patients, 
street address, phone number, and any other changes that affect 
availability to patients. Directories must be updated within 30 
days of the plan receiving information requiring update.
    MA plans vary with respect to whether, or the extent to 
which, they cover out-of-network care. When out-of-network care 
is covered, the enrollee is generally required to pay higher 
cost sharing for going out-of-network.

Provision

    These provisions would require that beginning in plan year 
(PY) 2026, each network-based MA plan would be responsible for 
maintaining an accurate provider directory on a public website 
and would meet the requirements described below.
    These provisions would require MA plans to pay for covered 
items or services when delivered by a provider listed in the 
directory as in-network, but who was actually out-of-network 
when the appointment was made. MA plans would be required to 
submit annual reports of their provider directory accuracy. The 
accuracy of the plan directory would be reported on the plan's 
directory and to the HHS Secretary. The Comptroller General of 
the United States would be required to submit a study of this 
information submitted under this provision and related issues.
    The HHS Secretary would be required to hold a public 
stakeholder meeting on best practices for maintaining accurate 
provider directories, issue guidance to MA Organizations on 
best practices, and issue guidance to providers on when to 
update their information in the National Plan and Provider 
Enumeration System.
            I. Accurate Plan Provider Directory Requirements
    This provision would amend Section 1852(c), requiring 
network-based MA plans to maintain an accurate provider 
directory on a publicly available website. Network-based plan 
has the meaning given in Section 1852(d)(5)(C) except that it 
includes private fee-for-service plans as determined by the 
Secretary. Each network-based MA plan would be required to 
verify provider directory information for each provider listed 
in such directory, at least every 90 days or in the case of a 
hospital or other facility the HHS Secretary can specify a 
lesser frequency that is in no case less than once every 12 
months. MA plans would be required to note in the directory 
providers whose information could not be verified, to remove 
providers listed in a directory within five business days if 
the organization determines the provider is no longer 
participating in the network, and meet other requirements as 
specified by the HHS Secretary. Provider directories would be 
required to include information that the enrollee may need to 
access covered benefits from a contracted provider. The section 
provides examples of what directory information could include 
(such as provider name, specialty, contact information, primary 
office or facility address, whether the provider is accepting 
new patients, accommodations for people with disabilities, 
cultural and linguistic capabilities, and telehealth 
capabilities) but leaves the determination to the HHS 
Secretary.
    This provision would amend Section 1852(d) requiring MA 
plans beginning in plan year 2026 to ensure that if an enrollee 
received care from an out-of-network provider that was listed 
on the date the appointment was made as an in-network provider 
in the plan's directory, the MA organization would be cover 
that out of network care, as long as it was a covered item or 
service, and ensure that the enrollee was only responsible for 
in-network cost sharing. This provision amends Section 
1852(d)(1)(C) to require MA plans to cover services furnished 
upon reliance on incorrect provider directory information on an 
out of network basis. For plan year 2026, MA plans would notify 
enrollees of their cost-sharing protections on an explanation 
of benefits, annual notifications provided prior to the annual, 
coordinated election period under 1851(e)(3), and on the plan's 
provider directory.
            II. Accountability and Transparency for Accurate Plan 
                    Provider Directories
    This provision would amend Section 1857(e) to require MA 
contracts beginning plan year 2026 to conduct and submit to the 
HHS Secretary annual reports of their provider directory 
accuracy, including provider specialties with high inaccuracy 
rates (such as providers specializing in mental health) as 
determined by the HHS Secretary for each plan. The HHS 
Secretary, in specifying methodologies that MA plans can use to 
estimate the accuracy of the provider directory information and 
their accuracy scores, would consider availability of various 
data sources, administrative burden on plans and providers, and 
the relative importance of certain directory information on 
access to care. Beginning in plan year 2027, the HHS Secretary 
would be required to post on the CMS website the provider 
directory accuracy scores, in a machine-readable format and 
plans would be required to disclose the accuracy scores on its 
plan directory. The HHS Secretary would be required to 
implement provider directory accuracy analyses through the 
rulemaking process and would be permitted to waive these 
requirements for low enrollment MA plans, as defined by the 
Secretary. To implement these requirements, $1,000,000 to 
remain available until expended would be appropriated to CMS 
Program Management Account, out of the General Fund of the U.S. 
Treasury.
    By not later than January 15, 2031, the Comptroller General 
of the United States would be required to submit a study of the 
implementation of: (1) the requirement that in-network cost 
sharing amounts apply to care furnished by an out-of-network 
provider if the provider choice was based on incorrect 
directory information; (2) provider response rates to plan 
outreach methods; and (3) the requirement that MA organizations 
conduct and submit provider directory accuracy analyses (both 
overall and among providers specializing in mental health or 
substance disorder treatment).
            III. Stakeholder Engagement and CMS Guidance to Improve 
                    Plan Provider Directories
    Not later than 3 months after enactment, the HHS Secretary 
would be required to hold a public stakeholder meeting on 
maintaining accurate provider directories for MA plans, 
including approaches for reducing administrative burden such as 
data standardization and best practices to maintain provider 
directory information. Participants of the meeting shall 
include representatives from the Medicare program, Office of 
the National Coordinator for Health Information Technology, 
health care providers, companies that specialize in relevant 
technologies, health insurers, and patient advocates.
    Not later than 12 months after enactment, the HHS Secretary 
would be required to issue guidance to MA Organizations on 
mainlining accurate provider directories for such plans taking 
into consideration comments submitted during the public 
stakeholder meeting. The guidance may include the following 
topics as determined appropriate by the Secretary: best 
practices for MA organizations on how to work with providers to 
maintain the accuracy of provider directories and reduce 
provider and MA organization burden with respect to maintaining 
the accuracy of provider directories; information on data sets 
and data sources with information that could be used by MA 
organizations to maintain accurate provider directories; 
approaches for utilizing data sources maintained by MA 
organizations and publicly available data sets to maintain 
accurate provider directories; and information to be included 
in the provider directory that may be useful for Medicare 
beneficiaries to assess plan networks when selecting a plan and 
accessing providers participating in plan networks during the 
plan year.
    Not later than 12 months after enactment, the HHS Secretary 
would be required to issue guidance to Part B participating 
providers on when to update their information in the National 
Plan and Provider Enumeration System.

 SECTION 110. GUIDANCE TO STATES ON STRATEGIES UNDER MEDICAID AND CHIP 
  TO INCREASE MENTAL HEALTH AND SUBSTANCE USE DISORDER CARE PROVIDER 
                                CAPACITY

Current Law

    In general, Medicaid state plans must allow program 
enrollees to obtain services from any willing and qualified 
provider that chooses to offer such services. States are 
generally responsible for determining which providers meet 
program qualification criteria including licensed clinicians 
and non-licensed providers such as peer support specialists. 
Providers who meet these federal and state requirements may 
enter into agreements with state Medicaid agencies to provide 
Medicaid-covered services to individuals enrolled in the 
Medicaid program.
    Section 1003 of the Substance Use-Disorder Prevention That 
Promotes Opioid Recovery and Treatment for Patients and 
Communities Act (SUPPORT Act; Pub. L. 115-271) established a 
time-limited competitive demonstration project to increase the 
treatment capacity of Medicaid substance use disorder (SUD) 
providers and inform best practices through specified 
activities, including improved reimbursement, recruitment, 
training, and technical assistance.

Provision

    This provision would require the HHS Secretary to issue 
state guidance within 18 months of the enactment of this Act on 
strategies to increase the capacity of mental health (MH) and 
SUD providers under Medicaid and CHIP, with a focus on 
improving MH/SUD provider capacity in rural and underserved 
areas.

 SECTION 111. GUIDANCE TO STATES ON SUPPORTING MENTAL HEALTH SERVICES 
         AND SUBSTANCE USE DISORDER CARE FOR CHILDREN AND YOUTH

Current Law

    EPSDT services are a required benefit for nearly all 
children (under age 21) who are enrolled in Medicaid, and for 
targeted low-income children under the State CHIP Medicaid 
expansion programs.\22\ EPSDT covers comprehensive health 
screenings, including assessments of children's physical and 
mental health development, and all federally allowable, 
medically necessary treatment to correct problems identified 
through screenings (including services to treat any identified 
MH and/or SUD condition), even if the specific treatment needed 
is not otherwise covered under a given state's Medicaid plan.
---------------------------------------------------------------------------
    \22\While EPSDT is not a required benefit for separate CHIP 
programs, many states also offer this benefit under their separate CHIP 
plans.
---------------------------------------------------------------------------
    While MH and SUD services are not specifically defined 
categories of Medicaid benefits, the program covers many MH/SUD 
benefits under other service categories, and states have the 
flexibility to cover MH/SUD services under several different 
statutory authorities (e.g., state plan, waiver authorities, 
and other authorities for Medicaid payment). For separate CHIP 
programs, Title XXI of the SSA requires states to cover a wide-
array of MH/SUD services necessary to prevent, diagnose, and 
treat mental health conditions and substance use disorders.

Provision

    Within one year after enactment of this Act, the provision 
would require the HHS Secretary, in consultation with (1) the 
CMS Administrator, (2) the Assistant Secretary for the 
Administration for Children and Families (ACF), (3) the 
Assistant Secretary for Mental Health and Substance Use, and 
(4) the Director of the Office of National Drug Control Policy 
to release state guidance regarding opportunities to improve 
the design, implementation, screening for and access to a 
continuum of culturally competent, developmentally appropriate, 
and trauma-informed Medicaid and CHIP MH/SUD services for at-
risk children and youth, as defined, as well as other special 
populations such as youth in foster care and those with 
intellectual or developmental disabilities.

SECTION 112. RECURRING ANALYSIS AND PUBLICATION OF MEDICAID HEALTH CARE 
                 DATA RELATED TO MENTAL HEALTH SERVICES

Current Law

    The SUPPORT Act requires the HHS Secretary to publish a 
report on the prevalence of SUDs and the SUD treatment services 
provided to Medicaid enrollees based on federally required 
state submissions of Transformed Medicaid Statistical 
Information System (T-MSIS) data. CMS is required to issue 
annual updates that include certain specified information not 
later than January 1st for each calendar year through 2024.

Provision

    The provision would require the HHS Secretary to publish to 
a publicly available website with specified information on the 
prevalence of MH conditions and MH treatment services provided 
to Medicaid enrollees, based on federally required state 
submissions of T-MSIS (or a successor system) data. The first 
publication of Medicaid MH data would be required to be made 
available within 18 months of this Act's enactment, and 
biennially thereafter. The provision would also require CMS to 
permanently continue to issue annual updates of the SUPPORT Act 
SUD Databook.

SECTION 113. GUIDANCE TO STATES ON SUPPORTING MENTAL HEALTH SERVICES OR 
 SUBSTANCE USE DISORDER CARE INTEGRATION WITH PRIMARY CARE IN MEDICAID 
                                AND CHIP

Current Law

    CMS has issued guidance to encourage states to adopt 
strategies that promote the integration of physical and MH or 
SUD care delivery under existing Medicaid and CHIP authorities, 
payment methodologies, and integrated care models. This 
approach is being undertaken in an attempt to more effectively 
identify enrollee health care needs and connect enrollees with 
appropriate treatment.\23\
---------------------------------------------------------------------------
    \23\Leveraging Medicaid, CHIP, and Other Federal Programs in the 
Delivery of Behavioral Health Services for Children and Youth, Daniel 
Tsai, CMCS Informational Bulletin, August 18, 2022, available at 
https://www.medicaid.gov/sites/default/files/2022-08/
bhccib08182022.pdf.
---------------------------------------------------------------------------

Provision

    The provision would require the HHS Secretary to conduct an 
analysis of Medicaid and CHIP clinical outcomes associated with 
various integrated care models and payment methodologies, 
within 18 months of the enactment of this Act. Within 12 months 
of completing this analysis, the HHS Secretary would be 
required to issue state guidance on supporting the integration 
of Medicaid and CHIP MH care or SUD care with primary care that 
meets specified requirements.

SECTION 114. MEDICAID STATE OPTION RELATING TO INMATES WITH A SUBSTANCE 
              USE DISORDER PENDING DISPOSITION OF CHARGES

Current Law

    The federal Medicaid statute includes the inmate payment 
exclusion which generally prohibits the use of federal Medicaid 
funds to pay for the health care of an inmate of a public 
institution. CMS sub-regulatory guidance clarifies that 
Medicaid's definition of an inmate of a public institution does 
not distinguish between individuals who are detained in a 
public institution pending disposition of charges and those who 
are incarcerated post-sentencing.
    Section 5122 of the Consolidated Appropriations Act, 2023 
(CAA 2023; Pub. L. 117-328) permits states to receive federal 
payment for certain specified Medicaid services provided to 
``eligible juveniles'' during the period in which such 
enrollees are inmates of a public institution pending 
disposition of charges, beginning January 1, 2025.

Provision

    The provision would modify the Medicaid statute, as amended 
in CAA 2023, to permit states to receive federal payment, for a 
period not to exceed 7 days, for medical assistance for 
individuals with an SUD who are inmates of a public institution 
pending disposition of charges, who were assessed to confirm an 
SUD diagnosis while incarcerated, and whose eligibility for 
medical assistance is suspended by the state during the period 
the individual is an inmate of such a public institution. The 
provision would be effective beginning January 1, 2026.

  SECTION 115. DEFINING CERTIFIED COMMUNITY BEHAVIORAL HEALTH CLINICS 
                  (CCBHCS) WITHIN THE MEDICAID PROGRAM

Current Law

    Section 223 of the Protecting Access to Medicare Act of 
2014 (Pub. L. 113-93) authorized a Medicaid demonstration 
program which established CCBHCs.\24\ CCBHCs are facilities 
operated by nonprofit, governmental, or tribal entities that 
offer a comprehensive range of behavioral health services. The 
HHS Secretary was required to publish criteria relating to 
staffing, care coordination, and other clinic requirements for 
States to use to certify clinics.\25\ States participating in 
the CCBHC demonstration program receive the enhanced federal 
medical assistance percentage (E-FMAP; i.e., the federal 
reimbursement rate used for the State CHIP for CCBHC services 
provided to Medicaid enrollees during the applicable 
demonstration period. In addition, the CCBHCs in these states 
receive greater Medicaid payment rates for the services 
provided to Medicaid enrollees through a prospective payment 
system (PPS) methodology. There are currently eight states 
participating in the demonstration with varying expirations. 
The Bipartisan Safer Communities Act of 2022 (Pub. L. 117-159) 
authorized the HHS Secretary to select up to 10 additional 
states for the Medicaid demonstration program beginning July 1, 
2024, and every two years after that.
---------------------------------------------------------------------------
    \24\The Consolidated Appropriations Act of 2018 (Pub. L. 115-141) 
authorized a CCBHC expansion grant program which was further funded by 
additional laws passed in 2021 and 2022. Expansion grants provide 
supplemental funds directly to clinics in order to increase access and 
improve the quality of their behavioral health services.
    \25\ HHS issued the original CCBHC certification criteria in 2015, 
which outlined standards for staffing, provider credentialing, training 
requirements, linguistic competence, timely access, among others. In 
March 2023, HHS issued updated criteria which was informed by public 
input and includes updates to the standards related to developments in 
the field.
---------------------------------------------------------------------------
    CCBHCs can be supported by a Medicaid demonstration program 
for states and/or discretionary grant funding for clinics from 
the Substance Abuse and Mental Health Services Administration 
(SAMHSA). States that are not part of the CCBHC Medicaid 
demonstration program are able to make Medicaid payments to 
CCBHCs, but these states are not required to pay CCBHCs through 
a PPS. In addition, only states participating in the Medicaid 
demonstration program are eligible for the E-FMAP for CCBHC 
services.

Provision

    Section 115 would amend Section 1905 of the SSA (42 U.S.C. 
Sec. 1396d) to add CCBHC services to the list of Medicaid 
optional service categories under traditional Medicaid. The 
provision would add a definition of CCBHC services which would 
include the same services that CCBHCs are required to provide 
in the demonstration program (e.g., crisis mental health 
services, targeted case management, psychiatric 
rehabilitation). A CCBHC would be defined as an organization 
that furnishes CCBHC services, is legally authorized to furnish 
such services under State law, agrees to furnish data as 
required as a condition of certification, and has been 
certified by a State to meet the criteria issued by the HHS 
Secretary as of January 1, 2024, and any subsequent updates to 
those criteria, regardless of whether the state is 
participating in the Medicaid demonstration program.\26\ The 
effective date for this provision would be January 1, 2024.
---------------------------------------------------------------------------
    \26\There is bracketed text providing the following examples of the 
data states would need to furnish: ``encounter data, clinical outcomes 
data, quality data, and such other data as the State or Secretary may 
require.''
---------------------------------------------------------------------------

 TITLE II--REDUCING PRESCRIPTION DRUG COSTS UNDER MEDICARE AND MEDICAID

     SECTION 201. ASSURING PHARMACY ACCESS AND CHOICE FOR MEDICARE 
                             BENEFICIARIES

Current Law

    Under SSA Section 1860D-4(b) ((42 U.S.C. Sec. 1395w-
104(b)), Part D plans must contract with an adequate network of 
brick-and-mortar pharmacies each year in order to provide easy 
access for plan enrollees. Plan sponsors often contract with 
PBMs to contract with pharmacies and maintain pharmacy networks 
on the plan's behalf. Under 1860D-4(b)(A), plan sponsors must 
contract with any willing pharmacy that agrees to accept their 
pharmacy network terms and conditions. Under current 
regulations and program guidance, such terms and conditions 
must be reasonable and relevant, including with respect to 
reimbursement.\27\ However, pharmacy contract terms and drug 
reimbursement vary among Part D plans.
---------------------------------------------------------------------------
    \27\42 C.F.R. Sec.  423.505; Medicare Prescription Drug Benefit 
Manual, Chapter 5, Section 50.
---------------------------------------------------------------------------
    Chapter 5 of the Medicare Prescription Drug Benefit Manual 
indicates that CMS generally defers to the relevant parties to 
resolve disputes regarding Part D's any willing pharmacy 
requirements, although the agency issued program guidance in 
2015 highlighting reports from pharmacies raising ``several 
issues''' with plan sponsors' approach to compliance.\28\\29\ 
The guidance did not outline any substantive changes or 
increases in enforcement with respect to the relevant 
requirements.
---------------------------------------------------------------------------
    \28\Ibid.
    \29\Compliance with Any Willing Pharmacy (AWP) Requirements, Amy K. 
Larrick, CMS, August 13, 2015, available at https://www.hhs.gov/
guidance/sites/default/files/hhs-guidance-
documents/anywillingpharmacyguidance_166.pdf.
---------------------------------------------------------------------------
    In recent years, CMS has also noted a sharp rise in 
pharmacy fees and other price concessions that plan sponsors 
and PBMs extracted from retail pharmacies after the point of 
sale and reported as Direct and Indirect Remuneration (DIR). 
Part D pharmacy DIR includes administrative fees, network 
access fees, and fees for not meeting plan quality metrics. 
Part D plan sponsors may provide incentive payments to 
pharmacies for meeting specified goals, but CMS data indicate 
that extracted fees, or penalties, far outpace additional 
compensation to pharmacies. According to CMS, pharmacy fees are 
the fastest-growing category of DIR, accounting for nearly 5% 
of gross Part D drug costs ($9.5 billion) in 2020, compared to 
0.01% ($8.9 million) in 2010.\30\ The increase in fees, as well 
as their post-point of sale nature, have made it difficult for 
pharmacies to accurately predict their total reimbursement for 
dispensing a covered drug, with some pharmacies expressing 
concerns that reimbursement on certain drugs can drop below 
pharmacy acquisition costs.
---------------------------------------------------------------------------
    \30\Medicare Program: Contract Year 2023 Policy and Technical 
Changes to the Medicare Advantage and Medicare Prescription Drug 
Benefit Programs, 87 Federal Register p. 1413, CMS, May 2022, available 
at https://www.federalregister.gov/d/2022-09375/p-1413.
---------------------------------------------------------------------------
    In May 2022, CMS issued a final rule, effective in 2024, to 
help address the uncertainties in pharmacy reimbursement caused 
by PBM fees. The rule changes the definition of ``negotiated 
price'' to include the lowest possible reimbursement that a 
network pharmacy will receive in total for dispensing a 
drug.\31\ Some pharmacies have expressed concerns that 
implementation of this rule could lead to further reductions in 
overall reimbursement from PBMs working on behalf of Part D 
plans.\32\
---------------------------------------------------------------------------
    \31\Id.
    \32\A New World Order of Drastically Lower Pharmacy Reimbursement 
Series--Part 1: Lower Net Pharmacy Reimbursement Following CMS Final 
Rule on DIR Fees, Jonathan Levitt, Frier Levitt, June 2022, available 
at https://www.frierlevitt.com/articles/a-new-world-order-of-
drastically-lower-pharmacy-reimbursement-series-part-1-lower-net-
pharmacy-reimbursement-following-cms-final-rule-on-dir-fees.
---------------------------------------------------------------------------
    After a plan has developed an adequate network, Part D plan 
sponsors (except those offering the Part D defined standard 
benefit) may contract with select pharmacies to create a 
second, preferred pharmacy network. Part D sponsors may 
institute lower copayments or coinsurance for enrollee 
prescriptions filled in preferred pharmacies, but such cost-
sharing reductions may not increase Medicare payments to the 
Part D plan. CMS does not apply any willing pharmacy 
requirements to the designation of preferred network 
pharmacies, and program guidance permits plans to increase cost 
sharing for non-preferred network pharmacies in order to meet 
the requisite actuarial tests while reducing cost sharing for 
preferred network pharmacies.\33\ A number of large Part D 
plans include no independent pharmacies in their preferred 
networks.\34\
---------------------------------------------------------------------------
    \33\42 C.F.R. Sec.  423.505; Medicare Prescription Drug Benefit 
Manual, Chapter 5, Section 50.
    \34\Small Pharmacies Walk Away from Medicare Part D's 2023 
Preferred Networks, Adam Fein, Drug Channels, December 2022, available 
at https://www.drugchannels.net/2022/12/small-pharmacies-walk-away-
from.html.
---------------------------------------------------------------------------

Provisions

            I. Reasonable and Relevant Codification
    These provisions would amend SSA Section 1860D-4(b)(1) by 
requiring plan sponsors to contract with any willing pharmacy 
that meets their standard contract terms and conditions, and by 
requiring that such contract terms and conditions be reasonable 
and relevant. No later than January 1, 2025, the HHS Secretary 
would be required to request information on such contract terms 
and conditions, as well as contracting practices between 
pharmacies and Part D plans/PBMs, including with respect to 
information on reimbursement and dispensing fees. No later than 
January 1, 2028, the HHS Secretary would establish standards 
for reasonable and relevant contract terms and conditions 
through notice-and-comment rulemaking.
            II. Essential Retail Pharmacies
    These provisions would also amend Section 1860D-4(b)(1)(C) 
(42 U.S.C. Sec. 1395w-104(b)(1)(C)), which governs convenient 
access to Part D pharmacies. Effective starting in 2028, a plan 
sponsor offering preferred pharmacy networks would be required 
to contract with at least:
           80% of essential retail pharmacies in the 
        plan's service area that are independent community 
        pharmacies, and
           50% of essential retail pharmacies in such 
        plan's service area that are not independent community 
        pharmacies.
    An independent community pharmacy would be defined as a 
retail pharmacy with fewer than four locations that is not 
affiliated with any person or entity other than its owners. 
Franchises and pharmacies associated with pharmacy services 
administrative organizations that meet the relevant 
requirements can qualify as independent community pharmacies 
under this provision.
    An essential retail pharmacy would be defined as a pharmacy 
that: (1) is not an affiliate of a PBM or plan sponsor;\35\ (2) 
is located in a medically underserved area; and (3) is 
designated as an essential retail pharmacy by the HHS Secretary 
for the year. The HHS Secretary would designate essential 
retail pharmacies each plan year based in part on information 
submitted by plan sponsors about affiliate pharmacies. The HHS 
Secretary would issue a list of essential retail pharmacies 
prior to the start of a plan year. The HHS Secretary could 
revoke a designation in certain cases, such as when a pharmacy 
no longer meets the requirements.
---------------------------------------------------------------------------
    \35\Affiliate.--The term ``affiliate'' means any entity that is 
owned by, controlled by, or related under a common ownership structure 
with a pharmacy benefit manager or PDP sponsor or that acts as a 
contractor or agent to such pharmacy benefit manager or PDP sponsor, if 
such contractor or agent performs any of the functions described in 
item (cc).
---------------------------------------------------------------------------
    Starting in 2028, total reimbursement for a covered drug 
dispensed by an essential retail pharmacy that is an 
independent community pharmacy could not be lower than the 
average National Average Drug Acquisition Cost\36\ (NADAC) for 
such drug for retail community pharmacies. If there were no 
NADAC data for retail community pharmacies available, the NADAC 
for applicable non-retail pharmacies or the Wholesale 
Acquisition Cost (WAC) would be used to determine the 
reimbursement floor for such pharmacies.
---------------------------------------------------------------------------
    \36\The National Average Drug Acquisition Cost (NADAC) is a 
Medicaid price measure that is based on survey of pharmacy acquisition 
costs and represents the average acquisition cost.
---------------------------------------------------------------------------
            III. Allegations of Violations
    These provisions would amend SSA Section 1860D-4(b)(1) (42 
U.S.C. Sec. 1395w-104(b)(1)) to require the HHS Secretary, no 
later than January 1, 2028, to establish a process enabling a 
pharmacy to submit an allegation, via a standardized template, 
that a plan sponsor was in violation of: (1) standards for 
reasonable and relevant contract terms and conditions; or (2) 
protections for essential retail pharmacies that are 
independent pharmacies. The provisions would allow a pharmacy 
to submit allegations of violations related to reasonable and 
relevant standards once per contract per plan year, with the 
ability to submit an additional allegation within a single plan 
year in the event of a substantive change in the terms or 
conditions offered under such contract. Essential retail 
pharmacies that are independent pharmacies would be permitted 
to submit allegations of reimbursement violations on a 
quarterly basis.
    A plan sponsor accused of such violations would have to 
provide relevant documents or materials to the HHS Secretary 
upon request, and could not limit the ability of a pharmacy to 
submit such information to the HHS Secretary. If the HHS 
Secretary determined that a pharmacy submitted frivolous 
allegations on a routine basis, the HHS Secretary could 
temporarily prohibit such pharmacy from using the allegation 
process.
    Civil penalties would apply for violations of the statute. 
In addition, a plan sponsor that underpaid a pharmacy would be 
required to provide full reimbursement.
    These provisions would also amend SSA Section 1860D-12(b) 
(42 U.S.C. 1395w-112) to require that each contract between a 
Part D plan and a PBM include a written agreement that the PBM 
reimburse the sponsor for any amounts related to violations of 
contract terms and essential retail pharmacy protections that 
were related to responsibilities such plan delegated to the 
PBM.
    These provisions would provide $250 million in funding to 
carry out these provisions, beginning in 2024, to remain 
available until expended.
            IV. Oversight of Pharmacy Access Requirements
    This provision would direct the Secretary to brief Congress 
and to compile and publish periodic reports, beginning no later 
than 90 days after the date of enactment of this legislation, 
through plan year 2027, on the following topics related to 
implementation of the Pharmacy DIR rule that takes effect in 
2024, as well as related to statutory, regulatory, and sub-
regulatory requirements and standards:
           Monitoring of changes to contract terms and 
        conditions offered to pharmacies for network or 
        preferred network participation;
           HHS enforcement or oversight activities 
        related to regulatory and sub-regulatory requirements 
        regarding Part D's any willing pharmacy provisions; and
           HHS plans, strategies, or initiatives to 
        address or mitigate concerns related to convenient 
        pharmacy access.

  SECTION 202. ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID

Current Law

    State Medicaid programs reimburse statutorily defined 
retail community pharmacies (RCPs) for covered outpatient drugs 
dispensed to Medicaid beneficiaries based on two components: 
(1) the cost of the medicine (the ingredient cost) and (2) a 
payment for the cost to the pharmacy of administering and 
filling a prescription (the professional dispensing fee). State 
Medicaid programs, subject to CMS approval, determine pharmacy 
ingredient payment rates, as well as professional dispensing 
fees.
    The Deficit Reduction Act of 2005 (DRA, Pub. L. 109-171) 
amended SSA Section 1927 by adding a new subsection (f) that 
required the HHS Secretary to retain a contractor to survey 
RCPs. To implement the survey, CMS contracted for the NADAC 
survey. NADAC is a monthly survey of RCP acquisition costs paid 
for most covered outpatient drugs. CMS, through a contractor, 
surveys a national random sample of RCPs monthly and has been 
publishing NADAC data since November 2013. RCP participation in 
NADAC is voluntary, but to provide an accurate national 
estimate of average acquisition costs, it is important that the 
sample is representative of all geographic areas and different 
pharmacy types such as independent and chain pharmacies.
    The NADAC survey excludes specialty and mail-order 
pharmacies, as well as a number of other non-retail community 
pharmacies. According to a 2020 HHS OIG report, ``60 percent of 
drugs categorized as specialty drugs with Medicaid 
reimbursement in 2018 did not have NADAC data available,'' 
limiting states' ability to set accurate payment rates for 
these products.\37\ OIG recommended that CMS provide states 
with acquisition cost data for these products, but the agency 
cited its lack of clear statutory authority to conduct a NADAC-
like survey of specialty pharmacies in responding to the 
recommendation.
---------------------------------------------------------------------------
    \37\States Could Do More to Oversee Spending and Contain Medicaid 
Costs for Specialty Drugs, Suzanne Murrin, HHS OIG, December 2020, 
available at https://oig.hhs.gov/oei/reports/OEI-03-17-00430.pdf.
---------------------------------------------------------------------------
    As of last year, the three largest specialty pharmacies 
were all PBM affiliates and accounted for a combined 65% of 
prescription revenue for pharmacy-dispensed specialty 
drugs.\38\ A September 2023 Nephron Research study found that 
``expansion of specialty pharmacy is now the leading driver of 
PBM profit growth,'' accounting for an estimated 39% of gross 
profits for PBMs in 2023, up from just 16% in 2012.\39\ A 
number of studies have pointed to vertical integration in the 
sector as a potential source of substantial markups on 
otherwise low-cost specialty drugs in Part D.
---------------------------------------------------------------------------
    \38\ DCI's Top 15 Specialty Pharmacies of 2022: Five Key Trends 
About Today's Marketplace, Adam Fein, Drug Channels, April 2023, 
available at https://www.drugchannels.net/2023/04/dcis-top-15-
specialty-pharmacies-of.html.
    \39\Trends in Profitability and Compensation of PBMs and PBM 
Contracting Entities, Eric Percher, Nephron Research, September 2023, 
available at https://nephronresearch.bluematrix.com/sellside/
AttachmentViewer.action?encrypt=1c65fc0e-f558-4f1d-891f-
21c196a9f1ad&fileId=7276_04a77b17-d298-48a2-bd15-
1c5ed22a6984&isPdf=false.
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Provision

    This provision would require the HHS Secretary to survey 
RCPs' drug prices to determine national average drug 
acquisition costs. Specifically, the HHS Secretary would be 
required to conduct a monthly survey to determine NADACs for 
covered outpatient drugs that represent a nationwide average of 
consumer purchase prices, net of all discounts and rebates (to 
the extent discount and rebate information is available). RCPs 
that receive payment related to the dispensing of covered 
outpatient drugs to individuals receiving benefits under 
Medicaid would be required to respond to the survey. The HHS 
Secretary would be authorized to use a vendor to conduct the 
survey. Information on national drug acquisition prices 
obtained through the NADAC survey would be publicly available, 
as would other specified information on the NADAC survey.
    These provisions would also require the HHS Secretary to 
survey drug prices at applicable non-retail pharmacies to 
determine NADAC benchmarks for such pharmacies that are 
separate from benchmarks used for RCPs. Applicable non-retail 
pharmacies that receive payment related to the dispensing of 
covered outpatient drugs to individuals receiving benefits 
under Medicaid would also be required to respond to the survey.
    An ``applicable non-retail pharmacy'' would be a state-
licensed pharmacy that is not an RCP, including mail order and 
specialty pharmacies. The following pharmacies would not be 
considered applicable non-retail pharmacies: nursing home, 
long-term care facility, hospital, clinic, charitable or not-
for-profit, government, and low-dispensing (defined by the HHS 
Secretary) pharmacies. By January 1, 2025, the HHS Secretary, 
would be required to consult with appropriate stakeholders and 
issue guidance defining applicable non-retail pharmacies. In 
addition, under the guidance promulgated to define non-retail 
pharmacies, the HHS Secretary would be required to establish 
pharmacy type indicators to distinguish between different non-
retail pharmacies, such as mail order and specialty pharmacies. 
Applicable non-retail pharmacies may be identified by multiple 
pharmacy type indicators.
    To receive federal financial participation on prescription 
drugs, state Medicaid programs must require pharmacies in the 
state to respond to the monthly NADAC surveys. States would be 
prohibited from using survey data from applicable non-retail 
pharmacy prices to develop or inform reimbursement rates for 
RCPs.
    National drug acquisition prices would be made publicly 
available as well as other information on the survey such as 
the monthly response rate, identification of noncompliant 
pharmacies, the sampling frame and the number of pharmacies 
sampled monthly. In addition, price concessions to pharmacies 
including discounts, rebates, and other price concessions would 
be made public, if that information may be released publicly, 
and to the extent the HHS Secretary has collected the 
information through the NADAC survey during the survey period.
    The HHS Secretary in consultation with the OIG would be 
required to enforce pharmacy compliance with the NADAC survey 
through establishing appropriate civil monetary penalties 
(CMPs). CMPs may be assessed for each violation or survey non-
response and on each non-compliant pharmacy until compliance is 
completed.
    OIG would be required to conduct appropriate periodic 
studies of the NADAC survey data, including substantial 
variations in acquisition costs or other applicable costs, as 
well as how internal transfer prices and related party 
transactions may influence costs reported by pharmacies. As 
appropriate, OIG would be required to update Congress 
periodically on the results of these studies without disclosing 
trade secrets and other proprietary information.
    OIG would receive an appropriation of $5 million for FY 
2024 that would be available until expended to carry out 
oversight of the NADAC survey. The HHS Secretary would receive 
a $9-million appropriation for Fiscal Year (FY) 2024 and for 
each fiscal year thereafter to conduct the NADAC survey.
    These provisions would be effective on the first day of the 
first quarter 18 months after this provision's enactment date.

SECTION 203. PROTECTING SENIORS FROM EXCESSIVE COST SHARING FOR CERTAIN 
                               MEDICINES

Current Law

    Under Part D's standard benefit, enrollees incur 100% of 
covered drug costs during the deductible phase, after which 
point they incur 25% cost sharing until reaching the out-of-
pocket threshold. Currently, beneficiaries face 5% cost sharing 
beyond the out-of-pocket threshold, but this obligation will 
sunset after plan year 2023. Plans participating in the program 
can opt to provide either the standard benefit, an actuarially 
equivalent benefit, or an enhanced benefit.
    Most Part D plans charge a mix of flat copayments and 
coinsurance (cost sharing calculated as a percentage of a 
drug's price), although adoption of the latter has grown in 
recent years. Cost-sharing levels tend to vary across formulary 
tiers. For specialty-tier drugs, for instance, all plans charge 
coinsurance (between 25% and 33%), and a sizable share of plans 
apply coinsurance to medications on their non-preferred tiers 
(charging up to 50%), whereas all plans adopt flat copays for 
generic and preferred generic tiers.\40\
---------------------------------------------------------------------------
    \40\Key Facts About Medicare Part D Enrollment and Costs in 2023, 
Juliette Cubanski and Anthony Damico, Kaiser Family Foundation, July 
2023, available at https://www.kff.org/medicare/issue-brief/key-facts-
about-medicare-part-d-enrollment-and-costs-in-2023.
---------------------------------------------------------------------------
    While the Part D statute requires plans to provide 
enrollees with ``access to negotiated prices'' for covered 
drugs, ``tak[ing] into account negotiated price concessions, 
such as discounts, direct or indirect subsidies, rebates, and 
direct or indirect remunerations,'' most plans choose not to 
include manufacturer rebates in calculating these prices, which 
typically form the basis for beneficiary cost sharing.\41\ As 
summarized by the GAO, ``[R]ebates do not lower individual 
beneficiary payments for drugs, as these are based on the gross 
cost of the drug before accounting for rebates.''\42\ CMS has 
finalized regulations, effective beginning next year, that will 
require plan sponsors to incorporate price concessions from 
pharmacies into the Part D negotiated price, thus reducing 
beneficiary cost sharing at the point of sale, but this rule 
does not extend to rebates furnished by manufacturers.
---------------------------------------------------------------------------
    \41\42 U.S.C. Sec.  1395w-102(d)(1).
    \42\Medicare Part D: CMS Should Monitor Effects of Rebates on Plan 
Formularies and Beneficiary Spending, GAO, September 2023, available at 
https://www.gao.gov/assets/gao-23-105270.pdf.
---------------------------------------------------------------------------
    Manufacturer rebates refer to post-sale price concessions 
paid by drug makers to plans, often through their PBMs. 
According to a GAO analysis of CMS data, for 2021, 
manufacturers paid $48.6 billion in rebates, compared with 
$16.8 billion in 2014, representing a 189% increase.\43\\44\ A 
recent MedPAC analysis of 2020 data suggests manufacturers 
rebate approximately 22% of Part D spending back to plan 
sponsors and PBMs, in addition to the mandatory discounts that 
the statute requires drug manufacturers to provide on branded 
drugs and biosimilars.\45\ That said, rebate volume varies 
significantly across therapeutic classes.
---------------------------------------------------------------------------
    \43\Ibid.
    \44\Drug Pricing's $268 billion non-event, 46 brooklyn, January 
2020, available at https://www.46brooklyn.com/research/2020/1/21/2018-
medicare-part-d-data-review-sxfn7.
    \45\Analysis of Part D data on drug rebates and discounts, Tara 
Hayes, Shinobu Suzuki, and Rachel Schmidt, MedPAC, September 2022, 
available at https://www.medpac.gov/wp-content/uploads/2021/10/DIR-
Slides-MedPAC-29-Sept-2022.pdf.
---------------------------------------------------------------------------
    Rebate growth has a range of implications for 
beneficiaries, plan sponsors, and other stakeholders across the 
prescription drug supply chain. With respect to cost sharing, 
MedPAC noted in its June 2023 report to Congress that ``the 
subset of enrollees who use rebated drugs may pay 
disproportionately high cost sharing relative to the net 
benefit cost of their medicines,'' and that ``for about 8% of 
gross spending aggregated across all phases of the Part D 
benefit (9% of brand spending), the cost-sharing amounts set by 
plan sponsors exceeded net drug costs after deducting 
rebates.''\46\ GAO found that for 79 of the 100 most highly 
rebated Part D drugs, beneficiaries paid more, on net, than 
their plan sponsors.\47\ A Journal of the American Medical 
Association (JAMA) analysis concluded that rebate growth was 
associated with a $13 average increase in Medicare beneficiary 
cost sharing per prescription between 2014 and 2018.\48\
---------------------------------------------------------------------------
    \46\June 2023 Report to Congress, MedPAC, June 2023, available at 
https://www.medpac.gov/wp-content/uploads/2023/06/
Jun23_Ch2_MedPAC_Report_To_Congress_SEC.pdf.
    \47\Id.
    \48\Association of Branded Prescription Drug Rebate Size and 
Patient Out-of-Pocket Costs in a Nationally Representative Sample, 
2007-2018, Kai Yeung, Stacie Dusetzina, and Anirban Basu, JAMA Open 
Network, June 2021, available at https://jamanetwork.com/journals/
jamanetworkopen/fullarticle/2780950.
---------------------------------------------------------------------------
    Manufacturer rebates also influence formulary design and 
coverage decisions, often to the advantage of products with 
higher list prices, as more than 92% of rebate volume in Part D 
is provided ``for providing manufacturers with formulary access 
and tier placement.'' GAO's analysis indicates frequent use of 
rebate agreements as a means of blocking coverage or 
preferential placement for biosimilars and other products with 
lower list prices. Plan sponsors generally direct the majority 
of rebate revenue to reduce premiums for enrollees and premium 
subsidies for the program, although MedPAC notes in its June 
2023 report that data from the 2020 Medicare Current 
Beneficiary Survey indicate that more beneficiaries report out-
of-pocket costs as the most important factor in choosing a plan 
than any other feature, including premiums.

Provision

    Starting in 2028, these provisions would amend SSA Section 
1860D-2(b) to base post-deductible enrollee coinsurance for 
certain covered Part D drugs (``discount-eligible drugs'') on 
their net prices, inclusive of projected manufacturer rebates, 
rather than their Part D negotiated prices or other list price 
derivatives. The HHS Secretary would publish a list of 
discount-eligible drugs in advance of the relevant plan year.
    ``Discount-eligible drugs'' would be defined as Part D 
drugs that are on a plan's formulary, are subject to a 
coinsurance amount (other than recommended vaccines or 
insulin), and:
          1. Are in the following categories and classes: anti-
        inflammatories that are inhaled corticosteroids; 
        bronchodilators, anticholinergic agents; 
        bronchodilators, sympathomimetic agents; respiratory 
        tract agents; anticoagulants; and cardiovascular 
        agents; and
          2. For which aggregate manufacturer price concessions 
        to Part D plan sponsors/PBMs, in aggregate, are equal 
        to or exceed 50% of aggregate Part D gross costs.
    The ``net price'' would be defined as the Part D negotiated 
price, net of all approximate price concessions that were not 
already reflected in the negotiated price for a plan year. 
``Approximate price concessions'' would be defined as the 
amount of price concessions that Part D sponsors prospectively 
expect to receive from manufacturers for a plan year. Each 
year, plan sponsors would provide the HHS Secretary with: (1) 
approximate price concessions and net prices for each discount-
eligible drug; and (2) a written explanation of the methodology 
used to calculate such approximate price concessions and net 
prices.
    Plans would be compliant with rules under these provisions 
when net price calculations are consistent with:
          1. A ``drug-specific threshold'' (set at 20% for 2028 
        through 2032), which would be the maximum percentage by 
        which approximate price concessions for a specific 
        discount-eligible drug could vary from the actual price 
        concessions a plan received for such a drug, according 
        to DIR reporting for the applicable plan year; and
          2. An ``aggregate threshold'' (set at 15% for 2028 
        through 2032), which would be the maximum percentage by 
        which total approximate price concessions for all 
        discount-eligible drugs could vary from the actual 
        price concessions for all such discount-eligible drugs, 
        in the aggregate, according to DIR reporting for the 
        applicable plan year.
    Beginning in 2033, the HHS Secretary could adjust these 
thresholds, taking into account historical variations in 
expected and actual drug price concessions, factors that could 
result in price concession uncertainty or variation in a given 
plan year, sponsor behavioral responses, effects of precise 
price concession disclosures, beneficiary out-of-pocket costs, 
expenditures under Part D, and other factors. The HHS Secretary 
would be required to publish any threshold adjustments prior to 
the start of the applicable plan year.
    The HHS Secretary would perform audits, as determined 
appropriate, in order to monitor compliance. A plan sponsor 
that violated the requirements could be subject to civil 
monetary penalties.
    Additionally, beginning in 2028, Part D plans would be 
required to limit post-deductible enrollee cost sharing for any 
covered Part D drug included in their formulary to the net 
price for such drug, inclusive of manufacturer rebates. 
Enforcement would occur retroactively, as needed, based on a 
comparison between cost-sharing amounts for covered Part D 
drugs under a plan and the net prices for such drugs under said 
plan, as evidenced through DIR reporting. Plans found to be in 
violation of this requirement could face civil penalties.
    This provision would also direct the GAO to conduct a study 
and publish a report (along with subsequent reports, as 
determined appropriate), once relevant data becomes available, 
on certain effects and behavioral responses related to the 
implementation of the cost-sharing provisions specified in this 
section, including:
           Effects on enrollee cost sharing, 
        utilization and adherence, formulary coverage and 
        placement, and utilization management with respect to 
        affected covered Part D drugs (discount-eligible drugs 
        and covered Part D drugs for which, prior to 
        implementation of these provisions, cost sharing 
        exceeded net price for some beneficiaries), along with 
        any effects on beneficiary premiums.
           Changes to pharmacy reimbursement 
        methodologies and levels, if any, with respect to 
        discount-eligible drugs.
           Changes in manufacturer rebating levels 
        (relative to gross costs) for discount-eligible drugs.
           Other behavioral responses by PDP sponsors, 
        enrollees, manufacturers, pharmacies, or other entities 
        related to the implementation of these provisions.
           Other issues determined appropriate by the 
        Comptroller General.

                TITLE III--MEDICAID EXPIRING PROVISIONS

 SECTION 301. DELAYING CERTAIN DISPROPORTIONATE SHARE HOSPITAL PAYMENT 
                 REDUCTIONS UNDER THE MEDICAID PROGRAM

Current Law

    SSA Section 1923 requires states to make Medicaid 
disproportionate share hospital (DSH) payments to hospitals 
treating large numbers of low-income patients. Each state 
receives an annual DSH allotment, which is the maximum amount 
of federal matching funds that each state is permitted to claim 
for Medicaid DSH payments. The ACA included a provision 
directing the HHS Secretary to make aggregate reductions in 
Medicaid DSH allotments for FY 2014 through FY 2020, but 
subsequent laws have amended the Medicaid DSH reductions by 
eliminating the reductions or delaying them. Under current law, 
the aggregate reductions to the Medicaid DSH allotments equal 
$8.0 billion for part of FY 2024 (i.e., November 18, 2023 
through September 30, 2024) and $8.0 billion for each fiscal 
year from FY 2025 through FY 2027, which totals $32.0 billion. 
In FY 2028, DSH allotments are to rebound to the pre-reduced 
levels, with annual inflation adjustments for FY 2024 to FY 
2027.\49\
---------------------------------------------------------------------------
    \49\The Continuing Appropriations Act, 2024, and Other Extensions 
Act (Pub. L. 118-15) amended the Medicaid DSH reductions by eliminating 
the reductions from September 30, 2023 through November 17, 2023. The 
Further Continuing Appropriations and Other Extensions Act (Pub. L. 
118-22) amended the Medicaid DSH reductions by eliminating the 
reductions from November 17, 2023 until January 20, 2024.
---------------------------------------------------------------------------

Provision

    The provision would further amend the Medicaid DSH 
reductions under SSA Section 1923(f)(7) (42 U.S.C. Sec. 1396r-
4(f)(7)(A)) by eliminating the reductions for FY 2024 and FY 
2025. The reductions for FY 2026 and FY 2027 would be 
unchanged. The aggregate reduction amount from FY 2024 to FY 
2027 would decrease from $32.0 billion under current law to 
$16.0 billion.

 SECTION 302. EXTENSION OF STATE OPTION TO PROVIDE MEDICAL ASSISTANCE 
 FOR CERTAIN INDIVIDUALS WHO ARE PATIENTS IN CERTAIN INSTITUTIONS FOR 
                            MENTAL DISEASES

Current Law

    Medicaid's institutions for mental diseases (IMD) exclusion 
limits the circumstances under which federal Medicaid funding 
to states is available for inpatient behavioral health care. In 
addition to the other authorities available to states to allow 
Medicaid coverage for a period of time for eligible individuals 
who are patients in an eligible IMD, Section 5052 of the 
SUPPORT Act added a new Section 1915(l) of the SSA. Section 
1915(l) provided a new state option to make Medicaid coverage 
available to eligible individuals who were patients in an 
eligible IMD. This coverage was authorized from October 1, 2019 
through September 30, 2023 and available to patients for no 
more than a 30-day period (whether or not consecutive days) 
during any 12-month period.\50\ To participate in the state 
option, states were required to comply with a maintenance of 
effort (MOE) requirement and requirements regarding coverage of 
certain services and transitions of care, among others. Only 
two states were participating in this state option as of 
September 30, 2023: South Dakota and Tennessee.
---------------------------------------------------------------------------
    \50\For more information about the SUPPORT Act state option, see 
CRS Insight IN12212, Expiration of 1915(l) Medicaid State Plan Option.
---------------------------------------------------------------------------

Provision

    The provision would amend SSA Section 1915(l)(1) to remove 
the September 30, 2023, expiration date of the state option to 
make the state option permanent. The provision would also amend 
the MOE requirement to broaden the type of expenditures 
relevant to the MOE standard, among other things. In addition, 
the provision would add a requirement that states commence an 
assessment of the availability of treatment at each level of 
care for Medicaid enrollees.

  TITLE IV--MEDICARE EXPIRING PROVISIONS AND PROVIDER PAYMENT CHANGES

  SECTION 401. EXTENSION OF FUNDING FOR QUALITY MEASURE ENDORSEMENT, 
                          INPUT, AND SELECTION

Current Law

    Under SSA Section 1890, the HHS Secretary is required to 
have a contract with a consensus-based entity (CBE) to carry 
out specified duties related to health care performance 
measurement. These duties include, among others, convening 
multi-stakeholder groups to provide input on the selection of 
measures, making recommendations on a national strategy for 
health care performance measurement, endorsing new health care 
performance measures, maintaining existing health care 
performance measures, and submitting annual reports to 
Congress.
    SSA Section 1890A requires the HHS Secretary establish a 
pre-rulemaking process to select quality measures for use in 
the Medicare program. As part of this process, the HHS 
Secretary makes available to the public measures under 
consideration for use in Medicare quality programs and broadly 
disseminates the quality measures that are selected to be used. 
Simultaneously, the CBE gathers input from multiple 
stakeholders and annually transmits that input to the HHS 
Secretary. Until recently, the National Quality Forum (NQF) 
held this contract and fulfilled this requirement through its 
Measure Applications Partnership (MAP), an entity that convened 
multi-stakeholder groups to provide input into the selection of 
quality measures for use in Medicare and other federal 
programs. The MAP published annual reports with recommendations 
for selection of quality measures in February of each calendar 
year, with the first report published in February of 2012. On 
February 8, 2023, CMS awarded the CBE contract to Battelle 
Memorial Institute, which carries out this work under its 
Partnership for Quality Measurement (PQM).
    The Consolidated Appropriations Act, 2021 (Pub. L. 116-260) 
most recently extended mandatory funding for quality measure 
endorsement, input, and selection through September 30, 2023. 
The law appropriated $26 million for FY 2021, $20 million for 
FY 2022, and $20 million for FY 2023.

Provision

    The provision would amend Section 1890(d)(2) of the SSA (42 
U.S.C. Sec. 1395aaa(d)(2)) to provide for the transfer of $20 
million for FY 2024 from the Medicare Hospital Insurance (HI) 
and Supplementary Medical Insurance (SMI) Trust Funds, to carry 
out Section 1890 and Section 1890A activities. Amounts 
transferred shall remain available until expended.

   SECTION 402. EXTENSION OF FUNDING OUTREACH AND ASSISTANCE FOR LOW-
                            INCOME PROGRAMS

Current Law

    Beginning in FY 2009, Section 119 of the Medicare 
Improvements for Patients and Providers Act (MIPPA; Pub. L. 
110-275) provided mandatory funding for outreach and assistance 
to low-income Medicare beneficiaries through State Health 
Insurance Assistance Programs (SHIPs), Area Agencies on Aging 
(AAAs), and Aging and Disability Resource Centers (ADRCs). This 
funding includes assistance to those who may be eligible for 
the Low-Income Subsidy program, Medicare Savings Program, and 
the Medicare Part D Prescription Drug Program. This funding is 
in addition to annual discretionary funding for SHIPs, AAAs, 
and ADRCs. MIPPA also provided mandatory funding to an entity 
to help inform older Americans about benefits available under 
Federal and State Programs. The funds are awarded through a 
competitive process. The grant is currently awarded to the 
National Council on Aging, which operates the National Center 
for Benefits and Outreach Enrollment. The National Center for 
Benefits and Outreach Enrollment assists organizations to 
enroll older adults and individuals with disabilities into 
benefit programs that they may be eligible for, such as 
Medicare, Medicaid, the Supplemental Security Income program, 
and the Supplemental Nutrition Assistance Program, among 
others. MIPPA funding was extended multiple times, most 
recently in the Consolidated Appropriations Act, 2021 (Pub. L. 
116-260) through FY 2023. The HHS Secretary is required to 
transfer specified amounts for MIPPA program activities from 
the Medicare HI and SMI Trust Funds to the CMS.

Provision

    The provision would amend specified subsections of MIPPA 
Section 119 (42 U.S.C. Sec. 1395b-3 note) to extend authority 
for these programs through September 30, 2024. For FY 2024, it 
would provide the same funding levels as FY 2023, for a total 
of $50 million annually to be transferred from the Medicare HI 
and SMI Trust Funds in the following amounts: SHIPs, $15 
million; AAAs, $15 million; ADRCs, $5 million; and grant 
funding to coordinate efforts to inform older Americans about 
benefits available under federal and state programs, $15 
million.

  SECTION 403. EXTENSION OF THE WORK GEOGRAPHIC INDEX FLOOR UNDER THE 
                            MEDICARE PROGRAM

Current Law

    Medicare payments for services of physicians and certain 
nonphysician practitioners are made on the basis of a fee 
schedule (SSA Sec. 1848(e)(1)(E), U.S.C. Sec. 1395w-
4(e)(1)(E)). The Medicare physician fee schedule (MPFS) is 
adjusted geographically for three categories of inputs to 
reflect differences in the cost of resources needed to produce 
physician services: physician work, practice expense, and 
medical malpractice insurance. The geographic adjustments are 
indices--known as Geographic Practice Cost Indices (GPCIs)--
that reflect how each area compares to the national average in 
a ``market basket'' of goods. A value of 1.0 represents the 
average across all areas. These indices are used to calculate 
the payment rate under the MPFS.
    Since January 1, 2004, several laws have established a 
``floor'' on the physician work GPCI where the index has been 
increased to 1.0 for all geographic regions in which the 
calculation of the GPCI would have been less than 1.0. The 
current authority is scheduled to expire on December 31, 
2023.\51\
---------------------------------------------------------------------------
    \51\The Further Continuing Appropriations and Other Extensions Act 
(Pub. L. 118-22) extended the floor value of 1.0 for the physician work 
geographic index used in the calculation of payments under the Medicare 
physician fee schedule through January 19, 2024.
---------------------------------------------------------------------------

Provision

    The provision would extend the floor value of 1.0 for the 
physician work geographic index used in the calculation of 
payments under the Medicare physician fee schedule through 
December 31, 2024.

       SECTION 404. EXTENSION OF MEDICARE APM PAYMENT INCENTIVES

Current Law

    The Medicare Access and CHIP Reauthorization Act of 2015 
(MACRA; Pub. L. 114-10) introduced a new merit-based incentive 
payment system (MIPS) based on fee-for-service payments and put 
in place processes for developing, evaluating, and adopting 
alternative payment models (APMs) designed to incentivize 
improvements in the quality and efficiency of care. Advanced 
Alternative Payment Models (AAPMs), APMs that include certain 
features related to quality measures and financial risk, 
provide a number of incentives for clinicians who meet the 
requisite payment- or patient-based thresholds to become 
Qualifying APM Participants (QPs).
    Specifically, under amendments included in the Consolidated 
Appropriations Act, 2023, for performance year 2023, an 
eligible professional must either receive at least 50% of 
Medicare Part B payments through an AAPM entity or see at least 
35% of Medicare patients through such an entity in order to 
become a QP. Meeting these thresholds for performance year 2023 
qualifies a QP for an APM Incentive Payment, to be paid out in 
payment year 2025, as a lump-sum amount equal to 3.5% of the 
estimated aggregate payment amounts for covered professional 
services furnished by the clinician during the preceding year.
    Under current law, QPs will not receive an APM Incentive 
Payment in payment year 2026 on the basis of performance year 
2024, although beginning in 2026, the statute provides for an 
annual MPFS conversion factor update of 0.75% for QPs. 
Additionally, starting with performance year 2024, the relevant 
thresholds for QP eligibility will increase, requiring a larger 
share of Part B payments or patients through AAPM entities in 
order to qualify as a QP.

Provision

    This provision would provide for a 1.75% APM Incentive 
Payment for QPs for payment year 2026 (based on performance 
year 2024) and would extend the QP payment and patient 
thresholds in place with respect to payment year 2025 through 
payment year 2026 (based on performance year 2024).

  SECTION 405. PAYMENT RATES FOR DURABLE MEDICAL EQUIPMENT UNDER THE 
                            MEDICARE PROGRAM

Current Law

    Medicare pays for certain durable medical equipment, 
prosthetics, orthotics, and supplies (DMEPOS) either through 
(a) statutorily defined fee schedules, (b) competitive bidding 
in selected urban areas, or (c) adjustments to the fee schedule 
amounts based on data from competitive bidding; the adjustment 
decreases the payments relative to unadjusted payments. The 
CARES Act temporarily increased the adjusted DME fee schedule 
amounts for certain geographic areas (areas other than rural or 
noncontiguous areas), basing them on a blend of (higher) 
unadjusted fee schedule amounts and (lower) amounts adjusted by 
competitive bidding data; prior to the CARES Act, the payments 
for areas other than rural or noncontiguous areas were based 
entirely on the lower amounts adjusted by competitive bidding 
data. The CARES Act specified a weighting scheme calling for 
the payments to be based 25% on the higher unadjusted rates, 
and 75% on the lower adjusted rates (hereafter, referred to as 
the 25/75 blend), through the duration of the COVID-19 public 
health emergency. The Consolidated Appropriations Act, 2023 
(Pub. L. 117-328) extended the 
25/75 blend through December 31, 2023.

Provision

    The provision would extend by one year (through December 
31, 2024) the 25/75 blend payment that applies to areas other 
than rural or noncontiguous areas. The provision prohibits the 
HHS Secretary from applying the pre-CARES act payment (i.e., 
the lower payment based entirely on the fee schedule amounts 
adjusted by competitive bidding data) in areas other than rural 
or noncontiguous areas prior January 1, 2025. The HHS Secretary 
may implement the provision through program instructions or 
otherwise.

   SECTION 406. EXTENDING THE INDEPENDENCE AT HOME MEDICAL PRACTICE 
            DEMONSTRATION PROGRAM UNDER THE MEDICARE PROGRAM

Current Law

    The Affordable Care Act (ACA; Pub. L. 111-148) created the 
Independence at Home (IAH) demonstration under the Medicare 
program to test a payment incentive and service delivery model 
that uses home-based primary care teams and is designed to 
reduce expenditures and improve health outcomes in the care of 
certain chronically ill Medicare beneficiaries. Qualifying IAH 
medical practices are legal entities comprised of an individual 
physician or nurse practitioner, or group of physicians and 
nurse practitioners, that use a team-based approach to carry 
out care plans that are tailored to individual beneficiaries' 
chronic conditions. Such teams could include physicians, 
nurses, physician assistants, pharmacists, and other health and 
social services staff, as appropriate. Practice staff are to 
have experience providing home-based primary care services to 
applicable beneficiaries. The practice staff is required to 
make in-home visits and to be available 24 hours per day, 7 
days per week to implement care plans. Subject to meeting 
performance standards on quality measures, qualifying IAH 
medical practices may be eligible for sharing savings, based on 
the extent to which actual expenditures for a year for the 
applicable beneficiaries enrolled by an IAH practice are less 
than the estimated annual spending target and the resulting 
incentive payment.
    The CMS Innovation Center (CMMI) initially selected a total 
of 15 individual practices to launch the IAH demonstration in 
2012; however, the number of participating practices with IAH 
agreements has varied over the years. The demonstration was 
originally scheduled to end on September 30, 2017, but has been 
extended twice (Bipartisan Budget Act of 2018, Pub. L. 115-123, 
Section 50301, and the Consolidated Appropriations Act of 2021, 
Pub. L. 116-260, Division CC, Section 105), such that 
agreements with IAH medical practices under the demonstration 
program are set to end no later than December 31, 2023.
    For purposes of administering and carrying out the 
demonstration program, the Consolidated Appropriations Act of 
2021 provided $9.0 million to CMS from the Medicare HI and the 
SMI Trust Funds, in proportions determined appropriate by the 
HHS Secretary. The funding was made available for FY 2021, and 
available until expended.

Provision

    The provision would extend the IAH demonstration program 
through December 31, 2025. Further, for purposes of 
administering and carrying out the demonstration program, the 
provision would provide $3.0 million from the Medicare HI and 
SMI Trust Funds (in proportions determined appropriate by the 
HHS Secretary) for FY 2024, to be available until expended.

SECTION 407. INCREASE IN SUPPORT FOR PHYSICIANS AND OTHER PROFESSIONALS 
                IN ADJUSTING TO MEDICARE PAYMENT CHANGES

Current Law

    In 2020, payments to physicians and non-physician 
practitioners under the Medicare physician fee schedule (MPFS) 
were subject to many changes due to a combination of statutory, 
technical, and circumstantial factors including the impact of 
questions about the application of sequestration and PAYGO 
requirements, the redefinition of certain medical codes, and 
the uncertainty of the impact of the COVID-19 pandemic on 
health care professionals. The Consolidated Appropriations Act, 
2021 (Pub. L. 116-260) established a 3.75% increase in MPFS 
payments to support physicians and other professionals for 
services furnished in 2021. The Protecting Medicare and 
American Farmers from Sequester Cuts Act (Pub. L. 117-71) 
extended the increase through 2022 at the reduced level of 
3.0%. The Consolidated Appropriations Act, 2023 (Pub. L. 117-
328) extended the increase through 2023 at 2.5% and through 
2024 at 1.25%.

Provision

    The provision would replace the statutory increase of 1.25% 
for MPFS services furnished in 2024 with 2.50% for that year.

  SECTION 408. REVISED PHASE-IN OF MEDICARE CLINICAL LABORATORY TEST 
                            PAYMENT CHANGES

Current Law

    Payments for outpatient clinical laboratory services are 
paid under the Medicare Clinical Laboratory Fee Schedule 
(CLFS). The Protecting Access to Medicare Act of 2014 (PAMA, 
Pub. L. 113-93) mandated a different method for determining 
clinical laboratory payments based on reported private 
insurance payment amounts and required the CMS to phase-in CLFS 
payments during the transition. Prior to the passage of PAMA, 
private insurance CLFS payment rates had generally been lower 
than Medicare payments. The applicable reporting period used to 
calculate the new rates and the date of implementation of the 
phase-in payments have been modified several times since PAMA 
was enacted.
    Current law establishes that (1) ``no reporting is required 
for clinical laboratory payments during the period beginning 
January 1, 2020, and ending December 31, 2023''; (2) 
``reporting is required during the period beginning January 1, 
2024, and ending March 31, 2024''; and (3) reporting is 
required every three years thereafter. Correspondingly, 
reductions in CLFS payments based on the phase-in of the new 
methodology are to be limited; for 2023, there are no 
reductions in payments compared to those received in the 
previous year, while reductions are limited to 15% for each 
Medicare clinical laboratory payment in 2024 through 2026.\52\
---------------------------------------------------------------------------
    \52\The Further Continuing Appropriations and Other Extensions Act 
(Pub. L. 118-22) extended the moratorium on the reporting and 
collecting of private insurance payments for clinical laboratory 
services through December 31, 2024 and extended the zero-percent cap on 
payment reductions through December 31, 2024.
---------------------------------------------------------------------------

Provision

    The provision would continue to limit reductions in CLFS 
payments by extending the moratorium on the reporting and 
collecting of private insurance payments for clinical 
laboratory services through December 31, 2024 and by extending 
the zero-percent cap on payment reductions through 2024. 
Reductions in CLFS payments in 2025 through 2027 would be 
limited to 15 percent.

  SECTION 409. EXTENSION OF ADJUSTMENT TO CALCULATION OF HOSPICE CAP 
                         AMOUNT UNDER MEDICARE

Current Law

    The Medicare hospice benefit covers a broad set of 
palliative care services in the management of a terminal 
illness. These services are furnished to Medicare beneficiaries 
with a life expectancy of six months or less, as determined by 
a physician. For conditions unrelated to a terminal illness, 
Medicare continues to cover items and services outside of the 
hospice benefit.
    Payment for hospice care is based on one of four 
prospectively determined rates (which correspond to four 
different levels of care) for each day a beneficiary is under 
the care of a Medicare-certified hospice agency. The four rate 
categories are routine home care, continuous home care, 
inpatient respite care, and general inpatient care. Payment 
rates are adjusted to reflect differences in area wage levels, 
using the hospital wage index. Annual payments to a hospice 
agency are limited by two caps. The first limits the number of 
days of inpatient care a hospice agency may provide to not more 
than 20% of total patient care days in a single year (42 Code 
of Federal Regulations (C.F.R.) Sec. 418.108(d)). The second, 
as required under law (SSA Sec. 1814(i)(2)(B)), limits a 
hospice agency's average annual payment per beneficiary. The 
latter cap is currently, for FY 2024, set at $33,494.01. If a 
hospice agency's total payments exceed its total number of 
Medicare patients, multiplied by the FY 2024 absolute dollar 
limit, then the hospice must repay the difference.
    Unlike the daily base payment rates, the hospice aggregate 
cap is not adjusted for geographic differences in costs. The 
average annual payment cap amount is adjusted for increases or 
decreases in medical care expenditures. As required by Section 
1814(i)(2)(B) of the SSA, the average annual payment cap, 
through FY 2032, is indexed to the general hospice base payment 
update, rather than using the Consumer Price Index for all 
urban consumers (CPI-U) for medical care expenditures. The CPI-
U is published by the U.S. Bureau of Labor Statistics. Federal 
law mandates that the average annual hospice payment cap after 
FY 2032 be adjusted to reflect the percentage increase or 
decrease in the medical care expenditure category of the CPI-U.

Provision

    The provision would amend Section 1814 of the SSA, 
extending the update of the Medicare hospice average annual 
payment cap using the general hospice base payment update 
(rather than indexing it to the CPI-U) through FY 2033. This 
policy allows the hospice payment rate and the aggregate 
hospice cap to grow using a common inflationary index.

                            TITLE V--OFFSETS

                 SECTION 501. MEDICAID IMPROVEMENT FUND

Current Law

    Section 7002(b) of the Supplemental Appropriations Act of 
2008 (Pub. L. 110-252) added SSA Section 1941, requiring the 
HHS Secretary to establish the Medicaid Improvement Fund (MIF). 
SSA Section 1941 authorized the HHS Secretary to use the MIF 
``to improve the management of the Medicaid program by the 
Centers for Medicare and Medicaid Services, including oversight 
of contracts and contractors and evaluation of demonstration 
projects.'' Pub. L. 110-252 authorized $100 million to be 
available for expenditures in FY 2014 and $150 million for FY 
2015 through FY 2018.
    Multiple pieces of legislation have amended SSA Section 
1941 to adjust the amount of money available to the MIF.\53\
---------------------------------------------------------------------------
    \53\The Continuing Appropriations Act, 2024, and Other Extensions 
Act (Pub. L. 118-15) amended SSA Section 1941 to reduce availability to 
the MIF for FY 2028 and thereafter from $7,000,000,000 to 
$6,357,117,810. The Further Continuing Appropriations and Other 
Extensions Act (Pub. L. 118-22) amended SSA Section 1941 to reduce 
funding availability to the MIF for FY 2028 and thereafter from 
$6,357,117,810 to $5,796,117,810.
---------------------------------------------------------------------------

Provision

    This provision would amend SSA Section 1941 (42 U.S.C. 
Sec. 1396w-1(b)(3)(A)) by reducing funding available to the MIF 
for FY 2028 and thereafter from $6,357,117,810 to $561,000,000.

                 SECTION 502. MEDICARE IMPROVEMENT FUND

Current Law

    MIPPA added SSA Section 1898 (42 U.S.C Sec. 1395iii), which 
authorized the HHS Secretary to establish the Medicare 
Improvement Fund. The amounts in the Medicare Improvement Fund 
are available to the HHS Secretary ``to make improvements under 
the original Medicare fee-for-service program under parts A and 
B . . . including adjustments to payments for items and 
services furnished by providers of services and suppliers under 
such original Medicare fee-for-service program.'' Funding for 
the Medicare Improvement Fund is made available from the HI 
Trust Fund and the SMI Trust Fund in the amount determined 
appropriate by the HHS Secretary. Many subsequent laws have 
modified the amount in the fund, but to date, none of the 
monies have been expended. Most recently, the Consolidated 
Appropriations Act, 2023 (Pub. L. 117-328) modified Section 
1898 to make $180,000,000 available in the Medicare Improvement 
Fund during and after FY 2022.\54\
---------------------------------------------------------------------------
    \54\The Further Continuing Appropriations and Other Extensions Act 
(Pub. L. 118-22) changed the amount available in the Medicare 
Improvement Fund for services furnished during and after FY 2022 to 
$466,795,056.
---------------------------------------------------------------------------

Provision

    This provision would change the amount available in the 
Medicare Improvement Fund for services furnished during and 
after FY 2022 to $936,000,000.

                    III. BUDGET EFFECTS OF THE BILL


                         A. COMMITTEE ESTIMATES

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 308(a)(1) of the 
Congressional Budget and Impoundment Control Act of 1974, as 
amended (the ``Budget Act''), the following statement is made 
concerning the estimated budget effects of the revenue 
provisions of the Better Mental Health Care, Lower-Cost Drugs, 
and Extenders Act, as reported. The spending effects of the 
bill will be included in the statement from the Congressional 
Budget Office that will be provided separately, as described in 
Part C below.

                B. BUDGET AUTHORITY AND TAX EXPENDITURES

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that the extent to which the provisions of the 
bill as reported involve new or increased budget authority or 
affect levels of tax expenditures will be included in the 
statement from the Congressional Budget Office that will be 
provided separately, as described in Part C below.

            C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE

    In accordance with section 403 of the Budget Act, the 
Committee advises that the Congressional Budget Office has not 
submitted a statement on the bill. The statement from the 
Congressional Budget Office will be provided separately.

                       IV. VOTES OF THE COMMITTEE

    In compliance with paragraph 7(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, with a 
majority present, the Better Mental Health Care, Lower-Cost 
Drugs, and Extenders Act, was ordered favorably reported on 
November 8, 2023, by a roll call vote of 26 ayes and 0 nays. 
The vote was as follows:
    Ayes: Wyden, Stabenow, Cantwell, Menendez, Carper, Cardin 
(proxy), Brown (proxy), Bennet (proxy), Casey, Warner, 
Whitehouse, Hassan, Cortez Masto, Warren, Crapo, Grassley 
(proxy), Cornyn (proxy), Thune (proxy), Scott (proxy), Cassidy 
(proxy), Lankford, Daines, Young (proxy), Barrasso (proxy), 
Tillis, and Blackburn.
    Nays: None.
    Not Voting: Johnson.

                 V. REGULATORY IMPACT AND OTHER MATTERS


                          A. REGULATORY IMPACT

    Pursuant to paragraph 11(b) of rule XXVI of the Standing 
Rules of the Senate, the Committee makes the following 
statement concerning the regulatory impact that might be 
incurred in carrying out the provisions of the bill.

Impact on individuals and businesses, personal privacy and paperwork

    The bill includes various provisions relating to coverage 
and payment of services provided under the Medicare and 
Medicaid programs that are not expected to impose additional 
administrative requirements or regulatory burdens on 
individuals, providers, or businesses beyond those normally 
necessary under the Medicare and Medicaid programs. In carrying 
out other provisions of the bill, MA plans and individuals and 
businesses across the drug supply chain will be subject to new 
administrative requirements.
    MA plans will be required to conduct annual reports on 
accuracy of their provider directories and submit those reports 
to the HHS Secretary, and to notify consumers of the cost-
sharing protections for services based on reliance on incorrect 
provider directory information. Across the drug supply chain, 
Part D plans and the PBMs they contract with will be required 
to report information about rebates they receive from 
manufacturers and pharmacies will be required to report 
acquisition cost information. Pharmacies, on a voluntary basis, 
will be enabled to file complaints with the HHS Secretary with 
respect to PBM adherence to the codification of regulatory 
requirements that PBMs are required to follow. Part D plans and 
PBMs may have to report information related to such complaints 
to the HHS Secretary.
    The provisions of the bill do not impact personal privacy.

                     B. UNFUNDED MANDATES STATEMENT

    The Committee adopts as its own the estimate of federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant of section 423 of the Unfunded Mandates Reform 
Act of 1995 (Pub. L. 104-4), which will be provided separately.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate, to dispense with the 
requirements of paragraph 12 of rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

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