[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2327 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 2327
To amend title XVIII of the Social Security Act to provide for a
Medicare part D modernization redesign and to establish a monthly out-
of-pocket cost sharing maximum for enrollees who incur a significant
portion of costs towards the annual out-of-pocket threshold under
Medicare part D.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 13, 2021
Mr. Cassidy (for himself and Mr. Menendez) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to provide for a
Medicare part D modernization redesign and to establish a monthly out-
of-pocket cost sharing maximum for enrollees who incur a significant
portion of costs towards the annual out-of-pocket threshold under
Medicare part D.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Seniors Prescription Drug Relief
Act''.
SEC. 2. MEDICARE PART D MODERNIZATION REDESIGN.
(a) Benefit Structure Redesign.--Section 1860D-2(b) of the Social
Security Act (42 U.S.C. 1395w-102(b)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), in the matter preceding
clause (i), by inserting ``for a year preceding 2024
and for costs above the annual deductible specified in
paragraph (1) and up to the annual out-of-pocket
threshold specified in paragraph (4)(B) for 2024 and
each subsequent year'' after ``paragraph (3)'';
(B) in subparagraph (C)--
(i) in clause (i), in the matter preceding
subclause (I), by inserting ``for a year
preceding 2024,'' after ``paragraph (4),''; and
(ii) in clause (ii)(III), by striking ``and
each subsequent year'' and inserting ``, 2021,
2022, and 2023''; and
(C) in subparagraph (D)--
(i) in clause (i)--
(I) in the matter preceding
subclause (I), by inserting ``for a
year preceding 2024,'' after
``paragraph (4),''; and
(II) in subclause (I)(bb), by
striking ``a year after 2018'' and
inserting ``each of years 2018 through
2023''; and
(ii) in clause (ii)(V), by striking ``2019
and each subsequent year'' and inserting ``each
of years 2019 through 2023'';
(2) in paragraph (3)(A)--
(A) in the matter preceding clause (i), by
inserting ``for a year preceding 2024,'' after ``and
(4),''; and
(B) in clause (ii), by striking ``for a subsequent
year'' and inserting ``for each of years 2007 through
2023'';
(3) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) by redesignating subclauses (I)
and (II) as items (aa) and (bb),
respectively, and indenting
appropriately;
(II) in the matter preceding item
(aa), as redesignated by subclause (I),
by striking ``is equal to the greater
of--'' and inserting ``is equal to--
``(I) for a year preceding 2024,
the greater of--'';
(III) by striking the period at the
end of item (bb), as redesignated by
subclause (I), and inserting ``; and'';
and
(IV) by adding at the end the
following:
``(II) for 2024 and each succeeding
year, $0.''; and
(ii) in clause (ii)--
(I) by striking ``clause (i)(I)''
and inserting ``clause (i)(I)(aa)'';
and
(II) by adding at the end the
following new sentence: ``The Secretary
shall continue to calculate the dollar
amounts specified in clause (i)(I)(aa),
including with the adjustment under
this clause, after 2023 for purposes of
section 1860D-14(a)(1)(D)(iii).'';
(B) in subparagraph (B)--
(i) in clause (i)--
(I) in subclause (V), by striking
``or'' at the end;
(II) in subclause (VI)--
(aa) by striking ``for a
subsequent year'' and inserting
``for 2021, 2022, and 2023'';
and
(bb) by striking the period
at the end and inserting a
semicolon; and
(III) by adding at the end the
following new subclauses:
``(VII) for 2024, is equal to
$3,100; or
``(VIII) for a subsequent year, is
equal to the amount specified in this
subparagraph for the previous year,
increased by the annual percentage
increase described in paragraph (6) for
the year involved.''; and
(ii) in clause (ii), by striking ``clause
(i)(II)'' and inserting ``clause (i)'';
(C) in subparagraph (C)(i), by striking ``and for
amounts'' and inserting ``and for a year preceding 2024
for amounts''; and
(D) in subparagraph (E), by striking ``In
applying'' and inserting ``For each of 2011 through
2023, in applying''.
(b) Reduction in Beneficiary Coinsurance.--
(1) In general.--Section 1860D-2(b)(2)(A) of the Social
Security Act (42 U.S.C. 1395w-102(b)(2)(A)), as amended by
subsection (a), is amended--
(A) by redesignating clauses (i) and (ii) as
subclauses (I) and (II) and moving such subclauses 2
ems to the right;
(B) by striking ``25 percent coinsurance.--Subject
to'' and inserting ``Coinsurance.--
``(i) In general.--Subject to'';
(C) in each of subclauses (I) and (II), as
redesignated by subparagraph (A), by striking ``25
percent'' and inserting ``the applicable percentage (as
defined in clause (ii))''; and
(D) by adding at the end the following new clause:
``(ii) Applicable percentage defined.--For
purposes of clause (i), the term `applicable
percentage' means--
``(I) for a year preceding 2024, 25
percent; and
``(II) for 2024 and each subsequent
year, 20 percent.''.
(2) Conforming amendment.--Section 1860D-14(a)(2)(D) of the
Social Security Act (42 U.S.C. 1395w-114(a)(2)(D)) is amended
by striking ``25 percent'' and inserting ``the applicable
percentage''.
(c) Decreasing Reinsurance Payment Amount.--Section 1860D-15(b) of
the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``equal to 80 percent'' and
inserting ``equal to--
``(A) for a year preceding 2024, 80 percent'';
(B) in subparagraph (A), as added by paragraph (1),
by striking the period at the end and inserting ``;
and''; and
(C) by adding at the end the following new
subparagraph:
``(B) for 2024 and each subsequent year, the sum
of--
``(i) an amount equal to the applicable
percentage specified in paragraph (5)(A) of
such allowable reinsurance costs attributable
to that portion of gross prescription drug
costs as specified in paragraph (3) incurred in
the coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to applicable drugs (as
defined in section 1860D-14B(g)(2)); and
``(ii) an amount equal to the applicable
percentage specified in paragraph (5)(B) of
allowable reinsurance costs attributable to
that portion of gross prescription drug costs
as specified in paragraph (3) incurred in the
coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to covered part D drugs
that are not applicable drugs (as so
defined).''; and
(2) by adding at the end the following new paragraph:
``(5) Applicable percentage specified.--For purposes of
paragraph (1)(B), the applicable percentage specified in this
paragraph is--
``(A) with respect to applicable drugs (as defined
in section 1860D-14B(g)(2))--
``(i) for 2024, 60 percent;
``(ii) for 2025, 40 percent; and
``(iii) for 2026 and each subsequent year,
20 percent; and
``(B) with respect to covered part D drugs that are
not applicable drugs (as so defined)--
``(i) for 2024, 80 percent;
``(ii) for 2025, 60 percent; and
``(iii) for 2026 and each subsequent year,
40 percent.''.
(d) Manufacturer Discount Program During Initial and Catastrophic
Phases of Coverage.--
(1) In general.--Part D of title XVIII of the Social
Security Act is amended by inserting after section 1860D-14A
(42 U.S.C. 1495w-114) the following new section:
``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.
``(a) Establishment.--The Secretary shall establish a manufacturer
discount program (in this section referred to as the `program'). Under
the program, the Secretary shall enter into agreements described in
subsection (b) with manufacturers and provide for the performance of
the duties described in subsection (c). The Secretary shall establish a
model agreement for use under the program by not later than January 1,
2023, in consultation with manufacturers, and allow for comment on such
model agreement.
``(b) Terms of Agreement.--
``(1) In general.--
``(A) Agreement.--An agreement under this section
shall require the manufacturer to provide applicable
beneficiaries access to discounted prices for
applicable drugs of the manufacturer that are dispensed
on or after January 1, 2024.
``(B) Provision of discounted prices at the point-
of-sale.--The discounted prices described in
subparagraph (A) shall be provided to the applicable
beneficiary at the pharmacy or by the mail order
service at the point-of-sale of an applicable drug.
``(2) Provision of appropriate data.--Each manufacturer
with an agreement in effect under this section shall collect
and have available appropriate data, as determined by the
Secretary, to ensure that it can demonstrate to the Secretary
compliance with the requirements under the program.
``(3) Compliance with requirements for administration of
program.--Each manufacturer with an agreement in effect under
this section shall comply with requirements imposed by the
Secretary or a third party with a contract under subsection
(d)(3), as applicable, for purposes of administering the
program, including any determination under subparagraph (A) of
subsection (c)(1) or procedures established under such
subsection (c)(1).
``(4) Length of agreement.--
``(A) In general.--An agreement under this section
shall be effective for an initial period of not less
than 12 months and shall be automatically renewed for a
period of not less than 1 year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The Secretary may
provide for termination of an agreement under
this section for a knowing and willful
violation of the requirements of the agreement
or other good cause shown. Such termination
shall not be effective earlier than 30 days
after the date of notice to the manufacturer of
such termination. The Secretary shall provide,
upon request, a manufacturer with a hearing
concerning such a termination, and such hearing
shall take place prior to the effective date of
the termination with sufficient time for such
effective date to be repealed if the Secretary
determines appropriate.
``(ii) By a manufacturer.--A manufacturer
may terminate an agreement under this section
for any reason. Any such termination shall be
effective, with respect to a plan year--
``(I) if the termination occurs
before January 30 of a plan year, as of
the day after the end of the plan year;
and
``(II) if the termination occurs on
or after January 30 of a plan year, as
of the day after the end of the
succeeding plan year.
``(iii) Effectiveness of termination.--Any
termination under this subparagraph shall not
affect discounts for applicable drugs of the
manufacturer that are due under the agreement
before the effective date of its termination.
``(iv) Notice to third party.--The
Secretary shall provide notice of such
termination to a third party with a contract
under subsection (d)(3) within not less than 30
days before the effective date of such
termination.
``(5) Effective date of agreement.--An agreement under this
section shall take effect on a date determined appropriate by
the Secretary, which may be at the start of a calendar quarter.
``(c) Duties Described.--The duties described in this subsection
are the following:
``(1) Administration of program.--Administering the
program, including--
``(A) the determination of the amount of the
discounted price of an applicable drug of a
manufacturer;
``(B) the establishment of procedures under which
discounted prices are provided to applicable
beneficiaries at pharmacies or by mail order service at
the point-of-sale of an applicable drug;
``(C) the establishment of procedures to ensure
that, not later than the applicable number of calendar
days after the dispensing of an applicable drug by a
pharmacy or mail order service, the pharmacy or mail
order service is reimbursed for an amount equal to the
difference between--
``(i) the negotiated price of the
applicable drug; and
``(ii) the discounted price of the
applicable drug;
``(D) the establishment of procedures to ensure
that the discounted price for an applicable drug under
this section is applied before any coverage or
financial assistance under other health benefit plans
or programs that provide coverage or financial
assistance for the purchase or provision of
prescription drug coverage on behalf of applicable
beneficiaries as the Secretary may specify; and
``(E) providing a reasonable dispute resolution
mechanism to resolve disagreements between
manufacturers, applicable beneficiaries, and the third
party with a contract under subsection (d)(3).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall monitor
compliance by a manufacturer with the terms of an
agreement under this section.
``(B) Notification.--If a third party with a
contract under subsection (d)(3) determines that the
manufacturer is not in compliance with such agreement,
the third party shall notify the Secretary of such
noncompliance for appropriate enforcement under
subsection (e).
``(3) Collection of data from prescription drug plans and
ma-pd plans.--The Secretary may collect appropriate data from
prescription drug plans and MA-PD plans in a timeframe that
allows for discounted prices to be provided for applicable
drugs under this section.
``(d) Administration.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall provide for the implementation of this section, including
the performance of the duties described in subsection (c).
``(2) Limitation.--In providing for the implementation of
this section, the Secretary shall not receive or distribute any
funds of a manufacturer under the program.
``(3) Contract with third parties.--The Secretary shall
enter into a contract with 1 or more third parties to
administer the requirements established by the Secretary in
order to carry out this section. At a minimum, the contract
with a third party under the preceding sentence shall require
that the third party--
``(A) receive and transmit information between the
Secretary, manufacturers, and other individuals or
entities the Secretary determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to appropriate
individuals or entities in order to meet the
obligations of manufacturers under agreements under
this section;
``(C) provide adequate and timely information to
manufacturers, consistent with the agreement with the
manufacturer under this section, as necessary for the
manufacturer to fulfill its obligations under this
section; and
``(D) permit manufacturers to conduct periodic
audits, directly or through contracts, of the data and
information used by the third party to determine
discounts for applicable drugs of the manufacturer
under the program.
``(4) Performance requirements.--The Secretary shall
establish performance requirements for a third party with a
contract under paragraph (3) and safeguards to protect the
independence and integrity of the activities carried out by the
third party under the program under this section.
``(5) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the program under this section.
``(6) Funding.--For purposes of carrying out this section,
the Secretary shall provide for the transfer, from the Federal
Supplementary Medical Insurance Trust Fund under section 1841
to the Centers for Medicare & Medicaid Services Program
Management Account, of $4,000,000 for each of fiscal years 2021
through 2024, to remain available until expended.''.
``(e) Enforcement.--
``(1) Audits.--Each manufacturer with an agreement in
effect under this section shall be subject to periodic audit by
the Secretary.
``(2) Civil money penalty.--
``(A) In general.--The Secretary shall impose a
civil money penalty on a manufacturer that fails to
provide applicable beneficiaries discounts for
applicable drugs of the manufacturer in accordance with
such agreement for each such failure in an amount the
Secretary determines is commensurate with the sum of--
``(i) the amount that the manufacturer
would have paid with respect to such discounts
under the agreement, which will then be used to
pay the discounts which the manufacturer had
failed to provide; and
``(ii) 25 percent of such amount.
``(B) Application.--The provisions of section 1128A
(other than subsections (a) and (b)) shall apply to a
civil money penalty under this paragraph in the same
manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(f) Clarification Regarding Availability of Other Covered Part D
Drugs.--Nothing in this section shall prevent an applicable beneficiary
from purchasing a covered part D drug that is not an applicable drug
(including a generic drug or a drug that is not on the formulary of the
prescription drug plan or MA-PD plan that the applicable beneficiary is
enrolled in).
``(g) Definitions.--In this section:
``(1) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who, on the date of dispensing
a covered part D drug--
``(A) is enrolled in a prescription drug plan or an
MA-PD plan;
``(B) is not enrolled in a qualified retiree
prescription drug plan; and
``(C) has incurred costs for covered part D drugs
in the year that are above the annual deductible
specified in section 1860D-2(b)(1) for such year.
``(2) Applicable drug.--The term `applicable drug' means,
with respect to an applicable beneficiary, a covered part D
drug--
``(A) approved under a new drug application under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act or, in the case of a biologic product, licensed
under section 351 of the Public Health Service Act
(including a product licensed under subsection (k) of
such section 351); and
``(B)(i) if the PDP sponsor of the prescription
drug plan or the MA organization offering the MA-PD
plan uses a formulary, which is on the formulary of the
prescription drug plan or MA-PD plan that the
applicable beneficiary is enrolled in;
``(ii) if the PDP sponsor of the prescription drug
plan or the MA organization offering the MA-PD plan
does not use a formulary, for which benefits are
available under the prescription drug plan or MA-PD
plan that the applicable beneficiary is enrolled in; or
``(iii) is provided through an exception or appeal.
``(3) Applicable number of calendar days.--The term
`applicable number of calendar days' means--
``(A) with respect to claims for reimbursement
submitted electronically, 14 days; and
``(B) with respect to claims for reimbursement
submitted otherwise, 30 days.
``(4) Discounted price.--
``(A) In general.--Except as provided in
subparagraph (B), the term `discounted price' means 90
percent of the negotiated price of the applicable drug
of a manufacturer.
``(B) Phase-in for certain drugs dispensed for
subsidy eligible individuals.--
``(i) In general.--In the case of an
applicable drug of a specified manufacturer (as
defined in clause (ii)) that is dispensed for
an applicable beneficiary who is a subsidy
eligible individual (as defined in section
1860D-14(a)(3)), the term `discounted price'
means the specified LIS percent (as defined in
clause (iii)) of the negotiated price of the
applicable drug of the manufacturer.
``(ii) Specified manufacturer.--In this
subparagraph, the term `specified manufacturer'
means a manufacturer of an applicable drug for
which, in the calendar year 2 years prior to
the current plan year (referred to in this
clause as the `applicable period'), the total
reimbursement under this title during the
applicable period represented less than 1
percent of the total reimbursement under this
title for all prescription drugs during such
period.
``(iii) Specified lis percent.--In this
subparagraph, the term `specified LIS percent'
means--
``(I) for 2024, 98 percent;
``(II) for 2025, 97 percent;
``(III) for 2026, 96 percent;
``(IV) for 2027, 95 percent;
``(V) for 2028, 94 percent;
``(VI) for 2029, 93 percent;
``(VII) for 2030, 92 percent;
``(VIII) for 2031, 91 percent; and
``(IX) for 2032 and each subsequent
year, 90 percent.
``(C) Clarification.--Nothing in this section shall
be construed as affecting the responsibility of an
applicable beneficiary for payment of a dispensing fee
for an applicable drug.
``(5) Manufacturer.--The term `manufacturer' means any
entity which is engaged in the production, preparation,
propagation, compounding, conversion, or processing of
prescription drug products, either directly or indirectly by
extraction from substances of natural origin, or independently
by means of chemical synthesis, or by a combination of
extraction and chemical synthesis. Such term does not include a
wholesale distributor of drugs or a retail pharmacy licensed
under State law.
``(6) Negotiated price.--The term `negotiated price' has
the meaning given such term in section 1860D-2(d)(1)(B), except
that such negotiated price shall not include any dispensing fee
for the applicable drug.
``(7) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' has the meaning
given such term in section 1860D-22(a)(2).''.
(2) Sunset of medicare coverage gap discount program.--
Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
114a) is amended--
(A) in subsection (a), in the first sentence, by
striking ``The Secretary'' and inserting ``Subject to
subsection (h), the Secretary''; and
(B) by adding at the end the following new
subsection:
``(h) Sunset of Program.--
``(1) In general.--The program shall not apply to
applicable drugs dispensed on or after January 1, 2024, and,
subject to paragraph (2), agreements under this section shall
be terminated as of such date.
``(2) Continued application for applicable drugs dispensed
prior to sunset.--The provisions of this section (including all
responsibilities and duties) shall continue to apply after
January 1, 2024, with respect to applicable drugs dispensed
prior to such date.''.
(3) Inclusion of actuarial value of manufacturer discounts
in bids.--Section 1860D-11 of the Social Security Act (42
U.S.C. 1395w-111) is amended--
(A) in subsection (b)(2)(C)(iii)--
(i) by striking ``assumptions regarding the
reinsurance'' and inserting ``assumptions
regarding--
``(I) the reinsurance''; and
(ii) by adding at the end the following:
``(II) for 2024 and each subsequent
year, the manufacturer discounts
provided under section 1860D-14B
subtracted from the actuarial value to
produce such bid; and''; and
(B) in subsection (c)(1)(C)--
(i) by striking ``an actuarial valuation of
the reinsurance'' and inserting ``an actuarial
valuation of--
``(i) the reinsurance'';
(ii) in clause (i), as added by clause (i)
of this subparagraph, by adding ``and'' at the
end; and
(iii) by adding at the end the following:
``(ii) for 2024 and each subsequent year,
the manufacturer discounts provided under
section 1860D-14B;''.
(4) Clarification regarding exclusion of manufacturer
discounts from troop.--Section 1860D-2(b)(4) of the Social
Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
(A) in subparagraph (C), by inserting ``and subject
to subparagraph (F)'' after ``subparagraph (E)''; and
(B) by adding at the end the following new
subparagraph:
``(F) Clarification regarding exclusion of
manufacturer discounts.--In applying subparagraph (A),
incurred costs shall not include any manufacturer
discounts provided under section 1860D-14B.''.
(e) Determination of Allowable Reinsurance Costs.--Section 1860D-
15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (2)--
(A) by striking ``costs.--For purposes'' and
inserting ``costs.--
``(A) In general.--Subject to subparagraph (B), for
purposes''; and
(B) by adding at the end the following new
subparagraph:
``(B) Inclusion of manufacturer discounts on
applicable drugs.--For purposes of applying
subparagraph (A), the term `allowable reinsurance
costs' shall include the portion of the negotiated
price (as defined in section 1860D-14B(g)(6)) of an
applicable drug (as defined in section 1860D-14B(g)(2))
that was paid by a manufacturer under the manufacturer
discount program under section 1860D-14B.''; and
(2) in paragraph (3)--
(A) in the first sentence, by striking ``For
purposes'' and inserting ``Subject to paragraph (2)(B),
for purposes''; and
(B) in the second sentence, by inserting ``or, in
the case of an applicable drug, by a manufacturer''
after ``by the individual or under the plan''.
(f) Updating Risk Adjustment Methodologies To Account for Part D
Modernization Redesign.--Section 1860D-15(c) of the Social Security Act
(42 U.S.C. 1395w-115(c)) is amended by adding at the end the following
new paragraph:
``(3) Updating risk adjustment methodologies to account for
part d modernization redesign.--The Secretary shall update the
risk adjustment methodologies used to adjust bid amounts
pursuant to this subsection as appropriate to take into account
changes in benefits under this part pursuant to the amendments
made by section 2 of the Seniors Prescription Drug Relief
Act.''.
(g) Conditions for Coverage of Drugs Under This Part.--Section
1860D-43 of the Social Security Act (42 U.S.C. 1395w-153) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``and'' at the
end;
(B) in paragraph (3), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(4) participate in the manufacturer discount program
under section 1860D-14B;
``(5) have entered into and have in effect an agreement
described in subsection (b) of such section 1860D-14B with the
Secretary; and
``(6) have entered into and have in effect, under terms and
conditions specified by the Secretary, a contract with a third
party that the Secretary has entered into a contract with under
subsection (d)(3) of such section 1860D-14B.'';
(2) by striking subsection (b) and inserting the following:
``(b) Effective Date.--Paragraphs (1) through (3) of subsection (a)
shall apply to covered part D drugs dispensed under this part on or
after January 1, 2011, and before January 1, 2024, and paragraphs (4)
through (6) of such subsection shall apply to covered part D drugs
dispensed on or after January 1, 2024.''; and
(3) in subsection (c), by striking paragraph (2) and
inserting the following:
``(2) the Secretary determines that in the period beginning
on January 1, 2011, and ending on December 31, 2011 (with
respect to paragraphs (1) through (3) of subsection (a)), or
the period beginning on January 1, 2024, and ending December
31, 2024 (with respect to paragraphs (4) through (6) of such
subsection), there were extenuating circumstances.''.
(h) Conforming Amendments.--
(1) Section 1860D-2 of the Social Security Act (42 U.S.C.
1395w-102) is amended--
(A) in subsection (a)(2)(A)(i)(I), by striking ``,
or an increase in the initial'' and inserting ``or for
a year preceding 2024 an increase in the initial'';
(B) in subsection (c)(1)(C)--
(i) in the subparagraph heading, by
striking ``at initial coverage limit''; and
(ii) by inserting ``for a year preceding
2024 or the annual out-of-pocket threshold
specified in subsection (b)(4)(B) for the year
for 2024 and each subsequent year'' after
``subsection (b)(3) for the year'' each place
it appears; and
(C) in subsection (d)(1)(A), by striking ``or an
initial'' and inserting ``or for a year preceding 2024
an initial''.
(2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act
(42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ``the
initial'' and inserting ``for a year preceding 2024, the
initial''.
(3) Section 1860D-14(a) of the Social Security Act (42
U.S.C. 1395w-114(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2024, the continuation'';
(ii) in subparagraph (D)(iii), by striking
``1860D-2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''; and
(iii) in subparagraph (E), by striking
``The elimination'' and inserting ``For a year
preceding 2024, the elimination''; and
(B) in paragraph (2)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2024, the continuation''; and
(ii) in subparagraph (E)--
(I) by inserting ``for a year
preceding 2024,'' after ``subsection
(c)''; and
(II) by striking ``1860D-
2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''.
(4) Section 1860D-21(d)(7) of the Social Security Act (42
U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
2(b)(B)(4)(B)(i)'' and inserting ``section 1860D-
2(b)(B)(4)(C)(i)''.
(5) Section 1860D-22(a)(2)(A) of the Social Security Act
(42 U.S.C. 1395w-132(a)(2)(A)) is amended--
(A) by striking ``the value of any discount'' and
inserting the following: ``the value of--
``(i) for years prior to 2024, any
discount'';
(B) in clause (i), as inserted by subparagraph (A)
of this paragraph, by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new clause:
``(ii) for 2024 and each subsequent year,
any discount provided pursuant to section
1860D-14B.''.
(6) Section 1860D-41(a)(6) of the Social Security Act (42
U.S.C. 1395w-151(a)(6)) is amended--
(A) by inserting ``for a year before 2024'' after
``1860D-2(b)(3)''; and
(B) by inserting ``for such year'' before the
period.
(i) Effective Date.--The amendments made by this section shall
apply to plan year 2024 and subsequent plan years.
SEC. 3. MONTHLY OUT-OF-POCKET COST SHARING MAXIMUM FOR ENROLLEES WHO
INCUR A SIGNIFICANT PORTION OF COSTS TOWARDS ANNUAL OUT-
OF-POCKET THRESHOLD.
(a) In General.--Section 1860D-2(b) of the Social Security Act (42
U.S.C. 1395w-102(b)), as amended by section 2, is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), by striking ``and (D)''
and inserting ``, (D), and (E)''; and
(B) by adding at the end the following new
subparagraph:
``(E) Monthly out-of-pocket cost sharing maximum
for enrollees who incur a significant portion of costs
towards annual out-of-pocket threshold.--
``(i) Establishment of process.--
``(I) In general.--For plan years
beginning on or after January 1, 2024,
the Secretary shall, through notice and
comment rulemaking, establish a process
under which each PDP sponsor offering a
prescription drug plan and each MA
organization offering an MA-PD plan
shall each plan year automatically
enroll applicable enrollees in the
option to have their monthly out-of-
pocket cost-sharing under the plan
capped and paid in monthly installments
in accordance with this subparagraph
(referred to in this subparagraph as
the `monthly out-of-pocket cost sharing
maximum option').
``(II) Opt out.--The process
established under this clause shall
permit an applicable enrollee, prior to
the beginning of the plan year or at
any point during the plan year, to opt
out of enrollment in the monthly out-
of-pocket cost sharing maximum option
and pay any out-of-pocket cost-sharing
otherwise applicable for any covered
part D drug in full at the time of the
dispensing of such drug (or at the time
of such opt out in the case of costs
incurred during such enrollment that
have not yet been billed to the
enrollee).
``(ii) Definitions.--
``(I) Applicable enrollee.--In this
subparagraph, the term `applicable
enrollee' means any enrollee in a
prescription drug plan or an MA-PD
plan, including an enrollee who is a
subsidy eligible individual (as defined
in paragraph (3) of section 1860D-
14(a)), who incurs or is likely to
incur a significant percentage of costs
for covered part D drugs.
``(II) Significant percentage.--For
purposes of subclause (I), the
Secretary shall, in the rulemaking
under clause (i), define the term
`significant percentage' with respect
to a percentage of the annual out-of-
pocket threshold specified in paragraph
(4)(B) but in no case shall the
`significant percentage' be less than
50 percent or more than 100 percent of
the annual out-of-pocket threshold.
``(iii) Determination of monthly out-of-
pocket cost sharing maximum.--For each month in
a plan year in which an applicable enrollee is
enrolled in the monthly out-of-pocket cost
sharing maximum option, the PDP sponsor or MA
organization shall determine a monthly out-of-
pocket cost sharing maximum (as defined in
clause (v)) for such enrollee.
``(iv) Beneficiary monthly payments.--With
respect to an applicable enrollee who is
enrolled in the monthly out-of-pocket cost
sharing maximum option, for each month
described in clause (iii), the PDP sponsor or
MA organization shall bill such enrollee an
amount (not to exceed the monthly out-of-pocket
cost sharing maximum) for the out-of-pocket
costs of such enrollee in such month.
``(v) Monthly out-of-pocket cost sharing
maximum defined.--In this subparagraph, the
term `monthly out-of-pocket cost sharing
maximum' means, with respect to an enrollee--
``(I) for the first month in which
this subparagraph applies, an amount
determined by calculating--
``(aa) the annual out-of-
pocket threshold specified in
paragraph (4)(B) minus the
incurred costs of the enrollee
as described in paragraph
(4)(C); divided by
``(bb) the number of months
remaining in the plan year; and
``(II) for a subsequent month, an
amount determined by calculating--
``(aa) the sum of any
remaining out-of-pocket costs
owed by the enrollee from a
previous month that have not
yet been billed to the enrollee
and any additional costs
incurred by the enrollee;
divided by
``(bb) the number of months
remaining in the plan year.
``(vi) Additional requirements.--The
following requirements shall apply with respect
to the monthly out-of-pocket cost sharing
maximum option under this subparagraph:
``(I) Secretarial
responsibilities.--The Secretary shall
provide information to part D eligible
individuals on the monthly out-of-
pocket cost sharing maximum option
through educational materials,
including through the notices provided
under section 1804(a).
``(II) PDP sponsor and ma
organization responsibilities.--Each
PDP sponsor offering a prescription
drug plan or MA organization offering
an MA-PD plan--
``(aa) shall not limit the
application of the monthly out-
of-pocket cost sharing maximum
option to certain covered part
D drugs;
``(bb) shall, prior to the
plan year, notify prospective
enrollees of such option,
including the availability of
the opt out under clause
(i)(II);
``(cc) shall include
information on such option in
enrollee educational materials,
including the availability of
the opt out under clause
(i)(II);
``(dd) shall have in place
a mechanism to notify a
pharmacy during the plan year
when an enrollee incurs out-of-
pocket costs with respect to
covered part D drugs that make
it likely the enrollee is an
applicable enrollee;
``(ee) shall provide that a
pharmacy, after receiving a
notification described in item
(dd) with respect to an
enrollee, informs the enrollee
of such notification;
``(ff) shall ensure that
the application of this
subparagraph has no effect on
the amount paid to pharmacies
(or the timing of such
payments) with respect to
covered part D drugs dispensed
to the enrollee; and
``(gg) shall have in place
a financial reconciliation
process to correct inaccuracies
in payments made by an enrollee
under this subparagraph with
respect to covered part D drugs
during the plan year.
``(III) Failure to pay amount
billed under monthly out-of-pocket cost
sharing maximum option.--If an
applicable enrollee fails to pay the
amount billed for a month as required
under this subparagraph, the applicable
enrollee's enrollment in the monthly
out-of-pocket cost sharing maximum
option shall be terminated and the
enrollee shall pay the cost-sharing
otherwise applicable for any covered
part D drugs subsequently dispensed to
the enrollee up to the annual out-of-
pocket threshold specified in paragraph
(4)(B).
``(IV) Clarification regarding past
due amounts.--Nothing in this
subparagraph shall be construed as
prohibiting a PDP sponsor or an MA
organization from billing an enrollee
for an amount owed under this
subparagraph.
``(V) Treatment of unsettled
balances.--Any unsettled balances with
respect to amounts owed under this
subparagraph shall be treated as plan
losses and the Secretary shall not be
liable for any such balances outside of
those assumed as losses estimated in
plan bids.''; and
(2) in paragraph (4)--
(A) in subparagraph (C), by striking ``and subject
to subparagraph (F)'' and inserting ``and subject to
subparagraphs (F) and (G)''; and
(B) by adding at the end the following new
subparagraph:
``(G) Inclusion of costs paid under monthly out-of-
pocket cost sharing maximum option.--In applying
subparagraph (A), with respect to an applicable
enrollee who is enrolled in the monthly out-of-pocket
cost sharing maximum option described in clause (i)(I)
of paragraph (2)(E), costs shall be treated as incurred
if such costs are paid by a PDP sponsor or an MA
organization under the process provided under such
paragraph.''.
(b) Application to Alternative Prescription Drug Coverage.--Section
1860D-2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is
amended by adding at the end the following new paragraph:
``(4) Same monthly out-of-pocket cost sharing maximum.--For
plan years beginning on or after January 1, 2024, the monthly
out-of-pocket cost sharing maximum for applicable enrollees
under the process provided under subsection (b)(2)(E) shall
apply to such coverage.''.
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