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115th Congress    }                                  {    Rept. 115-761
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                  {          Part 1

======================================================================



 
        PREVENTING ADDICTION FOR SUSCEPTIBLE SENIORS ACT OF 2018

                                _______
                                

                 June 19, 2018.--Ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5773]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5773) to amend title XVIII of the Social Security 
Act to require Medicare prescription drug plans to establish 
drug management programs for at-risk beneficiaries, require 
electronic prior authorization for covered part D drugs, and to 
provide for other program integrity measures under parts C and 
D of the Medicare program, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
 I. SUMMARY AND BACKGROUND............................................5
        A. Purpose and Summary...................................     5
        B. Background and Need for Legislation...................     6
        C. Legislative History...................................     6
II. EXPLANATION OF THE BILL...........................................7
        A. Preventing Addiction for Susceptible Seniors Act......     7
III.VOTES OF THE COMMITTEE...........................................11

IV. BUDGET EFFECTS OF THE BILL.......................................11
        A. Committee Estimate of Budgetary Effects...............    11
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................    12
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    12
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......20
        A. Committee Oversight Findings and Recommendations......    20
        B. Statement of General Performance Goals and Objectives.    20
        C. Information Relating to Unfunded Mandates.............    20
        D. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................    20
        E. Duplication of Federal Programs.......................    20
        F. Disclosure of Directed Rule Makings...................    20
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............21
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................    21
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    21

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Preventing Addiction for Susceptible 
Seniors Act of 2018'' or the ``PASS Act of 2018''.

SEC. 2. REQUIRING PRESCRIPTION DRUG PLAN SPONSORS UNDER MEDICARE TO 
                    ESTABLISH DRUG MANAGEMENT PROGRAMS FOR AT-RISK 
                    BENEFICIARIES.

  Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)) is amended--
          (1) in paragraph (1), by inserting after subparagraph (E) the 
        following new subparagraph:
                  ``(F) With respect to plan years beginning on or 
                after January 1, 2021, a drug management program for 
                at-risk beneficiaries described in paragraph (5).''; 
                and
          (2) in paragraph (5)(A), by inserting ``(and for plan years 
        beginning on or after January 1, 2021, a PDP sponsor shall)'' 
        after ``A PDP sponsor may''.

SEC. 3. ELECTRONIC PRIOR AUTHORIZATION FOR COVERED PART D DRUGS.

  (a) Inclusion in Electronic Prescription Program.--Section 1860D-
4(e)(2) of the Social Security Act (42 U.S.C. 1395w-104(e)(2)) is 
amended by adding at the end the following new subparagraph:
                  ``(E) Electronic prior authorization.--
                          ``(i) In general.--Not later than January 1, 
                        2021, the program shall provide for the secure 
                        electronic transmission of--
                                  ``(I) a prior authorization request 
                                from the prescribing health care 
                                professional for coverage of a covered 
                                part D drug for a part D eligible 
                                individual enrolled in a part D plan 
                                (as defined in section 1860D-23(a)(5)) 
                                to the PDP sponsor or Medicare 
                                Advantage organization offering such 
                                plan; and
                                  ``(II) a response, in accordance with 
                                this subparagraph, from such PDP 
                                sponsor or Medicare Advantage 
                                organization, respectively, to such 
                                professional.
                          ``(ii) Electronic transmission.--
                                  ``(I) Exclusions.--For purposes of 
                                this subparagraph, a facsimile, a 
                                proprietary payer portal that does not 
                                meet standards specified by the 
                                Secretary, or an electronic form shall 
                                not be treated as an electronic 
                                transmission described in clause (i).
                                  ``(II) Standards.--In order to be 
                                treated, for purposes of this 
                                subparagraph, as an electronic 
                                transmission described in clause (i), 
                                such transmission shall comply with 
                                technical standards adopted by the 
                                Secretary in consultation with the 
                                National Council for Prescription Drug 
                                Programs, other standard setting 
                                organizations determined appropriate by 
                                the Secretary, and stakeholders 
                                including PDP sponsors, Medicare 
                                Advantage organizations, health care 
                                professionals, and health information 
                                technology software vendors.
                                  ``(III) Application.--Notwithstanding 
                                any other provision of law, for 
                                purposes of this subparagraph, the 
                                Secretary may require the use of such 
                                standards adopted under subclause (II) 
                                in lieu of any other applicable 
                                standards for an electronic 
                                transmission described in clause (i) 
                                for a covered part D drug for a part D 
                                eligible individual.''.
  (b) Sense of Congress Regarding Electronic Prior Authorization.--It 
is the sense of the Congress that--
          (1) there should be increased use of electronic prior 
        authorizations for coverage of covered part D drugs for part D 
        eligible individuals enrolled in prescription drug plans under 
        part D of title XVIII of the Social Security Act and MA-PD 
        plans under part C of such title to reduce access delays by 
        resolving coverage issues before prescriptions for such drugs 
        are transmitted; and
          (2) greater priority should be placed on increasing the 
        adoption of use of such electronic prior authorizations among 
        prescribers of such drugs, pharmacies, PDP sponsors, and 
        Medicare Advantage organizations.

SEC. 4. PROGRAM INTEGRITY TRANSPARENCY MEASURES UNDER MEDICARE PARTS C 
                    AND D.

  (a) In General.--Section 1859 of the Social Security Act (42 U.S.C. 
1395w-28) is amended by adding at the end the following new subsection:
  ``(i) Program Integrity Transparency Measures.--
          ``(1) Program integrity portal.--
                  ``(A) In general.--Not later than two years after the 
                date of the enactment of this subsection, the Secretary 
                shall, after consultation with stakeholders, establish 
                a secure Internet website portal (or other successor 
                technology) that would allow a secure path for 
                communication between the Secretary, MA plans under 
                this part, prescription drug plans under part D, and an 
                eligible entity with a contract under section 1893 
                (such as a Medicare drug integrity contractor or an 
                entity responsible for carrying out program integrity 
                activities under this part and part D) for the purpose 
                of enabling through such portal (or other successor 
                technology)--
                          ``(i) the referral by such plans of 
                        substantiated fraud, waste, and abuse for 
                        initiating or assisting investigations 
                        conducted by the eligible entity; and
                          ``(ii) data sharing among such MA plans, 
                        prescription drug plans, and the Secretary.
                  ``(B) Required uses of portal.--The Secretary shall 
                disseminate the following information to MA plans under 
                this part and prescription drug plans under part D 
                through the secure Internet website portal (or other 
                successor technology) established under subparagraph 
                (A):
                          ``(i) Providers of services and suppliers 
                        that have been referred pursuant to 
                        subparagraph (A)(i) during the previous 12-
                        month period.
                          ``(ii) Providers of services and suppliers 
                        who are the subject of an active exclusion 
                        under section 1128 or who are subject to a 
                        suspension of payment under this title pursuant 
                        to section 1862(o) or otherwise.
                          ``(iii) Providers of services and suppliers 
                        who are the subject of an active revocation of 
                        participation under this title, including for 
                        not satisfying conditions of participation.
                          ``(iv) In the case of such a plan that makes 
                        a referral under subparagraph (A)(i) through 
                        the portal (or other successor technology) with 
                        respect to activities of substantiated fraud, 
                        waste, or abuse of a provider of services or 
                        supplier, if such provider or supplier has been 
                        the subject of an administrative action under 
                        this title or title XI with respect to similar 
                        activities, a notification to such plan of such 
                        action so taken.
                  ``(C) Rulemaking.--For purposes of this paragraph, 
                the Secretary shall, through rulemaking, specify what 
                constitutes substantiated fraud, waste, and abuse, 
                using guidance such as what is provided in the Medicare 
                Program Integrity Manual 4.7.1. In carrying out this 
                subsection, a fraud hotline tip (as defined by the 
                Secretary) without further evidence shall not be 
                treated as sufficient evidence for substantiated fraud, 
                waste, or abuse.
                  ``(D) HIPAA compliant information only.--For purposes 
                of this subsection, communications may only occur if 
                the communications are permitted under the Federal 
                regulations (concerning the privacy of individually 
                identifiable health information) promulgated under 
                section 264(c) of the Health Insurance Portability and 
                Accountability Act of 1996.
          ``(2) Quarterly reports.--Beginning two years after the date 
        of enactment of this subsection, the Secretary shall make 
        available to MA plans under this part and prescription drug 
        plans under part D in a timely manner (but no less frequently 
        than quarterly) and using information submitted to an entity 
        described in paragraph (1) through the portal (or other 
        successor technology) described in such paragraph or pursuant 
        to section 1893, information on fraud, waste, and abuse schemes 
        and trends in identifying suspicious activity. Information 
        included in each such report shall--
                  ``(A) include administrative actions, pertinent 
                information related to opioid overprescribing, and 
                other data determined appropriate by the Secretary in 
                consultation with stakeholders; and
                  ``(B) be anonymized information submitted by plans 
                without identifying the source of such information.
          ``(3) Clarification.--Nothing in this subsection shall be 
        construed as precluding or otherwise affecting referrals 
        described in subparagraph (A) that may otherwise be made to law 
        enforcement entities or to the Secretary.''.
  (b) Contract Requirement to Communicate Plan Corrective Actions 
Against Opioid Over-prescribers.--Section 1857(e)(4)(C) of the Social 
Security Act (42 U.S.C. 1395w-27(e)(4)(C)) is amended by adding at the 
end the following new paragraph:
          ``(5) Communicating plan corrective actions against opioids 
        over-prescribers.--
                  ``(A) In general.--Beginning with plan years 
                beginning on or after January 1, 2021, a contract under 
                this section with an MA organization shall require the 
                organization to submit to the Secretary, through the 
                process established under subparagraph (B), information 
                on the investigations and other actions taken by such 
                plans related to providers of services who prescribe a 
                high volume of opioids.
                  ``(B) Process.--Not later than January 1, 2021, the 
                Secretary shall, in consultation with stakeholders, 
                establish a process under which MA plans and 
                prescription drug plans shall submit to the Secretary 
                information described in subparagraph (A).
                  ``(C) Regulations.--For purposes of this paragraph, 
                including as applied under section 1860D-12(b)(3)(D), 
                the Secretary shall, pursuant to rulemaking--
                          ``(i) specify a definition for the term `high 
                        volume of opioids' and a method for determining 
                        if a provider of services prescribes such a 
                        high volume; and
                          ``(ii) establish the process described in 
                        subparagraph (B) and the types of information 
                        that shall be submitted through such 
                        process.''.
  (c) Reference Under Part D to Program Integrity Transparency 
Measures.--Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-
104) is amended by adding at the end the following new subsection:
  ``(m) Program Integrity Transparency Measures.--For program integrity 
transparency measures applied with respect to prescription drug plan 
and MA plans, see section 1859(i).''.

SEC. 5. EXPANDING ELIGIBILITY FOR MEDICATION THERAPY MANAGEMENT 
                    PROGRAMS UNDER PART D.

  Section 1860D-4(c)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
1395w-104(c)(2)(A)(ii)) is amended--
          (1) by redesignating subclauses (I) through (III) as items 
        (aa) through (cc), respectively, and adjusting the margins 
        accordingly;
          (2) by striking ``are part D eligible individuals who--'' and 
        inserting ``are the following:
                                  ``(I) Part D eligible individuals 
                                who--''; and
          (3) by adding at the end the following new subclause:
                                  ``(II) Beginning January 1, 2021, at-
                                risk beneficiaries for prescription 
                                drug abuse (as defined in paragraph 
                                (5)(C)).''.

SEC. 6. MEDICARE NOTIFICATIONS TO OUTLIER PRESCRIBERS OF OPIOIDS.

  Section 1860D-4(c)(4) of the Social Security Act (42 U.S.C. 1395w-
104(c)(4)) is amended by adding at the end the following new paragraph:
                  ``(D) Outlier prescriber notification.--
                          ``(i) Notification.--Beginning not later than 
                        two years after the date of the enactment of 
                        this subparagraph, the Secretary shall, in the 
                        case of a prescriber identified by the 
                        Secretary under clause (ii) to be an outlier 
                        prescriber of opioids, provide, subject to 
                        clause (iv), an annual notification to such 
                        prescriber that such prescriber has been so 
                        identified and that includes resources on 
                        proper prescribing methods and other 
                        information specified in accordance with clause 
                        (iii).
                          ``(ii) Identification of outlier prescribers 
                        of opioids.--
                                  ``(I) In general.--The Secretary 
                                shall, subject to subclause (III), 
                                using the valid prescriber National 
                                Provider Identifiers included pursuant 
                                to subparagraph (A) on claims for 
                                covered part D drugs for part D 
                                eligible individuals enrolled in 
                                prescription drug plans under this part 
                                or MA-PD plans under part C and based 
                                on the threshold established under 
                                subclause (II), conduct an analysis to 
                                identify prescribers that are outlier 
                                opioid prescribers for a period 
                                specified by the Secretary.
                                  ``(II) Establishment of threshold.--
                                For purposes of subclause (I) and 
                                subject to subclause (III), the 
                                Secretary shall, after consultation 
                                with stakeholders, establish a 
                                threshold, based on prescriber 
                                specialty and geographic area, for 
                                identifying whether a prescriber in a 
                                specialty and geographic area is an 
                                outlier prescriber of opioids as 
                                compared to other prescribers of 
                                opioids within such specialty and area.
                                  ``(III) Exclusions.--The Secretary 
                                may exclude the following individuals 
                                and prescribers from the analysis under 
                                this clause:
                                          ``(aa) Individuals receiving 
                                        hospice services.
                                          ``(bb) Individuals with a 
                                        cancer diagnosis.
                                          ``(cc) Prescribers who are 
                                        the subject of an investigation 
                                        by the Centers for Medicare & 
                                        Medicaid Services or the Office 
                                        of Inspector General of the 
                                        Department of Health and Human 
                                        Services.
                          ``(iii) Contents of notification.--The 
                        Secretary shall, based on input from 
                        stakeholders, specify the resources and other 
                        information to be included in notifications 
                        provided under clause (i).
                          ``(iv) Modifications and expansions.--
                                  ``(I) Frequency.--Beginning 5 years 
                                after the date of the enactment of this 
                                subparagraph, the Secretary may change 
                                the frequency of the notifications 
                                described in clause (i) based on 
                                stakeholder input.
                                  ``(II) Expansion to other 
                                prescriptions.--The Secretary may 
                                expand notifications under this 
                                subparagraph to include identifications 
                                and notifications with respect to 
                                concurrent prescriptions of covered 
                                Part D drugs used in combination with 
                                opioids that are considered to have 
                                adverse side effects when so used in 
                                such combination, as determined by the 
                                Secretary.
                          ``(v) Opioids defined.--For purposes of this 
                        subparagraph, the term `opioids' has such 
                        meaning as specified by the Secretary through 
                        program instruction or otherwise.''.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 5773, the ``Preventing Addiction for 
Susceptible Seniors (PASS) Act of 2018,'' was ordered reported 
by the Committee on Ways and Means on May 16, 2018.
    The bill requires Medicare prescription drug plans to 
establish lock-in programs for seniors at-risk of opioid 
overuse. These programs prevent doctor and pharmacy shopping by 
requiring individuals to use a single pharmacy for all 
prescriptions, providing a central location for all 
transactions that can be monitored for abuse or misuse.
    Further, the Secretary of Health and Human Services (HHS) 
(referred to as the Secretary) is required to establish a 
standard, secure electronic prior authorization (ePA) system. 
Currently, ePA systems are not standardized. By ensuring 
prescriptions are transmitted electronically, plans and 
providers can better integrate this information in medical 
records and monitor for abuse or misuse of certain medications.
    The bill requires the Secretary to establish a secure 
Internet website portal (or other successor technology) that 
would allow for a secure communication between the Centers for 
Medicare & Medicaid Services (CMS), plans providing Part D 
coverage, and the Medicare Drug Integrity Contractor (MEDIC) 
regarding certain program integrity activities. Plans must 
submit information on the investigations and other actions 
taken by such plans related to providers who inappropriately 
prescribe a high volume of opioids.
    The bill defines ``at-risk'' beneficiaries as eligible for 
the benefits provided under the Medication Therapy Management 
(MTM) Program. The MTM Program was established in 2003 and is a 
patient-centric and comprehensive approach to improve 
medication use, reduce the risk of adverse events, and improve 
medication adherence.
    Lastly, the bill requires the Secretary to notify providers 
that prescribe opioids in amounts or dosages in excess of their 
peers. This analysis would be conducted compared to peers in 
the same specialty and geographic area.

                 B. Background and Need for Legislation

    Many Medicare beneficiaries receive opioid prescriptions 
through Medicare Part D. Broadly, the Centers for Medicare & 
Medicaid Services' (CMS) role in Part D oversight is to provide 
guidance to private plans (plan sponsors) that contract with 
CMS to offer drug coverage to Medicare beneficiaries. Plan 
sponsors are encouraged to identify providers that prescribe 
inappropriate amounts of opioids, and in cases of fraud or 
abuse, refer those cases for further investigation. 
Accordingly, CMS has programs and processes in place to monitor 
overprescribing, crack down on abuse, and identify at-risk 
beneficiaries.
    According to a July 2017 report released by the Department 
of Health and Human Services Office of Inspector General, one 
third of Medicare Part D beneficiaries received an opioid 
prescription in 2016, costing the program $4.1 billion and 
representing 79.4 million prescriptions. The analysis also 
found that 501,008 Part D beneficiaries received high amounts 
of opioids, and 69,563 received ``extreme'' amounts--many as a 
result of ``doctor shopping,'' a practice through which 
beneficiaries obtain medically unnecessary prescriptions from 
multiple pharmacies and prescribers.
    This legislation enhances CMS and plan actions and 
authority relating to identification of beneficiaries at risk 
of opioid abuse or misuse and provides new authority to monitor 
and reach out to patients that are at risk. The legislation 
also provides new requirements for CMS to monitor and educate 
providers that are prescribing opioids in amounts or doses that 
exceed their peers.

                         C. Legislative History


Background

    H.R. 5773 was introduced on May 11, 2018, and was referred 
to the Committee on Ways and Means and additionally the 
Committee on Energy and Commerce.

Committee hearings

    On January 17, 2018, the Subcommittee on Oversight held a 
hearing on the current landscape and CMS actions to prevent 
opioid misuse.
    On February 6, 2018, the Subcommittee on Health held a 
hearing on removing barriers to prevent and treat opioid abuse 
and dependence in Medicare.
    On April 25, 2018, the Subcommittee on Trade held a hearing 
on stopping the flow of synthetic opioids in the international 
mail system.

Committee action

    The Committee on Ways and Means marked up H.R. 5773, the 
``Preventing Addiction for Susceptible Seniors (PASS) Act of 
2018,'' on May 16, 2018, and ordered the bill, as amended, 
favorably reported (with a quorum being present) by voice vote.

                      II. EXPLANATION OF THE BILL


    A. The Preventing Addiction for Susceptible Seniors Act of 2018


                              CURRENT LAW

    Under current law, many of the issues addressed by this 
bill are voluntary on the part of plans or CMS. As a result, 
there is inconsistency across the nation as to how patients and 
providers at risk of opioid misuse or abuse are treated.
    Plans are not required to have a safe prescribing and 
dispensing program for beneficiaries that are prescribed 
opioids. Section 704 of the Comprehensive Addiction and 
Recovery Act (CARA) of 2016 allows Medicare prescription drug 
plans to voluntarily develop a safe prescribing and dispensing 
program for beneficiaries that are at risk of abusing or 
diverting medications.
    Likewise, electronic prior authorization (ePA) transactions 
are not required to be standardized across all stakeholders. A 
recent HHS report entitled ``Ways to Improve the Part D Appeals 
Process'' suggested that increased industry use of ePA 
transactions may help resolve issues at the pharmacy between 
the ordering provider and the plan, resolving denials before 
they enter the appeals process unnecessarily. In Part D, the 
ordering prescriber is not a party to the claim rejection 
transaction in the pharmacy and cannot provide additional 
information to resolve the coverage determination criteria. 
This disconnect can adversely affect beneficiary safety and 
care.
    Additionally, current law Medication Therapy Management 
(MTM) Programs do not include beneficiaries at risk of opioid 
abuse or misuse. They are limited to beneficiaries that fit the 
following criteria:
          1. Have multiple chronic diseases (plans may set a 
        minimum threshold at two or three);
          2. Are taking multiple Part D drugs (plans may set a 
        minimum threshold at any number equal to or between two 
        and eight); and
          3. Are likely to incur annual costs for covered Part 
        D drugs that are greater or equal to a specified amount 
        (the cost threshold for 2018 is $3,967).
    Finally, while the Secretary is required to monitor and 
profile physicians' billing patterns within each area or 
locality and provide comparative data to physicians whose 
utilization patterns vary significantly from other physicians 
in the same payment area or locality, there is no specific 
statutory requirement that CMS analyze opioid prescribing 
patterns to target education to those who are outliers.

                           REASONS FOR CHANGE

    To prevent opioid overuse by increasing program integrity 
efforts and resources for beneficiaries to help ensure 
appropriate adherence to prescribed pain medications.

                       EXPLANATION OF PROVISIONS

    Section 1: Short Title: Preventing Addiction for 
Susceptible Seniors (PASS) Act of 2018
    Section 2: Requiring Prescription Drug Plan Sponsors Under 
Medicare to Establish Drug Management Programs for At-Risk 
Beneficiaries.
    Requires Medicare prescription drug plans to establish 
lock-in programs for seniors at-risk of opioid overuse 
beginning on or after January 1, 2021.
    Section 3: Electronic Prior Authorization for Covered Part 
D Drugs.
    Inclusion of Electronic Prescription Program: Requires the 
Secretary to establish a standard, secure electronic prior 
authorization (ePA) system for transmittal of prescriptions 
between providers, pharmacies, and plans no later than January 
1, 2021. Such program is required to provide for the secure 
electronic transmission of a prior authorization request from 
the prescribing health care professional for coverage of a Part 
D eligible drug for a Part D eligible individual enrolled in 
such plan and a response from such plan sponsor to such 
healthcare professional.
    Electronic Transmission Exclusions: For the purpose of 
electronic prior authorization, a fax, a proprietary payer 
portal that does not meet standard specified by the Secretary, 
or an electronic form will not count as an electronic 
transmission.
    Electronic Transmission Standards: The electronic 
transmission must comply with technical standards adopted by 
the Secretary in consultation with the National Council for 
Prescription Drug Programs, or other standard setting 
organizations determined appropriate by the Secretary, and 
other stakeholders including Prescription Drug Plan sponsors, 
Medicare Advantage Plan sponsors, healthcare professionals, and 
health information technology software vendors.
    Electronic Transmission Application: The Secretary may 
require the use of such standards in lieu of any other 
applicable standards for an electronic transmission.
    Sense of Congress: It is the sense of Congress that 
increased use of electronic prior authorization will reduce 
access delays by resolving coverage issues before prescriptions 
for such drugs are transmitted and that a greater priority 
should be placed on increasing the adoption of electronic prior 
authorization use.
    Section 4: Program Integrity Transparency Measures Under 
Medicare Parts C and D.
    Program Integrity Portal: The Secretary, no later than two 
years after the date of enactment, is required to establish a 
secure Internet website portal (or other successor technology) 
that would allow for a secure communication between the 
Secretary, Medicare Advantage and Part D plans, and the 
Medicare Drug Integrity Contractor (MEDIC), or other entity 
eligible with a contract under section 1893 for carrying out 
program integrity activities. Nothing in this section is 
intended to prevent the Secretary from implementing this 
requirement through new technologies that may deviate from an 
internet website portal technology, so long as alternative 
technologies are capable of fulfilling the requirements laid 
out in statute. The portal is intended to enable referrals by 
such plans of substantiated fraud, waste, and abuse for 
initiating or assisting investigations, as well as data sharing 
among such plans.
    Required Uses of Portal: The Secretary is required to use 
the portal to disseminate the following information to plans: 
(1) providers and suppliers that have been referred through the 
portal during the previous 12-month period for program 
integrity violations; (2) providers and suppliers who are the 
subject of an active exclusion under section 1128 or who are 
subject to suspension of payment under 1862(o); and (3) 
providers and suppliers who are the subject of an active 
revocation of Medicare participation for not satisfying 
conditions of participation. If the plan makes a referral 
through the portal and such provider or supplier has been the 
subject of an administrative action under Medicare or Title XI 
with respect to similar activities, the plans in which the 
provider or supplier participates are required to be notified. 
A plan's referrals could result in additional provider 
education, or in serious cases, disciplinary action.
    Rulemaking: The Secretary is required to go through 
rulemaking to define substantiated fraud, waste, and abuse 
using existing guidance provided in the Medicare Program 
Integrity Manual 4.7.1. A fraud hotline tip without further 
supporting evidence does not constitute sufficient evidence to 
be considered substantiated fraud, waste, and abuse.
    HIPPA Complaint Information: Communications may only occur 
as permitted under Federal regulations concerning the privacy 
of individually identifiable health information promulgated 
under section 264(c) of the Health Insurance Portability and 
Accountability Act of 1996.
    Quarterly Reports: Beginning two years after the date of 
enactment, the Secretary is required to report to plans, in a 
timely manner but not less frequently than quarterly, 
information on fraud, waste, and abuse schemes and trends in 
identifying suspicious activity based on the information 
submitted through the portal. Information included in such 
reports must include: (1) administrative actions, pertinent 
information related to opioid overprescribing and other data 
determined appropriate by the Secretary in consultation with 
stakeholders; and (2) anonymized information submitted by plans 
without identifying the source of such information.
    Clarification: Nothing in this section should be construed 
as precluding or otherwise affecting referrals that may 
otherwise be made to law enforcement entities or to the 
Secretary.
    Contract Requirement to Communicate Plan Corrective Actions 
Against Opioid Over-Prescribers: Plans are required to submit 
to the Secretary, on or after January 1, 2021, information on 
the investigations and other actions taken by such plans 
related to providers who inappropriately prescribe a high 
volume of opioids. The Committee does not intend for this 
requirement to take effect if the Secretary has not yet 
established a functional portal for the plans to report 
corrective actions.
    Process: No later than January 1, 2021, the Secretary is 
required, in consultation with stakeholders, to establish a 
process under which plans will submit information to the 
Secretary. The Committee urges CMS to provide plans with 
sufficient guidance in a timely manner to smooth reporting and 
compliance with these provisions. The Secretary, in developing 
this process, is encouraged to address instances in which a 
plan may identify a prescriber who prescribes a high volume of 
opioids, investigates the issue, and determines that no action 
is necessary.
    Regulations: Through rulemaking, the Secretary is required 
to: (1) define ``high volume of opioids,'' a method for 
determining if a provider inappropriately prescribes high 
volumes of such drugs; (2) establish a process for reporting 
information related to high volume prescribers; and (3) 
identify the types of information required to be reported.
    Section 5: Expanding Eligibility for Medication Therapy 
Management Programs Under Part D.
    Beneficiaries defined as ``at-risk'' for opioid overuse are 
required to be included in the Medication Therapy Management 
(MTM) Programs, beginning January 1, 2021. The Secretary in 
implementing these provisions shall ensure that requirements 
under MTM do not duplicate those case management services 
provided under the ``lock-in'' program. Additionally, the 
Committee intends for the Secretary to establish adequate 
training protocols, and encourage the use of innovative 
technologies, that will ensure that pharmacists and other 
healthcare professionals engaging with the at-risk beneficiary 
population through MTM are adequately trained to address the 
needs of this population, particularly as it applies to drugs 
that when used in combination with an opioid may result in an 
adverse drug interaction as well as potentiator drugs.
    Section 6: Medicare Notification to Outlier Prescribers of 
Opioids.
    Outlier Prescriber Notification: Beginning no later than 
two years after the date of enactment and annually thereafter, 
the Secretary is required to notify Medicare Part D prescribers 
who are outlier prescribers of opioids.
    Identification of Outlier Prescribers of Opioids: The 
Secretary's analysis shall be based on an established threshold 
and the valid prescriber National Provider Identifiers on 
claims for covered Part D drugs provided under prescription 
drug plans or Medicare Advantage Prescription Drug Plans. The 
Committee intends for all Part D opioid prescribers to be 
subject to analysis, with exceptions established below.
    Establishment of Threshold: The Secretary, after 
consultation with stakeholders, shall establish a threshold, 
based on prescriber specialty and geographic area for 
identifying an outlier prescriber of opioids as compared to 
other prescribers of opioids within such specialty and area. 
The intent of the Committee is for the threshold to reflect a 
statistically valid method for identifying prescribers whose 
prescribing patterns vary significantly from other physicians 
in their specialty and geographic area, modeled after the 
Comparative Billing Reports CMS has previously developed for 
opioid prescribers in other parts of Medicare.
    Exclusions: The Secretary may exclude the following 
individuals and prescribers from the analysis: (1) individuals 
receiving hospice services, (2) individuals with a cancer 
diagnosis, and (3) prescribers who are subjects of an 
investigation by the Inspector General.
    Contents of Notification: Based on input from stakeholders, 
the Secretary is required to specify the resources and other 
information to be included in the notifications to prescribers.
    Frequency: Beginning five years after the date of 
enactment, the Secretary may change the frequency of the 
notifications based on stakeholder input.
    Expansion to Other Prescriptions: The Secretary may also 
expand notifications to concurrent prescriptions used in 
combination with opioids that are considered to have adverse 
side effects when used in such combination and potentiator 
drugs.

                             EFFECTIVE DATE

    Requiring Prescription Drug Plan Sponsors Under Medicare to 
Establish Drug Management Programs for At-Risk Beneficiaries: 
Effective beginning on or after January 1, 2021.
    Inclusion of Electronic Prescription Program: The Secretary 
is required to establish a standard, secure electronic prior 
authorization (ePA) system no later than January 1, 2021.
    Program Integrity Portal: No later than two years after the 
date of enactment, the Secretary is required to establish a 
secure Internet website portal (or other successor technology).
    Quarterly Reports: Beginning two years after the date of 
enactment, the Secretary is required to report to plans 
information on fraud, waste, and abuse schemes and trends in 
identifying suspicious activity based on the information 
submitted through the portal.
    Contract Requirement to Communicate Plan Corrective Actions 
Against Opioid Over-Prescribers: On or after January 1, 2021, 
plans are required to submit to the Secretary information on 
the investigations and other actions taken by such plans 
related to providers who prescribe a high volume of opioids. No 
later than January 1, 2021, the Secretary is required to 
establish a process under which plans will submit to the 
Secretary information.
    Expanding Eligibility for Medication Therapy Management 
Programs Under Part D: Effective January 1, 2021, beneficiaries 
defined as ``at-risk'' for opioid overuse are required to be 
eligible.
    Outlier Prescriber Notification: No later than two years 
after the date of enactment, the Secretary is required to 
annually notify Medicare Part D prescribers of their outlier 
status.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 5773, the PASS Act of 2018, on May 16, 
2018.
    The Chairman`s amendment in the nature of a substitute was 
adopted by a voice vote (with a quorum being present).
    The bill, H.R. 5773, was ordered favorably reported as 
amended by voice vote (with a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 5773, as 
reported. The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 6, 2018.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for the opioid-related 
legislation ordered to be reported on May 16, 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Tom Bradley.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

Opioid Legislation

    Summary: On May 16, 2018, the House Committee on Ways and 
Means ordered seven bills to be reported related to the 
nation's response to the opioid epidemic. Generally, the bills 
would:
           Expand Medicare coverage of treatment for 
        opioid use disorder;
           Give Medicare providers and health plans 
        additional tools to curtail inappropriate prescribing 
        and use of opioids;
           Require the completion of studies and 
        reports related to opioid use and misuse in Medicare; 
        and
           Require the United States Postal Service and 
        Customs and Border Protection (CBP) to reduce illegal 
        shipment of opioids across international borders.
    Because the bills are related, CBO is publishing a single 
comprehensive document that includes estimates for each piece 
of legislation.
    CBO estimates that enacting four of the bills would affect 
direct spending; therefore, pay-as-you-go procedures apply for 
those bills. None of the bills would affect revenues.
    CBO estimates that although enacting one bill of the seven 
included in this document (H.R. 5776) would increase net direct 
spending and on-budget deficits over the four consecutive 10-
year periods beginning in 2029, those effects would not exceed 
the threshold established by the Congress for long-term costs. 
CBO estimates that none of the remaining bills would increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    None of the bills contain intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA).
    Estimated cost to the Federal Government: The estimates in 
this document do not include the effects of interactions among 
the bills. If all seven bills were combined and enacted as one 
piece of legislation, the budgetary effects would be different 
from the sum of the estimates in this document, although CBO 
expects that those differences would be small. The effects of 
this legislation fall within functions 550 (health), 570 
(Medicare), and 750 (administration of justice).
    Basis of estimate: For this estimate, CBO assumes that all 
of the legislation will be enacted late in 2018 and that 
authorized and estimated amounts will be appropriated each 
year. Outlays for discretionary programs are estimated based on 
historical spending patterns for similar programs.

Uncertainty

    CBO aims to produce estimates that generally reflect the 
middle of a range of the most likely budgetary outcomes that 
would result if the legislation was enacted. Because data on 
the utilization of mental health and substance abuse treatment 
under Medicaid and Medicare is scarce, CBO cannot precisely 
predict how patients or providers would respond to some policy 
changes or what budgetary effects would result. In addition, 
several of the bills would give the Department of Health and 
Human Services (HHS) considerable latitude in designing and 
implementing policies. Budgetary effects could differ from 
those provided in CBO's analyses depending on those decisions.

Direct Spending

    Table 1 lists the four bills included in this estimate that 
would affect direct spending.
    H.R. 5676, the Stop Excessive Narcotics in our Retirement 
Communities Protection Act of 2018, would allow prescription 
drug plans to suspend payments to pharmacies while fraud 
investigations are pending. CBO expects that enacting the 
legislation would reduce payments by those plans to pharmacies 
and result in lower premiums for benefits under Medicare's Part 
D. CBO estimates that the reduction in premiums would lower 
federal spending for Part D by $9 million over the 2019-2028 
period.

                                                    TABLE 1.--ESTIMATED CHANGES IN MANDATORY SPENDING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         By fiscal year, in millions of dollars--
                                ------------------------------------------------------------------------------------------------------------------------
                                   2018     2019     2020     2021     2022     2023     2024     2025     2026     2027     2028   2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
H.R. 5676, Stop Excessive
 Narcotics in our Retirement
 Communities Protection Act of
 2018:
    Budget Authority...........        0        0       -1       -1       -1       -1       -1       -1       -1       -1       -1         -4        -9
    Outlays....................        0        0       -1       -1       -1       -1       -1       -1       -1       -1       -1         -4        -9
 
H.R. 5773, Preventing Addiction
 for Susceptible Seniors Act of
 2018:a
    Budget Authority...........        0        0        0       -6       -7       -7       -7       -8       -9       -9      -11        -20       -64
    Outlays....................        0        0        0       -6       -7       -7       -7       -8       -9       -9      -11        -20       -64
 
H.R. 5776, the Medicare and
 Opioid Safe Treatment Act of
 2018:a
    Budget Authority...........        0        8        0       20       20       25       30       30       35       35       40         73       243
    Outlays....................        0        2        4       22       20       25       30       30       35       35       40         73       243
 
H.R. 5788, Securing the
 International Mail Against
 Opioids Act of 2018:a
    Budget Authority...........        0        0        *        *        *        *        *        *        *        *        *          *         *
    Outlays....................        0        0        *        *        *        *        *        *        *        *        *          *         *
--------------------------------------------------------------------------------------------------------------------------------------------------------
1Annual amounts may not sum to totals because of rounding. * = between -$500,000 and $500,000.
aThis bill also would affect spending subject to appropriation.

    H.R. 5773, the Preventing Addiction for Susceptible Seniors 
Act of 2018, would require Part D prescription drug plans to 
provide drug management programs for Medicare beneficiaries who 
are at risk for prescription drug abuse. (Under current law, 
Part D plans are permitted but not required to establish such 
programs as of 2019.) Based on an analysis of the number of 
plans currently providing those programs, CBO estimates that 
enacting H.R. 5773 would lower federal spending by $64 million 
over the 2019-2028 period by reducing the number of 
prescriptions filled and Medicare's payments for controlled 
substances.
    Two provisions of H.R. 5773 would have no significant 
budgetary effect; they are described later in this document.
    H.R. 5776, the Medicare and Opioid Safe Treatment Act of 
2018, would appropriate $8 million in 2019, which would be 
available until expended, for Federally Qualified Health 
Centers and Rural Health Clinics to support training in the 
treatment of opioid use disorder. CBO expects that $8 million 
would be spent between 2019 and 2021.
    H.R. 5776 also would expand the availability of medication-
assisted treatment (MAT) for Medicare beneficiaries with opioid 
use disorder. The bill would allow treatment programs certified 
by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) to become Medicare-participating 
providers.\1\ H.R. 5776 also would direct the Secretary of HHS 
to create a new schedule of bundled payments for MAT through 
certified programs and grant the Secretary considerable 
discretion for defining bundles and establishing payment rates.
---------------------------------------------------------------------------
    \1\MAT combines behavioral therapy and pharmaceutical treatment for 
substance use disorders. Under current law, methadone (an opioid used 
to treat and manage dependence on other drugs, such as heroin) can be 
dispensed only by SAMHSA-certified treatment programs, which do not 
participate in Medicare. Other drugs used in MAT, including 
buprenorphine and naltrexone, can be dispensed more widely.
---------------------------------------------------------------------------
    CBO projects that, beginning in 2021, about 3,000 Medicare 
beneficiaries who would not be treated for opioid abuse under 
current law would newly enroll each year in treatment offered 
by SAMHSA-certified programs and that the annual cost per 
participant would range from about $6,000 to about $10,000, 
depending largely on the medications dispensed and the period 
for which beneficiaries adhered to the protocol. CBO's 
projection of the number of beneficiaries who would receive 
treatment takes into consideration the number of beneficiaries 
estimated to have opioid-use disorder, the number already 
receiving some form of treatment, and the availability of 
providers to treat those who newly enroll in MAT. To develop a 
per capita treatment cost, CBO analyzed rates for MAT paid by 
other payers, as well as Medicare spending for health care 
services typically used by people receiving MAT. CBO estimates 
that the new MAT benefit would increase direct spending by $235 
million over the 2019-2028 period.
    CBO estimates that enacting H.R. 5776 would increase net 
Medicare spending by $243 million over the 2019-2028 period. 
(If enacted, H.R. 5776 would also affect spending subject to 
appropriation; CBO has not completed an estimate of that 
amount.)
    H.R. 5788, the Securing the International Mail Against 
Opioids Act of 2018, would establish a new fee for certain 
items mailed to the United States from overseas, beginning 
January 1, 2020. Initially, the fee for most such items would 
be one dollar, but the amount could be adjusted annually 
thereafter. Using information provided by CBP, CBO estimates 
that about $100 million in new fees would be collected over the 
2020-2028 period. The collections would be divided equally 
between CBP and the Postal Service and spent by those agencies 
on activities related to the processing of inbound mail. CBO 
estimates that the net effect on federal spending in each year 
would be insignificant. (If enacted, H.R. 5788 would also 
affect spending subject to appropriation; those effects are 
described below.)

Spending Subject to Appropriation

    For this document, CBO has grouped bills with spending that 
would be subject to appropriation into three general 
categories:
           Bills with provisions that would have no 
        budgetary effect;
           Bills with provisions for which CBO has 
        estimated an authorization of appropriations (see Table 
        2); and
           Bills with provisions that would affect 
        spending subject to appropriation for which CBO has not 
        yet completed an estimate.
    No Budgetary Effect. CBO estimates that three of the bills 
have provisions that would not significantly affect direct 
spending, revenues, or spending subject to appropriation.
    H.R. 5773, the Preventing Addiction for Susceptible Seniors 
Act of 2018, would require health care professionals to submit 
prior authorization requests electronically, starting on 
January 1, 2021, for drugs covered under Medicare Part D. 
Taking into account that many prescribers already use 
electronic methods to submit such requests, CBO estimates that 
enacting that Section 3 of H.R. 5773 would not significantly 
affect direct spending for Part D.
    Section 5 of that bill would expand medication therapy 
management programs under Medicare Part D to include 
beneficiaries who are at risk for prescription drug abuse. 
Because relatively few beneficiaries would be affected by this 
provision, CBO estimates that its enactment would not 
significantly affect direct spending for Part D.
    Section 6 of that bill would require the Secretary of HHS 
on an annual basis to identify high prescribers of opioids and 
furnish them with information about proper prescribing methods. 
Because HHS already has the capacity to meet those 
requirements, CBO estimates that enacting that provision would 
not impose additional administrative costs on the agency.
    H.R. 5775, the Providing Reliable Options for Patients and 
Educational Resources Act of 2018, would require prescription 
drug plans that provide coverage under Medicare Part D to 
furnish information to beneficiaries about the risks of opioid 
use and the availability of alternative treatments for pain. 
The bill also would require Medicare Advantage plans and 
prescription drug plans to provide information regarding safe 
disposal of controlled substances in home health risk 
assessments and medication therapy management programs, 
respectively. In CBO's estimation, neither proposal would have 
a budgetary effect because those activities would not impose 
significant administrative costs on plans or federal agencies.
    In addition, H.R. 5775 would restrict the use of certain 
pain-related questions on the Hospital Consumer Assessment of 
Healthcare Providers and Systems (HCAHPS) survey, which is 
administered by the Centers for Medicare & Medicaid Services 
(CMS). The survey is one measure used in CMS's Hospital Value-
Based Purchasing (VBP) Program, which adjusts payments to acute 
care hospitals on the basis of the quality of care they provide 
to Medicare beneficiaries. Because the VBP program is funded by 
reducing base payments to all hospitals, CBO estimates that 
changing the HCAHPS survey would not affect the total amount 
paid by Medicare.
    H.R. 5776, the Medicare and Opioid Safe Treatment Act of 
2018, in section 3, would require CMS, beginning on January 1, 
2020, to review and possibly modify payments made through 
Medicare's Hospital Outpatient Prospective Payment System for 
certain opioid and nonopioid pain management treatments and 
technologies. CMS could revise payments if the Secretary of HHS 
determined that there was a financial incentive to use opioids 
in place of nonopioid medications. The budget neutrality 
requirement under current law would apply to such revisions, 
and the rest of the payment rates within the system would be 
subject to offsetting adjustments. Because the changes would be 
made in a budget-neutral manner, CBO estimates that this 
provision would have no budgetary effect.
    Section 6 of H.R. 5776 would explicitly authorize the 
Center for Medicare and Medicaid Innovation (CMMI) to test 
approaches for expanding beneficiaries' awareness of 
psychological services and to help those beneficiaries curtail 
use of hospital-based mental health or behavioral health 
services. Because CMMI already has that authority, CBO 
estimates that enacting the legislation would not affect 
federal spending.
    Estimated Authorizations. Table 2 shows CBO's estimates of 
the authorization of appropriations for provisions in four 
bills. For those estimates, CBO assumes that appropriated funds 
would be available to implement those provisions.
    H.R. 5723, the Expanding Oversight of Opioid Prescribing 
and Payment Act of 2018, would require the Medicare Payment 
Advisory Commission to report to the Congress on payments for 
pain treatment, incentives for prescribing opioids in inpatient 
and outpatient settings, and documented tracking of opioid use 
from Medicare claims data. CBO estimates that producing such a 
report would cost less than $500,000 over the 2019-2023 period.

          TABLE 2.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
                                                             By fiscal year, in millions of dollars--
                                                ----------------------------------------------------------------
                                                   2018     2019     2020     2021     2022     2023   2019-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
H.R. 5723, Expanding Oversight of Opioid
 Prescribing and Payment Act of 2018:
    Estimated Authorization Level..............        0        *        0        0        0        0         *
    Estimated Outlays..........................        0        *        0        0        0        0         *
H.R. 5773, Preventing Addiction for Susceptible
 Seniors Act of 2018:a
    Estimated Authorization Level..............        0        2        2        2        2        2         9
    Estimated Outlays..........................        0        2        2        2        2        2         9
H.R. 5776, Medicare and Opioid Safe Treatment
 Act of 2018:a
    Estimated Authorization Level..............        0        1        0        0        0        0         1
    Estimated Outlays..........................        0        1        0        0        0        0         1
H.R. 5788, Securing the International Mail
 Against Opioids Act of 2018:a
    Estimated Authorization Level..............        0      100        0        0        0        0       100
    Estimated Outlays..........................        0       40       40       20        0        0       100
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between zero and $500,000.
aThis bill also would affect mandatory spending.

    H.R. 5773, the Preventing Addiction for Susceptible Seniors 
Act of 2018, would require the Secretary of HHS to establish a 
secure Internet portal to allow HHS, Medicare Advantage plans, 
and Medicare Part D plans to exchange information about fraud, 
waste, and abuse among providers and suppliers no later than 
two years after enactment. H.R. 5773 also would require 
organizations with Medicare Advantage contracts to submit 
information on investigations related to providers suspected of 
prescribing large volumes of opioids through a process 
established by the Secretary no later than January 2021. Based 
on historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5773 would cost approximately 
$9 million over the 2019-2023 period.
    H.R. 5776, the Medicare and Opioid Safe Treatment Act of 
2018, would direct the Secretary of HHS to report to the 
Congress on the availability of supplemental benefits to pay 
for treatment or prevention of substance abuse among enrollees 
in Medicare Advantage plans. The Secretary also would report on 
coverage of and payment for pain treatment and substance use 
disorders under Medicare. CBO estimates that producing those 
reports would cost $1 million over five years.
    H.R. 5788, the Securing the International Mail Against 
Opioids Act of 2018, would direct the Postal Service, CBP, and 
other federal agencies to collaborate to develop technology to 
detect opioids and other drugs that enter the United States in 
the mail. Using information provided by CBP, CBO estimates that 
it would cost roughly $100 million over the 2019-2021 period to 
deploy drug detection systems at international mail facilities.
    Other Authorizations. CBO has determined that provisions in 
two bills--H.R. 5774, Combating Opioid Abuse for Care in 
Hospitals Act of 2018; and H.R. 5776, the Medicare and Safe 
Opioid Treatment Act of 2018--would increase authorization 
levels, but has not completed estimates of amounts. Any 
spending that would result from those authorizations would be 
subject to future appropriation action.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. Four of the bills discussed in this document contain 
direct spending and are subject to pay-as-you-go procedures. 
Details about the amount of direct spending in those bills can 
be found in Table 1.
    Increase in long-term direct spending and deficits: CBO 
estimates that although enacting H.R. 5776, the Medicare and 
Opioid Safe Treatment Act of 2018, would increase net direct 
spending and on-budget deficits over the four consecutive 10-
year periods beginning in 2029, those effects would not exceed 
the threshold established by the Congress for long-term costs 
($2.5 billion for net direct spending and $5 billion for on-
budget deficits). CBO estimates that none of the remaining 
bills would increase net direct spending or on-budget deficits 
in any of the four consecutive 10-year periods beginning in 
2029.
    Mandates: None of the bills contains intergovernmental or 
private-sector mandates as defined in UMRA.
    Previous CBO estimate: On June 6, 2018, CBO issued an 
estimate for 59 opioid-related bills ordered reported by the 
House Committee on Energy and Commerce on May 9 and May 17, 
2018. Several of those bills contain provisions that are 
identical or similar to those in the legislation ordered 
reported by the Committee on Ways and Means, and for those 
provisions, CBO's estimates are the same.
    In particular, several sections in H.R. 5773, the 
Preventing Addiction for Susceptible Seniors Act of 2018, 
contain provisions that are identical or similar to those in 
five bills listed in the other estimate:
           Section 2, which would require prescription 
        drug plans to implement drug management programs, is 
        identical to a provision in H.R. 5675.
           Section 3, regarding electronic prior 
        authorization for prescriptions under Medicare's Part 
        D, is similar to a provision in H.R. 4841.
           Section 4, which would mandate the creation 
        of a new Internet portal to allow various stakeholders 
        to exchange information, is identical to a provision in 
        H.R. 5715.
           Section 5, which would expand medication 
        therapy management, is the same as a provision in H.R. 
        5684.
           Section 6, regarding prescriber 
        notification, is identical to H.R. 5716.
    In addition, in this estimate, a provision related to 
Medicare beneficiary education in section 2 of H.R. 5775, the 
Providing Reliable Options for Patients and Educational 
Resources Act of 2018, is the same as a provision in H.R. 5686, 
the Medicare Clear Health Options in Care for Enrollees Act of 
2018, in CBO's estimate for the Committee on Energy and 
Commerce.
    Estimate prepared by: Federal costs, Medicare: Philippa 
Haven, Lori Housman, Jamease Kowalczyk, Lara Robillard, Sarah 
Sajewski, Colin Yee, and Rebecca Yip; U.S. Postal Service and 
Customs and Border Protection: Mark Grabowicz; Mandates: Andrew 
Laughlin; Fact Checking: Zachary Byrum and Kate Kelly.
    Estimate reviewed by: Tom Bradley, Chief, Health Systems 
and Medicare Cost Estimates Unit; Kim P. Cawley, Chief, Natural 
Resources Cost Estimates Unit; Susan Willie, Chief, Mandates 
Unit; Leo Lex, Deputy Assistant Director for Budget Analysis; 
Theresa A. Gullo, Assistant Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee made findings and 
recommendations that are reflected in this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program; 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139; or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

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

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *



TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *



Part C--Medicare+Choice Program

           *       *       *       *       *       *       *



              contracts with medicare+choice organizations

  Sec. 1857. (a) In General.--The Secretary shall not permit 
the election under section 1851 of a Medicare+Choice plan 
offered by a Medicare+Choice organization under this part, and 
no payment shall be made under section 1853 to an organization, 
unless the Secretary has entered into a contract under this 
section with the organization with respect to the offering of 
such plan. Such a contract with an organization may cover more 
than 1 Medicare+Choice plan. Such contract shall provide that 
the organization agrees to comply with the applicable 
requirements and standards of this part and the terms and 
conditions of payment as provided for in this part.
  (b) Minimum Enrollment Requirements.--
          (1) In general.--Subject to paragraph (2), the 
        Secretary may not enter into a contract under this 
        section with a Medicare+Choice organization unless the 
        organization has--
                  (A) at least 5,000 individuals (or 1,500 
                individuals in the case of an organization that 
                is a provider-sponsored organization) who are 
                receiving health benefits through the 
                organization, or
                  (B) at least 1,500 individuals (or 500 
                individuals in the case of an organization that 
                is a provider-sponsored organization) who are 
                receiving health benefits through the 
                organization if the organization primarily 
                serves individuals residing outside of 
                urbanized areas.
          (2) Application to msa plans.--In applying paragraph 
        (1) in the case of a Medicare+Choice organization that 
        is offering an MSA plan, paragraph (1) shall be applied 
        by substituting covered lives for individuals.
          (3) Allowing transition.--The Secretary may waive the 
        requirement of paragraph (1) during the first 3 
        contract years with respect to an organization.
  (c) Contract Period and Effectiveness.--
          (1) Period.--Each contract under this section shall 
        be for a term of at least 1 year, as determined by the 
        Secretary, and may be made automatically renewable from 
        term to term in the absence of notice by either party 
        of intention to terminate at the end of the current 
        term.
          (2) Termination authority.--In accordance with 
        procedures established under subsection (h), the 
        Secretary may at any time terminate any such contract 
        if the Secretary determines that the organization--
                  (A) has failed substantially to carry out the 
                contract;
                  (B) is carrying out the contract in a manner 
                inconsistent with the efficient and effective 
                administration of this part; or
                  (C) no longer substantially meets the 
                applicable conditions of this part.
          (3) Effective date of contracts.--The effective date 
        of any contract executed pursuant to this section shall 
        be specified in the contract, except that in no case 
        shall a contract under this section which provides for 
        coverage under an MSA plan be effective before January 
        1999 with respect to such coverage.
          (4) Previous terminations.--
                  (A) In general.--The Secretary may not enter 
                into a contract with a Medicare+Choice 
                organization if a previous contract with that 
                organization under this section was terminated 
                at the request of the organization within the 
                preceding 2-year period, except as provided in 
                subparagraph (B) and except in such other 
                circumstances which warrant special 
                consideration, as determined by the Secretary.
                  (B) Earlier re-entry permitted where change 
                in payment policy.--Subparagraph (A) shall not 
                apply with respect to the offering by a 
                Medicare+Choice organization of a 
                Medicare+Choice plan in a Medicare+Choice 
                payment area if during the 6-month period 
                beginning on the date the organization notified 
                the Secretary of the intention to terminate the 
                most recent previous contract, there was a 
                legislative change enacted (or a regulatory 
                change adopted) that has the effect of 
                increasing payment amounts under section 1853 
                for that Medicare+Choice payment area.
          (5) Contracting authority.--The authority vested in 
        the Secretary by this part may be performed without 
        regard to such provisions of law or regulations 
        relating to the making, performance, amendment, or 
        modification of contracts of the United States as the 
        Secretary may determine to be inconsistent with the 
        furtherance of the purpose of this title.
  (d) Protections Against Fraud and Beneficiary Protections.--
          (1) Periodic auditing.--The Secretary shall provide 
        for the annual auditing of the financial records 
        (including data relating to medicare utilization and 
        costs, including allowable costs under section 1858(c)) 
        of at least one-third of the Medicare+Choice 
        organizations offering Medicare+Choice plans under this 
        part. The Comptroller General shall monitor auditing 
        activities conducted under this subsection.
          (2) Inspection and audit.--Each contract under this 
        section shall provide that the Secretary, or any person 
        or organization designated by the Secretary--
                  (A) shall have the right to timely inspect or 
                otherwise evaluate (i) the quality, 
                appropriateness, and timeliness of services 
                performed under the contract, and (ii) the 
                facilities of the organization when there is 
                reasonable evidence of some need for such 
                inspection, and
                  (B) shall have the right to timely audit and 
                inspect any books and records of the 
                Medicare+Choice organization that pertain (i) 
                to the ability of the organization to bear the 
                risk of potential financial losses, or (ii) to 
                services performed or determinations of amounts 
                payable under the contract.
          (3) Enrollee notice at time of termination.--Each 
        contract under this section shall require the 
        organization to provide (and pay for) written notice in 
        advance of the contract's termination, as well as a 
        description of alternatives for obtaining benefits 
        under this title, to each individual enrolled with the 
        organization under this part.
          (4) Disclosure.--
                  (A) In general.--Each Medicare+Choice 
                organization shall, in accordance with 
                regulations of the Secretary, report to the 
                Secretary financial information which shall 
                include the following:
                          (i) Such information as the Secretary 
                        may require demonstrating that the 
                        organization has a fiscally sound 
                        operation.
                          (ii) A copy of the report, if any, 
                        filed with the Secretary containing the 
                        information required to be reported 
                        under section 1124 by disclosing 
                        entities.
                          (iii) A description of transactions, 
                        as specified by the Secretary, between 
                        the organization and a party in 
                        interest. Such transactions shall 
                        include--
                                  (I) any sale or exchange, or 
                                leasing of any property between 
                                the organization and a party in 
                                interest;
                                  (II) any furnishing for 
                                consideration of goods, 
                                services (including management 
                                services), or facilities 
                                between the organization and a 
                                party in interest, but not 
                                including salaries paid to 
                                employees for services provided 
                                in the normal course of their 
                                employment and health services 
                                provided to members by 
                                hospitals and other providers 
                                and by staff, medical group (or 
                                groups), individual practice 
                                association (or associations), 
                                or any combination thereof; and
                                  (III) any lending of money or 
                                other extension of credit 
                                between an organization and a 
                                party in interest.
                The Secretary may require that information 
                reported respecting an organization which 
                controls, is controlled by, or is under common 
                control with, another entity be in the form of 
                a consolidated financial statement for the 
                organization and such entity.
                  (B) Party in interest defined.--For the 
                purposes of this paragraph, the term ``party in 
                interest'' means--
                          (i) any director, officer, partner, 
                        or employee responsible for management 
                        or administration of a Medicare+Choice 
                        organization, any person who is 
                        directly or indirectly the beneficial 
                        owner of more than 5 percent of the 
                        equity of the organization, any person 
                        who is the beneficial owner of a 
                        mortgage, deed of trust, note, or other 
                        interest secured by, and valuing more 
                        than 5 percent of the organization, 
                        and, in the case of a Medicare+Choice 
                        organization organized as a nonprofit 
                        corporation, an incorporator or member 
                        of such corporation under applicable 
                        State corporation law;
                          (ii) any entity in which a person 
                        described in clause (i)--
                                  (I) is an officer or 
                                director;
                                  (II) is a partner (if such 
                                entity is organized as a 
                                partnership);
                                  (III) has directly or 
                                indirectly a beneficial 
                                interest of more than 5 percent 
                                of the equity; or
                                  (IV) has a mortgage, deed of 
                                trust, note, or other interest 
                                valuing more than 5 percent of 
                                the assets of such entity;
                          (iii) any person directly or 
                        indirectly controlling, controlled by, 
                        or under common control with an 
                        organization; and
                          (iv) any spouse, child, or parent of 
                        an individual described in clause (i).
                  (C) Access to information.--Each 
                Medicare+Choice organization shall make the 
                information reported pursuant to subparagraph 
                (A) available to its enrollees upon reasonable 
                request.
          (5) Loan information.--The contract shall require the 
        organization to notify the Secretary of loans and other 
        special financial arrangements which are made between 
        the organization and subcontractors, affiliates, and 
        related parties.
          (6) Review to ensure compliance with care management 
        requirements for specialized medicare advantage plans 
        for special needs individuals.--In conjunction with the 
        periodic audit of a specialized Medicare Advantage plan 
        for special needs individuals under paragraph (1), the 
        Secretary shall conduct a review to ensure that such 
        organization offering the plan meets the requirements 
        described in section 1859(f)(5).
  (e) Additional Contract Terms.--
          (1) In general.--The contract shall contain such 
        other terms and conditions not inconsistent with this 
        part (including requiring the organization to provide 
        the Secretary with such information) as the Secretary 
        may find necessary and appropriate.
          (2) Cost-sharing in enrollment-related costs.--
                  (A) In general.--A Medicare+Choice 
                organization and a PDP sponsor under part D 
                shall pay the fee established by the Secretary 
                under subparagraph (B).
                  (B) Authorization.--The Secretary is 
                authorized to charge a fee to each 
                Medicare+Choice organization with a contract 
                under this part and each PDP sponsor with a 
                contract under part D that is equal to the 
                organization' or sponsor's pro rata share (as 
                determined by the Secretary) of the aggregate 
                amount of fees which the Secretary is directed 
                to collect in a fiscal year. Any amounts 
                collected shall be available without further 
                appropriation to the Secretary for the purpose 
                of carrying out section 1851 (relating to 
                enrollment and dissemination of information), 
                section 1860D-1(c), and section 4360 of the 
                Omnibus Budget Reconciliation Act of 1990 
                (relating to the health insurance counseling 
                and assistance program).
                  (C) Authorization of appropriations.--There 
                are authorized to be appropriated for the 
                purposes described in subparagraph (B) for each 
                fiscal year beginning with fiscal year 2001 and 
                ending with fiscal year 2005 an amount equal to 
                $100,000,000, and for each fiscal year 
                beginning with fiscal year 2006 an amount equal 
                to $200,000,000, reduced by the amount of fees 
                authorized to be collected under this paragraph 
                and section 1860D-12(b)(3)(D) for the fiscal 
                year.
                  (D) Limitation.--In any fiscal year the fees 
                collected by the Secretary under subparagraph 
                (B) shall not exceed the lesser of--
                          (i) the estimated costs to be 
                        incurred by the Secretary in the fiscal 
                        year in carrying out the activities 
                        described in section 1851 and section 
                        1860D-1(c) and section 4360 of the 
                        Omnibus Budget Reconciliation Act of 
                        1990; or
                          (ii)(I) $200,000,000 in fiscal year 
                        1998;
                          (II) $150,000,000 in fiscal year 
                        1999;
                          (III) $100,000,000 in fiscal year 
                        2000;
                          (IV) the Medicare+Choice portion (as 
                        defined in subparagraph (E)) of 
                        $100,000,000 in fiscal year 2001 and 
                        each succeeding fiscal year before 
                        fiscal year 2006; and
                          (V) the applicable portion (as 
                        defined in subparagraph (F)) of 
                        $200,000,000 in fiscal year 2006 and 
                        each succeeding fiscal year.
                  (E) Medicare+choice portion defined.--In this 
                paragraph, the term ``Medicare+Choice portion'' 
                means, for a fiscal year, the ratio, as 
                estimated by the Secretary, of--
                          (i) the average number of individuals 
                        enrolled in Medicare+Choice plans 
                        during the fiscal year, to
                          (ii) the average number of 
                        individuals entitled to benefits under 
                        part A, and enrolled under part B, 
                        during the fiscal year.
                  (F) Applicable portion defined.--In this 
                paragraph, the term ``applicable portion'' 
                means, for a fiscal year--
                          (i) with respect to MA organizations, 
                        the Secretary's estimate of the total 
                        proportion of expenditures under this 
                        title that are attributable to 
                        expenditures made under this part 
                        (including payments under part D that 
                        are made to such organizations); or
                          (ii) with respect to PDP sponsors, 
                        the Secretary's estimate of the total 
                        proportion of expenditures under this 
                        title that are attributable to 
                        expenditures made to such sponsors 
                        under part D.
          (3) Agreements with federally qualified health 
        centers.--
                  (A) Payment levels and amounts.--A contract 
                under this section with an MA organization 
                shall require the organization to provide, in 
                any written agreement described in section 
                1853(a)(4) between the organization and a 
                federally qualified health center, for a level 
                and amount of payment to the federally 
                qualified health center for services provided 
                by such health center that is not less than the 
                level and amount of payment that the plan would 
                make for such services if the services had been 
                furnished by a entity providing similar 
                services that was not a federally qualified 
                health center.
                  (B) Cost-sharing.--Under the written 
                agreement referred to in subparagraph (A), a 
                federally qualified health center must accept 
                the payment amount referred to in such 
                subparagraph plus the Federal payment provided 
                for in section 1833(a)(3)(B) as payment in full 
                for services covered by the agreement, except 
                that such a health center may collect any 
                amount of cost-sharing permitted under the 
                contract under this section, so long as the 
                amounts of any deductible, coinsurance, or 
                copayment comply with the requirements under 
                section 1854(e).
          (4) Requirement for minimum medical loss ratio.--If 
        the Secretary determines for a contract year (beginning 
        with 2014) that an MA plan has failed to have a medical 
        loss ratio of at least .85--
                  (A) the MA plan shall remit to the Secretary 
                an amount equal to the product of--
                          (i) the total revenue of the MA plan 
                        under this part for the contract year; 
                        and
                          (ii) the difference between .85 and 
                        the medical loss ratio;
                  (B) for 3 consecutive contract years, the 
                Secretary shall not permit the enrollment of 
                new enrollees under the plan for coverage 
                during the second succeeding contract year; and
                  (C) the Secretary shall terminate the plan 
                contract if the plan fails to have such a 
                medical loss ratio for 5 consecutive contract 
                years.
          (5) Communicating plan corrective actions against 
        opioids over-prescribers.--
                  (A) In general.--Beginning with plan years 
                beginning on or after January 1, 2021, a 
                contract under this section with an MA 
                organization shall require the organization to 
                submit to the Secretary, through the process 
                established under subparagraph (B), information 
                on the investigations and other actions taken 
                by such plans related to providers of services 
                who prescribe a high volume of opioids.
                  (B) Process.--Not later than January 1, 2021, 
                the Secretary shall, in consultation with 
                stakeholders, establish a process under which 
                MA plans and prescription drug plans shall 
                submit to the Secretary information described 
                in subparagraph (A).
                  (C) Regulations.--For purposes of this 
                paragraph, including as applied under section 
                1860D-12(b)(3)(D), the Secretary shall, 
                pursuant to rulemaking--
                          (i) specify a definition for the term 
                        ``high volume of opioids'' and a method 
                        for determining if a provider of 
                        services prescribes such a high volume; 
                        and
                          (ii) establish the process described 
                        in subparagraph (B) and the types of 
                        information that shall be submitted 
                        through such process.
  (f) Prompt Payment by Medicare+Choice Organization.--
          (1) Requirement.--A contract under this part shall 
        require a Medicare+Choice organization to provide 
        prompt payment (consistent with the provisions of 
        sections 1816(c)(2) and 1842(c)(2)) of claims submitted 
        for services and supplies furnished to enrollees 
        pursuant to the contract, if the services or supplies 
        are not furnished under a contract between the 
        organization and the provider or supplier (or in the 
        case of a Medicare+Choice private fee-for-service plan, 
        if a claim is submitted to such organization by an 
        enrollee).
          (2) Secretary's option to bypass noncomplying 
        organization.--In the case of a Medicare+Choice 
        eligible organization which the Secretary determines, 
        after notice and opportunity for a hearing, has failed 
        to make payments of amounts in compliance with 
        paragraph (1), the Secretary may provide for direct 
        payment of the amounts owed to providers and suppliers 
        (or, in the case of a Medicare+Choice private fee-for-
        service plan, amounts owed to the enrollees) for 
        covered services and supplies furnished to individuals 
        enrolled under this part under the contract. If the 
        Secretary provides for the direct payments, the 
        Secretary shall provide for an appropriate reduction in 
        the amount of payments otherwise made to the 
        organization under this part to reflect the amount of 
        the Secretary's payments (and the Secretary's costs in 
        making the payments).
          (3) Incorporation of certain prescription drug plan 
        contract requirements.--The following provisions shall 
        apply to contracts with a Medicare Advantage 
        organization offering an MA-PD plan in the same manner 
        as they apply to contracts with a PDP sponsor offering 
        a prescription drug plan under part D:
                  (A) Prompt payment.--Section 1860D-12(b)(4).
                  (B) Submission of claims by pharmacies 
                located in or contracting with long-term care 
                facilities.--Section 1860D-12(b)(5).
                  (C) Regular update of prescription drug 
                pricing standard.--Section 1860D-12(b)(6).
  (g) Intermediate Sanctions.--
          (1) In general.--If the Secretary determines that a 
        Medicare+Choice organization with a contract under this 
        section--
                  (A) fails substantially to provide medically 
                necessary items and services that are required 
                (under law or under the contract) to be 
                provided to an individual covered under the 
                contract, if the failure has adversely affected 
                (or has substantial likelihood of adversely 
                affecting) the individual;
                  (B) imposes premiums on individuals enrolled 
                under this part in excess of the amount of the 
                Medicare+Choice monthly basic and supplemental 
                beneficiary premiums permitted under section 
                1854;
                  (C) acts to expel or to refuse to re-enroll 
                an individual in violation of the provisions of 
                this part;
                  (D) engages in any practice that would 
                reasonably be expected to have the effect of 
                denying or discouraging enrollment (except as 
                permitted by this part) by eligible individuals 
                with the organization whose medical condition 
                or history indicates a need for substantial 
                future medical services;
                  (E) misrepresents or falsifies information 
                that is furnished--
                          (i) to the Secretary under this part, 
                        or
                          (ii) to an individual or to any other 
                        entity under this part;
                  (F) fails to comply with the applicable 
                requirements of section 1852(j)(3) or 
                1852(k)(2)(A)(ii);
                  (G) employs or contracts with any individual 
                or entity that is excluded from participation 
                under this title under section 1128 or 1128A 
                for the provision of health care, utilization 
                review, medical social work, or administrative 
                services or employs or contracts with any 
                entity for the provision (directly or 
                indirectly) through such an excluded individual 
                or entity of such services;
                  (H) except as provided under subparagraph (C) 
                or (D) of section 1860D-1(b)(1), enrolls an 
                individual in any plan under this part without 
                the prior consent of the individual or the 
                designee of the individual;
                  (I) transfers an individual enrolled under 
                this part from one plan to another without the 
                prior consent of the individual or the designee 
                of the individual or solely for the purpose of 
                earning a commission;
                  (J) fails to comply with marketing 
                restrictions described in subsections (h) and 
                (j) of section 1851 or applicable implementing 
                regulations or guidance; or
                  (K) employs or contracts with any individual 
                or entity who engages in the conduct described 
                in subparagraphs (A) through (J) of this 
                paragraph;
        the Secretary may provide, in addition to any other 
        remedies authorized by law, for any of the remedies 
        described in paragraph (2). The Secretary may provide, 
        in addition to any other remedies authorized by law, 
        for any of the remedies described in paragraph (2), if 
        the Secretary determines that any employee or agent of 
        such organization, or any provider or supplier who 
        contracts with such organization, has engaged in any 
        conduct described in subparagraphs (A) through (K) of 
        this paragraph.
          (2) Remedies.--The remedies described in this 
        paragraph are--
                  (A) civil money penalties of not more than 
                $25,000 for each determination under paragraph 
                (1) or, with respect to a determination under 
                subparagraph (D) or (E)(i) of such paragraph, 
                of not more than $100,000 for each such 
                determination, except with respect to a 
                determination under subparagraph (E), an 
                assessment of not more than the amount claimed 
                by such plan or plan sponsor based upon the 
                misrepresentation or falsified information 
                involved, plus, with respect to a determination 
                under paragraph (1)(B), double the excess 
                amount charged in violation of such paragraph 
                (and the excess amount charged shall be 
                deducted from the penalty and returned to the 
                individual concerned), and plus, with respect 
                to a determination under paragraph (1)(D), 
                $15,000 for each individual not enrolled as a 
                result of the practice involved,
                  (B) suspension of enrollment of individuals 
                under this part after the date the Secretary 
                notifies the organization of a determination 
                under paragraph (1) and until the Secretary is 
                satisfied that the basis for such determination 
                has been corrected and is not likely to recur, 
                or
                  (C) suspension of payment to the organization 
                under this part for individuals enrolled after 
                the date the Secretary notifies the 
                organization of a determination under paragraph 
                (1) and until the Secretary is satisfied that 
                the basis for such determination has been 
                corrected and is not likely to recur.
          (3) Other intermediate sanctions.--In the case of a 
        Medicare+Choice organization for which the Secretary 
        makes a determination under subsection (c)(2) the basis 
        of which is not described in paragraph (1), the 
        Secretary may apply the following intermediate 
        sanctions:
                  (A) Civil money penalties of not more than 
                $25,000 for each determination under subsection 
                (c)(2) if the deficiency that is the basis of 
                the determination has directly adversely 
                affected (or has the substantial likelihood of 
                adversely affecting) an individual covered 
                under the organization's contract.
                  (B) Civil money penalties of not more than 
                $10,000 for each week beginning after the 
                initiation of civil money penalty procedures by 
                the Secretary during which the deficiency that 
                is the basis of a determination under 
                subsection (c)(2) exists.
                  (C) Suspension of enrollment of individuals 
                under this part after the date the Secretary 
                notifies the organization of a determination 
                under subsection (c)(2) and until the Secretary 
                is satisfied that the deficiency that is the 
                basis for the determination has been corrected 
                and is not likely to recur.
                  (D) Civil monetary penalties of not more than 
                $100,000, or such higher amount as the 
                Secretary may establish by regulation, where 
                the finding under subsection (c)(2)(A) is based 
                on the organization's termination of its 
                contract under this section other than at a 
                time and in a manner provided for under 
                subsection (a).
          (4) Civil money penalties.--The provisions of section 
        1128A (other than subsections (a) and (b)) shall apply 
        to a civil money penalty under paragraph (2) or (3) in 
        the same manner as they apply to a civil money penalty 
        or proceeding under section 1128A(a).
  (h) Procedures for Termination.--
          (1) In general.--The Secretary may terminate a 
        contract with a Medicare+Choice organization under this 
        section in accordance with formal investigation and 
        compliance procedures established by the Secretary 
        under which--
                  (A) the Secretary provides the organization 
                with the reasonable opportunity to develop and 
                implement a corrective action plan to correct 
                the deficiencies that were the basis of the 
                Secretary's determination under subsection 
                (c)(2); and
                  (B) the Secretary provides the organization 
                with reasonable notice and opportunity for 
                hearing (including the right to appeal an 
                initial decision) before terminating the 
                contract.
          (2) Exception for imminent and serious risk to 
        health.--Paragraph (1) shall not apply if the Secretary 
        determines that a delay in termination, resulting from 
        compliance with the procedures specified in such 
        paragraph prior to termination, would pose an imminent 
        and serious risk to the health of individuals enrolled 
        under this part with the organization.
          (3) Delay in contract termination authority for plans 
        failing to achieve minimum quality rating.--During the 
        period beginning on the date of the enactment of this 
        paragraph and through the end of plan year 2018, the 
        Secretary may not terminate a contract under this 
        section with respect to the offering of an MA plan by a 
        Medicare Advantage organization solely because the MA 
        plan has failed to achieve a minimum quality rating 
        under the 5-star rating system under section 
        1853(o)(4).
  (i) Medicare+Choice Program Compatibility With Employer or 
Union Group Health Plans.--
          (1) Contracts with ma organizations.--To facilitate 
        the offering of Medicare+Choice plans under contracts 
        between Medicare+Choice organizations and employers, 
        labor organizations, or the trustees of a fund 
        established by one or more employers or labor 
        organizations (or combination thereof) to furnish 
        benefits to the entity's employees, former employees 
        (or combination thereof) or members or former members 
        (or combination thereof) of the labor organizations, 
        the Secretary may waive or modify requirements that 
        hinder the design of, the offering of, or the 
        enrollment in such Medicare+Choice plans.
          (2) Employer sponsored ma plans.--To facilitate the 
        offering of MA plans by employers, labor organizations, 
        or the trustees of a fund established by one or more 
        employers or labor organizations (or combination 
        thereof) to furnish benefits to the entity's employees, 
        former employees (or combination thereof) or members or 
        former members (or combination thereof) of the labor 
        organizations, the Secretary may waive or modify 
        requirements that hinder the design of, the offering 
        of, or the enrollment in such MA plans. Notwithstanding 
        section 1851(g), an MA plan described in the previous 
        sentence may restrict the enrollment of individuals 
        under this part to individuals who are beneficiaries 
        and participants in such plan.

           *       *       *       *       *       *       *


                 definitions; miscellaneous provisions

  Sec. 1859. (a) Definitions Relating to Medicare+Choice 
Organizations.--In this part--
          (1) Medicare+choice organization.--The term 
        ``Medicare+Choice organization'' means a public or 
        private entity that is certified under section 1856 as 
        meeting the requirements and standards of this part for 
        such an organization.
          (2) Provider-sponsored organization.--The term 
        ``provider-sponsored organization'' is defined in 
        section 1855(d)(1).
  (b) Definitions Relating to Medicare+Choice Plans.--
          (1) Medicare+choice plan.--The term ``Medicare+Choice 
        plan'' means health benefits coverage offered under a 
        policy, contract, or plan by a Medicare+Choice 
        organization pursuant to and in accordance with a 
        contract under section 1857.
          (2) Medicare+Choice private fee-for-service plan.--
        The term ``Medicare+Choice private fee-for-service 
        plan'' means a Medicare+Choice plan that--
                  (A) reimburses hospitals, physicians, and 
                other providers at a rate determined by the 
                plan on a fee-for-service basis without placing 
                the provider at financial risk;
                  (B) does not vary such rates for such a 
                provider based on utilization relating to such 
                provider; and
                  (C) does not restrict the selection of 
                providers among those who are lawfully 
                authorized to provide the covered services and 
                agree to accept the terms and conditions of 
                payment established by the plan.
        Nothing in subparagraph (B) shall be construed to 
        preclude a plan from varying rates for such a provider 
        based on the specialty of the provider, the location of 
        the provider, or other factors related to such provider 
        that are not related to utilization, or to preclude a 
        plan from increasing rates for such a provider based on 
        increased utilization of specified preventive or 
        screening services.
          (3) MSA plan.--
                  (A) In general.--The term ``MSA plan'' means 
                a Medicare+Choice plan that--
                          (i) provides reimbursement for at 
                        least the items and services described 
                        in section 1852(a)(1) in a year but 
                        only after the enrollee incurs 
                        countable expenses (as specified under 
                        the plan) equal to the amount of an 
                        annual deductible (described in 
                        subparagraph (B));
                          (ii) counts as such expenses (for 
                        purposes of such deductible) at least 
                        all amounts that would have been 
                        payable under parts A and B, and that 
                        would have been payable by the enrollee 
                        as deductibles, coinsurance, or 
                        copayments, if the enrollee had elected 
                        to receive benefits through the 
                        provisions of such parts; and
                          (iii) provides, after such deductible 
                        is met for a year and for all 
                        subsequent expenses for items and 
                        services referred to in clause (i) in 
                        the year, for a level of reimbursement 
                        that is not less than--
                                  (I) 100 percent of such 
                                expenses, or
                                  (II) 100 percent of the 
                                amounts that would have been 
                                paid (without regard to any 
                                deductibles or coinsurance) 
                                under parts A and B with 
                                respect to such expenses,
                        whichever is less.
                  (B) Deductible.--The amount of annual 
                deductible under an MSA plan--
                          (i) for contract year 1999 shall be 
                        not more than $6,000; and
                          (ii) for a subsequent contract year 
                        shall be not more than the maximum 
                        amount of such deductible for the 
                        previous contract year under this 
                        subparagraph increased by the national 
                        per capita Medicare+Choice growth 
                        percentage under section 1853(c)(6) for 
                        the year.
                If the amount of the deductible under clause 
                (ii) is not a multiple of $50, the amount shall 
                be rounded to the nearest multiple of $50.
          (4) MA regional plan.--The term ``MA regional plan'' 
        means an MA plan described in section 
        1851(a)(2)(A)(i)--
                  (A) that has a network of providers that have 
                agreed to a contractually specified 
                reimbursement for covered benefits with the 
                organization offering the plan;
                  (B) that provides for reimbursement for all 
                covered benefits regardless of whether such 
                benefits are provided within such network of 
                providers; and
                  (C) the service area of which is one or more 
                entire MA regions.
          (5) MA local plan.--The term ``MA local plan'' means 
        an MA plan that is not an MA regional plan.
          (6) Specialized ma plans for special needs 
        individuals.--
                  (A) In general.--The term ``specialized MA 
                plan for special needs individuals'' means an 
                MA plan that exclusively serves special needs 
                individuals (as defined in subparagraph (B)) 
                and that, as of January 1, 2010, meets the 
                applicable requirements of paragraph (2), (3), 
                or (4) of subsection (f), as the case may be.
                  (B) Special needs individual.--The term 
                ``special needs individual'' means an MA 
                eligible individual who--
                          (i) is institutionalized (as defined 
                        by the Secretary);
                          (ii) is entitled to medical 
                        assistance under a State plan under 
                        title XIX; or
                          (iii) meets such requirements as the 
                        Secretary may determine would benefit 
                        from enrollment in such a specialized 
                        MA plan described in subparagraph (A) 
                        for individuals with severe or 
                        disabling chronic conditions who--
                                  (I) before January 1, 2022, 
                                have one or more comorbid and 
                                medically complex chronic 
                                conditions that are 
                                substantially disabling or life 
                                threatening, have a high risk 
                                of hospitalization or other 
                                significant adverse health 
                                outcomes, and require 
                                specialized delivery systems 
                                across domains of care; and
                                  (II) on or after January 1, 
                                2022, have one or more comorbid 
                                and medically complex chronic 
                                conditions that is life 
                                threatening or significantly 
                                limits overall health or 
                                function, have a high risk of 
                                hospitalization or other 
                                adverse health outcomes, and 
                                require intensive care 
                                coordination and that is listed 
                                under subsection (f)(9)(A).
                The Secretary may apply rules similar to the 
                rules of section 1894(c)(4) for continued 
                eligibility of special needs individuals.
  (c) Other References to Other Terms.--
          (1) Medicare+choice eligible individual.--The term 
        ``Medicare+Choice eligible individual'' is defined in 
        section 1851(a)(3).
          (2) Medicare+choice payment area.--The term 
        ``Medicare+Choice payment area'' is defined in section 
        1853(d).
          (3) National per capita medicare+choice growth 
        percentage.--The ``national per capita Medicare+Choice 
        growth percentage'' is defined in section 1853(c)(6).
          (4) Medicare+choice monthly basic beneficiary 
        premium; medicare+choice monthly supplemental 
        beneficiary premium.--The terms ``Medicare+Choice 
        monthly basic beneficiary premium'' and 
        ``Medicare+Choice monthly supplemental beneficiary 
        premium'' are defined in section 1854(a)(2).
          (5) MA local area.--The term ``MA local area'' is 
        defined in section 1853(d)(2).
  (d) Coordinated Acute and Long-Term Care Benefits Under a 
Medicare+Choice Plan.--Nothing in this part shall be construed 
as preventing a State from coordinating benefits under a 
medicaid plan under title XIX with those provided under a 
Medicare+Choice plan in a manner that assures continuity of a 
full-range of acute care and long-term care services to poor 
elderly or disabled individuals eligible for benefits under 
this title and under such plan.
  (e) Restriction on Enrollment for Certain Medicare+Choice 
Plans.--
          (1) In general.--In the case of a Medicare+Choice 
        religious fraternal benefit society plan described in 
        paragraph (2), notwithstanding any other provision of 
        this part to the contrary and in accordance with 
        regulations of the Secretary, the society offering the 
        plan may restrict the enrollment of individuals under 
        this part to individuals who are members of the church, 
        convention, or group described in paragraph (3)(B) with 
        which the society is affiliated.
          (2) Medicare+choice religious fraternal benefit 
        society plan described.--For purposes of this 
        subsection, a Medicare+Choice religious fraternal 
        benefit society plan described in this paragraph is a 
        Medicare+Choice plan described in section 1851(a)(2) 
        that--
                  (A) is offered by a religious fraternal 
                benefit society described in paragraph (3) only 
                to members of the church, convention, or group 
                described in paragraph (3)(B); and
                  (B) permits all such members to enroll under 
                the plan without regard to health status-
                related factors.
        Nothing in this subsection shall be construed as 
        waiving any plan requirements relating to financial 
        solvency.
          (3) Religious fraternal benefit society defined.--For 
        purposes of paragraph (2)(A), a ``religious fraternal 
        benefit society'' described in this section is an 
        organization that--
                  (A) is described in section 501(c)(8) of the 
                Internal Revenue Code of 1986 and is exempt 
                from taxation under section 501(a) of such Act;
                  (B) is affiliated with, carries out the 
                tenets of, and shares a religious bond with, a 
                church or convention or association of churches 
                or an affiliated group of churches;
                  (C) offers, in addition to a Medicare+Choice 
                religious fraternal benefit society plan, 
                health coverage to individuals not entitled to 
                benefits under this title who are members of 
                such church, convention, or group; and
                  (D) does not impose any limitation on 
                membership in the society based on any health 
                status-related factor.
          (4) Payment adjustment.--Under regulations of the 
        Secretary, in the case of individuals enrolled under 
        this part under a Medicare+Choice religious fraternal 
        benefit society plan described in paragraph (2), the 
        Secretary shall provide for such adjustment to the 
        payment amounts otherwise established under section 
        1854 as may be appropriate to assure an appropriate 
        payment level, taking into account the actuarial 
        characteristics and experience of such individuals.
  (f) Requirements Regarding Enrollment in Specialized MA Plans 
for Special Needs Individuals.--
          (1) Requirements for enrollment.--In the case of a 
        specialized MA plan for special needs individuals (as 
        defined in subsection (b)(6)), notwithstanding any 
        other provision of this part and in accordance with 
        regulations of the Secretary, the plan may restrict the 
        enrollment of individuals under the plan to individuals 
        who are within one or more classes of special needs 
        individuals.
          (2) Additional requirements for institutional snps.--
        In the case of a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(i), the 
        applicable requirements described in this paragraph are 
        as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individuals described in subsection 
                (b)(6)(B)(i). In the case of an individual who 
                is living in the community but requires an 
                institutional level of care, such individual 
                shall not be considered a special needs 
                individual described in subsection (b)(6)(B)(i) 
                unless the determination that the individual 
                requires an institutional level of care was 
                made--
                          (i) using a State assessment tool of 
                        the State in which the individual 
                        resides; and
                          (ii) by an entity other than the 
                        organization offering the plan.
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (3) Additional requirements for dual snps.--In the 
        case of a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(ii), the 
        applicable requirements described in this paragraph are 
        as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individuals described in subsection 
                (b)(6)(B)(ii).
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) The plan provides each prospective 
                enrollee, prior to enrollment, with a 
                comprehensive written statement (using 
                standardized content and format established by 
                the Secretary) that describes--
                          (i) the benefits and cost-sharing 
                        protections that the individual is 
                        entitled to under the State Medicaid 
                        program under title XIX; and
                          (ii) which of such benefits and cost-
                        sharing protections are covered under 
                        the plan.
                Such statement shall be included with any 
                description of benefits offered by the plan.
                  (D) The plan has a contract with the State 
                Medicaid agency to provide benefits, or arrange 
                for benefits to be provided, for which such 
                individual is entitled to receive as medical 
                assistance under title XIX. Such benefits may 
                include long-term care services consistent with 
                State policy.
                  (E) If applicable, the plan meets the 
                requirement described in paragraph (7).
                  (F) The plan meets the requirements 
                applicable under paragraph (8).
          (4) Additional requirements for severe or disabling 
        chronic condition snps.--In the case of a specialized 
        MA plan for special needs individuals described in 
        subsection (b)(6)(B)(iii), the applicable requirements 
        described in this paragraph are as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individual described in subsection 
                (b)(6)(B)(iii).
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (5) Care management requirements for all snps.--
                  (A) In general.--Subject to subparagraph (B), 
                the requirements described in this paragraph 
                are that the organization offering a 
                specialized MA plan for special needs 
                individuals--
                          (i) have in place an evidenced-based 
                        model of care with appropriate networks 
                        of providers and specialists; and
                          (ii) with respect to each individual 
                        enrolled in the plan--
                                  (I) conduct an initial 
                                assessment and an annual 
                                reassessment of the 
                                individual's physical, 
                                psychosocial, and functional 
                                needs;
                                  (II) develop a plan, in 
                                consultation with the 
                                individual as feasible, that 
                                identifies goals and 
                                objectives, including 
                                measurable outcomes as well as 
                                specific services and benefits 
                                to be provided; and
                                  (III) use an 
                                interdisciplinary team in the 
                                management of care.
                  (B) Improvements to care management 
                requirements for severe or disabling chronic 
                condition snps.--For 2020 and subsequent years, 
                in the case of a specialized MA plan for 
                special needs individuals described in 
                subsection (b)(6)(B)(iii), the requirements 
                described in this paragraph include the 
                following:
                          (i) The interdisciplinary team under 
                        subparagraph (A)(ii)(III) includes a 
                        team of providers with demonstrated 
                        expertise, including training in an 
                        applicable specialty, in treating 
                        individuals similar to the targeted 
                        population of the plan.
                          (ii) Requirements developed by the 
                        Secretary to provide face-to-face 
                        encounters with individuals enrolled in 
                        the plan not less frequently than on an 
                        annual basis.
                           (III) As part of the model of care 
                        under clause (i) of subparagraph (A), 
                        the results of the initial assessment 
                        and annual reassessment under clause 
                        (ii)(I) of such subparagraph of each 
                        individual enrolled in the plan are 
                        addressed in the individual's 
                        individualized care plan under clause 
                        (ii)(II) of such subparagraph.
                          (iv) As part of the annual evaluation 
                        and approval of such model of care, the 
                        Secretary shall take into account 
                        whether the plan fulfilled the previous 
                        year's goals (as required under the 
                        model of care).
                          (v) The Secretary shall establish a 
                        minimum benchmark for each element of 
                        the model of care of a plan. The 
                        Secretary shall only approve a plan's 
                        model of care under this paragraph if 
                        each element of the model of care meets 
                        the minimum benchmark applicable under 
                        the preceding sentence.
          (6) Transition and exception regarding restriction on 
        enrollment.--
                  (A) In general.--Subject to subparagraph (C), 
                the Secretary shall establish procedures for 
                the transition of applicable individuals to--
                          (i) a Medicare Advantage plan that is 
                        not a specialized MA plan for special 
                        needs individuals (as defined in 
                        subsection (b)(6)); or
                          (ii) the original medicare fee-for-
                        service program under parts A and B.
                  (B) Applicable individuals.--For purposes of 
                clause (i), the term ``applicable individual'' 
                means an individual who--
                          (i) is enrolled under a specialized 
                        MA plan for special needs individuals 
                        (as defined in subsection (b)(6)); and
                          (ii) is not within the 1 or more of 
                        the classes of special needs 
                        individuals to which enrollment under 
                        the plan is restricted to.
                  (C) Exception.--The Secretary shall provide 
                for an exception to the transition described in 
                subparagraph (A) for a limited period of time 
                for individuals enrolled under a specialized MA 
                plan for special needs individuals described in 
                subsection (b)(6)(B)(ii) who are no longer 
                eligible for medical assistance under title 
                XIX.
                  (D) Timeline for initial transition.--The 
                Secretary shall ensure that applicable 
                individuals enrolled in a specialized MA plan 
                for special needs individuals (as defined in 
                subsection (b)(6)) prior to January 1, 2010, 
                are transitioned to a plan or the program 
                described in subparagraph (A) by not later than 
                January 1, 2013.
          (7) Authority to require special needs plans be ncqa 
        approved.--For 2012 and subsequent years, the Secretary 
        shall require that a Medicare Advantage organization 
        offering a specialized MA plan for special needs 
        individuals be approved by the National Committee for 
        Quality Assurance (based on standards established by 
        the Secretary).
          (8) Increased integration of dual snps.--
                  (A) Designated contact.--The Secretary, 
                acting through the Federal Coordinated Health 
                Care Office established under section 2602 of 
                Public Law 111-148, shall serve as a dedicated 
                point of contact for States to address 
                misalignments that arise with the integration 
                of specialized MA plans for special needs 
                individuals described in subsection 
                (b)(6)(B)(ii) under this paragraph and, 
                consistent with such role, shall establish--
                          (i) a uniform process for 
                        disseminating to State Medicaid 
                        agencies information under this title 
                        impacting contracts between such 
                        agencies and such plans under this 
                        subsection; and
                          (ii) basic resources for States 
                        interested in exploring such plans as a 
                        platform for integration, such as a 
                        model contract or other tools to 
                        achieve those goals.
                  (B) Unified grievances and appeals process.--
                          (i) In general.--Not later than April 
                        1, 2020, the Secretary shall establish 
                        procedures, to the extent feasible as 
                        determined by the Secretary, unifying 
                        grievances and appeals procedures under 
                        sections 1852(f), 1852(g), 1902(a)(3), 
                        1902(a)(5), and 1932(b)(4) for items 
                        and services provided by specialized MA 
                        plans for special needs individuals 
                        described in subsection (b)(6)(B)(ii) 
                        under this title and title XIX. With 
                        respect to items and services described 
                        in the preceding sentence, procedures 
                        established under this clause shall 
                        apply in place of otherwise applicable 
                        grievances and appeals procedures. The 
                        Secretary shall solicit comment in 
                        developing such procedures from States, 
                        plans, beneficiaries and their 
                        representatives, and other relevant 
                        stakeholders.
                          (ii) Procedures.--The procedures 
                        established under clause (i) shall be 
                        included in the plan contract under 
                        paragraph (3)(D) and shall--
                                  (I) adopt the provisions for 
                                the enrollee that are most 
                                protective for the enrollee 
                                and, to the extent feasible as 
                                determined by the Secretary, 
                                are compatible with unified 
                                timeframes and consolidated 
                                access to external review under 
                                an integrated process;
                                  (II) take into account 
                                differences in State plans 
                                under title XIX to the extent 
                                necessary;
                                  (III) be easily navigable by 
                                an enrollee; and
                                  (IV) include the elements 
                                described in clause (iii), as 
                                applicable.
                          (iii) Elements described.--Both 
                        unified appeals and unified grievance 
                        procedures shall include, as 
                        applicable, the following elements 
                        described in this clause:
                                  (I) Single written 
                                notification of all applicable 
                                grievances and appeal rights 
                                under this title and title XIX. 
                                For purposes of this 
                                subparagraph, the Secretary may 
                                waive the requirements under 
                                section 1852(g)(1)(B) when the 
                                specialized MA plan covers 
                                items or services under this 
                                part or under title XIX.
                                  (II) Single pathways for 
                                resolution of any grievance or 
                                appeal related to a particular 
                                item or service provided by 
                                specialized MA plans for 
                                special needs individuals 
                                described in subsection 
                                (b)(6)(B)(ii) under this title 
                                and title XIX.
                                  (III) Notices written in 
                                plain language and available in 
                                a language and format that is 
                                accessible to the enrollee, 
                                including in non-English 
                                languages that are prevalent in 
                                the service area of the 
                                specialized MA plan.
                                  (IV) Unified timeframes for 
                                grievances and appeals 
                                processes, such as an 
                                individual's filing of a 
                                grievance or appeal, a plan's 
                                acknowledgment and resolution 
                                of a grievance or appeal, and 
                                notification of decisions with 
                                respect to a grievance or 
                                appeal.
                                  (V) Requirements for how the 
                                plan must process, track, and 
                                resolve grievances and appeals, 
                                to ensure beneficiaries are 
                                notified on a timely basis of 
                                decisions that are made 
                                throughout the grievance or 
                                appeals process and are able to 
                                easily determine the status of 
                                a grievance or appeal.
                          (iv) Continuation of benefits pending 
                        appeal.--The unified procedures under 
                        clause (i) shall, with respect to all 
                        benefits under parts A and B and title 
                        XIX subject to appeal under such 
                        procedures, incorporate provisions 
                        under current law and implementing 
                        regulations that provide continuation 
                        of benefits pending appeal under this 
                        title and title XIX.
                  (C) Requirement for unified grievances and 
                appeals.--For 2021 and subsequent years, the 
                contract of a specialized MA plan for special 
                needs individuals described in subsection 
                (b)(6)(B)(ii) with a State Medicaid agency 
                under paragraph (3)(D) shall require the use of 
                unified grievances and appeals procedures as 
                described in subparagraph (B).
                  (D) Requirements for integration.--
                          (i) In general.--For 2021 and 
                        subsequent years, a specialized MA plan 
                        for special needs individuals described 
                        in subsection (b)(6)(B)(ii) shall meet 
                        one or more of the following 
                        requirements, to the extent permitted 
                        under State law, for integration of 
                        benefits under this title and title 
                        XIX:
                                  (I) The specialized MA plan 
                                must meet the requirements of 
                                contracting with the State 
                                Medicaid agency described in 
                                paragraph (3)(D) in addition to 
                                coordinating long-term services 
                                and supports or behavioral 
                                health services, or both, by 
                                meeting an additional minimum 
                                set of requirements determined 
                                by the Secretary through the 
                                Federal Coordinated Health Care 
                                Office established under 
                                section 2602 of the Patient 
                                Protection and Affordable Care 
                                Act based on input from 
                                stakeholders, such as notifying 
                                the State in a timely manner of 
                                hospitalizations, emergency 
                                room visits, and hospital or 
                                nursing home discharges of 
                                enrollees, assigning one 
                                primary care provider for each 
                                enrollee, or sharing data that 
                                would benefit the coordination 
                                of items and services under 
                                this title and the State plan 
                                under title XIX. Such minimum 
                                set of requirements must be 
                                included in the contract of the 
                                specialized MA plan with the 
                                State Medicaid agency under 
                                such paragraph.
                                  (II) The specialized MA plan 
                                must meet the requirements of a 
                                fully integrated plan described 
                                in section 
                                1853(a)(1)(B)(iv)(II) (other 
                                than the requirement that the 
                                plan have similar average 
                                levels of frailty, as 
                                determined by the Secretary, as 
                                the PACE program), or enter 
                                into a capitated contract with 
                                the State Medicaid agency to 
                                provide long-term services and 
                                supports or behavioral health 
                                services, or both.
                                  (III) In the case of a 
                                specialized MA plan that is 
                                offered by a parent 
                                organization that is also the 
                                parent organization of a 
                                Medicaid managed care 
                                organization providing long 
                                term services and supports or 
                                behavioral services under a 
                                contract under section 1903(m), 
                                the parent organization must 
                                assume clinical and financial 
                                responsibility for benefits 
                                provided under this title and 
                                title XIX with respect to any 
                                individual who is enrolled in 
                                both the specialized MA plan 
                                and the Medicaid managed care 
                                organization.
                          (ii) Suspension of enrollment for 
                        failure to meet requirements during 
                        initial period.--During the period of 
                        plan years 2021 through 2025, if the 
                        Secretary determines that a specialized 
                        MA plan for special needs individuals 
                        described in subsection (b)(6)(B)(ii) 
                        has failed to comply with clause (i), 
                        the Secretary may provide for the 
                        application against the Medicare 
                        Advantage organization offering the 
                        plan of the remedy described in section 
                        1857(g)(2)(B) in the same manner as the 
                        Secretary may apply such remedy, and in 
                        accordance with the same procedures as 
                        would apply, in the case of an MA 
                        organization determined by the 
                        Secretary to have engaged in conduct 
                        described in section 1857(g)(1). If the 
                        Secretary applies such remedy to a 
                        Medicare Advantage organization under 
                        the preceding sentence, the 
                        organization shall submit to the 
                        Secretary (at a time, and in a form and 
                        manner, specified by the Secretary) 
                        information describing how the plan 
                        will come into compliance with clause 
                        (i).
                  (E) Study and report to congress.--
                          (i) In general.--Not later than March 
                        15, 2022, and, subject to clause (iii), 
                        biennially thereafter through 2032, the 
                        Medicare Payment Advisory Commission 
                        established under section 1805, in 
                        consultation with the Medicaid and CHIP 
                        Payment and Access Commission 
                        established under section 1900, shall 
                        conduct (and submit to the Secretary 
                        and the Committees on Ways and Means 
                        and Energy and Commerce of the House of 
                        Representatives and the Committee on 
                        Finance of the Senate a report on) a 
                        study to determine how specialized MA 
                        plans for special needs individuals 
                        described in subsection (b)(6)(B)(ii) 
                        perform among each other based on data 
                        from Healthcare Effectiveness Data and 
                        Information Set (HEDIS) quality 
                        measures, reported on the plan level, 
                        as required under section 1852(e)(3) 
                        (or such other measures or data sources 
                        that are available and appropriate, 
                        such as encounter data and Consumer 
                        Assessment of Healthcare Providers and 
                        Systems data, as specified by such 
                        Commissions as enabling an accurate 
                        evaluation under this subparagraph). 
                        Such study shall include, as feasible, 
                        the following comparison groups of 
                        specialized MA plans for special needs 
                        individuals described in subsection 
                        (b)(6)(B)(ii):
                                  (I) A comparison group of 
                                such plans that are described 
                                in subparagraph (D)(i)(I).
                                  (II) A comparison group of 
                                such plans that are described 
                                in subparagraph (D)(i)(II).
                                  (III) A comparison group of 
                                such plans operating within the 
                                Financial Alignment Initiative 
                                demonstration for the period 
                                for which such plan is so 
                                operating and the demonstration 
                                is in effect, and, in the case 
                                that an integration option that 
                                is not with respect to 
                                specialized MA plans for 
                                special needs individuals is 
                                established after the 
                                conclusion of the demonstration 
                                involved.
                                  (IV) A comparison group of 
                                such plans that are described 
                                in subparagraph (D)(i)(III).
                                  (V) A comparison group of MA 
                                plans, as feasible, not 
                                described in a previous 
                                subclause of this clause, with 
                                respect to the performance of 
                                such plans for enrollees who 
                                are special needs individuals 
                                described in subsection 
                                (b)(6)(B)(ii).
                          (ii) Additional reports.--Beginning 
                        with 2033 and every five years 
                        thereafter, the Medicare Payment 
                        Advisory Commission, in consultation 
                        with the Medicaid and CHIP Payment and 
                        Access Commission, shall conduct a 
                        study described in clause (i).
          (9) List of conditions for clarification of the 
        definition of a severe or disabling chronic conditions 
        specialized needs individual.--
                  (A) In general.--Not later than December 31, 
                2020, and every 5 years thereafter, subject to 
                subparagraphs (B) and (C), the Secretary shall 
                convene a panel of clinical advisors to 
                establish and update a list of conditions that 
                meet each of the following criteria:
                          (i) Conditions that meet the 
                        definition of a severe or disabling 
                        chronic condition under subsection 
                        (b)(6)(B)(iii) on or after January 1, 
                        2022.
                          (ii) Conditions that require 
                        prescription drugs, providers, and 
                        models of care that are unique to the 
                        specific population of enrollees in a 
                        specialized MA plan for special needs 
                        individuals described in such 
                        subsection on or after such date and--
                                  (I) as a result of access to, 
                                and enrollment in, such a 
                                specialized MA plan for special 
                                needs individuals, individuals 
                                with such condition would have 
                                a reasonable expectation of 
                                slowing or halting the 
                                progression of the disease, 
                                improving health outcomes and 
                                decreasing overall costs for 
                                individuals diagnosed with such 
                                condition compared to available 
                                options of care other than 
                                through such a specialized MA 
                                plan for special needs 
                                individuals; or
                                  (II) have a low prevalence in 
                                the general population of 
                                beneficiaries under this title 
                                or a disproportionally high 
                                per-beneficiary cost under this 
                                title.
                  (B) Inclusion of certain conditions.--The 
                conditions listed under subparagraph (A) shall 
                include HIV/AIDS, end stage renal disease, and 
                chronic and disabling mental illness.
                  (C) Requirement.--In establishing and 
                updating the list under subparagraph (A), the 
                panel shall take into account the availability 
                of varied benefits, cost-sharing, and 
                supplemental benefits under the model described 
                in paragraph (2) of section 1859(h), including 
                the expansion under paragraph (1) of such 
                section.
  (g) Special Rules for Senior Housing Facility Plans.--
          (1) In general.--In the case of a Medicare Advantage 
        senior housing facility plan described in paragraph 
        (2), notwithstanding any other provision of this part 
        to the contrary and in accordance with regulations of 
        the Secretary, the service area of such plan may be 
        limited to a senior housing facility in a geographic 
        area.
          (2) Medicare advantage senior housing facility plan 
        described.--For purposes of this subsection, a Medicare 
        Advantage senior housing facility plan is a Medicare 
        Advantage plan that--
                  (A) restricts enrollment of individuals under 
                this part to individuals who reside in a 
                continuing care retirement community (as 
                defined in section 1852(l)(4)(B));
                  (B) provides primary care services onsite and 
                has a ratio of accessible physicians to 
                beneficiaries that the Secretary determines is 
                adequate;
                  (C) provides transportation services for 
                beneficiaries to specialty providers outside of 
                the facility; and
                  (D) has participated (as of December 31, 
                2009) in a demonstration project established by 
                the Secretary under which such a plan was 
                offered for not less than 1 year.
  (h) National Testing of Medicare Advantage Value-Based 
Insurance Design Model.--
          (1) In general.--In implementing the Medicare 
        Advantage Value-Based Insurance Design model that is 
        being tested under section 1115A(b), the Secretary 
        shall revise the testing of the model under such 
        section to cover, effective not later than January 1, 
        2020, all States.
          (2) Termination and modification provision not 
        applicable until january 1, 2022.--The provisions of 
        section 1115A(b)(3)(B) shall apply to the Medicare 
        Advantage Value-Based Insurance Design model, including 
        such model as revised under paragraph (1), beginning 
        January 1, 2022, but shall not apply to such model, as 
        so revised, prior to such date.
          (3) Funding.--The Secretary shall allocate funds made 
        available under section 1115A(f)(1) to design, 
        implement, and evaluate the Medicare Advantage Value-
        Based Insurance Design model, as revised under 
        paragraph (1).
  (i) Program Integrity Transparency Measures.--
          (1) Program integrity portal.--
                  (A) In general.--Not later than two years 
                after the date of the enactment of this 
                subsection, the Secretary shall, after 
                consultation with stakeholders, establish a 
                secure Internet website portal (or other 
                successor technology) that would allow a secure 
                path for communication between the Secretary, 
                MA plans under this part, prescription drug 
                plans under part D, and an eligible entity with 
                a contract under section 1893 (such as a 
                Medicare drug integrity contractor or an entity 
                responsible for carrying out program integrity 
                activities under this part and part D) for the 
                purpose of enabling through such portal (or 
                other successor technology)--
                          (i) the referral by such plans of 
                        substantiated fraud, waste, and abuse 
                        for initiating or assisting 
                        investigations conducted by the 
                        eligible entity; and
                          (ii) data sharing among such MA 
                        plans, prescription drug plans, and the 
                        Secretary.
                  (B) Required uses of portal.--The Secretary 
                shall disseminate the following information to 
                MA plans under this part and prescription drug 
                plans under part D through the secure Internet 
                website portal (or other successor technology) 
                established under subparagraph (A):
                          (i) Providers of services and 
                        suppliers that have been referred 
                        pursuant to subparagraph (A)(i) during 
                        the previous 12-month period.
                          (ii) Providers of services and 
                        suppliers who are the subject of an 
                        active exclusion under section 1128 or 
                        who are subject to a suspension of 
                        payment under this title pursuant to 
                        section 1862(o) or otherwise.
                          (iii) Providers of services and 
                        suppliers who are the subject of an 
                        active revocation of participation 
                        under this title, including for not 
                        satisfying conditions of participation.
                          (iv) In the case of such a plan that 
                        makes a referral under subparagraph 
                        (A)(i) through the portal (or other 
                        successor technology) with respect to 
                        activities of substantiated fraud, 
                        waste, or abuse of a provider of 
                        services or supplier, if such provider 
                        or supplier has been the subject of an 
                        administrative action under this title 
                        or title XI with respect to similar 
                        activities, a notification to such plan 
                        of such action so taken.
                  (C) Rulemaking.--For purposes of this 
                paragraph, the Secretary shall, through 
                rulemaking, specify what constitutes 
                substantiated fraud, waste, and abuse, using 
                guidance such as what is provided in the 
                Medicare Program Integrity Manual 4.7.1. In 
                carrying out this subsection, a fraud hotline 
                tip (as defined by the Secretary) without 
                further evidence shall not be treated as 
                sufficient evidence for substantiated fraud, 
                waste, or abuse
                  (D) HIPAA compliant information only.--For 
                purposes of this subsection, communications may 
                only occur if the communications are permitted 
                under the Federal regulations (concerning the 
                privacy of individually identifiable health 
                information) promulgated under section 264(c) 
                of the Health Insurance Portability and 
                Accountability Act of 1996.
          (2) Quarterly reports.--Beginning two years after the 
        date of enactment of this subsection, the Secretary 
        shall make available to MA plans under this part and 
        prescription drug plans under part D in a timely manner 
        (but no less frequently than quarterly) and using 
        information submitted to an entity described in 
        paragraph (1) through the portal (or other successor 
        technology) described in such paragraph or pursuant to 
        section 1893, information on fraud, waste, and abuse 
        schemes and trends in identifying suspicious activity. 
        Information included in each such report shall--
                  (A) include administrative actions, pertinent 
                information related to opioid overprescribing, 
                and other data determined appropriate by the 
                Secretary in consultation with stakeholders; 
                and
                  (B) be anonymized information submitted by 
                plans without identifying the source of such 
                information.
          (3) Clarification.--Nothing in this subsection shall 
        be construed as precluding or otherwise affecting 
        referrals described in subparagraph (A) that may 
        otherwise be made to law enforcement entities or to the 
        Secretary.

          Part D--Voluntary Prescription Drug Benefit Program

Subpart 1--Part D Eligible Individuals and Prescription Drug Benefits

           *       *       *       *       *       *       *


    beneficiary protections for qualified prescription drug coverage

  Sec. 1860D-4. (a) Dissemination of Information.--
          (1) General information.--
                  (A) Application of ma information.--A PDP 
                sponsor shall disclose, in a clear, accurate, 
                and standardized form to each enrollee with a 
                prescription drug plan offered by the sponsor 
                under this part at the time of enrollment and 
                at least annually thereafter, the information 
                described in section 1852(c)(1) relating to 
                such plan, insofar as the Secretary determines 
                appropriate with respect to benefits provided 
                under this part, and including the information 
                described in subparagraph (B).
                  (B) Drug specific information.--The 
                information described in this subparagraph is 
                information concerning the following:
                          (i) Access to specific covered part D 
                        drugs, including access through 
                        pharmacy networks.
                          (ii) How any formulary (including any 
                        tiered formulary structure) used by the 
                        sponsor functions, including a 
                        description of how a part D eligible 
                        individual may obtain information on 
                        the formulary consistent with paragraph 
                        (3).
                          (iii) Beneficiary cost-sharing 
                        requirements and how a part D eligible 
                        individual may obtain information on 
                        such requirements, including tiered or 
                        other copayment level applicable to 
                        each drug (or class of drugs), 
                        consistent with paragraph (3).
                          (iv) The medication therapy 
                        management program required under 
                        subsection (c).
                          (v) The drug management program for 
                        at-risk beneficiaries under subsection 
                        (c)(5).
          (2) Disclosure upon request of general coverage, 
        utilization, and grievance information.--Upon request 
        of a part D eligible individual who is eligible to 
        enroll in a prescription drug plan, the PDP sponsor 
        offering such plan shall provide information similar 
        (as determined by the Secretary) to the information 
        described in subparagraphs (A), (B), and (C) of section 
        1852(c)(2) to such individual.
          (3) Provision of specific information.--
                  (A) Response to beneficiary questions.--Each 
                PDP sponsor offering a prescription drug plan 
                shall have a mechanism for providing specific 
                information on a timely basis to enrollees upon 
                request. Such mechanism shall include access to 
                information through the use of a toll-free 
                telephone number and, upon request, the 
                provision of such information in writing.
                  (B) Availability of information on changes in 
                formulary through the internet.--A PDP sponsor 
                offering a prescription drug plan shall make 
                available on a timely basis through an Internet 
                website information on specific changes in the 
                formulary under the plan (including changes to 
                tiered or preferred status of covered part D 
                drugs).
          (4) Claims information.--A PDP sponsor offering a 
        prescription drug plan must furnish to each enrollee in 
        a form easily understandable to such enrollees--
                  (A) an explanation of benefits (in accordance 
                with section 1806(a) or in a comparable 
                manner); and
                  (B) when prescription drug benefits are 
                provided under this part, a notice of the 
                benefits in relation to--
                          (i) the initial coverage limit for 
                        the current year; and
                          (ii) the annual out-of-pocket 
                        threshold for the current year.
                Notices under subparagraph (B) need not be 
                provided more often than as specified by the 
                Secretary and notices under subparagraph 
                (B)(ii) shall take into account the application 
                of section 1860D-2(b)(4)(C) to the extent 
                practicable, as specified by the Secretary.
  (b) Access to Covered Part D Drugs.--
          (1) Assuring pharmacy access.--
                  (A) Participation of any willing pharmacy.--A 
                prescription drug plan shall permit the 
                participation of any pharmacy that meets the 
                terms and conditions under the plan.
                  (B) Discounts allowed for network 
                pharmacies.--For covered part D drugs dispensed 
                through in-network pharmacies, a prescription 
                drug plan may, notwithstanding subparagraph 
                (A), reduce coinsurance or copayments for part 
                D eligible individuals enrolled in the plan 
                below the level otherwise required. In no case 
                shall such a reduction result in an increase in 
                payments made by the Secretary under section 
                1860D-15 to a plan.
                  (C) Convenient access for network 
                pharmacies.--
                          (i) In general.--The PDP sponsor of 
                        the prescription drug plan shall secure 
                        the participation in its network of a 
                        sufficient number of pharmacies that 
                        dispense (other than by mail order) 
                        drugs directly to patients to ensure 
                        convenient access (consistent with 
                        rules established by the Secretary).
                          (ii) Application of tricare 
                        standards.--The Secretary shall 
                        establish rules for convenient access 
                        to in-network pharmacies under this 
                        subparagraph that are no less favorable 
                        to enrollees than the rules for 
                        convenient access to pharmacies 
                        included in the statement of work of 
                        solicitation (#MDA906-03-R-0002) of the 
                        Department of Defense under the TRICARE 
                        Retail Pharmacy (TRRx) as of March 13, 
                        2003.
                          (iii) Adequate emergency access.--
                        Such rules shall include adequate 
                        emergency access for enrollees.
                          (iv) Convenient access in long-term 
                        care facilities.--Such rules may 
                        include standards with respect to 
                        access for enrollees who are residing 
                        in long-term care facilities and for 
                        pharmacies operated by the Indian 
                        Health Service, Indian tribes and 
                        tribal organizations, and urban Indian 
                        organizations (as defined in section 4 
                        of the Indian Health Care Improvement 
                        Act).
                  (D) Level playing field.--Such a sponsor 
                shall permit enrollees to receive benefits 
                (which may include a 90-day supply of drugs or 
                biologicals) through a pharmacy (other than a 
                mail order pharmacy), with any differential in 
                charge paid by such enrollees.
                  (E) Not required to accept insurance risk.--
                The terms and conditions under subparagraph (A) 
                may not require participating pharmacies to 
                accept insurance risk as a condition of 
                participation.
          (2) Use of standardized technology.--
                  (A) In general.--The PDP sponsor of a 
                prescription drug plan shall issue (and 
                reissue, as appropriate) such a card (or other 
                technology) that may be used by an enrollee to 
                assure access to negotiated prices under 
                section 1860D-2(d).
                  (B) Standards.--
                          (i) In general.--The Secretary shall 
                        provide for the development, adoption, 
                        or recognition of standards relating to 
                        a standardized format for the card or 
                        other technology required under 
                        subparagraph (A). Such standards shall 
                        be compatible with part C of title XI 
                        and may be based on standards developed 
                        by an appropriate standard setting 
                        organization.
                          (ii) Consultation.--In developing the 
                        standards under clause (i), the 
                        Secretary shall consult with the 
                        National Council for Prescription Drug 
                        Programs and other standard setting 
                        organizations determined appropriate by 
                        the Secretary.
                          (iii) Implementation.--The Secretary 
                        shall develop, adopt, or recognize the 
                        standards under clause (i) by such date 
                        as the Secretary determines shall be 
                        sufficient to ensure that PDP sponsors 
                        utilize such standards beginning 
                        January 1, 2006.
          (3) Requirements on development and application of 
        formularies.--If a PDP sponsor of a prescription drug 
        plan uses a formulary (including the use of tiered 
        cost-sharing), the following requirements must be met:
                  (A) Development and revision by a pharmacy 
                and therapeutic (p&t) committee.--
                          (i) In general.--The formulary must 
                        be developed and reviewed by a pharmacy 
                        and therapeutic committee. A majority 
                        of the members of such committee shall 
                        consist of individuals who are 
                        practicing physicians or practicing 
                        pharmacists (or both).
                          (ii) Inclusion of independent 
                        experts.--Such committee shall include 
                        at least one practicing physician and 
                        at least one practicing pharmacist, 
                        each of whom--
                                  (I) is independent and free 
                                of conflict with respect to the 
                                sponsor and plan; and
                                  (II) has expertise in the 
                                care of elderly or disabled 
                                persons.
                  (B) Formulary development.--In developing and 
                reviewing the formulary, the committee shall--
                          (i) base clinical decisions on the 
                        strength of scientific evidence and 
                        standards of practice, including 
                        assessing peer-reviewed medical 
                        literature, such as randomized clinical 
                        trials, pharmacoeconomic studies, 
                        outcomes research data, and on such 
                        other information as the committee 
                        determines to be appropriate; and
                          (ii) take into account whether 
                        including in the formulary (or in a 
                        tier in such formulary) particular 
                        covered part D drugs has therapeutic 
                        advantages in terms of safety and 
                        efficacy.
                  (C) Inclusion of drugs in all therapeutic 
                categories and classes.--
                          (i) In general.--Subject to 
                        subparagraph (G), the formulary must 
                        include drugs within each therapeutic 
                        category and class of covered part D 
                        drugs, although not necessarily all 
                        drugs within such categories and 
                        classes.
                          (ii) Model guidelines.--The Secretary 
                        shall request the United States 
                        Pharmacopeia to develop, in 
                        consultation with pharmaceutical 
                        benefit managers and other interested 
                        parties, a list of categories and 
                        classes that may be used by 
                        prescription drug plans under this 
                        paragraph and to revise such 
                        classification from time to time to 
                        reflect changes in therapeutic uses of 
                        covered part D drugs and the additions 
                        of new covered part D drugs.
                          (iii) Limitation on changes in 
                        therapeutic classification.--The PDP 
                        sponsor of a prescription drug plan may 
                        not change the therapeutic categories 
                        and classes in a formulary other than 
                        at the beginning of each plan year 
                        except as the Secretary may permit to 
                        take into account new therapeutic uses 
                        and newly approved covered part D 
                        drugs.
                  (D) Provider and patient education.--The PDP 
                sponsor shall establish policies and procedures 
                to educate and inform health care providers and 
                enrollees concerning the formulary.
                  (E) Notice before removing drug from 
                formulary or changing preferred or tier status 
                of drug.--Any removal of a covered part D drug 
                from a formulary and any change in the 
                preferred or tiered cost-sharing status of such 
                a drug shall take effect only after appropriate 
                notice is made available (such as under 
                subsection (a)(3)) to the Secretary, affected 
                enrollees, physicians, pharmacies, and 
                pharmacists.
                  (F) Periodic evaluation of protocols.--In 
                connection with the formulary, the sponsor of a 
                prescription drug plan shall provide for the 
                periodic evaluation and analysis of treatment 
                protocols and procedures.
                  (G) Required inclusion of drugs in certain 
                categories and classes.--
                          (i) Formulary requirements.--
                                  (I) In general.--Subject to 
                                subclause (II), a PDP sponsor 
                                offering a prescription drug 
                                plan shall be required to 
                                include all covered part D 
                                drugs in the categories and 
                                classes identified by the 
                                Secretary under clause (ii)(I).
                                  (II) Exceptions.--The 
                                Secretary may establish 
                                exceptions that permit a PDP 
                                sponsor offering a prescription 
                                drug plan to exclude from its 
                                formulary a particular covered 
                                part D drug in a category or 
                                class that is otherwise 
                                required to be included in the 
                                formulary under subclause (I) 
                                (or to otherwise limit access 
                                to such a drug, including 
                                through prior authorization or 
                                utilization management).
                          (ii) Identification of drugs in 
                        certain categories and classes.--
                                  (I) In general.--Subject to 
                                clause (iv), the Secretary 
                                shall identify, as appropriate, 
                                categories and classes of drugs 
                                for which the Secretary 
                                determines are of clinical 
                                concern.
                                  (II) Criteria.--The Secretary 
                                shall use criteria established 
                                by the Secretary in making any 
                                determination under subclause 
                                (I).
                          (iii) Implementation.--The Secretary 
                        shall establish the criteria under 
                        clause (ii)(II) and any exceptions 
                        under clause (i)(II) through the 
                        promulgation of a regulation which 
                        includes a public notice and comment 
                        period.
                          (iv) Requirement for certain 
                        categories and classes until criteria 
                        established.--Until such time as the 
                        Secretary establishes the criteria 
                        under clause (ii)(II) the following 
                        categories and classes of drugs shall 
                        be identified under clause (ii)(I):
                                  (I) Anticonvulsants.
                                  (II) Antidepressants.
                                  (III) Antineoplastics.
                                  (IV) Antipsychotics.
                                  (V) Antiretrovirals.
                                  (VI) Immunosuppressants for 
                                the treatment of transplant 
                                rejection.
                  (H) Use of single, uniform exceptions and 
                appeals process.--Notwithstanding any other 
                provision of this part, each PDP sponsor of a 
                prescription drug plan shall--
                          (i) use a single, uniform exceptions 
                        and appeals process (including, to the 
                        extent the Secretary determines 
                        feasible, a single, uniform model form 
                        for use under such process) with 
                        respect to the determination of 
                        prescription drug coverage for an 
                        enrollee under the plan; and
                          (ii) provide instant access to such 
                        process by enrollees through a toll-
                        free telephone number and an Internet 
                        website.
  (c) Cost and Utilization Management; Quality Assurance; 
Medication Therapy Management Program.--
          (1) In general.--The PDP sponsor shall have in place, 
        directly or through appropriate arrangements, with 
        respect to covered part D drugs, the following:
                  (A) A cost-effective drug utilization 
                management program, including incentives to 
                reduce costs when medically appropriate, such 
                as through the use of multiple source drugs (as 
                defined in section 1927(k)(7)(A)(i)).
                  (B) Quality assurance measures and systems to 
                reduce medication errors and adverse drug 
                interactions and improve medication use.
                  (C) A medication therapy management program 
                described in paragraph (2).
                  (D) A program to control fraud, abuse, and 
                waste.
                  (E) A utilization management tool to prevent 
                drug abuse (as described in paragraph (6)(A)).
                  (F) With respect to plan years beginning on 
                or after January 1, 2021, a drug management 
                program for at-risk beneficiaries described in 
                paragraph (5).
        Nothing in this section shall be construed as impairing 
        a PDP sponsor from utilizing cost management tools 
        (including differential payments) under all methods of 
        operation.
          (2) Medication therapy management program.--
                  (A) Description.--
                          (i) In general.--A medication therapy 
                        management program described in this 
                        paragraph is a program of drug therapy 
                        management that may be furnished by a 
                        pharmacist and that is designed to 
                        assure, with respect to targeted 
                        beneficiaries described in clause (ii), 
                        that covered part D drugs under the 
                        prescription drug plan are 
                        appropriately used to optimize 
                        therapeutic outcomes through improved 
                        medication use, and to reduce the risk 
                        of adverse events, including adverse 
                        drug interactions. Such a program may 
                        distinguish between services in 
                        ambulatory and institutional settings.
                          (ii) Targeted beneficiaries 
                        described.--Targeted beneficiaries 
                        described in this clause [are part D 
                        eligible individuals who--] are the 
                        following:
                                  (I) Part D eligible 
                                individuals who-- 
                                          [(I)] (aa) have 
                                        multiple chronic 
                                        diseases (such as 
                                        diabetes, asthma, 
                                        hypertension, 
                                        hyperlipidemia, and 
                                        congestive heart 
                                        failure);
                                          [(II)] (bb) are 
                                        taking multiple covered 
                                        part D drugs; and
                                          [(III)] (cc) are 
                                        identified as likely to 
                                        incur annual costs for 
                                        covered part D drugs 
                                        that exceed a level 
                                        specified by the 
                                        Secretary.
                                  (II) Beginning January 1, 
                                2021, at-risk beneficiaries for 
                                prescription drug abuse (as 
                                defined in paragraph (5)(C)).
                  (B) Elements.--Such program may include 
                elements that promote--
                          (i) enhanced enrollee understanding 
                        to promote the appropriate use of 
                        medications by enrollees and to reduce 
                        the risk of potential adverse events 
                        associated with medications, through 
                        beneficiary education, counseling, and 
                        other appropriate means;
                          (ii) increased enrollee adherence 
                        with prescription medication regimens 
                        through medication refill reminders, 
                        special packaging, and other compliance 
                        programs and other appropriate means; 
                        and
                          (iii) detection of adverse drug 
                        events and patterns of overuse and 
                        underuse of prescription drugs.
                  (C) Required interventions.--For plan years 
                beginning on or after the date that is 2 years 
                after the date of the enactment of the Patient 
                Protection and Affordable Care Act, 
                prescription drug plan sponsors shall offer 
                medication therapy management services to 
                targeted beneficiaries described in 
                subparagraph (A)(ii) that include, at a 
                minimum, the following to increase adherence to 
                prescription medications or other goals deemed 
                necessary by the Secretary:
                          (i) An annual comprehensive 
                        medication review furnished person-to-
                        person or using telehealth technologies 
                        (as defined by the Secretary) by a 
                        licensed pharmacist or other qualified 
                        provider. The comprehensive medication 
                        review--
                                  (I) shall include a review of 
                                the individual's medications 
                                and may result in the creation 
                                of a recommended medication 
                                action plan or other actions in 
                                consultation with the 
                                individual and with input from 
                                the prescriber to the extent 
                                necessary and practicable; and
                                  (II) shall include providing 
                                the individual with a written 
                                or printed summary of the 
                                results of the review.
                        The Secretary, in consultation with 
                        relevant stakeholders, shall develop a 
                        standardized format for the action plan 
                        under subclause (I) and the summary 
                        under subclause (II).
                          (ii) Follow-up interventions as 
                        warranted based on the findings of the 
                        annual medication review or the 
                        targeted medication enrollment and 
                        which may be provided person-to-person 
                        or using telehealth technologies (as 
                        defined by the Secretary).
                  (D) Assessment.--The prescription drug plan 
                sponsor shall have in place a process to 
                assess, at least on a quarterly basis, the 
                medication use of individuals who are at risk 
                but not enrolled in the medication therapy 
                management program, including individuals who 
                have experienced a transition in care, if the 
                prescription drug plan sponsor has access to 
                that information.
                  (E) Automatic enrollment with ability to opt-
                out.--The prescription drug plan sponsor shall 
                have in place a process to--
                          (i) subject to clause (ii), 
                        automatically enroll targeted 
                        beneficiaries described in subparagraph 
                        (A)(ii), including beneficiaries 
                        identified under subparagraph (D), in 
                        the medication therapy management 
                        program required under this subsection; 
                        and
                          (ii) permit such beneficiaries to 
                        opt-out of enrollment in such program.
                  (E) Development of program in cooperation 
                with licensed pharmacists.--Such program shall 
                be developed in cooperation with licensed and 
                practicing pharmacists and physicians.
                  (F) Coordination with care management 
                plans.--The Secretary shall establish 
                guidelines for the coordination of any 
                medication therapy management program under 
                this paragraph with respect to a targeted 
                beneficiary with any care management plan 
                established with respect to such beneficiary 
                under a chronic care improvement program under 
                section 1807.
                  (G) Considerations in pharmacy fees.--The PDP 
                sponsor of a prescription drug plan shall take 
                into account, in establishing fees for 
                pharmacists and others providing services under 
                such plan, the resources used, and time 
                required to, implement the medication therapy 
                management program under this paragraph. Each 
                such sponsor shall disclose to the Secretary 
                upon request the amount of any such management 
                or dispensing fees. The provisions of section 
                1927(b)(3)(D) apply to information disclosed 
                under this subparagraph.
          (3) Reducing wasteful dispensing of outpatient 
        prescription drugs in long-term care facilities.--The 
        Secretary shall require PDP sponsors of prescription 
        drug plans to utilize specific, uniform dispensing 
        techniques, as determined by the Secretary, in 
        consultation with relevant stakeholders (including 
        representatives of nursing facilities, residents of 
        nursing facilities, pharmacists, the pharmacy industry 
        (including retail and long-term care pharmacy), 
        prescription drug plans, MA-PD plans, and any other 
        stakeholders the Secretary determines appropriate), 
        such as weekly, daily, or automated dose dispensing, 
        when dispensing covered part D drugs to enrollees who 
        reside in a long-term care facility in order to reduce 
        waste associated with 30-day fills.
          (4) Requiring valid prescriber national provider 
        identifiers on pharmacy claims.--
                  (A) In general.--For plan year 2016 and 
                subsequent plan years, the Secretary shall 
                require a claim for a covered part D drug for a 
                part D eligible individual enrolled in a 
                prescription drug plan under this part or an 
                MA-PD plan under part C to include a prescriber 
                National Provider Identifier that is determined 
                to be valid under the procedures established 
                under subparagraph (B)(i).
                  (B) Procedures.--
                          (i) Validity of prescriber national 
                        provider identifiers.--The Secretary, 
                        in consultation with appropriate 
                        stakeholders, shall establish 
                        procedures for determining the validity 
                        of prescriber National Provider 
                        Identifiers under subparagraph (A).
                          (ii) Informing beneficiaries of 
                        reason for denial.--The Secretary shall 
                        establish procedures to ensure that, in 
                        the case that a claim for a covered 
                        part D drug of an individual described 
                        in subparagraph (A) is denied because 
                        the claim does not meet the 
                        requirements of this paragraph, the 
                        individual is properly informed at the 
                        point of service of the reason for the 
                        denial.
                  (C) Report.--Not later than January 1, 2018, 
                the Inspector General of the Department of 
                Health and Human Services shall submit to 
                Congress a report on the effectiveness of the 
                procedures established under subparagraph 
                (B)(i).
                  (D) Outlier prescriber notification.--
                          (i) Notification.--Beginning not 
                        later than two years after the date of 
                        the enactment of this subparagraph, the 
                        Secretary shall, in the case of a 
                        prescriber identified by the Secretary 
                        under clause (ii) to be an outlier 
                        prescriber of opioids, provide, subject 
                        to clause (iv), an annual notification 
                        to such prescriber that such prescriber 
                        has been so identified and that 
                        includes resources on proper 
                        prescribing methods and other 
                        information specified in accordance 
                        with clause (iii).
                          (ii) Identification of outlier 
                        prescribers of opioids.--
                                  (I) In general.--The 
                                Secretary shall, subject to 
                                subclause (III), using the 
                                valid prescriber National 
                                Provider Identifiers included 
                                pursuant to subparagraph (A) on 
                                claims for covered part D drugs 
                                for part D eligible individuals 
                                enrolled in prescription drug 
                                plans under this part or MA-PD 
                                plans under part C and based on 
                                the threshold established under 
                                subclause (II), conduct an 
                                analysis to identify 
                                prescribers that are outlier 
                                opioid prescribers for a period 
                                specified by the Secretary.
                                  (II) Establishment of 
                                threshold.--For purposes of 
                                subclause (I) and subject to 
                                subclause (III), the Secretary 
                                shall, after consultation with 
                                stakeholders, establish a 
                                threshold, based on prescriber 
                                specialty and geographic area, 
                                for identifying whether a 
                                prescriber in a specialty and 
                                geographic area is an outlier 
                                prescriber of opioids as 
                                compared to other prescribers 
                                of opioids within such 
                                specialty and area.
                                  (III) Exclusions.--The 
                                Secretary may exclude the 
                                following individuals and 
                                prescribers from the analysis 
                                under this clause:
                                          (aa) Individuals 
                                        receiving hospice 
                                        services.
                                          (bb) Individuals with 
                                        a cancer diagnosis.
                                          (cc) Prescribers who 
                                        are the subject of an 
                                        investigation by the 
                                        Centers for Medicare & 
                                        Medicaid Services or 
                                        the Office of Inspector 
                                        General of the 
                                        Department of Health 
                                        and Human Services.
                          (iii) Contents of notification.--The 
                        Secretary shall, based on input from 
                        stakeholders, specify the resources and 
                        other information to be included in 
                        notifications provided under clause 
                        (i).
                          (iv) Modifications and expansions.--
                                  (I) Frequency.--Beginning 5 
                                years after the date of the 
                                enactment of this subparagraph, 
                                the Secretary may change the 
                                frequency of the notifications 
                                described in clause (i) based 
                                on stakeholder input.
                                  (II) Expansion to other 
                                prescriptions.--The Secretary 
                                may expand notifications under 
                                this subparagraph to include 
                                identifications and 
                                notifications with respect to 
                                concurrent prescriptions of 
                                covered Part D drugs used in 
                                combination with opioids that 
                                are considered to have adverse 
                                side effects when so used in 
                                such combination, as determined 
                                by the Secretary.
                          (v) Opioids defined.--For purposes of 
                        this subparagraph, the term ``opioids'' 
                        has such meaning as specified by the 
                        Secretary through program instruction 
                        or otherwise.
          (5) Drug management program for at-risk 
        beneficiaries.--
                  (A) Authority to establish.--A PDP sponsor 
                may (and for plan years beginning on or after 
                January 1, 2021, a PDP sponsor shall) establish 
                a drug management program for at-risk 
                beneficiaries under which, subject to 
                subparagraph (B), the PDP sponsor may, in the 
                case of an at-risk beneficiary for prescription 
                drug abuse who is an enrollee in a prescription 
                drug plan of such PDP sponsor, limit such 
                beneficiary's access to coverage for frequently 
                abused drugs under such plan to frequently 
                abused drugs that are prescribed for such 
                beneficiary by one or more prescribers selected 
                under subparagraph (D), and dispensed for such 
                beneficiary by one or more pharmacies selected 
                under such subparagraph.
                  (B) Requirement for notices.--
                          (i) In general.--A PDP sponsor may 
                        not limit the access of an at-risk 
                        beneficiary for prescription drug abuse 
                        to coverage for frequently abused drugs 
                        under a prescription drug plan until 
                        such sponsor--
                                  (I) provides to the 
                                beneficiary an initial notice 
                                described in clause (ii) and a 
                                second notice described in 
                                clause (iii); and
                                  (II) verifies with the 
                                providers of the beneficiary 
                                that the beneficiary is an at-
                                risk beneficiary for 
                                prescription drug abuse.
                          (ii) Initial notice.--An initial 
                        notice described in this clause is a 
                        notice that provides to the 
                        beneficiary--
                                  (I) notice that the PDP 
                                sponsor has identified the 
                                beneficiary as potentially 
                                being an at-risk beneficiary 
                                for prescription drug abuse;
                                  (II) information describing 
                                all State and Federal public 
                                health resources that are 
                                designed to address 
                                prescription drug abuse to 
                                which the beneficiary has 
                                access, including mental health 
                                services and other counseling 
                                services;
                                  (III) notice of, and 
                                information about, the right of 
                                the beneficiary to appeal such 
                                identification under subsection 
                                (h) and the option of an 
                                automatic escalation to 
                                external review;
                                  (IV) a request for the 
                                beneficiary to submit to the 
                                PDP sponsor preferences for 
                                which prescribers and 
                                pharmacies the beneficiary 
                                would prefer the PDP sponsor to 
                                select under subparagraph (D) 
                                in the case that the 
                                beneficiary is identified as an 
                                at-risk beneficiary for 
                                prescription drug abuse as 
                                described in clause (iii)(I);
                                  (V) an explanation of the 
                                meaning and consequences of the 
                                identification of the 
                                beneficiary as potentially 
                                being an at-risk beneficiary 
                                for prescription drug abuse, 
                                including an explanation of the 
                                drug management program 
                                established by the PDP sponsor 
                                pursuant to subparagraph (A);
                                  (VI) clear instructions that 
                                explain how the beneficiary can 
                                contact the PDP sponsor in 
                                order to submit to the PDP 
                                sponsor the preferences 
                                described in subclause (IV) and 
                                any other communications 
                                relating to the drug management 
                                program for at-risk 
                                beneficiaries established by 
                                the PDP sponsor; and
                                  (VII) contact information for 
                                other organizations that can 
                                provide the beneficiary with 
                                assistance regarding such drug 
                                management program (similar to 
                                the information provided by the 
                                Secretary in other standardized 
                                notices provided to part D 
                                eligible individuals enrolled 
                                in prescription drug plans 
                                under this part).
                          (iii) Second notice.--A second notice 
                        described in this clause is a notice 
                        that provides to the beneficiary 
                        notice--
                                  (I) that the PDP sponsor has 
                                identified the beneficiary as 
                                an at-risk beneficiary for 
                                prescription drug abuse;
                                  (II) that such beneficiary is 
                                subject to the requirements of 
                                the drug management program for 
                                at-risk beneficiaries 
                                established by such PDP sponsor 
                                for such plan;
                                  (III) of the prescriber (or 
                                prescribers) and pharmacy (or 
                                pharmacies) selected for such 
                                individual under subparagraph 
                                (D);
                                  (IV) of, and information 
                                about, the beneficiary's right 
                                to appeal such identification 
                                under subsection (h) and the 
                                option of an automatic 
                                escalation to external review;
                                  (V) that the beneficiary can, 
                                in the case that the 
                                beneficiary has not previously 
                                submitted to the PDP sponsor 
                                preferences for which 
                                prescribers and pharmacies the 
                                beneficiary would prefer the 
                                PDP sponsor select under 
                                subparagraph (D), submit such 
                                preferences to the PDP sponsor; 
                                and
                                  (VI) that includes clear 
                                instructions that explain how 
                                the beneficiary can contact the 
                                PDP sponsor.
                          (iv) Timing of notices.--
                                  (I) In general.--Subject to 
                                subclause (II), a second notice 
                                described in clause (iii) shall 
                                be provided to the beneficiary 
                                on a date that is not less than 
                                30 days after an initial notice 
                                described in clause (ii) is 
                                provided to the beneficiary.
                                  (II) Exception.--In the case 
                                that the PDP sponsor, in 
                                conjunction with the Secretary, 
                                determines that concerns 
                                identified through rulemaking 
                                by the Secretary regarding the 
                                health or safety of the 
                                beneficiary or regarding 
                                significant drug diversion 
                                activities require the PDP 
                                sponsor to provide a second 
                                notice described in clause 
                                (iii) to the beneficiary on a 
                                date that is earlier than the 
                                date described in subclause 
                                (I), the PDP sponsor may 
                                provide such second notice on 
                                such earlier date.
                  (C) At-risk beneficiary for prescription drug 
                abuse.--
                          (i) In general.--For purposes of this 
                        paragraph, the term ``at-risk 
                        beneficiary for prescription drug 
                        abuse'' means a part D eligible 
                        individual who is not an exempted 
                        individual described in clause (ii) 
                        and--
                                  (I) who is identified as such 
                                an at-risk beneficiary through 
                                the use of clinical guidelines 
                                that indicate misuse or abuse 
                                of prescription drugs described 
                                in subparagraph (G) and that 
                                are developed by the Secretary 
                                in consultation with PDP 
                                sponsors and other 
                                stakeholders, including 
                                individuals entitled to 
                                benefits under part A or 
                                enrolled under part B, advocacy 
                                groups representing such 
                                individuals, physicians, 
                                pharmacists, and other 
                                clinicians, retail pharmacies, 
                                plan sponsors, entities 
                                delegated by plan sponsors, and 
                                biopharmaceutical 
                                manufacturers; or
                                  (II) with respect to whom the 
                                PDP sponsor of a prescription 
                                drug plan, upon enrolling such 
                                individual in such plan, 
                                received notice from the 
                                Secretary that such individual 
                                was identified under this 
                                paragraph to be an at-risk 
                                beneficiary for prescription 
                                drug abuse under the 
                                prescription drug plan in which 
                                such individual was most 
                                recently previously enrolled 
                                and such identification has not 
                                been terminated under 
                                subparagraph (F).
                          (ii) Exempted individual described.--
                        An exempted individual described in 
                        this clause is an individual who--
                                  (I) receives hospice care 
                                under this title;
                                  (II) is a resident of a long-
                                term care facility, of a 
                                facility described in section 
                                1905(d), or of another facility 
                                for which frequently abused 
                                drugs are dispensed for 
                                residents through a contract 
                                with a single pharmacy; or
                                  (III) the Secretary elects to 
                                treat as an exempted individual 
                                for purposes of clause (i).
                          (iii) Program size.--The Secretary 
                        shall establish policies, including the 
                        guidelines developed under clause 
                        (i)(I) and the exemptions under clause 
                        (ii)(III), to ensure that the 
                        population of enrollees in a drug 
                        management program for at-risk 
                        beneficiaries operated by a 
                        prescription drug plan can be 
                        effectively managed by such plans.
                          (iv) Clinical contact.--With respect 
                        to each at-risk beneficiary for 
                        prescription drug abuse enrolled in a 
                        prescription drug plan offered by a PDP 
                        sponsor, the PDP sponsor shall contact 
                        the beneficiary's providers who have 
                        prescribed frequently abused drugs 
                        regarding whether prescribed 
                        medications are appropriate for such 
                        beneficiary's medical conditions.
                  (D) Selection of prescribers and 
                pharmacies.--
                          (i) In general.--With respect to each 
                        at-risk beneficiary for prescription 
                        drug abuse enrolled in a prescription 
                        drug plan offered by such sponsor, a 
                        PDP sponsor shall, based on the 
                        preferences submitted to the PDP 
                        sponsor by the beneficiary pursuant to 
                        clauses (ii)(IV) and (iii)(V) of 
                        subparagraph (B) (except as otherwise 
                        provided in this subparagraph) select--
                                  (I) one, or, if the PDP 
                                sponsor reasonably determines 
                                it necessary to provide the 
                                beneficiary with reasonable 
                                access under clause (ii), more 
                                than one, individual who is 
                                authorized to prescribe 
                                frequently abused drugs 
                                (referred to in this paragraph 
                                as a ``prescriber'') who may 
                                write prescriptions for such 
                                drugs for such beneficiary; and
                                  (II) one, or, if the PDP 
                                sponsor reasonably determines 
                                it necessary to provide the 
                                beneficiary with reasonable 
                                access under clause (ii), more 
                                than one, pharmacy that may 
                                dispense such drugs to such 
                                beneficiary.
                        For purposes of subclause (II), in the 
                        case of a pharmacy that has multiple 
                        locations that share real-time 
                        electronic data, all such locations of 
                        the pharmacy shall collectively be 
                        treated as one pharmacy.
                          (ii) Reasonable access.--In making 
                        the selections under this 
                        subparagraph--
                                  (I) a PDP sponsor shall 
                                ensure that the beneficiary 
                                continues to have reasonable 
                                access to frequently abused 
                                drugs (as defined in 
                                subparagraph (G)), taking into 
                                account geographic location, 
                                beneficiary preference, impact 
                                on costsharing, and reasonable 
                                travel time; and
                                  (II) a PDP sponsor shall 
                                ensure such access (including 
                                access to prescribers and 
                                pharmacies with respect to 
                                frequently abused drugs) in the 
                                case of individuals with 
                                multiple residences, in the 
                                case of natural disasters and 
                                similar situations, and in the 
                                case of the provision of 
                                emergency services.
                          (iii) Beneficiary preferences.--If an 
                        at-risk beneficiary for prescription 
                        drug abuse submits preferences for 
                        which in-network prescribers and 
                        pharmacies the beneficiary would prefer 
                        the PDP sponsor select in response to a 
                        notice under subparagraph (B), the PDP 
                        sponsor shall--
                                  (I) review such preferences;
                                  (II) select or change the 
                                selection of prescribers and 
                                pharmacies for the beneficiary 
                                based on such preferences; and
                                  (III) inform the beneficiary 
                                of such selection or change of 
                                selection.
                          (iv) Exception regarding beneficiary 
                        preferences.--In the case that the PDP 
                        sponsor determines that a change to the 
                        selection of prescriber or pharmacy 
                        under clause (iii)(II) by the PDP 
                        sponsor is contributing or would 
                        contribute to prescription drug abuse 
                        or drug diversion by the beneficiary, 
                        the PDP sponsor may change the 
                        selection of prescriber or pharmacy for 
                        the beneficiary without regard to the 
                        preferences of the beneficiary 
                        described in clause (iii). If the PDP 
                        sponsor changes the selection pursuant 
                        to the preceding sentence, the PDP 
                        sponsor shall provide the beneficiary 
                        with--
                                  (I) at least 30 days written 
                                notice of the change of 
                                selection; and
                                  (II) a rationale for the 
                                change.
                          (v) Confirmation.--Before selecting a 
                        prescriber or pharmacy under this 
                        subparagraph, a PDP sponsor must notify 
                        the prescriber and pharmacy that the 
                        beneficiary involved has been 
                        identified for inclusion in the drug 
                        management program for at-risk 
                        beneficiaries and that the prescriber 
                        and pharmacy has been selected as the 
                        beneficiary's designated prescriber and 
                        pharmacy.
                  (E) Terminations and appeals.--The 
                identification of an individual as an at-risk 
                beneficiary for prescription drug abuse under 
                this paragraph, a coverage determination made 
                under a drug management program for at-risk 
                beneficiaries, the selection of prescriber or 
                pharmacy under subparagraph (D), and 
                information to be shared under subparagraph 
                (I), with respect to such individual, shall be 
                subject to reconsideration and appeal under 
                subsection (h) and the option of an automatic 
                escalation to external review to the extent 
                provided by the Secretary.
                  (F) Termination of identification.--
                          (i) In general.--The Secretary shall 
                        develop standards for the termination 
                        of identification of an individual as 
                        an at-risk beneficiary for prescription 
                        drug abuse under this paragraph. Under 
                        such standards such identification 
                        shall terminate as of the earlier of--
                                  (I) the date the individual 
                                demonstrates that the 
                                individual is no longer likely, 
                                in the absence of the 
                                restrictions under this 
                                paragraph, to be an at-risk 
                                beneficiary for prescription 
                                drug abuse described in 
                                subparagraph (C)(i); and
                                  (II) the end of such maximum 
                                period of identification as the 
                                Secretary may specify.
                          (ii) Rule of construction.--Nothing 
                        in clause (i) shall be construed as 
                        preventing a plan from identifying an 
                        individual as an at-risk beneficiary 
                        for prescription drug abuse under 
                        subparagraph (C)(i) after such 
                        termination on the basis of additional 
                        information on drug use occurring after 
                        the date of notice of such termination.
                  (G) Frequently abused drug.--For purposes of 
                this subsection, the term ``frequently abused 
                drug'' means a drug that is a controlled 
                substance that the Secretary determines to be 
                frequently abused or diverted.
                  (H) Data disclosure.--
                          (i) Data on decision to impose 
                        limitation.--In the case of an at-risk 
                        beneficiary for prescription drug abuse 
                        (or an individual who is a potentially 
                        at-risk beneficiary for prescription 
                        drug abuse) whose access to coverage 
                        for frequently abused drugs under a 
                        prescription drug plan has been limited 
                        by a PDP sponsor under this paragraph, 
                        the Secretary shall establish rules and 
                        procedures to require the PDP sponsor 
                        to disclose data, including any 
                        necessary individually identifiable 
                        health information, in a form and 
                        manner specified by the Secretary, 
                        about the decision to impose such 
                        limitations and the limitations imposed 
                        by the sponsor under this part.
                          (ii) Data to reduce fraud, abuse, and 
                        waste.--The Secretary shall establish 
                        rules and procedures to require PDP 
                        sponsors operating a drug management 
                        program for at-risk beneficiaries under 
                        this paragraph to provide the Secretary 
                        with such data as the Secretary 
                        determines appropriate for purposes of 
                        identifying patterns of prescription 
                        drug utilization for plan enrollees 
                        that are outside normal patterns and 
                        that may indicate fraudulent, medically 
                        unnecessary, or unsafe use.
                  (I) Sharing of information for subsequent 
                plan enrollments.--The Secretary shall 
                establish procedures under which PDP sponsors 
                who offer prescription drug plans shall share 
                information with respect to individuals who are 
                at-risk beneficiaries for prescription drug 
                abuse (or individuals who are potentially at-
                risk beneficiaries for prescription drug abuse) 
                and enrolled in a prescription drug plan and 
                who subsequently disenroll from such plan and 
                enroll in another prescription drug plan 
                offered by another PDP sponsor.
                  (J) Privacy issues.--Prior to the 
                implementation of the rules and procedures 
                under this paragraph, the Secretary shall 
                clarify privacy requirements, including 
                requirements under the regulations promulgated 
                pursuant to section 264(c) of the Health 
                Insurance Portability and Accountability Act of 
                1996 (42 U.S.C. 1320d-2 note), related to the 
                sharing of data under subparagraphs (H) and (I) 
                by PDP sponsors. Such clarification shall 
                provide that the sharing of such data shall be 
                considered to be protected health information 
                in accordance with the requirements of the 
                regulations promulgated pursuant to such 
                section 264(c).
                  (K) Education.--The Secretary shall provide 
                education to enrollees in prescription drug 
                plans of PDP sponsors and providers regarding 
                the drug management program for at-risk 
                beneficiaries described in this paragraph, 
                including education--
                          (i) provided by Medicare 
                        administrative contractors through the 
                        improper payment outreach and education 
                        program described in section 1874A(h); 
                        and
                          (ii) through current education 
                        efforts (such as State health insurance 
                        assistance programs described in 
                        subsection (a)(1)(A) of section 119 of 
                        the Medicare Improvements for Patients 
                        and Providers Act of 2008 (42 U.S.C. 
                        1395b-3 note)) and materials directed 
                        toward such enrollees.
                  (L) Application under ma-pd plans.--Pursuant 
                to section 1860D-21(c)(1), the provisions of 
                this paragraph apply under part D to MA 
                organizations offering MA-PD plans to MA 
                eligible individuals in the same manner as such 
                provisions apply under this part to a PDP 
                sponsor offering a prescription drug plan to a 
                part D eligible individual.
                  (M) CMS compliance review.--The Secretary 
                shall ensure that existing plan sponsor 
                compliance reviews and audit processes include 
                the drug management programs for at-risk 
                beneficiaries under this paragraph, including 
                appeals processes under such programs.
          (6) Utilization management tool to prevent drug 
        abuse.--
                  (A) In general.--A tool described in this 
                paragraph is any of the following:
                          (i) A utilization tool designed to 
                        prevent the abuse of frequently abused 
                        drugs by individuals and to prevent the 
                        diversion of such drugs at pharmacies.
                          (ii) Retrospective utilization review 
                        to identify--
                                  (I) individuals that receive 
                                frequently abused drugs at a 
                                frequency or in amounts that 
                                are not clinically appropriate; 
                                and
                                  (II) providers of services or 
                                suppliers that may facilitate 
                                the abuse or diversion of 
                                frequently abused drugs by 
                                beneficiaries.
                          (iii) Consultation with the 
                        contractor described in subparagraph 
                        (B) to verify if an individual 
                        enrolling in a prescription drug plan 
                        offered by a PDP sponsor has been 
                        previously identified by another PDP 
                        sponsor as an individual described in 
                        clause (ii)(I).
                  (B) Reporting.--A PDP sponsor offering a 
                prescription drug plan (and an MA organization 
                offering an MA-PD plan) in a State shall submit 
                to the Secretary and the Medicare drug 
                integrity contractor with which the Secretary 
                has entered into a contract under section 1893 
                with respect to such State a report, on a 
                monthly basis, containing information on--
                          (i) any provider of services or 
                        supplier described in subparagraph 
                        (A)(ii)(II) that is identified by such 
                        plan sponsor (or organization) during 
                        the 30-day period before such report is 
                        submitted; and
                          (ii) the name and prescription 
                        records of individuals described in 
                        paragraph (5)(C).
                  (C) CMS compliance review.--The Secretary 
                shall ensure that plan sponsor compliance 
                reviews and program audits biennially include a 
                certification that utilization management tools 
                under this paragraph are in compliance with the 
                requirements for such tools.
          (6) Providing prescription drug plans with parts a 
        and b claims data to promote the appropriate use of 
        medications and improve health outcomes.--
                  (A) Process.--Subject to subparagraph (B), 
                the Secretary shall establish a process under 
                which a PDP sponsor of a prescription drug plan 
                may submit a request for the Secretary to 
                provide the sponsor, on a periodic basis and in 
                an electronic format, beginning in plan year 
                2020, data described in subparagraph (D) with 
                respect to enrollees in such plan. Such data 
                shall be provided without regard to whether 
                such enrollees are described in clause (ii) of 
                paragraph (2)(A).
                  (B) Purposes.--A PDP sponsor may use the data 
                provided to the sponsor pursuant to 
                subparagraph (A) for any of the following 
                purposes:
                          (i) To optimize therapeutic outcomes 
                        through improved medication use, as 
                        such phrase is used in clause (i) of 
                        paragraph (2)(A).
                          (ii) To improving care coordination 
                        so as to prevent adverse health 
                        outcomes, such as preventable emergency 
                        department visits and hospital 
                        readmissions.
                          (iii) For any other purpose 
                        determined appropriate by the 
                        Secretary.
                  (C) Limitations on data use.--A PDP sponsor 
                shall not use data provided to the sponsor 
                pursuant to subparagraph (A) for any of the 
                following purposes:
                          (i) To inform coverage determinations 
                        under this part.
                          (ii) To conduct retroactive reviews 
                        of medically accepted indications 
                        determinations.
                          (iii) To facilitate enrollment 
                        changes to a different prescription 
                        drug plan or an MA-PD plan offered by 
                        the same parent organization.
                          (iv) To inform marketing of benefits.
                          (v) For any other purpose that the 
                        Secretary determines is necessary to 
                        include in order to protect the 
                        identity of individuals entitled to, or 
                        enrolled for, benefits under this title 
                        and to protect the security of personal 
                        health information.
                  (D) Data described.--The data described in 
                this clause are standardized extracts (as 
                determined by the Secretary) of claims data 
                under parts A and B for items and services 
                furnished under such parts for time periods 
                specified by the Secretary. Such data shall 
                include data as current as practicable.
  (d) Consumer Satisfaction Surveys.--In order to provide for 
comparative information under section 1860D-1(c)(3)(A)(v), the 
Secretary shall conduct consumer satisfaction surveys with 
respect to PDP sponsors and prescription drug plans in a manner 
similar to the manner such surveys are conducted for MA 
organizations and MA plans under part C.
  (e) Electronic Prescription Program.--
          (1) Application of standards.--As of such date as the 
        Secretary may specify, but not later than 1 year after 
        the date of promulgation of final standards under 
        paragraph (4)(D), prescriptions and other information 
        described in paragraph (2)(A) for covered part D drugs 
        prescribed for part D eligible individuals that are 
        transmitted electronically shall be transmitted only in 
        accordance with such standards under an electronic 
        prescription drug program that meets the requirements 
        of paragraph (2).
          (2) Program requirements.--Consistent with uniform 
        standards established under paragraph (3)--
                  (A) Provision of information to prescribing 
                health care professional and dispensing 
                pharmacies and pharmacists.--An electronic 
                prescription drug program shall provide for the 
                electronic transmittal to the prescribing 
                health care professional and to the dispensing 
                pharmacy and pharmacist of the prescription and 
                information on eligibility and benefits 
                (including the drugs included in the applicable 
                formulary, any tiered formulary structure, and 
                any requirements for prior authorization) and 
                of the following information with respect to 
                the prescribing and dispensing of a covered 
                part D drug:
                          (i) Information on the drug being 
                        prescribed or dispensed and other drugs 
                        listed on the medication history, 
                        including information on drug-drug 
                        interactions, warnings or cautions, 
                        and, when indicated, dosage 
                        adjustments.
                          (ii) Information on the availability 
                        of lower cost, therapeutically 
                        appropriate alternatives (if any) for 
                        the drug prescribed.
                  (B) Application to medical history 
                information.--Effective on and after such date 
                as the Secretary specifies and after the 
                establishment of appropriate standards to carry 
                out this subparagraph, the program shall 
                provide for the electronic transmittal in a 
                manner similar to the manner under subparagraph 
                (A) of information that relates to the medical 
                history concerning the individual and related 
                to a covered part D drug being prescribed or 
                dispensed, upon request of the professional or 
                pharmacist involved.
                  (C) Limitations.--Information shall only be 
                disclosed under subparagraph (A) or (B) if the 
                disclosure of such information is permitted 
                under the Federal regulations (concerning the 
                privacy of individually identifiable health 
                information) promulgated under section 264(c) 
                of the Health Insurance Portability and 
                Accountability Act of 1996.
                  (D) Timing.--To the extent feasible, the 
                information exchanged under this paragraph 
                shall be on an interactive, real-time basis.
                  (E) Electronic prior authorization.--
                          (i) In general.--Not later than 
                        January 1, 2021, the program shall 
                        provide for the secure electronic 
                        transmission of--
                                  (I) a prior authorization 
                                request from the prescribing 
                                health care professional for 
                                coverage of a covered part D 
                                drug for a part D eligible 
                                individual enrolled in a part D 
                                plan (as defined in section 
                                1860D-23(a)(5)) to the PDP 
                                sponsor or Medicare Advantage 
                                organization offering such 
                                plan; and
                                  (II) a response, in 
                                accordance with this 
                                subparagraph, from such PDP 
                                sponsor or Medicare Advantage 
                                organization, respectively, to 
                                such professional.
                          (ii) Electronic transmission.--
                                  (I) Exclusions.--For purposes 
                                of this subparagraph, a 
                                facsimile, a proprietary payer 
                                portal that does not meet 
                                standards specified by the 
                                Secretary, or an electronic 
                                form shall not be treated as an 
                                electronic transmission 
                                described in clause (i).
                                  (II) Standards.--In order to 
                                be treated, for purposes of 
                                this subparagraph, as an 
                                electronic transmission 
                                described in clause (i), such 
                                transmission shall comply with 
                                technical standards adopted by 
                                the Secretary in consultation 
                                with the National Council for 
                                Prescription Drug Programs, 
                                other standard setting 
                                organizations determined 
                                appropriate by the Secretary, 
                                and stakeholders including PDP 
                                sponsors, Medicare Advantage 
                                organizations, health care 
                                professionals, and health 
                                information technology software 
                                vendors.
                                  (III) Application.--
                                Notwithstanding any other 
                                provision of law, for purposes 
                                of this subparagraph, the 
                                Secretary may require the use 
                                of such standards adopted under 
                                subclause (II) in lieu of any 
                                other applicable standards for 
                                an electronic transmission 
                                described in clause (i) for a 
                                covered part D drug for a part 
                                D eligible individual.
          (3) Standards.--
                  (A) In general.--The Secretary shall provide 
                consistent with this subsection for the 
                promulgation of uniform standards relating to 
                the requirements for electronic prescription 
                drug programs under paragraph (2).
                  (B) Objectives.--Such standards shall be 
                consistent with the objectives of improving--
                          (i) patient safety;
                          (ii) the quality of care provided to 
                        patients; and
                          (iii) efficiencies, including cost 
                        savings, in the delivery of care.
                  (C) Design criteria.--Such standards shall--
                          (i) be designed so that, to the 
                        extent practicable, the standards do 
                        not impose an undue administrative 
                        burden on prescribing health care 
                        professionals and dispensing pharmacies 
                        and pharmacists;
                          (ii) be compatible with standards 
                        established under part C of title XI, 
                        standards established under subsection 
                        (b)(2)(B)(i), and with general health 
                        information technology standards; and
                          (iii) be designed so that they permit 
                        electronic exchange of drug labeling 
                        and drug listing information maintained 
                        by the Food and Drug Administration and 
                        the National Library of Medicine.
                  (D) Permitting use of appropriate 
                messaging.--Such standards shall allow for the 
                messaging of information only if it relates to 
                the appropriate prescribing of drugs, including 
                quality assurance measures and systems referred 
                to in subsection (c)(1)(B).
                  (E) Permitting patient designation of 
                dispensing pharmacy.--
                          (i) In general.--Consistent with 
                        clause (ii), such standards shall 
                        permit a part D eligible individual to 
                        designate a particular pharmacy to 
                        dispense a prescribed drug.
                          (ii) No change in benefits.--Clause 
                        (i) shall not be construed as 
                        affecting--
                                  (I) the access required to be 
                                provided to pharmacies by a 
                                prescription drug plan; or
                                  (II) the application of any 
                                differences in benefits or 
                                payments under such a plan 
                                based on the pharmacy 
                                dispensing a covered part D 
                                drug.
          (4) Development, promulgation, and modification of 
        standards.--
                  (A) Initial standards.--Not later than 
                September 1, 2005, the Secretary shall develop, 
                adopt, recognize, or modify initial uniform 
                standards relating to the requirements for 
                electronic prescription drug programs described 
                in paragraph (2) taking into consideration the 
                recommendations (if any) from the National 
                Committee on Vital and Health Statistics (as 
                established under section 306(k) of the Public 
                Health Service Act (42 U.S.C. 242k(k))) under 
                subparagraph (B).
                  (B) Role of ncvhs.--The National Committee on 
                Vital and Health Statistics shall develop 
                recommendations for uniform standards relating 
                to such requirements in consultation with the 
                following:
                          (i) Standard setting organizations 
                        (as defined in section 1171(8))
                          (ii) Practicing physicians.
                          (iii) Hospitals.
                          (iv) Pharmacies.
                          (v) Practicing pharmacists.
                          (vi) Pharmacy benefit managers.
                          (vii) State boards of pharmacy.
                          (viii) State boards of medicine.
                          (ix) Experts on electronic 
                        prescribing.
                          (x) Other appropriate Federal 
                        agencies.
                  (C) Pilot project to test initial 
                standards.--
                          (i) In general.--During the 1-year 
                        period that begins on January 1, 2006, 
                        the Secretary shall conduct a pilot 
                        project to test the initial standards 
                        developed under subparagraph (A) prior 
                        to the promulgation of the final 
                        uniform standards under subparagraph 
                        (D) in order to provide for the 
                        efficient implementation of the 
                        requirements described in paragraph 
                        (2).
                          (ii) Exception.--Pilot testing of 
                        standards is not required under clause 
                        (i) where there already is adequate 
                        industry experience with such 
                        standards, as determined by the 
                        Secretary after consultation with 
                        effected standard setting organizations 
                        and industry users.
                          (iii) Voluntary participation of 
                        physicians and pharmacies.--In order to 
                        conduct the pilot project under clause 
                        (i), the Secretary shall enter into 
                        agreements with physicians, physician 
                        groups, pharmacies, hospitals, PDP 
                        sponsors, MA organizations, and other 
                        appropriate entities under which health 
                        care professionals electronically 
                        transmit prescriptions to dispensing 
                        pharmacies and pharmacists in 
                        accordance with such standards.
                          (iv) Evaluation and report.--
                                  (I) Evaluation.--The 
                                Secretary shall conduct an 
                                evaluation of the pilot project 
                                conducted under clause (i).
                                  (II) Report to congress.--Not 
                                later than April 1, 2007, the 
                                Secretary shall submit to 
                                Congress a report on the 
                                evaluation conducted under 
                                subclause (I).
                  (D) Final standards.--Based upon the 
                evaluation of the pilot project under 
                subparagraph (C)(iv)(I) and not later than 
                April 1, 2008, the Secretary shall promulgate 
                uniform standards relating to the requirements 
                described in paragraph (2).
          (5) Relation to state laws.--The standards 
        promulgated under this subsection shall supersede any 
        State law or regulation that--
                  (A) is contrary to the standards or restricts 
                the ability to carry out this part; and
                  (B) pertains to the electronic transmission 
                of medication history and of information on 
                eligibility, benefits, and prescriptions with 
                respect to covered part D drugs under this 
                part.
          (6) Establishment of safe harbor.--The Secretary, in 
        consultation with the Attorney General, shall 
        promulgate regulations that provide for a safe harbor 
        from sanctions under paragraphs (1) and (2) of section 
        1128B(b) and an exception to the prohibition under 
        subsection (a)(1) of section 1877 with respect to the 
        provision of nonmonetary remuneration (in the form of 
        hardware, software, or information technology and 
        training services) necessary and used solely to receive 
        and transmit electronic prescription information in 
        accordance with the standards promulgated under this 
        subsection--
                  (A) in the case of a hospital, by the 
                hospital to members of its medical staff;
                  (B) in the case of a group practice (as 
                defined in section 1877(h)(4)), by the practice 
                to prescribing health care professionals who 
                are members of such practice; and
                  (C) in the case of a PDP sponsor or MA 
                organization, by the sponsor or organization to 
                pharmacists and pharmacies participating in the 
                network of such sponsor or organization, and to 
                prescribing health care professionals.
  (f) Grievance Mechanism.--Each PDP sponsor shall provide 
meaningful procedures for hearing and resolving grievances 
between the sponsor (including any entity or individual through 
which the sponsor provides covered benefits) and enrollees with 
prescription drug plans of the sponsor under this part in 
accordance with section 1852(f).
  (g) Coverage Determinations and Reconsiderations.--
          (1) Application of coverage determination and 
        reconsideration provisions.--A PDP sponsor shall meet 
        the requirements of paragraphs (1) through (3) of 
        section 1852(g) with respect to covered benefits under 
        the prescription drug plan it offers under this part in 
        the same manner as such requirements apply to an MA 
        organization with respect to benefits it offers under 
        an MA plan under part C.
          (2) Request for a determination for the treatment of 
        tiered formulary drug.--In the case of a prescription 
        drug plan offered by a PDP sponsor that provides for 
        tiered cost-sharing for drugs included within a 
        formulary and provides lower cost-sharing for preferred 
        drugs included within the formulary, a part D eligible 
        individual who is enrolled in the plan may request an 
        exception to the tiered cost-sharing structure. Under 
        such an exception, a nonpreferred drug could be covered 
        under the terms applicable for preferred drugs if the 
        prescribing physician determines that the preferred 
        drug for treatment of the same condition either would 
        not be as effective for the individual or would have 
        adverse effects for the individual or both. A PDP 
        sponsor shall have an exceptions process under this 
        paragraph consistent with guidelines established by the 
        Secretary for making a determination with respect to 
        such a request. Denial of such an exception shall be 
        treated as a coverage denial for purposes of applying 
        subsection (h).
  (h) Appeals.--
          (1) In general.--Subject to paragraph (2), a PDP 
        sponsor shall meet the requirements of paragraphs (4) 
        and (5) of section 1852(g) with respect to benefits 
        (including a determination related to the application 
        of tiered cost-sharing described in subsection (g)(2)) 
        in a manner similar (as determined by the Secretary) to 
        the manner such requirements apply to an MA 
        organization with respect to benefits under the 
        original medicare fee-for-service program option it 
        offers under an MA plan under part C. In applying this 
        paragraph only the part D eligible individual shall be 
        entitled to bring such an appeal.
          (2) Limitation in cases on nonformulary 
        determinations.--A part D eligible individual who is 
        enrolled in a prescription drug plan offered by a PDP 
        sponsor may appeal under paragraph (1) a determination 
        not to provide for coverage of a covered part D drug 
        that is not on the formulary under the plan only if the 
        prescribing physician determines that all covered part 
        D drugs on any tier of the formulary for treatment of 
        the same condition would not be as effective for the 
        individual as the nonformulary drug, would have adverse 
        effects for the individual, or both.
          (3) Treatment of nonformulary determinations.--If a 
        PDP sponsor determines that a plan provides coverage 
        for a covered part D drug that is not on the formulary 
        of the plan, the drug shall be treated as being 
        included on the formulary for purposes of section 
        1860D-2(b)(4)(C)(i).
  (i) Privacy, Confidentiality, and Accuracy of Enrollee 
Records.--The provisions of section 1852(h) shall apply to a 
PDP sponsor and prescription drug plan in the same manner as it 
applies to an MA organization and an MA plan.
  (j) Treatment of Accreditation.--Subparagraph (A) of section 
1852(e)(4) (relating to treatment of accreditation) shall apply 
to a PDP sponsor under this part with respect to the following 
requirements, in the same manner as it applies to an MA 
organization with respect to the requirements in subparagraph 
(B) (other than clause (vii) thereof) of such section:
          (1) Subsection (b) of this section (relating to 
        access to covered part D drugs).
          (2) Subsection (c) of this section (including quality 
        assurance and medication therapy management).
          (3) Subsection (i) of this section (relating to 
        confidentiality and accuracy of enrollee records).
  (k) Public Disclosure of Pharmaceutical Prices for Equivalent 
Drugs.--
          (1) In general.--A PDP sponsor offering a 
        prescription drug plan shall provide that each pharmacy 
        that dispenses a covered part D drug shall inform an 
        enrollee of any differential between the price of the 
        drug to the enrollee and the price of the lowest priced 
        generic covered part D drug under the plan that is 
        therapeutically equivalent and bioequivalent and 
        available at such pharmacy.
          (2) Timing of notice.--
                  (A) In general.--Subject to subparagraph (B), 
                the information under paragraph (1) shall be 
                provided at the time of purchase of the drug 
                involved, or, in the case of dispensing by mail 
                order, at the time of delivery of such drug.
                  (B) Waiver.--The Secretary may waive 
                subparagraph (A) in such circumstances as the 
                Secretary may specify.
  (l) Requirements with Respect to Sales and Marketing 
Activities.--The following provisions shall apply to a PDP 
sponsor (and the agents, brokers, and other third parties 
representing such sponsor) in the same manner as such 
provisions apply to a Medicare Advantage organization (and the 
agents, brokers, and other third parties representing such 
organization):
          (1) The prohibition under section 1851(h)(4)(C) on 
        conducting activities described in section 1851(j)(1).
          (2) The requirement under section 1851(h)(4)(D) to 
        conduct activities described in section 1851(j)(2) in 
        accordance with the limitations established under such 
        subsection.
          (3) The inclusion of the plan type in the plan name 
        under section 1851(h)(6).
          (4) The requirements regarding the appointment of 
        agents and brokers and compliance with State 
        information requests under subparagraphs (A) and (B), 
        respectively, of section 1851(h)(7).
  (m) Program Integrity Transparency Measures.--For program 
integrity transparency measures applied with respect to 
prescription drug plan and MA plans, see section 1859(i).

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