Sec. 121. Medicare part D benefit redesign
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/bill/116/hr/19/ih/section-121A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 1860D–2(b) of the Social Security Act ( 42 U.S.C. 1395w– 102(b)) is amended— in paragraph (2)— in subparagraph (A)— in the matter preceding clause (i), by inserting for a year preceding 2022 and for costs above the annual deductible specified in paragraph
(1)and up to the annual out-of-pocket threshold specified in paragraph (4)(B) for 2022 and each subsequent year after paragraph
(3); and in clause (i), by inserting after 25 percent the following: (or, for 2022 and each subsequent year, 15 percent) ; in subparagraph (C)— in clause (i), in the matter preceding subclause (I), by inserting for a year preceding 2022, after paragraph (4), ; and in clause (ii)(III), by striking and each subsequent year and inserting and 2021 ; and in subparagraph (D)— in clause (i)— in the matter preceding subclause (I), by inserting for a year preceding 2022, after paragraph (4), ; and in subclause (I)(bb), by striking a year after 2018 and inserting each of years 2018 through 2021 ; and in clause (ii)(V), by striking 2019 and each subsequent year and inserting each of years 2019 through 2021 ; in paragraph (3)(A)— in the matter preceding clause (i), by inserting for a year preceding 2022, after and (4), ; and in clause (ii), by striking for a subsequent year and inserting for each of years 2007 through 2021 ; and in paragraph (4)— in subparagraph (A)— in clause (i)— by redesignating subclauses
(I)and
(II)as items
(aa)and (bb), respectively, and indenting appropriately; in the matter preceding item (aa), as redesignated by subclause (I), by striking is equal to the greater of— and inserting is equal to— for a year preceding 2022, the greater of— ; by striking the period at the end of item (bb), as redesignated by subclause (I), and inserting ; and ; and by adding at the end the following: for 2022 and each succeeding year, $0. ; and in clause (ii)— by striking clause (i)(I) and inserting clause (i)(I)(aa) ; and by adding at the end the following new sentence: The Secretary shall continue to calculate the dollar amounts specified in clause (i)(I)(aa), including with the adjustment under this clause, after 2021 for purposes of section 1860D–14(a)(1)(D)(iii). ; in subparagraph (B)— in clause (i)— in subclause (V), by striking or at the end; in subclause (VI)— by striking for a subsequent year and inserting for 2021 ; and by striking the period at the end and inserting a semicolon; and by adding at the end the following new subclauses: for 2022, is equal to $3,100; or for a subsequent year, is equal to the amount specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph
(6)for the year involved. ; and in clause (ii), by striking clause (i)(II) and inserting clause
(i); in subparagraph (C)(i), by striking and for amounts and inserting and for a year preceding 2022 for amounts ; and in subparagraph (E), by striking In applying and inserting For each of 2011 through 2021, in applying . Section 1860D–15(b)(1) of the Social Security Act ( 42 U.S.C. 1395w–115(b)(1) ) is amended— by striking equal to 80 percent and inserting equal to— for a year preceding 2022, 80 percent ; in subparagraph (A), as added by paragraph (1), by striking the period at the end and inserting ; and ; and by adding at the end the following new subparagraph: for 2022 and each subsequent year, the sum of— an amount equal to 20 percent of the allowable reinsurance costs (as specified in paragraph (2)) attributable to that portion of gross covered prescription drug costs as specified in paragraph
(3)incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section 1860D–2(b)(4)(B) with respect to applicable drugs (as defined in section 1860D–14B(g)(2)); and an amount equal to 30 percent of the allowable reinsurance costs (as specified in paragraph (2)) attributable to that portion of gross covered prescription drug costs as specified in paragraph
(3)incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section 1860D–2(b)(4)(B) with respect to covered part D drugs that are not applicable drugs (as so defined). . Part D of title XVIII of the Social Security Act is amended by inserting after section 1860D–14A ( 42 U.S.C. 1495w–114 ) the following new section: The Secretary shall establish a manufacturer discount program (in this section referred to as the program ). Under the program, the Secretary shall enter into agreements described in subsection
(b)with manufacturers and provide for the performance of the duties described in subsection (c). The Secretary shall establish a model agreement for use under the program by not later than January 1, 2021, in consultation with manufacturers, and allow for comment on such model agreement. An agreement under this section shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer that are dispensed on or after January 1, 2022. The discounted prices described in subparagraph
(A)shall be provided to the applicable beneficiary at the pharmacy or by the mail order service at the point-of-sale of an applicable drug. Each manufacturer with an agreement in effect under this section shall collect and have available appropriate data, as determined by the Secretary, to ensure that it can demonstrate to the Secretary compliance with the requirements under the program. Each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the Secretary or a third party with a contract under subsection (d)(3), as applicable, for purposes of administering the program, including any determination under subparagraph
(A)of subsection (c)(1) or procedures established under such subsection (c)(1). An agreement under this section shall be effective for an initial period of not less than 12 months and shall be automatically renewed for a period of not less than 1 year unless terminated under subparagraph (B). The Secretary may provide for termination of an agreement under this section for a knowing and willful violation of the requirements of the agreement or other good cause shown. Such termination shall not be effective earlier than 30 days after the date of notice to the manufacturer of such termination. The Secretary shall provide, upon request, a manufacturer with a hearing concerning such a termination, and such hearing shall take place prior to the effective date of the termination with sufficient time for such effective date to be repealed if the Secretary determines appropriate. A manufacturer may terminate an agreement under this section for any reason. Any such termination shall be effective, with respect to a plan year— if the termination occurs before January 30 of a plan year, as of the day after the end of the plan year; and if the termination occurs on or after January 30 of a plan year, as of the day after the end of the succeeding plan year. Any termination under this subparagraph shall not affect discounts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination. The Secretary shall provide notice of such termination to a third party with a contract under subsection (d)(3) within not less than 30 days before the effective date of such termination. An agreement under this section shall take effect on a date determined appropriate by the Secretary, which may be at the start of a calendar quarter. The duties described in this subsection are the following: Administering the program, including— the determination of the amount of the discounted price of an applicable drug of a manufacturer; the establishment of procedures under which discounted prices are provided to applicable beneficiaries at pharmacies or by mail order service at the point-of-sale of an applicable drug; the establishment of procedures to ensure that, not later than the applicable number of calendar days after the dispensing of an applicable drug by a pharmacy or mail order service, the pharmacy or mail order service is reimbursed for an amount equal to the difference between— the negotiated price of the applicable drug; and the discounted price of the applicable drug; the establishment of procedures to ensure that the discounted price for an applicable drug under this section is applied before any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of applicable beneficiaries as the Secretary may specify; and providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers, applicable beneficiaries, and the third party with a contract under subsection (d)(3). The Secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section. If a third party with a contract under subsection (d)(3) determines that the manufacturer is not in compliance with such agreement, the third party shall notify the Secretary of such noncompliance for appropriate enforcement under subsection (e). The Secretary may collect appropriate data from prescription drug plans and MA–PD plans in a timeframe that allows for discounted prices to be provided for applicable drugs under this section. Subject to paragraph (2), the Secretary shall provide for the implementation of this section, including the performance of the duties described in subsection (c). In providing for the implementation of this section, the Secretary shall not receive or distribute any funds of a manufacturer under the program. The Secretary shall enter into a contract with 1 or more third parties to administer the requirements established by the Secretary in order to carry out this section. At a minimum, the contract with a third party under the preceding sentence shall require that the third party— receive and transmit information between the Secretary, manufacturers, and other individuals or entities the Secretary determines appropriate; receive, distribute, or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this section; provide adequate and timely information to manufacturers, consistent with the agreement with the manufacturer under this section, as necessary for the manufacturer to fulfill its obligations under this section; and permit manufacturers to conduct periodic audits, directly or through contracts, of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program. The Secretary shall establish performance requirements for a third party with a contract under paragraph
(3)and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this section. Chapter 35 of title 44, United States Code, shall not apply to the program under this section. Each manufacturer with an agreement in effect under this section shall be subject to periodic audit by the Secretary. The Secretary shall impose a civil money penalty on a manufacturer that fails to provide applicable beneficiaries discounts for applicable drugs of the manufacturer in accordance with such agreement for each such failure in an amount the Secretary determines is commensurate with the sum of— the amount that the manufacturer would have paid with respect to such discounts under the agreement, which will then be used to pay the discounts which the manufacturer had failed to provide; and 25 percent of such amount. The provisions of section 1128A (other than subsections
(a)and (b)) shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). Nothing in this section shall prevent an applicable beneficiary from purchasing a covered part D drug that is not on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in. In this section: The term applicable beneficiary means an individual who, on the date of dispensing a covered part D drug— is enrolled in a prescription drug plan or an MA–PD plan; is not enrolled in a qualified retiree prescription drug plan; and has incurred costs for covered part D drugs in the year that are equal to or exceed the annual deductible specified in section 1860D–2(b)(1) for such year. The term applicable drug means, with respect to an applicable beneficiary, a covered part D drug— approved under a new drug application under section 505(c) of the Federal Food, Drug, and Cosmetic Act or, in the case of a biologic product, licensed under section 351 of the Public Health Service Act (including a product licensed under subsection
(k)of such section); and if the PDP sponsor of the prescription drug plan or the MA organization offering the MA–PD plan uses a formulary, which is on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in; if the PDP sponsor of the prescription drug plan or the MA organization offering the MA–PD plan does not use a formulary, for which benefits are available under the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in; or is provided through an exception or appeal. The term applicable number of calendar days means— with respect to claims for reimbursement submitted electronically, 14 days; and with respect to claims for reimbursement submitted otherwise, 30 days. The term discounted price means, with respect to an applicable drug of a manufacturer furnished during a year to an applicable beneficiary, 90 percent of the negotiated price of such drug. Nothing in this section shall be construed as affecting the responsibility of an applicable beneficiary for payment of a dispensing fee for an applicable drug. In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the annual deductible specified in section 1860D–2(b)(1) for the year, the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above such annual deductible. The term manufacturer means any entity which is engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law. The term negotiated price has the meaning given such term in section 1860D–2(d)(1)(B), except that such negotiated price shall not include any dispensing fee for an applicable drug. The term qualified retiree prescription drug plan has the meaning given such term in section 11860D–22(a)(2). . Section 1860D–14A of the Social Security Act ( 42 U.S.C. 1395–114a ) is amended— in subsection (a), in the first sentence, by striking The Secretary and inserting Subject to subsection (h), the Secretary ; and by adding at the end the following new subsection: The program shall not apply to applicable drugs dispensed on or after January 1, 2022, and, subject to paragraph (2), agreements under this section shall be terminated as of such date. The provisions of this section (including all responsibilities and duties) shall continue to apply after January 1, 2022, with respect to applicable drugs dispensed prior to such date. . Section 1860D–11 of the Social Security Act ( 42 U.S.C. 1395w–111 ) is amended— in subsection (b)(2)(C)(iii)— by striking assumptions regarding the reinsurance and inserting assumptions regarding— the reinsurance ; and by adding at the end the following: for 2022 and each subsequent year, the manufacturer discounts provided under section 1860D– 14B subtracted from the actuarial value to produce such bid; and ; and in subsection (c)(1)(C)— by striking an actuarial valuation of the reinsurance and inserting an actuarial valuation of— the reinsurance ; in clause (i), as added by clause
(i)of this subparagraph, by adding and at the end; and by adding at the end the following: for 2022 and each subsequent year, the manufacturer discounts provided under section 1860D–14B; . Section 1860D–15(b) of the Social Security Act ( 42 U.S.C. 1395w–115(b) ) is amended— in paragraph (2)— by striking and inserting Costs.— For purposes Costs.— Subject to subparagraph (B), for purposes ; and by adding at the end the following new subparagraph: For purposes of applying subparagraph (A), the term allowable reinsurance costs shall include the portion of the negotiated price (as defined in section 1860D–14B(g)(6)) of an applicable drug (as defined in section 1860D–14(g)(2)) that was paid by a manufacturer under the manufacturer discount program under section 1860D–14B. ; and in paragraph (3)— in the first sentence, by striking For purposes and inserting Subject to paragraph (2)(B), for purposes ; and in the second sentence, by inserting or, in the case of an applicable drug, by a manufacturer after by the individual or under the plan . Section 1860D–15(c) of the Social Security Act ( 42 U.S.C. 1395w–115(c) ) is amended by adding at the end the following new paragraph: The Secretary shall update the risk adjustment model used to adjust bid amounts pursuant to this subsection as appropriate to take into account changes in benefits under this part pursuant to the amendments made by section 121 of the Lower Costs, More Cures Act of 2019. . Section 1860D–43 of the Social Security Act ( 42 U.S.C. 1395w–153 ) is amended— in subsection (a)— in paragraph (2), by striking and at the end; in paragraph (3), by striking the period at the end and inserting a semicolon; and by adding at the end the following new paragraphs: participate in the manufacturer discount program under section 1860D–14B; have entered into and have in effect an agreement described in subsection
(b)of such section 1860D–14B with the Secretary; and have entered into and have in effect, under terms and conditions specified by the Secretary, a contract with a third party that the Secretary has entered into a contract with under subsection (d)(3) of such section 1860D–14B. ; by striking subsection
(b)and inserting the following: Paragraphs
(1)through
(3)of subsection
(a)shall apply to covered part D drugs dispensed under this part on or after January 1, 2011, and before January 1, 2022, and paragraphs
(4)through
(6)of such subsection shall apply to covered part D drugs dispensed on or after January 1, 2022. ; and in subsection (c), by striking paragraph
(2)and inserting the following: the Secretary determines that in the period beginning on January 1, 2011, and ending on December 31, 2011 (with respect to paragraphs
(1)through
(3)of subsection (a)), or the period beginning on January 1, 2022, and ending December 31, 2022 (with respect to paragraphs
(4)through
(6)of such subsection), there were extenuating circumstances. . Section 1860D–2 of the Social Security Act ( 42 U.S.C. 1395w–102 ) is amended— in subsection (a)(2)(A)(i)(I), by striking , or an increase in the initial and inserting or for a year preceding 2022 an increase in the initial ; in subsection (c)(1)(C)— in the subparagraph heading, by striking ; and at initial coverage limit by inserting for a year preceding 2022 or the annual out-of-pocket threshold specified in subsection (b)(4)(B) for the year for 2022 and each subsequent year after subsection (b)(3) for the year each place it appears; and in subsection (d)(1)(A), by striking or an initial and inserting or for a year preceding 2022, an initial . Section 1860D–4(a)(4)(B)(i) of the Social Security Act ( 42 U.S.C. 1395w–104(a)(4)(B)(i) ) is amended by striking the initial and inserting for a year preceding 2022, the initial . Section 1860D–14(a) of the Social Security Act ( 42 U.S.C. 1395w–114(a) ) is amended— in paragraph (1)— in subparagraph (C), by striking The continuation and inserting For a year preceding 2022, the continuation ; in subparagraph (D)(iii), by striking 1860D–2(b)(4)(A)(i)(I) and inserting 1860D–2(b)(4)(A)(i)(I)(aa) ; and in subparagraph (E), by striking The elimination and inserting For a year preceding 2022, the elimination ; and in paragraph (2)— in subparagraph (C), by striking The continuation and inserting For a year preceding 2022, the continuation ; and in subparagraph (E)— by inserting for a year preceding 2022, after subsection
(c); and by striking 1860D– 2(b)(4)(A)(i)(I) and inserting 1860D–2(b)(4)(A)(i)(I)(aa) . Section 1860D–21(d)(7) of the Social Security Act ( 42 U.S.C. 1395w–131(d)(7) ) is amended by striking section 1860D–2(b)(4)(B)(i) and inserting section 1860D–2(b)(4)(C)(i) . Section 1860D–22(a)(2)(A) of the Social Security Act ( 42 U.S.C. 1395w–132(a)(2)(A) ) is amended— by striking the value of any discount and inserting the following: the value of— for years prior to 2022, any discount ; in clause (i), as inserted by subparagraph
(A)of this paragraph, by striking the period at the end and inserting ; and ; and by adding at the end the following new clause: for 2022 and each subsequent year, any discount provided pursuant to section 1860D–14B. . Section 1860D–41(a)(6) of the Social Security Act ( 42 U.S.C. 1395w–151(a)(6) ) is amended— by inserting for a year before 2022 after 1860D–2(b)(3) ; and by inserting for such year before the period. The amendments made by this section shall apply to plan year 2022 and subsequent plan years.
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13 references not yet in our index
- 42 USC 1395w–115(b)(1)
- 42 USC 1495w–114
- 42 USC 1395–114a
- 42 USC 1395w–111
- 42 USC 1395w–115(b)
- 42 USC 1395w–115(c)
- 42 USC 1395w–153
- 42 USC 1395w–102
- 42 USC 1395w–104(a)(4)(B)(i)
- 42 USC 1395w–114(a)
- 42 USC 1395w–131(d)(7)
- 42 USC 1395w–132(a)(2)(A)
- 42 USC 1395w–151(a)(6)
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Sec. 121
Medicare part D benefit redesign
Cite42 USC 1395w–115(b)(1)
Cite42 USC 1495w–114
Cite42 USC 1395–114a
Cite42 USC 1395w–111
Cite42 USC 1395w–115(b)
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