108th CONGRESS
1st Session
H. R. 1568
To amend part B of title XVIII of the Social Security Act to provide
for a prescription drug benefit with a high deductible at no additional premium
and access to discount prices on drugs and to provide for the operation of
such benefit without a deductible for certain low-income Medicare beneficiaries.
IN THE HOUSE OF REPRESENTATIVES
April 2, 2003
Mr. DOOLEY of California (for himself, Mrs. TAUSCHER, Mr. KIND, Mr. DAVIS
of Florida, Mr. SMITH of Washington, Mr. STENHOLM, Mr. EMANUEL, Mr. COOPER,
Mr. HILL, Mr. FORD, Mr. PETERSON of Minnesota, Mr. CARDOZA, Mr. CASE, Mr.
CRAMER, Mr. MOORE, Ms. HARMAN, Mr. MILLER of North Carolina, Mr. DAVIS of
Alabama, Mrs. MCCARTHY of New York, Mr. ISRAEL, Mr. WU, Mr. MARSHALL, Mr.
LUCAS of Kentucky, Mr. MATHESON, and Mr. LARSEN of Washington) introduced
the following bill; which was referred to the Committee on Energy and Commerce,
and in addition to the Committee on Ways and Means, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend part B of title XVIII of the Social Security Act to provide
for a prescription drug benefit with a high deductible at no additional premium
and access to discount prices on drugs and to provide for the operation of
such benefit without a deductible for certain low-income Medicare beneficiaries.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Medicare Rx Now Act of 2003'.
(b) AMENDMENTS TO SOCIAL SECURITY ACT- Except as otherwise specifically provided,
whenever in this Act an amendment is expressed in terms of an amendment to
or repeal of a section or other provision, the reference shall be considered
to be made to that section or other provision of the Social Security Act.
(c) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--PART B DRUG BENEFIT WITH HIGH DEDUCTIBLE AND NO PREMIUM
Sec. 101. Inclusion of high-deductible outpatient prescription drug benefit
under part B.
Sec. 102. Provision of benefits through medicare approved prescription drug
plans.
TITLE II--BENEFITS FOR LOW-INCOME BENEFICIARIES
Sec. 201. Benefits for low-income beneficiaries.
Sec. 202. Improving enrollment process under medicaid.
SEC. 2. PURPOSE.
The purpose of this Act is to provide for outpatient prescription drug benefits
to medicare beneficiaries in the following manner:
(1) Medicare beneficiaries enrolled under medicare part B qualify for outpatient
prescription drug benefits after an annual deductible (initially set at
$4,000) has been met. This benefit is available without any additional premium.
(2) There are fixed dollar copayments for this coverage, with the average
of such copayments equal to 20 percent of the benefits and the amount of
the copayments varying depending upon whether the drugs are generic, preferred
brand-name, or non-preferred brand-name drugs.
(3) The benefits are provided through medicare-approved prescription drug
plans. These plans may be current plans, such as Medicare+Choice plans,
employer-based retiree coverage, medigap plans, State assistance programs,
medicaid, drug discount card plans, and other qualified plans (as determined
by the Secretary). All of these plans must offer, in addition to the high-deductible
coverage, discounts for prescription drugs both while the annual deductible
is being satisfied and after it is satisfied.
(4) To assure access to medicare-approved prescription drug plans for all
medicare beneficiaries, the Secretary will solicit bids for prescription
drug discount plans that will be available in all geographic regions to
all medicare beneficiaries.
(5) All pharmacies that comply with electronic claims processing standards
may provide drugs under the program.
(6) The Act also provides for the availability of additional benefits in
the form of a waiver of the annual deductible, thereby providing immediate
entitlement to prescription drug benefits, for medicare beneficiaries who
have incomes under 200 percent of the poverty line and who are not eligible
for medicaid prescription drug benefits.
TITLE I--PART B DRUG BENEFIT WITH HIGH DEDUCTIBLE AND NO PREMIUM
SEC. 101. INCLUSION OF HIGH-DEDUCTIBLE OUTPATIENT PRESCRIPTION DRUG BENEFIT
UNDER PART B.
(a) COVERAGE- Section 1832(a) (42 U.S.C. 1395k(a)) is amended--
(1) by striking `and' at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and inserting `;
and'; and
(3) by adding at the end the following new paragraph:
`(3) entitlement to have payment made on his behalf (subject to the provisions
of this part) for high-deductible outpatient prescription drug coverage
under section 1845.'.
(b) DESCRIPTION OF HIGH-DEDUCTIBLE PRESCRIPTION DRUG BENEFIT- Title XVIII
is amended by inserting after section 1844 the following new section:
`OUTPATIENT PRESCRIPTION DRUG COVERAGE
`SEC. 1845. (a) HIGH-DEDUCTIBLE OUTPATIENT PRESCRIPTION DRUG COVERAGE DEFINED-
`(1) IN GENERAL- For purposes of this part, the term `high-deductible outpatient
prescription drug coverage' means payment of--
`(A) expenses for covered outpatient prescription drugs incurred in a
year after the individual has incurred expenses for such drugs in the
year of an amount equal to the annual deductible specified in paragraph
(2); reduced by
`(B) cost-sharing described in paragraph (3).
`(A) IN GENERAL- The annual deductible under this paragraph--
`(i) for 2005 is equal to $4,000; and
`(ii) for a subsequent year is equal to the amount specified in subparagraph
(B) for that year, except that, if the amount specified in such subparagraph
is not a multiple of $10, it shall be rounded to the nearest multiple
of $10.
`(B) INFLATIONARY ADJUSTMENT- The amount specified in this subparagraph--
`(i) for 2005, is $4,000; or
`(ii) the amount specified in this subparagraph for a subsequent year
is the amount specified in this subparagraph for the previous year increased
by the annual percentage increase in average per capita aggregate expenditures
for covered outpatient prescription drugs in the United States for medicare
beneficiaries, as determined by the Secretary for the 12-month period
ending in July of the previous year.
`(A) THREE-TIERED COPAYMENT STRUCTURE- Subject to the succeeding provisions
of this paragraph, in the case of a covered outpatient drug that is dispensed
in a year to an eligible individual, the individual shall be responsible
for a copayment for the drug in an amount equal to the following (or,
if less, the price for the drug negotiated pursuant to subsection (c)(5)):
`(i) GENERIC DRUGS- In the case of a generic covered outpatient drug,
the base copayment amount specified in accordance with subparagraph
(B) for each prescription (as defined by the Secretary) of such drug.
`(ii) PREFERRED BRAND NAME DRUGS- In the case of a preferred brand name
covered outpatient drug, 4 times the copayment amount applied under
clause (i) for each prescription (as so defined) of such drug.
`(iii) NONPREFERRED BRAND NAME DRUG- In the case of a nonpreferred brand
name covered outpatient drug, 150 percent of the copayment amount applied
under clause (ii) for each prescription (as so defined) of such drug.
`(B) ESTABLISHMENT OF BASE COPAYMENT AMOUNT CONSISTENT WITH 80:20 BENEFIT
RATIO- For each year beginning with 2005 the Secretary shall establish
a base copayment amount in a manner consistent with the principle (subject
to reasonable rounding rules) that the ratio of the aggregate amount of
benefits provided under this section to the aggregate copayments under
this paragraph for each year should be approximately equal to 80 to 20.
`(C) DISCOUNTS ALLOWED FOR NETWORK PHARMACIES- A medicare-approved prescription
drug plan may reduce copayments for its designees below the level otherwise
provided under this paragraph, but in no case shall such a reduction result
in an increase in payments made by the Secretary under this section to
a plan.
`(D) TREATMENT OF MEDICALLY NECESSARY NONPREFERRED DRUGS- A nonpreferred
brand name drug shall be treated as a preferred brand name drug under
this paragraph if such nonpreferred drug is determined (pursuant to procedures
established under subsection (c)(6)) to be medically necessary.
`(E) REQUIREMENT FOR DESIGNATION OF PREFERRED BRAND NAME DRUGS- Within
each category of therapeutic-equivalent covered
outpatient prescription drugs (as defined by the Secretary), each medicare-approved
prescription drug plan shall provide for the designation of at least one preferred
brand name covered outpatient drug.
`(4) PAYMENT OF BENEFITS BEYOND DEDUCTIBLE-
`(A) IN GENERAL- There shall be paid from the Federal Supplementary Medical
Insurance Trust Fund, in the case of each individual who is covered under
the insurance program established by this part and incurs expenses for
covered outpatient prescription drugs with respect to which benefits are
payable under this section, amounts equal to the amounts provided under
paragraph (1).
`(B) COUNTING OF INCURRED EXPENSES- Expenses with respect to covered outpatient
prescription drugs under this section shall--
`(i) be treated as incurred regardless of whether they are reimbursed
by a third-party payor;
`(ii) not be treated as incurred unless the expenses were incurred during
a period in which the individual was covered under this part; and
`(iii) not be treated as incurred unless information concerning the
transaction giving rise to such expenses has been electronically transmitted
by the pharmacy or other entity dispensing the covered outpatient prescription
drugs to the medicare-approved prescription drug plan consistent with
electronic claims standards established under subsection (c)(3).'.
SEC. 102. PROVISION OF BENEFITS THROUGH MEDICARE APPROVED PRESCRIPTION DRUG
PLANS.
(a) IN GENERAL- Section 1845 of the Social Security Act, as inserted by section
101(a), is further amended by adding at the end the following:
`(b) PROVISION OF BENEFITS THROUGH A MEDICARE APPROVED PRESCRIPTION DRUG PLAN-
`(1) IN GENERAL- In the case of an individual entitled to benefits for high-deductible
outpatient prescription drug coverage under this section, the individual
shall obtain such benefits through a medicare-approved prescription drug
plan that is designated under this subsection.
`(2) DESIGNATION PROCESS- The Secretary shall provide for a process for
designation of medicare-approved prescription drug plans consistent with
the following:
`(A) FREQUENCY OF DESIGNATIONS- The Secretary shall permit individuals,
on an annual basis and at such other times during a year as the Secretary
may specify, to change the plan designated.
`(B) DISSEMINATION OF INFORMATION- The Secretary shall provide for the
dissemination of information on designation of plans under this subsection.
Such dissemination may be coordinated with the dissemination of information
on Medicare+Choice plan selection under part C.
`(C) DEFAULT ASSIGNMENT- In the case of an individual who is enrolled
under this part who has not otherwise designated a medicare-approved prescription
drug plan, the Secretary shall assign the individual to an appropriate
prescription drug discount card plan serving the area in which the individual
resides.
`(D) DEEMED DESIGNATION- The Secretary may deem an individual who is enrolled
in a medicare-approved prescription drug plan described in subparagraph
(A) through (E) of subsection (c)(2) as having designated such plan, but
shall permit the individual to designate a prescription drug discount
card plan instead. The Secretary shall establish rules in cases where
an individual is enrolled in more than one such plan.
`(3) DESIGNEE DEFINED- In this section, the term `designee' means such an
individual who makes such a designation and, with respect to a plan, an
individual who has designated that plan under this subsection.
`(c) MEDICARE-APPROVED PRESCRIPTION DRUG PLANS-
`(1) IN GENERAL- For purposes of this part, the term `medicare-approved
prescription drug plan' means a health plan or program described in paragraph
(2) that--
`(A) provides at least high-deductible outpatient prescription drug coverage
to designees of that plan or program;
`(B) meets the applicable requirements of paragraph (3) and succeeding
paragraphs of this subsection with respect to such designees;
`(C) has entered into an agreement with the Secretary to provide and exchange
electronically such information as the Secretary may require for the administration
of the program of benefits under this section; and
`(D) meets such additional requirements as the Secretary may specify,
including requiring the provision of appropriate periodic audits.
`(2) TYPES OF PLANS AND PROGRAMS THAT MAY QUALIFY- The types of plans and
programs that may qualify as a medicare-approved prescription drug plan
are the following:
`(A) A Medicare+Choice plan.
`(B) A group health plan, including a retirement health benefits plan,
that provides prescription drug coverage.
`(C) A State plan under title XIX.
`(D) A health benefits plan under the Federal employees' health benefits
program under chapter 89 of title 5, United States Code.
`(E) A medicare supplemental policy.
`(F) State pharmaceutical assistance program.
`(G) A prescription drug discount card plan (described in subsection (d)).
`(H) Any other prescription drug plan that is determined to meet such
requirements as the Secretary establishes.
`(3) ADMINISTRATION THROUGH CARD-BASED ELECTRONIC MECHANISM-
`(A) USE OF MEDICARE PRESCRIPTION DRUG CARD- Claims for benefits under
this section under a medicare-approved prescription drug plan may only
be made electronically through the use of an electronic prescription card
system (in this paragraph referred to as the `system').
`(B) STANDARDS FOR ELECTRONIC PRESCRIPTION CARD SYSTEM- The Secretary
shall establish standards for the system, including the following:
`(i) CARDS- Standards for claims cards to be used by designees under
the system.
`(ii) COORDINATION OF ELECTRONIC INFORMATION- Standards for the real-time
transmittal among pharmacies, medicare-approved prescription drug plans,
and the Secretary (including an appropriate data clearinghouse operated
by or under contract with the Secretary) of information on expenses
incurred for covered outpatient prescription drugs by designees.
`(iii) CONFIDENTIALITY- Standards that assure the confidentiality of
individually identifiable information of designees and that are consistent
with the regulations promulgated under section 264(c) of the Health
Insurance Portability and Accountability Act of 1996.
`(4) ACCEPTANCE OF CLAIMS THROUGH ALL QUALIFYING PHARMACIES- A medicare-approved
prescription drug plan shall provide for acceptance and process of claims
for designees from any pharmacy that meets standards the Secretary has established
under paragraph (3) to carry out real-time transmittal of claims to such
plans and that provides for disclosure, in the case of dispensing of a brand
name drug to a designee, of information on the availability of generic equivalents
at reduced cost to the designee.
`(5) REQUIREMENT TO NEGOTIATE DISCOUNTS AND GENERIC EQUIVALENTS- A medicare-approved
prescription drug plan shall provide designees of the plan with the following:
`(A) NEGOTIATED PRICES- Access to negotiated prices (including applicable
discounts) used for payment for covered outpatient drugs, regardless of
the fact that no benefits or only partial benefits may be payable with
respect to such drugs because of the application of the deductible under
subsection (a)(2) or copayment under subsection (a)(3).
`(B) GENERIC EQUIVALENTS- Information on the availability of generic equivalents
at reduced cost to such designees.
`(6) TREATMENT OF NONPREFERRED BRAND NAME DRUGS-
`(A) PROCEDURES REGARDING THE DETERMINATION OF DRUGS THAT ARE MEDICALLY
NECESSARY-
`(i) IN GENERAL- A medicare-approved prescription drug plan shall have
in place procedures on a case-by-case basis to treat a nonpreferred
brand name drug as a preferred brand name drug for purposes of subsection
(a) if the nonpreferred brand name drug is determined--
`(I) to be not as effective for the designee in preventing or slowing
the
deterioration of, or improving or maintaining, the health of the individual;
or
`(II) to have a significant adverse effect on the individual.
`(ii) REQUIREMENT- The procedures under clause (i) shall require that
determinations under such clause are based on professional medical judgment,
the medical condition of the enrollee, and other medical evidence.
`(B) PROCEDURES REGARDING APPEAL RIGHTS WITH RESPECT TO DENIALS OF CARE-
Such a plan shall have in place procedures to ensure a timely internal
review (and timely independent external review) for resolution of denials
of coverage in accordance with the medical exigencies of the case in accordance
with requirements established by the Secretary that are comparable to
such requirements for Medicare+Choice organizations under part C and to
ensure notice to designees regarding such procedures. A designee shall
have the further right to an appeal of such a denial of coverage in the
same manner as is provided under section 1852(g)(5) in the case of a failure
to receive health services under a Medicare+Choice plan.
`(7) PROMPT PAYMENT OF PHARMACIES FOR COVERED BENEFITS- Medicare-approved
prescription drug plans shall provide for payment to qualifying pharmacies
of benefits under subsection (a)(4) promptly in accordance with rules no
less generous than the rules applicable under section 1842(c)(2)(B).
`(8) EDUCATION- Medicare-approved prescription drug plans shall apply methods
to identify and educate providers, pharmacists, and designees regarding--
`(A) instances or patterns concerning the unnecessary or inappropriate
prescribing or dispensing of covered outpatient prescription drugs;
`(B) instances or patterns of substandard care;
`(C) potential adverse reactions to covered outpatient prescription drugs;
`(D) inappropriate use of antibiotics;
`(E) appropriate use of generic products; and
`(F) the importance of using covered outpatient prescription drugs in
accordance with the instruction of prescribing providers.
`(9) NOT AT FINANCIAL RISK- The entity offering a medicare-approved prescription
drug plan shall not be at financial risk for the provision of high-deductible
prescription drug coverage under the plan to designees, but there shall
be performance incentives (based on risk corridors negotiated between the
entity and the Secretary and subject to audit) in relation to the administration
of the contract and the entity's ability to reduce costs through appropriate
incentive mechanisms.
`(10) PROVISION OF DATA- The entity offering such a plan shall provide the
Secretary with such information as is required to make payments to the entity
under this section.
`(d) PRESCRIPTION DRUG DISCOUNT CARD PLANS-
`(1) SOLICITATION OF BIDS- The Secretary shall solicit bids from entities
to offer prescription drug discount card plans to individuals enrolled under
this part either nationwide or in large geographic areas. The Secretary
shall award bids in a manner so that such plans are offered in all areas
of the United States. The Secretary may not award a contract based on such
a bid to an entity with respect to a plan unless the entity and plan meet
the applicable requirements to be a medicare-approved prescription drug
plan under this section.
`(2) LIMITATION ON BENEFITS- The entity offering a prescription drug discount
card plan shall not offer (or charge for) benefits to designees of the plan
in addition to high-deductible prescription drug coverage, access to negotiated
prices, and other benefits required under this section and, in the case
of subsidy eligible individuals, benefits under subsection (h).
`(1) IN GENERAL- The Secretary shall provide, in the contract entered into
between the Secretary and entities that offer medicare-approved prescription
drug plans, for payment to the plans for high-deductible prescription drug
coverage offered through the plan, including expanded coverage for low-income
individuals under subsection (g) and taking into account performance incentives
described in paragraph (2). In addition, in the case of prescription drug
discount card plans, the Secretary shall provide for payment of administrative
costs in carrying out the contract (taking into account the performance
incentives described in paragraph (2)), based on rates negotiated between
the Secretary and the entity in the solicitation process under subsection
(d).
`(2) INCENTIVES FOR COST AND UTILIZATION MANAGEMENT AND QUALITY IMPROVEMENT-
The Secretary shall include in the contract such financial or other performance
incentives for cost and utilization management and quality improvement as
the Secretary may deem appropriate.
`(f) COVERED OUTPATIENT PRESCRIPTION DRUGS DEFINED-
`(1) IN GENERAL- Except as provided in this subsection, for purposes of
this section, the term `covered outpatient prescription drug' means--
`(A) a drug that may be dispensed only upon a prescription and that is
described in subparagraph (A)(i) or (A)(ii) of section 1927(k)(2); or
`(B) a biological product described in clauses (i) through (iii) of subparagraph
(B) of such section or insulin described in subparagraph (C) of such section,
and such term includes a vaccine licensed under section 351 of the Public
Health Service Act and any use of a covered outpatient drug for a medically
accepted indication (as defined in section 1927(k)(6)).
`(A) IN GENERAL- Such term does not include drugs or classes of drugs,
or their medical uses, which may be excluded from coverage or otherwise
restricted under section 1927(d)(2), other than subparagraph (E) thereof
(relating to smoking cessation agents), or under section 1927(d)(3), as
the Secretary may specify and does not include such other medicines, classes,
and uses as the Secretary may specify consistent with the goals of providing
quality care and containing costs under this section.
`(B) AVOIDANCE OF DUPLICATE COVERAGE- A drug prescribed for an individual
that would otherwise be a covered outpatient prescription drug under this
section shall not be so considered if payment for such drug is available
under part A or under this part (other than under this section).'.
(b) NO EFFECT ON PART B PREMIUM-
(1) IN GENERAL- Section 1839(a) (42 U.S.C. 1395r(a)) is amended by adding
at the end the following new paragraph:
`(5) Notwithstanding the previous provisions of this subsection, in computing
actuarial rates there shall not be taken into account benefits and administrative
costs that are attributable to the prescription drug coverage provided under
section 1845.'.
(2) GOVERNMENT CONTRIBUTION- Section 1844(a)(1) (42 U.S.C. 1395w(a)(1))
is amended--
(A) by striking `plus' at the end of subparagraph (A);
(B) by striking `; plus' at the end of subparagraph (B) and inserting
`, plus'; and
(C) by adding at the end the following new subparagraph:
`(C) a Government contribution equal to the aggregate amounts expended from
the Trust Fund for benefits and administrative expenses attributable to
the prescription drug coverage provided under section 1845; plus'.
(c) MEDICARE AS PRIMARY PAYOR- Section 1862(b) (42 U.S.C. 1395y(b)) is amended
by adding at the end the following new paragraph:
`(7) EXCEPTION FOR OUTPATIENT PRESCRIPTION DRUG BENEFIT- The previous provisions
of this subsection shall not apply to benefits provided under section 1845.'.
TITLE II--BENEFITS FOR LOW-INCOME BENEFICIARIES
SEC. 201. BENEFITS FOR LOW-INCOME BENEFICIARIES.
(a) IN GENERAL- Section 1845, as inserted by section 101(b), is amended by
adding at the end the following new subsection:
`(g) FIRST DOLLAR COVERAGE FOR CERTAIN LOW-INCOME INDIVIDUALS-
`(1) IN GENERAL- In the case of a subsidy eligible individual (as defined
in paragraph (2)), this section shall be applied as if the annual deductible
were equal to zero but, with respect to costs incurred before the amount
of the annual deductible otherwise applicable, the following copayment amounts
shall apply:
`(A) 20 PERCENT COPAYMENT FOR INDIVIDUALS WITH INCOMES UP TO 135 PERCENT
OF POVERTY- For subsidy eligible individuals with income that does not
exceed 135 percent of the poverty line, the copayment amounts shall be
the copayments amounts specified in subsection (a)(3), which reflects
an average benefit percentage of 80 percent.
`(B) 30 PERCENT COPAYMENT FOR INDIVIDUALS WITH INCOMES BETWEEN 135 AND
150 PERCENT OF POVERTY- For subsidy eligible individuals with income that
exceeds 135 percent (but does not exceed 150 percent) of the poverty line,
the copayment amounts shall be the copayments amounts specified in subsection
(a)(3) increased by 50 percent, which reflects an average benefit percentage
of 70 percent.
`(C) 50 PERCENT COPAYMENT FOR INDIVIDUALS WITH INCOMES ABOVE 150 PERCENT
OF POVERTY- For subsidy eligible individuals with income that exceeds
150 percent of the poverty line, the copayment amounts shall be the copayments
amounts specified in subsection (a)(3) increased by 150 percent, which
reflects an average benefit percentage of 50 percent.
`(2) DETERMINATION OF ELIGIBILITY-
`(A) SUBSIDY ELIGIBLE INDIVIDUAL DEFINED- For purposes of this subsection,
subject to subparagraph (D), the term `subsidy eligible individual' means
an individual who--
`(i) is enrolled under this part;
`(ii) has income below 150 percent (or such higher percent, not to exceed
200 percent, as a State may specify under subparagraph (B)) of the Federal
poverty line; and
`(iii) is not eligible for medical assistance with respect to prescription
drugs under title XIX.
For purposes of this section, an individual shall not be treated as eligible
for medical assistance with respect to prescription drugs under title XIX
(including under a waiver under section 1115) only if, with respect to such
assistance, the individual is charged a copayment greater than a nominal
amount (as described in section 1916(a)(3)) and there is no monthly or similar
dollar limit established for the amount of such assistance over any period
of time.
`(B) COVERAGE OF INDIVIDUALS WITH INCOME UP TO 200 PERCENT OF POVERTY
AT STATE OPTION- One of the 50 States or the District of Columbia may,
at its option and subject to section 1935(c), specify a percent of income,
that exceeds 150 percent but does not exceed 200 percent, that will apply
for purposes
of this subsection to individuals residing in the State.
`(C) DETERMINATIONS- The determination of whether an individual residing
in a State is a subsidy eligible individual shall be determined under
the State medicaid plan for the State under section 1935(a) or by the
Social Security Administration. There are authorized to be appropriated
to the Social Security Administration such sums as may be necessary for
the determination of eligibility under this subparagraph.
`(D) INCOME DETERMINATIONS- For purposes of applying this subsection--
`(i) income shall be determined in the manner no less restrictive than
the manner described in section 1905(p)(1)(B); and
`(ii) the term `Federal poverty line' means the official poverty line
(as defined by the Office of Management and Budget, and revised annually
in accordance with section 673(2) of the Omnibus Budget Reconciliation
Act of 1981) applicable to a family of the size involved.
`(E) TREATMENT OF TERRITORIAL RESIDENTS- In the case of an individual
who is not a resident of the 50 States or the District of Columbia, the
individual is not eligible to be a subsidy eligible individual but may
be eligible for financial assistance with prescription drug expenses under
section 1935(f).
`(3) ADMINISTRATION OF SUBSIDY PROGRAM- The Secretary shall provide a process
whereby, in the case of an individual who is determined to be a subsidy
eligible individual and who is enrolled in a medicare-approved prescription
drug plan--
`(A) the Secretary provides for a notification of the entity offering
the plan that the individual is eligible for a subsidy under paragraph
(1);
`(B) such entity adjusts the benefits for prescription drug coverage accordingly
and submits to the Secretary information on the amount of such benefits
provided; and
`(C) the Secretary periodically and on a timely basis reimburses the entity
for the amount of such benefits (including reasonable related administrative
costs) that are provided only because of the application of this subsection.
`(4) RELATION TO MEDICAID PROGRAM-
`(A) IN GENERAL- For provisions providing for eligibility determinations,
and additional financing, under the medicaid program, see section 1935.
`(B) COORDINATION- The Secretary shall develop and implement a plan for
the coordination of prescription drug benefits under this part with the
benefits provided under the medicaid program under title XIX, with particular
attention to insuring coordination of payments and prevention of fraud
and abuse. In developing and implementing such plan, the Secretary shall
involve the States, the data processing industry, pharmacists, and pharmaceutical
manufacturers, and other experts and representatives of low-income medicare
beneficiaries.
`(C) EXEMPTION- Section 1902(n) shall not apply with respect to coverage
of cost-sharing imposed under paragraph (1) or under subsection (a)(3).'.
(1) DETERMINATIONS OF ELIGIBILITY FOR LOW-INCOME SUBSIDIES-
(A) REQUIREMENT- Section 1902(a) (42 U.S.C. 1396a(a)) is amended--
(i) by striking `and' at the end of paragraph (64);
(ii) by striking the period at the end of paragraph (65) and inserting
`; and'; and
(iii) by inserting after paragraph (65) the following new paragraph:
`(66) provide for making eligibility determinations under sections 1845(g)
and 1935(a).'.
(2) NEW SECTION- Title XIX of such Act is further amended--
(A) by redesignating section 1935 as section 1936; and
(B) by inserting after section 1934 the following new section:
`SPECIAL PROVISIONS RELATING TO MEDICARE PRESCRIPTION DRUG BENEFIT
`SEC. 1935. (a) REQUIREMENT FOR MAKING ELIGIBILITY DETERMINATIONS FOR LOW-INCOME
SUBSIDY-
`(1) IN GENERAL- As a condition of its State plan under this title under
section 1902(a)(66) and
receipt of any Federal financial assistance under section 1903(a), a State
shall--
`(A) make determinations of eligibility for subsidies under (and in accordance
with) section 1845(g);
`(B) inform the Secretary of such determinations in cases in which such
eligibility is established; and
`(C) otherwise provide the Secretary with such information as may be required
to carry out section 1845.
`(2) STATE OPTION FOR COVERAGE OF ADDITIONAL LOW-INCOME INDIVIDUALS- A State
may elect under paragraph (2)(B) of section 1845(g) to cover additional
low-income medicare beneficiaries under the prescription drug subsidy program
provided under such subsection, subject to contribution under subsection
(c).
`(b) PAYMENTS FOR ADDITIONAL ADMINISTRATIVE COSTS-
`(1) IN GENERAL- The amounts expended by a State in carrying out subsection
(a) are, subject to paragraph (2), expenditures reimbursable under the appropriate
paragraph of section 1903(a); except that, notwithstanding any other provision
of such section, the applicable Federal matching rates with respect to such
expenditures under such section shall be increased as follows (but in no
case shall the rate as so increased exceed 100 percent):
`(A) For expenditures attributable to costs incurred during 2005, the
otherwise applicable Federal matching rate shall be increased by 10 percent
of the percentage otherwise payable (but for this subsection) by the State.
`(B)(i) For expenditures attributable to costs incurred during 2006 and
each subsequent year through 2013, the otherwise applicable Federal matching
rate shall be increased by the applicable percent (as defined in clause
(ii)) of the percentage otherwise payable (but for this subsection) by
the State.
`(ii) For purposes of clause (i), the `applicable percent' for--
`(I) 2006 is 20 percent; or
`(II) a subsequent year is the applicable percent under this clause
for the previous year increased by 10 percentage points.
`(C) For expenditures attributable to costs incurred after 2013, the otherwise
applicable Federal matching rate shall be increased to 100 percent.
`(2) COORDINATION- The State shall provide the Secretary with such information
as may be necessary to properly allocate administrative expenditures described
in paragraph (1) that may otherwise be made for similar eligibility determinations.
`(c) STATE CONTRIBUTION AT SCHIP MATCHING RATE TOWARDS ADDITIONAL LOW-INCOME
SUBSIDIES FOR OPTIONAL SUBSIDY ELIGIBLE INDIVIDUALS COVERED UNDER STATE OPTION-
In the case of a State that specifies a percent of income under section 1845(g)(2)(B)
for a quarter, the amount of payment made to the State under section 1903(a)(1)
for the quarter shall be reduced by the product of--
`(1) 100 percent less the enhanced FMAP described in section 2105(b) for
that State and quarter; and
`(2) the additional amount of payment made under section 1845 because of
the application of such specification.'.
(b) PHASED-IN FEDERAL ASSUMPTION OF MEDICAID RESPONSIBILITY FOR COST-SHARING
SUBSIDIES FOR DUALLY ELIGIBLE INDIVIDUALS-
(1) IN GENERAL- Section 1903(a)(1) (42 U.S.C. 1396b(a)(1)) is amended by
inserting before the semicolon the following: `, reduced by the amount computed
under section 1935(d)(1) for the State and the quarter'.
(2) AMOUNT DESCRIBED- Section 1935, as inserted by subsection (a)(2), is
amended by adding at the end the following new subsection:
`(d) FEDERAL ASSUMPTION OF MEDICAID PRESCRIPTION DRUG COSTS FOR DUALLY-ELIGIBLE
BENEFICIARIES-
`(1) IN GENERAL- For purposes of section 1903(a)(1), for a State that is
one of the 50 States or the District of Columbia for a calendar quarter
in a year (beginning with 2005) the amount computed under this subsection
is equal to the product of the following:
`(A) MEDICARE BENEFITS FOR MEDICAID ELIGIBLES- The total amount of payments
made in the quarter because of the operation of section 1845 that are
attributable to individuals who are residents of the State and are eligible
for medical assistance with respect to prescription drugs under this title.
`(B) STATE MATCHING RATE- A proportion computed by subtracting from 100
percent the Federal medical assistance percentage (as defined in section
1905(b)) applicable to the State and the quarter.
`(C) PHASE-OUT PROPORTION- The phase-out proportion (as defined in paragraph
(2)) for the quarter.
`(2) PHASE-OUT PROPORTION- For purposes of paragraph (1)(C), the `phase-out
proportion' for a calendar quarter in--
`(B) a subsequent year before 2014, is the phase-out proportion for calendar
quarters in the previous year decreased by 10 percentage points; or
`(C) a year after 2013 is 0 percent.'.
(3) MEDICAID PROVIDING WRAP-AROUND BENEFITS- Section 1935, as so inserted
and amended, is further amended by adding at the end the following new subsection:
`(e) MEDICAID AS SECONDARY PAYOR- In the case of an individual who is entitled
to benefits under part B of title XVIII and is eligible for medical assistance
with respect to prescribed drugs under this title, medical assistance shall
continue to be provided under this title for prescribed drugs to the extent
payment is not made under such part B, without regard to section 1902(n)(2).'.
(d) TREATMENT OF TERRITORIES-
(1) IN GENERAL- Section 1935 of such Act, as so inserted and amended, is
further amended--
(A) in subsection (a) in the matter preceding paragraph (1), by inserting
`subject to subsection (f)' after `section 1903(a)';
(B) in subsection (c)(1), by inserting `subject to subsection (f)' after
`1903(a)(1)'; and
(C) by adding at the end the following new subsection:
`(f) TREATMENT OF TERRITORIES-
`(1) IN GENERAL- In the case of a State, other than the 50 States and the
District of Columbia--
`(A) the previous provisions of this section shall not apply to residents
of such State; and
`(B) if the State establishes a plan described in paragraph (2) (for providing
medical assistance with respect to the provision of prescription drugs
to medicare beneficiaries under section 1845(g)), the amount otherwise
determined under section 1108(f) (as increased under section 1108(g))
for the State shall be increased by the amount specified in paragraph
(3).
`(2) PLAN- The plan described in this paragraph is a plan that--
`(A) provides medical assistance under section 1845(g) with respect to
the provision of covered outpatient drugs to low-income medicare beneficiaries
whose income does not exceed an income level specified under the plan;
and
`(B) assures that additional amounts received by the State that are attributable
to the operation of this subsection are used only for such assistance.
`(A) IN GENERAL- The amount specified in this paragraph for a State for
a year is equal to the product of--
`(i) the aggregate amount specified in subparagraph (B); and
`(ii) the amount specified in section 1108(g)(1) for that State, divided
by the sum of the amounts specified in such section for all such States.
`(B) AGGREGATE AMOUNT- The aggregate amount specified in this subparagraph
for--
`(i) 2005, is equal to $25,000,000; or
`(ii) a subsequent year, is equal to the aggregate amount specified
in this subparagraph for the previous year increased by annual percentage
increase specified in section 1845(a)(2)(B) for the year involved.
`(4) REPORT- The Secretary shall submit to Congress a report on the application
of this subsection and may include in the report such recommendations as
the Secretary deems appropriate.'.
(2) CONFORMING AMENDMENT- Section 1108(f) (42 U.S.C. 1308(f)) is amended
by inserting `and section 1935(f)(1)(B)' after `Subject to subsection (g)'.
SEC. 202. IMPROVING ENROLLMENT PROCESS UNDER MEDICAID.
(a) AUTOMATIC REENROLLMENT WITHOUT NEED TO REAPPLY-
(1) IN GENERAL- Section 1905(p) (42 U.S.C. 1396d(p)) is amended--
(A) by redesignating paragraph (6) as paragraph (9); and
(B) by inserting after paragraph (5), the following new paragraph:
`(6) In the case of an individual who has been determined to qualify as a
qualified medicare beneficiary or to be eligible for benefits under section
1902(a)(10)(E)(iii), the individual shall be deemed to continue to be so qualified
or eligible without the need for any annual or periodic application unless
and until the individual notifies the State that the individual's eligibility
conditions have changed so that the individual is no longer so qualified or
eligible.'.
(2) CONFORMING AMENDMENT- Section 1902(e)(8) (42 U.S.C. 1396a(e)(8)) is
amended by striking the second sentence.
(b) USE OF SIMPLIFIED APPLICATION PROCESS- Such section 1905(p) is further
amended by adding at the end the following new paragraph:
`(7) A State shall permit individuals to apply to qualify as a qualified medicare
beneficiary or for benefits under section 1902(a)(10)(E)(iii) through the
use of the simplified application form developed under section 1905(p)(5)(A)
and shall permit such an application to be made over the telephone, the Internet,
or by mail, without the need for an interview in person by the applicant or
a representative of the applicant.'.
(c) ROLE OF SOCIAL SECURITY OFFICES-
(1) ENROLLMENT AND PROVISION OF INFORMATION AT SOCIAL SECURITY OFFICES-
Such section is further amended by adding at the end the following new paragraph:
`(8) The Commissioner of Social Security shall provide, through local offices
of the Social Security Administration--
`(A) for the enrollment under State plans under this title for appropriate
medicare cost-sharing benefits for individuals who qualify as a qualified
medicare beneficiary or for benefits under section 1902(a)(10)(E)(iii);
and
`(B) for providing oral and written notice of the availability of such benefits.'.
(2) CLARIFYING AMENDMENT- Section 1902(a)(5) (42 U.S.C. 1396a(a)(5)) is
amended by inserting `as provided in section 1905(p)(10)' before `except'.
(d) OUTSTATIONING OF STATE ELIGIBILITY WORKERS AT SSA FIELD OFFICES- Section
1902(a)(55) (42 U.S.C. 1396a(a)(55)) is amended--
(1) by striking `subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII),
or (a)(10)(A)(ii)(IX)' and inserting `paragraph (10)(A)(i)(IV), (10)(A)(i)(VI),
(10)(A)(i)(VII), (10)(A)(ii)(IX), or (10)(E)'; and
(2) in subparagraph (A), by inserting `and in the case of applications of
individuals for medical assistance under paragraph (10)(E), at locations
that include field offices of the Social Security Administration'.
END
