[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1954 Introduced in Senate (IS)]
110th CONGRESS
1st Session
S. 1954
To amend title XVIII of the Social Security Act to improve access to
pharmacies under part D.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 2, 2007
Mr. Baucus (for himself, Mr. Grassley, Mrs. Lincoln, Mr. Roberts, Mr.
Conrad, Mr. Enzi, Mr. Schumer, Mr. Cochran, Mr. Salazar, Mr. Smith, Mr.
Bingaman, and Ms. Snowe) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to improve access to
pharmacies under part D.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pharmacy Access Improvement (PhAIm)
Act of 2007''.
SEC. 2. STRENGTHENING STANDARDS FOR ACCESS TO PHARMACIES.
(a) In General.--Section 1860D-4(b)(1)(C) of the Social Security
Act (42 U.S.C. 1395w-104(b)(1)(C)) is amended--
(1) in clause (i)--
(A) by inserting ``that are accessible to the
general public (not including closed pharmacies, such
as pharmacies that dispense drugs by mail order only or
are located in a hospital or nursing home, except that
a closed pharmacy shall be included if the pharmacy is
operated by the Indian Health Service, an Indian tribe
or tribal organization, or an urban Indian organization
(as defined in section 4 of the Indian Health Care
Improvement Act))'' after ``sufficient number of
pharmacies''; and
(B) by striking ``(other than by mail order)''; and
(2) in clause (ii), by adding at the end the following new
sentence: ``If the PDP sponsor of a prescription drug plan
designates in-network pharmacies as either preferred or non-
preferred pharmacies (or any designation other than preferred
or any other distinction between or among pharmacies with
respect to participation status), only in-network preferred
pharmacies shall be counted in determining if the requirements
of such rules are met.''.
(b) Expanding Participation by Any Willing Pharmacy.--Section
1860D-4(b)(1)(A) of the Social Security Act (42 U.S.C. 1395w-
104(b)(1)(A)) is amended--
(1) by striking ``Pharmacy.--A prescription drug plan'' and
inserting ``pharmacy.--
``(i) In general.--Subject to clause (ii),
a prescription drug plan'';
(2) in clause (i), as added by paragraph (1), by adding at
the end the following new sentence: ``A previous refusal by a
pharmacy of an offer to participate, or the expiration of such
an offer, shall not be grounds to exclude a pharmacy from
participation under this subparagraph.''; and
(3) by adding at the end the following new clause:
``(ii) Participation of 340b entities.--
``(I) In general.--A prescription
drug plan shall not exclude a pharmacy
from participation solely on the basis
that such pharmacy is a covered entity
under section 340B of the Public Health
Service Act.
``(II) Reasonable terms and
conditions for 340b entities.--In the
case of a pharmacy that is a covered
entity under such section 340B, if such
an entity requests that the terms and
conditions of the appropriate version
(as determined by the Secretary) of the
Model Safety Net Pharmacy Addendum to
Pharmacy Contract apply to a contract
to dispense covered part D drugs under
such plan, subject to subclause (III),
the terms and conditions of such
contract shall be the terms and
conditions for participation of such
pharmacy under clause (i).
``(III) Permitting waiver of cost-
sharing.--In the case of a pharmacy
that is a covered entity under such
section 340B, if such an entity
requests that the terms and conditions
of a contract to dispense covered part
D drugs under such plan permit the
pharmacy to waive or reduce cost-
sharing under this part, consistent
with the requirements of section
1128B(b)(3)(G), such permission shall
be included in the terms and conditions
for participation of such pharmacy
under clause (i).''.
(c) Strengthening Convenient Access Standards.--
(1) Access in long-term care facilities and to pharmacies
serving indians.--Section 1860D-4(b)(1)(C) of the Social
Security Act (42 U.S.C. 1395w-104(b)(1)(C)) is amended by
striking clause (iv) and inserting the following new clauses:
``(iv) Convenient access in long-term care
facilities.--Such rules shall include standards
with respect to access for enrollees who are
residing in long-term care facilities to ensure
that such enrollees have access to a long-term
care network pharmacy.
``(v) Convenient access to pharmacies
serving indians.--Such rules may include
standards with respect to access for enrollees
to 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.''.
(2) Convenient access to extended supplies at retail
pharmacies.--Section 1860D-4(b)(1)(C) of the Social Security
Act (42 U.S.C. 1395w-104(b)(1)(C)), as amended by paragraph
(1), is amended--
(A) in clause (ii), by striking ``The Secretary''
and inserting ``Subject to clause (vi), the
Secretary''; and
(B) by adding at the end the following new clause:
``(vi) The Secretary shall establish rules
for convenient access to in-network pharmacies
under this subparagraph that dispense extended
supplies of covered part D drugs that are
modeled after the rules for convenient access
to pharmacies included in the statement of work
described in clause (ii).''.
(d) Disclosure of Maximum Allowable Cost Pricing.--Section 1860D-
4(b)(1) of the Social Security Act (42 U.S.C. 1395w-104(b)(1)) is
amended by adding at the end the following new subparagraph:
``(F) Disclosure of maximum allowable cost
pricing.--If a contract for a pharmacy to dispense
covered part D drugs under a prescription drug plan
references maximum allowable cost lists or pricing, the
PDP sponsor of such plan shall disclose, through (at a
minimum) an Internet website and a toll-free telephone
number--
``(i) any such lists or pricing to the
pharmacy at the time of offering such contract;
and
``(ii) information updated not less
frequently than every 7 days on such lists or
pricing to pharmacies that have entered into
such a contract.''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date that is 180 days after the date of enactment of this
Act.
SEC. 3. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS AND MA-PD PLANS UNDER
PART D.
(a) Prompt Payment by Prescription Drug Plans.--Section 1860D-12(b)
of the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by
adding at the end the following new paragraph:
``(4) Prompt payment of clean claims.--
``(A) Prompt payment.--
``(i) In general.--Each contract entered
into with a PDP sponsor under this part with
respect to a prescription drug plan offered by
such sponsor shall provide that payment shall
be issued, mailed, or otherwise transmitted
with respect to all clean claims submitted by
pharmacies (other than pharmacies that dispense
drugs by mail order only or are located in, or
contract with, a long-term care facility) under
this part within the applicable number of
calendar days after the date on which the claim
is received.
``(ii) Clean claim defined.--In this
paragraph, the term `clean claim' means a claim
that has no defect or impropriety (including
any lack of any required substantiating
documentation) or particular circumstance
requiring special treatment that prevents
timely payment from being made on the claim
under this part.
``(B) Applicable number of calendar days defined.--
In this paragraph, the term `applicable number of
calendar days' means--
``(i) with respect to claims submitted
electronically, 14 days; and
``(ii) with respect to claims submitted
otherwise, 30 days.
``(C) Interest payment.--If payment is not issued,
mailed, or otherwise transmitted within the applicable
number of calendar days (as defined in subparagraph
(B)) after a clean claim is received, the PDP sponsor
shall pay interest to the pharmacy that submitted the
claim at a rate equal to the weighted average of
interest on 3-month marketable Treasury securities
determined for such period, increased by 0.1 percentage
point for the period beginning on the day after the
required payment date and ending on the date on which
payment is made (as determined under subparagraph
(D)(iv)). Interest amounts paid under this subparagraph
shall not be counted against the administrative costs
of a prescription drug plan or treated as allowable
risk corridor costs under section 1860D-15(e).
``(D) Procedures involving claims.--
``(i) Claim deemed to be clean.--A claim is
deemed to be a clean claim if the PDP sponsor
involved does not provide notice to the
claimant of any deficiency in the claim within
10 days of the date on which the claim is
submitted.
``(ii) Claim determined to not be a clean
claim.--
``(I) In general.--If a PDP sponsor
determines that a submitted claim is
not a clean claim, the PDP sponsor
shall, not later than the end of the
period described in clause (i), notify
the claimant of such determination.
Such notification shall specify all
defects or improprieties in the claim
and shall list all additional
information or documents necessary for
the proper processing and payment of
the claim.
``(II) Determination after
submission of additional information.--
A claim is deemed to be a clean claim
under this paragraph if the PDP sponsor
involved does not provide notice to the
claimant of any defect or impropriety
in the claim within 10 days of the date
on which additional information is
received under subclause (I).
``(III) Payment of clean portion of
a claim.--A PDP sponsor shall, as
appropriate, pay any portion of a claim
that would be a clean claim but for a
defect or impropriety in a separate
portion of the claim in accordance with
subparagraph (A).
``(iii) Obligation to pay.--A claim
submitted to a PDP sponsor that is not paid or
contested by the sponsor within the applicable
number of days (as defined in subparagraph (B))
shall be deemed to be a clean claim and shall
be paid by the PDP sponsor in accordance with
subparagraph (A).
``(iv) Date of payment of claim.--Payment
of a clean claim under such subparagraph is
considered to have been made on the date on
which--
``(I) with respect to claims paid
electronically, the payment is
transferred; and
``(II) with respect to claims paid
otherwise, the payment is submitted to
the United States Postal Service or
common carrier for delivery.
``(E) Electronic transfer of funds.--A PDP sponsor
shall pay all clean claims submitted electronically by
electronic transfer of funds if the pharmacy so
requests or has so requested previously. In the case
where such payment is made electronically, remittance
may be made by the PDP sponsor electronically as well.
``(F) Protecting the rights of claimants.--
``(i) In general.--Nothing in this
paragraph shall be construed to prohibit or
limit a claim or action not covered by the
subject matter of this section that any
individual or organization has against a
provider or a PDP sponsor.
``(ii) Anti-retaliation.--Consistent with
applicable Federal or State law, a PDP sponsor
shall not retaliate against an individual or
provider for exercising a right of action under
this subparagraph.
``(G) Rule of construction.--A determination under
this paragraph that a claim submitted by a pharmacy is
a clean claim shall not be construed as a positive
determination regarding eligibility for payment under
this title, nor is it an indication of government
approval of, or acquiescence regarding, the claim
submitted. The determination shall not relieve any
party of civil or criminal liability with respect to
the claim, nor does it offer a defense to any
administrative, civil, or criminal action with respect
to the claim.''.
(b) Prompt Payment by MA-PD Plans.--Section 1857(f) of the Social
Security Act (42 U.S.C. 1395w-27) is amended by adding at the end the
following new paragraph:
``(3) Incorporation of certain prescription drug plan
contract requirements.--The following provisions shall apply to
contracts with a Medicare Advantage organization 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).''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date that is 1 year after the date of enactment of this
Act.
SEC. 4. MEDICARE PART D INFORMATIONAL RESOURCES AND CUSTOMER SERVICE.
(a) Health and Human Services Pharmacy Hotline.--The Secretary of
Health and Human Services shall--
(1) establish a toll-free telephone number that is
dedicated to providing information regarding the Medicare
prescription drug benefit under part D of title XVIII of the
Social Security Act to pharmacists and pharmacy staff; and
(2) staff such telephone number in order to ensure that the
toll-free number is available to answer calls 24-hours each
day.
(b) Customer Service Provided by Prescription Drug Plans and MA-PD
Plans.--
(1) In general.--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:
``(l) Customer Service.--
``(1) Pharmacy hotline.--A PDP sponsor of a prescription
drug plan shall--
``(A) establish a toll-free telephone number that
is dedicated to providing information regarding the
plan to pharmacists and pharmacy staff; and
``(B) staff such telephone number in order to
ensure compliance with customer service standards (as
established by the Secretary).
``(2) Physician and provider hotline.--A PDP sponsor of a
prescription drug plan shall--
``(A) establish a toll-free telephone number that
is dedicated to providing information regarding the
plan to physicians and providers; and
``(B) staff such telephone number in order to
ensure compliance with customer service standards (as
established by the Secretary).''.
(2) Effective date.--The amendments made by this subsection
shall apply to plan years beginning on or after January 1,
2008.
SEC. 5. RESTRICTIONS ON PHARMACY CO-BRANDING BY PRESCRIPTION DRUG PLANS
AND MA-PD PLANS.
(a) In General.--Section 1860D-4 of the Social Security Act (42
U.S.C. 1395w-104), as amended by section 4(b), is amended by adding at
the end the following new subsection:
``(m) Co-Branding.--
``(1) Prohibition of co-branding on prescription drug
card.--A card that is issued under subsection (b)(2)(A) for use
under a prescription drug plan offered by a PDP sponsor shall
not display the name, brand, logo, or trademark of any
pharmacy.
``(2) Marketing materials.--Marketing materials distributed
by a PDP sponsor that has a co-branding relationship with a
pharmacy with respect to such a plan shall include a disclaimer
in large, off-set, bold-face type of the following: Other
pharmacies are also available in our network.''.
(b) Effective Date.--The amendments made by this section shall
apply to cards and marketing materials distributed on or after the date
that is 60 days after the date of enactment of this Act.
SEC. 6. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR CONTRACTING
WITH LONG-TERM CARE FACILITIES.
(a) Submission of Claims by Pharmacies Located in or Contracting
With Long-Term Care Facilities.--
(1) Submission of claims to prescription drug plans.--
Section 1860D-12(b) of the Social Security Act (42 U.S.C.
1395w-112(b)), as amended by section 3(a), is amended by adding
at the end the following new paragraph:
``(5) Submission of claims by pharmacies located in or
contracting with long-term care facilities.--Each contract
entered into with a PDP sponsor under this part with respect to
a prescription drug plan offered by such sponsor shall provide
that a pharmacy located in, or having a contract with, a long-
term care facility shall have not less than 30 days (but not
more than 90 days) to submit claims to the sponsor for
reimbursement under the plan.''.
(2) Submission of claims to ma-pd plans.--Section
1857(f)(3) of the Social Security Act, as added by section
3(b), is amended by adding at the end the following new
subparagraph:
``(B) Submission of claims by pharmacies located in
or contracting with long-term care facilities.--Section
1860D-12(b)(5).''.
(b) Effective Date.--The amendments made by this section shall
apply to plan years beginning on or after January 1, 2008.
SEC. 7. OIG STUDY AND REPORT ON DISPENSING FEES.
(a) Study.--The Inspector General of the Department of Health and
Human Services shall conduct an analysis of the cost of dispensing
covered part D drugs (as defined in section 1860D-2(e) of the Social
Security Act (42 U.S.C. 1395w-102(e)) under a prescription drug plan
under part D of title XVIII of such Act or an MA-PD plan under part C
of such title that takes into consideration the following:
(1) Any reasonable costs associated with a pharmacist's
time in--
(A) checking for information about an individual's
coverage; and
(B) performing necessary clinical review and
quality assurance activities, such as activities to
identify and reduce the frequency of patterns of fraud,
abuse, gross overuse, or inappropriate or medically
unnecessary care, among physicians, pharmacists, and
patients, or associated with specific drugs or groups
of drugs, as well as potential and actual severe
adverse reactions to drugs including education on
therapeutic appropriateness, overutilization and
underutilization, appropriate use of generic products,
therapeutic duplication, drug-disease
contraindications, drug-drug interactions, incorrect
drug dosage or duration of drug treatment, drug-allergy
interactions, and clinical abuse/misuse, and any other
clinical review and quality assurance activities
required under Federal or State law.
(2) Costs incurred by the pharmacist that are associated
with--
(A) the measurement or mixing of a covered part D
drug;
(B) filling the container for such a drug;
(C) physically providing the completed prescription
to an individual enrolled in such a plan;
(D) delivery;
(E) special packaging;
(F) overhead related to the pharmacy, or the
section of the facility that is devoted to a pharmacy,
and its maintenance (including the equipment necessary
to operate such pharmacy or such section and the
salaries of pharmacists and other pharmacy workers);
and
(G) geographic factors that impact operational
costs.
(3) The variation in costs described in paragraph (2) based
on--
(A) whether the pharmacist is dispensing a standard
or extended supply of a covered part D drug;
(B) whether the pharmacy is an independent or chain
pharmacy;
(C) whether a product dispensed is a specialty
pharmacy product; and
(D) whether the pharmacy is located in, or
contracts with, a long-term care facility.
(4) The increase in dispensing fees, taking into
consideration the costs described in paragraphs (1), (2), and
(3), that is sufficient to create an incentive for a pharmacist
to promote the substitution of covered general alternative
therapies.
(b) Report.--Not later than December 1, 2008, the Inspector General
of the Department of Health and Human Services shall submit a report to
the Secretary of Health and Human Services on the study conducted under
subsection (a). The report shall include the following:
(1) The average cost to dispense a prescription drug under
part D of title XVIII of the Social Security Act determined
with respect to the area in which a prescription drug plan or
an MA-PD plan is offered, including with respect to each PDP
region (as determined under section 1860D-11(a)(2) of such Act
(42 U.S.C. 1395w-111(a)(2)) and each MA region (as determined
under section 1858(a) of such Act (42 U.S.C. 1395w-27(a)).
(2) The findings of the study conducted under subsection
(a) with respect to--
(A) the variation in costs studied under
subparagraphs (A) through (D) of paragraph (3) of such
subsection; and
(B) the increase in dispensing fees studied under
paragraph (4) of such subsection.
SEC. 8. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD REQUIRED.
(a) Requirement for Prescription Drug Plans.--Section 1860D-12(b)
of the Social Security Act (42 U.S.C. 1395w-112(b)), as amended by
section 6(a)(1), is amended by adding at the end the following new
paragraph:
``(6) Regular update of prescription drug pricing
standard.--If the PDP sponsor of a prescription drug plan uses
a standard for reimbursement of pharmacies based on the cost of
a drug, each contract entered into with such sponsor under this
part with respect to the plan shall provide that the sponsor
shall update such standard not less frequently than once every
7 days, beginning with an initial update on January 1 of each
year, to accurately reflect the market price of acquiring the
drug.''.
(b) Requirement for MA-PD Plans.--Section 1857(f)(3) of the Social
Security Act, as amended by section 6(a)(2), is amended by adding at
the end the following new subparagraph:
``(C) Regular update of prescription drug pricing
standard.--Section 1860D-12(b)(6).''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning on or after January 1, 2008.
<all>