42 USC 1395 - Medicare prescription drug discount card and transitional assistance program

View all text of Subpart 4 [§ 1395w-141 - § 1395w-141]

§ 1395w–141. Medicare prescription drug discount card and transitional assistance program

(a) Establishment of program

(1) In generalThe Secretary shall establish a program under this section—

(A) to endorse prescription drug discount card programs that meet the requirements of this section in order to provide access to prescription drug discounts through prescription drug card sponsors for discount card eligible individuals throughout the United States; and

(B) to provide for transitional assistance for transitional assistance eligible individuals enrolled in such endorsed programs.

(2) Period of operation

(A) Implementation deadline

(B) Expediting implementation

(i) In generalSubject to clause (ii)—(I) the program under this section shall not apply to covered discount card drugs dispensed after December 31, 2005; and(II) transitional assistance shall be available after such date to the extent the assistance relates to drugs dispensed on or before such date.

(ii) TransitionIn the case of an individual who is enrolled in an endorsed discount card program as of December 31, 2005, during the individual’s transition period (if any) under clause (iii), in accordance with transition rules specified by the Secretary—(I) such endorsed program may continue to apply to covered discount card drugs dispensed to the individual under the program during such transition period;(II) no annual enrollment fee shall be applicable during the transition period;(III) during such period the individual may not change the endorsed program plan in which the individual is enrolled; and(IV) the balance of any transitional assistance remaining on January 1, 2006, shall remain available for drugs dispensed during the individual’s transition period.

(iii) Transition periodThe transition period under this clause for an individual is the period beginning on January 1, 2006, and ending in the case of an individual who—(I) is enrolled in a prescription drug plan or an MA–PD plan before the last date of the initial enrollment period under section 1395w–101(b)(2)(A) of this title, on the effective date of the individual’s coverage under such part; or(II) is not so enrolled, on the last day of such initial period.

(3) Voluntary nature of program

(4) Glossary and definitions of termsFor purposes of this section:

(A) Covered discount card drug

(B) Discount card eligible individual

(D) Negotiated price

(E) Prescription drug card sponsor; sponsor

(F) State

(G) Transitional assistance eligible individual

(b) Eligibility for discount card and for transitional assistanceFor purposes of this section:

(1) Discount card eligible individual

(A) In generalThe term “discount card eligible individual” means an individual who—

(i) is entitled to benefits, or enrolled, under part A or enrolled under part B; and

(ii) subject to paragraph (4), is not an individual described in subparagraph (B).

(B) Individual described

(2) Transitional assistance eligible individual

(A) In general

(B) Exclusion of individuals with certain prescription drug coverageSuch term does not include an individual who has coverage of, or assistance for, covered discount card drugs under any of the following:

(i) A group health plan or health insurance coverage (as such terms are defined in section 300gg–91 of this title), other than coverage under a plan under part C and other than coverage consisting only of excepted benefits (as defined in such section).

(ii) Chapter 55 of title 10 (relating to medical and dental care for members of the uniformed services).

(iii) A plan under chapter 89 of title 5 (relating to the Federal employees’ health benefits program).

(3) Special transitional assistance eligible individual

(4) Treatment of medicaid medically needy

(1) Enrollment processThe Secretary shall establish a process through which a discount card eligible individual is enrolled and disenrolled in an endorsed discount card program under this section consistent with the following:

(A) Continuous open enrollmentSubject to the succeeding provisions of this paragraph and subsection (h)(9), a discount card eligible individual who is not enrolled in an endorsed discount card program and is residing in a State may enroll in any such endorsed program—

(i) that serves residents of the State; and

(ii) at any time beginning on the initial enrollment date, specified by the Secretary, and before January 1, 2006.

(B) Use of standard enrollment form

(i) In general

(ii) Change in endorsed program permitted for 2005

(iii) Additional exceptions

(D) Disenrollment

(i) Voluntary

(ii) Involuntary

(E) Application to certain enrollees

(2) Enrollment fees

(A) In general

(B) Amount

(D) Collection

(E) Payment of fee for transitional assistance eligible individuals

(F) Optional payment of fee by State

(i) In general

(ii) No Federal matching available under medicaid or SCHIP

(G) Rules in case of changes in program enrollment during a year

(3) Issuance of discount card

(4) Period of access

(d) Provision of information on enrollment and program features

(1) Secretarial responsibilities

(A) In generalThe Secretary shall provide for activities under this subsection to broadly disseminate information to discount card eligible individuals (and prospective eligible individuals) regarding—

(i) enrollment in endorsed discount card programs; and

(ii) the features of the program under this section, including the availability of transitional assistance.

(B) Promotion of informed choiceIn order to promote informed choice among endorsed prescription drug discount card programs, the Secretary shall provide for the dissemination of information which—

(i) compares the annual enrollment fee and other features of such programs, which may include comparative prices for covered discount card drugs; and

(ii) includes educational materials on the variability of discounts on prices of covered discount card drugs under an endorsed program.

The dissemination of information under clause (i) shall, to the extent practicable, be coordinated with the dissemination of educational information on other medicare options.

(D) Use of medicare toll-free number

(2) Prescription drug card sponsor responsibilities

(A) In general

(B) Response to enrollee questions

(3) Public disclosure of pharmaceutical prices for equivalent drugs

(A) In general

(B) Timing of notice

(i) In general

(ii) Waiver

(e) Discount card features

(1) Savings to enrollees through negotiated prices

(A) Access to negotiated prices

(i) In general

(ii) Negotiated prices

(B) Ensuring pharmacy access

(i) In general

(ii) ConstructionNothing in clause (i) shall be construed to prevent—(I) the sponsor from charging the annual enrollment fee (except in the case of a transitional assistance eligible individual); and(II) the pharmacy dispensing the covered discount card drug, from imposing a charge (consistent with the negotiated price) for the covered discount card drug dispensed, reduced by the amount of any transitional assistance made available.

(D) Inapplicability of medicaid best price rules

(2) Reduction of medication errors and adverse drug interactions

(f) Eligibility procedures for endorsed programs and transitional assistance

(1) Determinations

(A) Procedures

(B) Income and family size determinations

(2) Use of self-certification for transitional assistance

(A) In general

(B) Treatment of self-certification

(3) Verification

(A) In general

(B) Information describedThe information described in this subparagraph is as follows:

(i) Medicaid-related information

(ii) Social security information

(iii) Information from Secretary of the Treasury

(i) In general

(ii) Availability of information for verification purposes

(4) Reconsideration

(A) In general

(B) Contract authority

(g) Transitional assistance

(1) Provision of transitional assistanceAn individual who is a transitional assistance eligible individual (as determined under this section) and who is enrolled with an endorsed program is entitled—

(A) to have payment made of any annual enrollment fee charged under subsection (c)(2) for enrollment under the program; and

(B) to have payment made, up to the amount specified in paragraph (2), under such endorsed program of 90 percent (or 95 percent in the case of a special transitional assistance eligible individual) of the costs incurred for covered discount card drugs obtained through the program taking into account the negotiated price (if any) for the drug under the program.

(2) Limitation on dollar amount

(A) In generalSubject to subparagraph (B), the amount specified in this paragraph for a transitional assistance eligible individual—

(i) for costs incurred during 2004, is $600; or

(ii) for costs incurred during 2005, is—(I) $600, plus(II) except as provided in subparagraph (E), the amount by which the amount available under this paragraph for 2004 for that individual exceeds the amount of payment made under paragraph (1)(B) for that individual for costs incurred during 2004.

(B) Proration

(i) In general

(ii) Individual describedAn individual described in this clause is a transitional assistance eligible individual who—(I) with respect to 2004, enrolls in an endorsed program, and provides a certification under subsection (f)(2), before the initial implementation date of the program under this section; and(II) with respect to 2005, is enrolled in an endorsed program, and has provided such a certification, before February 1, 2005.

(D) Limitation on use of funds

(E) No rollover permitted in case of voluntary disenrollment

(3) Payment

(4) Coverage of coinsurance

(A) Waiver permitted by pharmacy

(B) Optional payment of coinsurance by State

(i) In general

(ii) No Federal matching available under medicaid or SCHIP

(iii) Not treated as medicare cost-sharing

(5) Ensuring access to transitional assistance for qualified residents of long-term care facilities and American Indians

(A) Residents of long-term care facilities

(B) American Indians

(6) No impact on benefits under other programs

(7) Disregard for purposes of part C

(h) Qualification of prescription drug card sponsors and endorsement of discount card programs; beneficiary protections

(1) Prescription drug card sponsor and qualifications

(A) Prescription drug card sponsor and sponsor definedFor purposes of this section, the terms “prescription drug card sponsor” and “sponsor” mean any nongovernmental entity that the Secretary determines to be appropriate to offer an endorsed discount card program under this section, which may include—

(i) a pharmaceutical benefit management company;

(ii) a wholesale or retail pharmacy delivery system;

(iii) an insurer (including an insurer that offers medicare supplemental policies under section 1395ss of this title);

(iv) an organization offering a plan under part C; or

(v) any combination of the entities described in clauses (i) through (iv).

(B) Administrative qualifications

(2) Applications for program endorsement

(A) Submission

(B) Approval; compliance with applicable requirementsThe Secretary shall review the application submitted under subparagraph (A) and shall determine whether to endorse the prescription drug discount card program. The Secretary may not endorse such a program unless—

(i) the program and prescription drug card sponsor offering the program comply with the applicable requirements under this section; and

(ii) the sponsor has entered into a contract with the Secretary to carry out such requirements.

(D) Ensuring choice of programs

(i) In general

(ii) Limitation on number

(3) Service area encompassing entire States

(4) Savings to medicare beneficiaries

(5) Grievance mechanism

(6) Confidentiality of enrollee records

(A) In general

(B) Waiver authority

(7) Limitation on provision and marketing of products and servicesThe sponsor of an endorsed discount card program—

(A) may provide under the program—

(i) a product or service only if the product or service is directly related to a covered discount card drug; or

(ii) a discount price for nonprescription drugs; and

(B) may, to the extent otherwise permitted under paragraph (6) (relating to application of HIPAA requirements), market a product or service under the program only if the product or service is directly related to—

(i) a covered discount card drug; or

(ii) a drug described in subparagraph (A)(ii) and the marketing consists of information on the discounted price made available for the drug involved.

(8) Additional protections

(9) Special rules for certain organizations

(A) In general

(B) Special rulesThe special rules under this subparagraph are as follows:

(i) Limitation on enrollment

(ii) Pharmacy access

(iii) Sponsor requirements

(i) Disclosure and oversight

(1) Disclosure

(2) Oversight; audit and inspection authority

(3) Sanctions for abusive practices

(j) Treatment of territories

(1) In general

(2) Transitional assistance

(A) In general

(B) PlanThe plan described in this subparagraph is a plan that—

(i) provides transitional assistance with respect to the provision of covered discount card drugs to some or all individuals who are entitled to benefits under part A or enrolled under part B, who reside in the State, and who have income below 135 percent of the poverty line; and

(ii) assures that amounts received by the State under this paragraph are used only for such assistance.

(C) Allotment limitThe amount described in this subparagraph for a State is equal to $35,000,000 multiplied by the ratio (as estimated by the Secretary) of—

(i) the number of individuals who are entitled to benefits under part A or enrolled under part B and who reside in the State (as determined by the Secretary as of July 1, 2003), to

(ii) the sum of such numbers for all States to which this paragraph applies.

(D) Continued availability of funds

(k) Funding

(1) Establishment of Transitional Assistance Account

(A) In general

(B) Funds

(2) Payments from account

(A) In general

(B) Treatment in relation to part B premium

(3) Appropriations to cover benefits

(4) For administrative expenses

(5) Transfer of any remaining balance to Medicare Prescription Drug Account

(6) Construction

(Aug. 14, 1935, ch. 531, title XVIII, § 1860D–31, as added Pub. L. 108–173, title I, § 101(a)(2), Dec. 8, 2003, 117 Stat. 2131.)