TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT
SEC. 103. MEDICAID AMENDMENTS.
(a) DETERMINATIONS OF ELIGIBILITY FOR LOW-INCOME
SUBSIDIES-
(1) REQUIREMENT- Section 1902(a) (42
U.S.C. 1396a(a)) is amended--
(A) by striking `and' at the
end of paragraph (64);
(B) by striking the period
at the end of paragraph (65) and inserting `; and'; and
(C) by inserting after paragraph
(65) the following new paragraph:
`(66) provide for making eligibility determinations under section
1935(a).'.
(2) NEW SECTION- Title XIX 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) REQUIREMENTS RELATING TO MEDICARE PRESCRIPTION DRUG
LOW-INCOME SUBSIDIES AND MEDICARE TRANSITIONAL PRESCRIPTION DRUG ASSISTANCE-
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 do the following:
`(1) INFORMATION FOR TRANSITIONAL PRESCRIPTION DRUG ASSISTANCE
VERIFICATION- The State shall provide the Secretary with information to
carry out section 1860D-31(f)(3)(B)(i).
`(2) ELIGIBILITY DETERMINATIONS FOR LOW-INCOME SUBSIDIES- The State
shall--
`(A) make determinations of eligibility for premium and cost-sharing
subsidies under and in accordance with section 1860D-14;
`(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 part D, other than subpart 4, of title XVIII
(including section 1860D-14).
`(3) SCREENING FOR ELIGIBILITY, AND ENROLLMENT OF, BENEFICIARIES FOR
MEDICARE COST-SHARING- As part of making an eligibility determination
required under paragraph (2) for an individual, the State shall make a
determination of the individual's eligibility for medical assistance for any
medicare cost-sharing described in section 1905(p)(3) and, if the individual
is eligible for any such medicare cost-sharing, offer enrollment to the
individual under the State plan (or under a waiver of such plan).
`(b) REGULAR FEDERAL SUBSIDY OF ADMINISTRATIVE COSTS- The amounts expended
by a State in carrying out subsection (a) are expenditures reimbursable under
the appropriate paragraph of section 1903(a).'.
(b) PHASED-IN FEDERAL ASSUMPTION OF MEDICAID
RESPONSIBILITY FOR PREMIUM AND COST-SHARING SUBSIDIES FOR DUALLY ELIGIBLE INDIVIDUALS-
Section 1935, as inserted by subsection (a)(2), is amended by adding at the
end the following new subsection:
`(c) FEDERAL ASSUMPTION OF MEDICAID PRESCRIPTION DRUG COSTS FOR DUALLY
ELIGIBLE INDIVIDUALS-
`(1) PHASED-DOWN STATE CONTRIBUTION-
`(A) IN GENERAL- Each of the 50 States and the District of Columbia
for each month beginning with January 2006 shall provide for payment under
this subsection to the Secretary of the product of--
`(i) the amount computed under paragraph (2)(A) for the State and
month;
`(ii) the total number of full-benefit dual eligible individuals (as
defined in paragraph (6)) for such State and month; and
`(iii) the factor for the month specified in paragraph
(5).
`(B) FORM AND MANNER OF PAYMENT- Payment under subparagraph (A) shall
be made in a manner specified by the Secretary that is similar to the
manner in which State payments are made under an agreement entered into
under section 1843, except that all such payments shall be deposited into
the Medicare Prescription Drug Account in the Federal Supplementary
Medical Insurance Trust Fund.
`(C) COMPLIANCE- If a State fails to pay to the Secretary an amount
required under subparagraph (A), interest shall accrue on such amount at
the rate provided under section 1903(d)(5). The amount so owed and
applicable interest shall be immediately offset against amounts otherwise
payable to the State under section 1903(a), in accordance with the Federal
Claims Collection Act of 1996 and applicable regulations.
`(D) DATA MATCH- The Secretary shall perform such periodic data
matches as may be necessary to identify and compute the number of
full-benefit dual eligible individuals for purposes of computing the
amount under subparagraph (A).
`(A) IN GENERAL- The amount computed under this paragraph for a State
described in paragraph (1) and for a month in a year is equal
to--
`(i) 1/12 of the product of--
`(I) the base year State medicaid per capita expenditures for
covered part D drugs for full-benefit dual eligible individuals (as
computed under paragraph (3)); and
`(II) a proportion equal to 100 percent minus the Federal medical
assistance percentage (as defined in section 1905(b)) applicable to
the State for the fiscal year in which the month occurs;
and
`(ii) increased for each year (beginning with 2004 up to and
including the year involved) by the applicable growth factor specified
in paragraph (4) for that year.
`(B) NOTICE- The Secretary shall notify each State described in
paragraph (1) not later than October 15 before the beginning of each year
(beginning with 2006) of the amount computed under subparagraph (A) for
the State for that year.
`(3) BASE YEAR STATE MEDICAID PER CAPITA EXPENDITURES FOR COVERED PART D
DRUGS FOR FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS-
`(A) IN GENERAL- For purposes of paragraph (2)(A), the `base year
State medicaid per capita expenditures for covered part D drugs for
full-benefit dual eligible individuals' for a State is equal to the
weighted average (as weighted under subparagraph (C)) of--
`(i) the gross per capita medicaid expenditures for prescription
drugs for 2003, determined under subparagraph (B); and
`(ii) the estimated actuarial value of prescription drug benefits
provided under a capitated managed care plan per full-benefit dual
eligible individual for 2003, as determined using such data as the
Secretary determines appropriate.
`(B) GROSS PER CAPITA MEDICAID EXPENDITURES FOR PRESCRIPTION
DRUGS-
`(i) IN GENERAL- The gross per capita medicaid expenditures for
prescription drugs for 2003 under this subparagraph is equal to the
expenditures, including dispensing fees, for the State under this title
during 2003 for covered outpatient drugs, determined per
full-benefit-dual-eligible-individual for such individuals not receiving
medical assistance for such drugs through a medicaid managed care
plan.
`(ii) DETERMINATION- In determining the amount under clause (i), the
Secretary shall--
`(I) use data from the Medicaid Statistical Information System
(MSIS) and other available data;
`(II) exclude expenditures attributable to covered outpatient
prescription drugs that are not covered part D drugs (as defined in
section 1860D-2(e)); and
`(III) reduce such expenditures by the product of such portion and
the adjustment factor (described in clause (iii)).
`(iii) ADJUSTMENT FACTOR- The adjustment factor described in this
clause for a State is equal to the ratio for the State for 2003
of--
`(I) aggregate payments under agreements under section 1927;
to
`(II) the gross expenditures under this title for covered
outpatient drugs referred to in clause (i).
Such factor shall be determined based on information reported by the
State in the medicaid financial management reports (form CMS-64) for the
4 quarters of calendar year 2003 and such other data as the Secretary
may require.
`(C) WEIGHTED AVERAGE- The weighted average under subparagraph (A)
shall be determined taking into account--
`(i) with respect to subparagraph (A)(i), the average number of
full-benefit dual eligible individuals in 2003 who are not described in
clause (ii); and
`(ii) with respect to subparagraph (A)(ii), the average number of
full-benefit dual eligible individuals in such year who received in 2003
medical assistance for covered outpatient drugs through a medicaid
managed care plan.
`(4) APPLICABLE GROWTH FACTOR- The applicable growth factor under this
paragraph for--
`(A) each of 2004, 2005, and 2006, is the average annual percent
change (to that year from the previous year) of the per capita amount of
prescription drug expenditures (as determined based on the most recent
National Health Expenditure projections for the years involved);
and
`(B) a succeeding year, is the annual percentage increase specified in
section 1860D-2(b)(6) for the year.
`(5) FACTOR- The factor under this paragraph for a month--
`(A) in 2006 is 90 percent;
`(B) in 2007 is 88 1/3 percent;
`(C) in 2008 is 86 2/3 percent;
`(D) in 2009 is 85 percent;
`(E) in 2010 is 83 1/3 percent;
`(F) in 2011 is 81 2/3 percent;
`(G) in 2012 is 80 percent;
`(H) in 2013 is 78 1/3 percent;
`(I) in 2014 is 76 2/3 percent; or
`(J) after December 2014, is 75 percent.
`(6) FULL-BENEFIT DUAL ELIGIBLE INDIVIDUAL DEFINED-
`(A) IN GENERAL- For purposes of this section, the term `full-benefit
dual eligible individual' means for a State for a month an individual
who--
`(i) has coverage for the month for covered part D drugs under a
prescription drug plan under part D of title XVIII, or under an MA-PD
plan under part C of such title; and
`(ii) is determined eligible by the State for medical assistance for
full benefits under this title for such month under section
1902(a)(10)(A) or 1902(a)(10)(C), by reason of section 1902(f), or under
any other category of eligibility for medical assistance for full
benefits under this title, as determined by the Secretary.
`(B) TREATMENT OF MEDICALLY NEEDY AND OTHER INDIVIDUALS REQUIRED TO
SPEND DOWN- In applying subparagraph (A) in the case of an individual
determined to be eligible by the State for medical assistance under
section 1902(a)(10)(C) or by reason of section 1902(f), the individual
shall be treated as meeting the requirement of subparagraph (A)(ii) for
any month if such medical assistance is provided for in any part of the
month.'.
(c) MEDICAID COORDINATION WITH MEDICARE PRESCRIPTION
DRUG BENEFITS- Section 1935, as so inserted and amended, is further amended
by adding at the end the following new subsection:
`(d) COORDINATION OF PRESCRIPTION DRUG BENEFITS-
`(1) MEDICARE AS PRIMARY PAYOR- In the case of a part D eligible
individual (as defined in section 1860D-1(a)(3)(A)) who is described in
subsection (c)(6)(A)(ii), notwithstanding any other provision of this title,
medical assistance is not available under this title for such drugs (or for
any cost-sharing respecting such drugs), and the rules under this title
relating to the provision of medical assistance for such drugs shall not
apply. The provision of benefits with respect to such drugs shall not be
considered as the provision of care or services under the plan under this
title. No payment may be made under section 1903(a) for prescribed drugs for
which medical assistance is not available pursuant to this paragraph.
`(2) COVERAGE OF CERTAIN EXCLUDABLE DRUGS- In the case of medical
assistance under this title with respect to a covered outpatient drug (other
than a covered part D drug) furnished to an individual who is enrolled in a
prescription drug plan under part D of title XVIII or an MA-PD plan under
part C of such title, the State may elect to provide such medical assistance
in the manner otherwise provided in the case of individuals who are not
full-benefit dual eligible individuals or through an arrangement with such
plan.'.
(d) TREATMENT OF TERRITORIES-
(1) IN GENERAL- Section 1935, as so
inserted and amended, is further amended--
(A) in subsection (a) in the
matter preceding paragraph (1), by inserting `subject to subsection (e)'
after `section 1903(a)';
(B) in subsection (c)(1), by
inserting `subject to subsection (e)' after `1903(a)(1)'; and
(C) by adding at the end the
following new subsection:
`(e) 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 and submits to the Secretary a plan
described in paragraph (2) (for providing medical assistance with respect
to the provision of prescription drugs to part D eligible individuals),
the amount otherwise determined under section 1108(f) (as increased under
section 1108(g)) for the State shall be increased by the amount for the
fiscal period specified in paragraph (3).
`(2) PLAN- The Secretary shall determine that a plan is described in
this paragraph if the plan--
`(A) provides medical assistance with respect to the provision of
covered part D drugs (as defined in section 1860D-2(e)) to low-income part
D eligible individuals;
`(B) provides assurances that additional amounts received by the State
that are attributable to the operation of this subsection shall be used
only for such assistance and related administrative expenses and that no
more than 10 percent of the amount specified in paragraph (3)(A) for the
State for any fiscal period shall be used for such administrative
expenses; and
`(C) meets such other criteria as the Secretary may
establish.
`(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 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 based on the most recent available data
before the beginning of the year); to
`(II) the sum of such numbers for all States that submit a plan
described in paragraph (2).
`(B) AGGREGATE AMOUNT- The aggregate amount specified in this
subparagraph for--
`(i) the last 3 quarters of fiscal year 2006, is equal to
$28,125,000;
`(ii) fiscal year 2007, is equal to $37,500,000; or
`(iii) 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 1860D-2(b)(6) 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(e)(1)(B)' after
`Subject to subsection (g)'.
(e) AMENDMENT TO BEST PRICE-
(1) IN GENERAL- Section 1927(c)(1)(C)(i)
(42 U.S.C. 1396r-8(c)(1)(C)(i)) is amended--
(A) by striking `and' at the
end of subclause (III);
(B) by striking the period
at the end of subclause (IV) and inserting a semicolon; and
(C) by adding at the end the
following new subclauses:
`(V) the prices negotiated from drug manufacturers for covered
discount card drugs under an endorsed discount card program under
section 1860D-31; and
`(VI) any prices charged which are negotiated by a prescription
drug plan under part D of title XVIII, by an MA-PD plan under part C
of such title with respect to covered part D drugs or by a qualified
retiree prescription drug plan (as defined in section 1860D-22(a)(2))
with respect to such drugs on behalf of individuals entitled to
benefits under part A or enrolled under part B of such
title.'.
(2) IN GENERAL- Section 1927(c)(1)(C)(i)(VI)
of the Social Security Act, as added by paragraph (1), shall apply to prices
charged for drugs dispensed on or after January 1, 2006.
(f) EXTENSION OF MEDICARE COST-SHARING FOR
PART B PREMIUM FOR QUALIFYING INDIVIDUALS THROUGH SEPTEMBER 2004-
(1) IN GENERAL- Section 1902(a)(10)(E)(iv)
(42 U.S.C. 1396a(a)(10)(E)(iv)), as amended by section 401(a) of Public Law
108-89, is amended by striking `ending with March 2004' and inserting `ending
with September 2004'.
(2) TOTAL AMOUNT AVAILABLE FOR ALLOCATION-
Section 1933(g) (42 U.S.C. 1396u-3(g)), as added by section 401(c) of Public
Law 108-89, is amended--
(A) in the matter preceding paragraph
(1), by striking `March 31, 2004' and inserting `September 30, 2004'; and
(B) in paragraph (2), by striking
`$100,000,000' and inserting `$300,000,000'.
(3) EFFECTIVE DATE- The amendments
made by this subsection shall apply to calendar quarters beginning on or after
April 1, 2004.
(g) OUTREACH BY THE COMMISSIONER OF SOCIAL
SECURITY- Section 1144 (42 U.S.C. 1320b-14) is amended--
(1) in the section heading, by inserting
`AND SUBSIDIES FOR LOW-INCOME INDIVIDUALS UNDER TITLE XVIII' after `COST-SHARING';
(i) in subparagraph
(A), by inserting `for the transitional assistance under section 1860D-31(f),
or for premium and cost-sharing subsidies under section 1860D-14' before
the semicolon; and
(ii) in subparagraph
(B), by inserting `, program, and subsidies' after `medical assistance';
and
(i) in the matter preceding
subparagraph (A), by inserting `, the transitional assistance under section
1860D-31(f), or premium and cost-sharing subsidies under section 1860D-14'
after `assistance'; and
(ii) in subparagraph
(A), by striking `such eligibility' and inserting `eligibility for medicare
cost-sharing under the medicaid program'; and
(A) in paragraph (1)(A), by
inserting `, for transitional assistance under section 1860D-31(f), or for
premium and cost-sharing subsidies for low-income individuals under section
1860D-14' after `1933'; and
(B) in paragraph (2), by inserting
`, program, and subsidies' after `medical assistance'.
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