,i  #aafth ,,congress  #ast ,session    
,h4 ,r4 #aeei  ,,in ,,the ,,house ,,of  
,,representatives  ,march #f1 #bjai,mr4 
,collins of ,new ,york introduced the   
following bill2 which was referred to   
the ,committee on ,energy and ,commerce 
,a ,,bill  ,to amend the ,public ,health
 ,service ,act to strengthen program    
integrity and enhance low-income patient
 benefits for safety net providers4  #a4
 ,short title ,this ,act may be cited as
 the #cdj;,b ,protection and            
,accountability ,act of #bjai4  #b4     
,strengthening #cdj;,b program integrity
 and enhancing low-income patient       
benefits for safety net providers  7a7  
,definition of patient ,section         
#cdj;,b7b7 of the ,public ,health       
,service ,act 7#db ,u4,s4,c4 #bef;b7b77 
is amended by adding at the end the     
following new paragraph3  7#c7 ,patient 
7,a7 ,in general ,in this section1 the  
term patient means1 with respect to a   
covered entity described in subparagraph
 7,l7 or 7,m7 of subsection 7a77#d71 an 

individual who1 on a                    
prescription-by-prescription or         
order-by-order basis--  7i7 receives a  
health care service at a covered entity 
or an outpatient hospital facility      
described in subsection 7c77#c7 which is
 registered for the drug discount       
program under this section and listed on
 the public internet website of the     
,department of ,health and ,human       
,services relating to this section2     
7ii7 receives an outpatient in-person   
health care service from a health care  
provider employed by the covered entity 
or who is an independent contractor of  
the covered entity1 such that the       
covered entity bills for services on    
behalf of the provider2  7iii7 receives 
a drug that is ordered or prescribed by 
the covered entity provider1 including  
any renewals of existing prescriptions1 
as a result of the service described in 
clause 7ii72  7iv7 in the case of a     
covered entity that has a contract with 
a ,state or local government described  

in subclause 7,,iii7 of subsection      
7a77#d77,l77i71 receives a health care  
service or range of such services1 to   
include the ordering or prescribing of a
 covered outpatient drug1 from the      
covered entity pursuant to such         
contract2  7v7 is classified as an      
outpatient when the drug is ordered or  
prescribed1 as demonstrated by how the  
service was reimbursed by the applicable
 payer1 or1 where the covered entity    
does not seek such reimbursement1 how   
the service would have been reimbursed  
under title ,,xviii of the ,social      
,security ,act2 and  7vi7 has a         
relationship with the covered entity    
such that the covered entity creates and
 maintains auditable health care records
 which demonstrate that--  7,i7 the     
covered entity has a provider-to-patient
 relationship with the individual2 and  
7,,ii7 responsibility for the           
individual's health care service that   
resulted in the prescription or order   
for the drug described in clause 7iii7  

is with the covered entity4  7,b7       
,exclusions ,for purposes of this       
section1 an individual shall not be     
considered a patient of a covered entity
 described in subparagraph 7,l7 or 7,m7 
of subsection 7a77#d7 if--  7i7 the     
individual is an inmate of a            
correctional facility2  7ii7 the health 
care service described in clause 7ii7 of
 subparagraph 7,a7 received by the      
individual from the covered entity      
consists only of the administration or  
infusion of a drug or drugs1 or the     
dispensing of a drug or drugs for       
subsequent self-administration or       
administration in the home setting1     
without a covered entity                
provider-to-patient encounter2  7iii7   
the health care service described in    
clause 7ii7 of subparagraph 7,a7        
received by the individual from the     
covered entity is provided by a health  
care organization that has only an      
affiliation arrangement with the covered
 entity1 even if the covered entity has 

access to the affiliated organization's 
records2 or  7iv7 the primary           
relationship between the individual and 
the covered entity is one of employment4
  7,c7 ,regulations ,not later than #ahj
 days after the date of enactment of the
 #cdj;,b ,protection and ,accountability
 ,act of #bjai1 the ,secretary shall    
promulgate final regulations through    
notice-and-comment rulemaking to define 
the term patient with respect to covered
 entities described in subparagraph 7,l7
 or 7,m7 of subsection 7a77#d7 to       
reflect the requirements described in   
subparagraphs 7,a7 and 7,b7 of this     
paragraph4  7,d7 ,definition relating to
 other covered entities ,in this        
section1 the term patient1 with respect 
to a covered entity described in        
subparagraphs 7,a7 through 7,k7 of      
subsection 7a77#d71 has the meaning     
given such term in the ,october #bd1    
#aiif1 ,,hrsa ,final ,notice ,regarding 
,section #fjb of the ,veterans ,health  
,care ,act of #aiib ,patient and ,entity

 ,eligibility 7#fa ,fed ,reg4 #eeaef74  
7,e7 ,record retention ,a covered entity
 described in subparagraph 7,l7 or 7,m7 
of subsection 7a77#d7 shall retain      
auditable health care records which     
demonstrate the existence of a patient  
relationship in accordance with this    
paragraph for each prescription or order
 for a rolling period of not less than  
five years1 or longer to the extent     
required by ,state or ,federal law4  4  
7b7 ,treatment of contracted services   
,subsection 7a7 of section #cdj;,b of   
the ,public ,health ,service ,act 7#db  
,u4,s4,c4 #bef;b7 is amended by adding  
at the end the following new paragraphs3
  7#aa7 ,contracted services ,in the    
case of a covered entity described in   
subparagraph 7,l7 or 7,m7 of subsection 
7a77#d7 that elects to enter into a     
contractual arrangement with a third    
party for services related to the drug  
discount program under this section1    
such as to dispense covered outpatient  
drugs subject to an agreement under this

 section to patients of the covered     
entity1 to administer contracted        
pharmacy services1 or to provide any    
other service related to the drug       
discount program under this section1 the
 remuneration for which is based in     
whole or in part on the volume of       
dispensed covered outpatient drugs      
subject to an agreement under this      
section1 such covered entity shall--    
7,a7 have a contractual agreement in    
place between the covered entity and    
each contracted entity1 including with  
each location of a pharmacy contracted  
to dispense covered outpatient drugs    
subject to an agreement under this      
section to patients 7as so defined7 of  
the covered entity1 which shall specify 
that the contracted entity shall adhere 
to all requirements of the drug discount
 program under this section1 but that   
ultimate responsibility for program     
compliance and oversight of compliance  
by each contracted entity shall remain  
with the covered entity and that all    

covered outpatient drugs subject to an  
agreement under this section shall be   
purchased by the covered entity2  7,b7  
register each such agreement with the   
,secretary1 include in such registration
 such information as shall be specified 
by the ,secretary1 and make available   
such agreement upon request by the      
,secretary2  7,c7 ensure the compliance 
of each such agreement with the         
requirements of this section to prevent 
drug diversion in violation of          
subparagraph 7,b7 of paragraph 7#e7 and 
to prevent duplicate discounts in       
violation of subparagraph 7,a7 of such  
paragraph before utilizing the services 
of the contracted entity1 including by--
  7i7 developing and implementing1 with 
each contracted entity subject to such  
an agreement1 a system to verify        
eligibility of patients 7as so defined7 
of the entity2  7ii7 developing and     
implementing1 with each such contracted 
entity1 a mechanism for tracking the    
inventory of covered outpatient drugs   

that are subject to an agreement under  
this section that is suitable to prevent
 diversion in violation of subparagraph 
7,b7 of paragraph 7#e7 and to prevent   
duplicate discounts in violation of     
subparagraph 7,a7 of such paragraph1    
such as a separate inventory for such   
drugs2 and  7iii7 establishing a        
mechanism with each such contracted     
entity and each applicable ,state       
,medicaid agency that is suitable to    
prevent duplicate discounts for covered 
outpatient drugs that are subject to an 
agreement under this section1 including 
such drugs dispensed to enrollees of    
,medicaid managed care organizations1   
and complies with regulations on        
methodologies to prevent duplicate      
discounts issued by the ,secretary2     
7,d7 make available1 to the extent the  
covered entity offers a charity care    
policy or has an obligation under       
subsection 7a77#e77;,e7 to have a       
sliding fee scale1 patient access to a  
covered entity's prescription drug      

charity care benefit and its sliding fee
 scale1 and developing and implementing1
 with each such contracted entity1 a    
mechanism for documenting the income and
 insurance status of each patient 7as so
 defined7 of the covered entity and the 
amount each such patient pays to receive
 covered outpatient drugs that are      
subject to an agreement under this      
section2  7,e7 maintain1 and ensure that
 each such contracted entity maintains1 
auditable records that pertain to the   
compliance of the covered entity and the
 contracted entity with the requirements
 described in this paragraph1 for a     
rolling period of not less than #e      
years2  7,f7 establish a process for1   
and conduct1 periodic comparisons of the
 covered entity's prescribing records   
with the dispensing records of each such
 contracted entity1 as applicable1 to   
detect potential irregularities and to  
ensure that all drugs dispensed by the  
contracted entity are for patients 7as  
so defined7 of the covered entity2  7,g7

 provide for annual on-site audits of   
each such contracted entity to be       
conducted by an independent outside     
auditor2  7,h7 maintain arrangements to 
dispense covered outpatient drugs that  
are subject to an agreement under this  
section to patients 7as so defined7 of  
the covered entity with no more than #e 
contract pharmacy locations at any given
 time1 all of which must be located     
within 7or1 for mail-order pharmacies1  
serve patients residing in7 lower-income
 7using ,american ,community ,survey    
data as determined by the ,secretary7   
census tracts served by the covered     
entity1 except in the case that the     
covered entity files a publicly         
available exception request with the    
,secretary that seeks authorization to  
establish a particular contract pharmacy
 arrangement in a higher-income census  
tract and explains the reason in that   
particular case such a contract pharmacy
 would best meet the needs of low-income
 patients of the covered entity1 and the

 ,secretary decides to grant the request
 to establish one of the #e contract    
pharmacies in the census tract          
requested2  7,i7 ensure1 as applicable1 
that patients 7as so defined7 of the    
covered entity have access to the       
covered entity's prescription drug      
charity care benefit through each       
contract pharmacy location at the time  
of purchase of each covered outpatient  
drug subject to an agreement under this 
section to the same extent such patients
 have access to the benefit with respect
 to such drugs purchased directly       
through the covered entity2 and  7,j7   
limit any amount paid by the covered    
entity1 or any agent of the covered     
entity1 to the contracted entity for    
dispensing covered outpatient drugs     
subject to an agreement under this      
section or for any other service related
 to the drug discount program under this
 section to a reasonable amount1 which  
shall not exceed the fair market value  
of such drug dispensing or other        

service4  ,in the case the ,secretary   
grants a request under subparagraph 7,h7
 to establish a particular contract     
pharmacy arrangement in a higher-income 
census tract1 the ,secretary shall make 
such decision available on a public     
website4  7#ab7 ,auditing ,a covered    
entity described in subparagraph 7,l7 or
 7,m7 of subsection 7a77#d7 and a       
contracted entity that enter into a     
contractual arrangement described in    
paragraph 7#aa7 shall permit--  7,a7 the
 ,secretary to audit the records of the 
covered entity and of the contracted    
entity that pertain to the covered      
entity's and the contracted entity's    
compliance with the requirements        
described in such paragraph2 and  7,b7  
the manufacturer of a covered outpatient
 drug that is subject to an agreement   
under this section 7or its designee7 to 
audit such records of the covered entity
 and of the contracted entity solely    
with respect to such drugs of the       
manufacturer4  7#ac7 ,regulations  7,a7 

,not later than #ahj days after the date
 of enactment of this paragraph1 the    
,secretary shall promulgate final       
regulations through notice-and-comment  
rulemaking to implement the requirements
 of paragraph 7#aa7 and paragraph 7#ab74
 ,such regulations shall include model  
terms for the contractual agreement     
described in subparagraph 7,a7 of       
paragraph 7#aa74  7,b7 ,not later than  
#ahj days after the date of enactment of
 this paragraph1 the ,secretary shall   
promulgate final regulations through    
notice-and-comment rulemaking to        
establish procedures1 in the case in    
which the ,secretary determines that a  
violation of the annual contract        
pharmacy independent on-site audit      
requirement in subparagraph 7,f7 of     
paragraph 7#aa71 with respect to a      
contract pharmacy arrangement1 was      
knowing and intentional--  7i7 for      
removing the contract pharmacy          
arrangement from a covered entity's     
contract pharmacy network and           

disqualifying the entity from adding any
 additional contract pharmacies for a   
reasonable period1 to be determined by  
the ,secretary1 of not less than two    
years2 and  7ii7 for requiring that the 
entity pay a monetary penalty to a      
manufacturer or manufacturers in the    
form of interest on sums that are owed  
to the manufacturer due to violations of
 subparagraph 7,a7 or 7,b7 of subsection
 7a77#e7 that occurred at one or more   
contract pharmacies and that were       
discovered later than such violations   
would have been if the entity had       
complied with its obligation to have    
annual independent audits of contract   
pharmacies conducted4  7#ad7 ,mail order
 study and regulations  7,a7 ,report    
,not later than #ahj days after the date
 of the enactment of this paragraph1 the
 ,secretary shall conduct a study 7and  
submit to ,congress a report containing 
the results of such study7 regarding    
compliance concerns associated with     
covered entities described in           

subparagraph 7,l7 or 7,m7 of subsection 
7a77#d7 contracting with mail order     
pharmacies to dispense covered          
outpatient drugs subject to an agreement
 under this section1 and any additional 
safeguards or limitations necessary and 
appropriate to reduce those compliance  
concerns4  7,b7 ,regulations ,not later 
than #ahj days after the submission of  
the report under subparagraph 7,a71 the 
,secretary shall promulgate final       
regulations applicable to covered       
entities described in such subparagraph1
 through notice-and-comment rulemaking1 
to implement any additional safeguards  
or limitations recommended by the study4
  7#ae7 ,contract pharmacy moratorium   
,no covered entity described in         
subparagraphs 7,l7 or 7,m7 of subsection
 7a77#d7 shall enter into a new or      
expanded contractual arrangement        
pursuant to which a third party         
dispenses covered outpatient drugs      
subject to an agreement under this      
section to patients 7as so defined7 of  

the covered entity during the period    
beginning on the date of the enactment  
of this paragraph and ending on the     
latter of--  7,a7 the effective date of 
final regulations described in paragraph
 7#ac72  7,b7 the effective date of     
final regulations described in paragraph
 7#ad72  7,c7 the effective date of     
final regulations issued through        
,secretarial notice-and-comment         
rulemaking that take into consideration 
the findings and recommendations in the 
report from the ,inspector ,general of  
the ,department of ,health and ,human   
,services required under subsection     
7g77#c74  4  7c7 ,regulations ,to reduce
 duplicate discount risks ,subsection   
7a77#e77;,a7 of section #cdj;,b of the  
,public ,health ,service ,act 7#db      
,u4,s4,c4 #bef;b7 is amended by adding  
at the end the following new clause3    
7iii7 ,not later than one year after the
 date of the enactment of this clause1  
the ,secretary shall promulgate final   
regulations through notice-and-comment  

rulemaking1 describing methodologies for
 ,state ,medicaid programs and all      
covered entities under subsection       
7a77#d7 to identify and bill drugs      
subject to an agreement under this      
section in a manner that ensures        
compliance with #cdj;,b ,program        
prohibitions regarding duplicate        
discounts1 including the duplicate      
discount prohibition under section      
#aibg7;j77#a7 of the ,social ,security  
,act1 to include the application of such
 prohibitions to ,medicaid managed care 
enrollees4 ,such methodologies shall    
include the use of #cdj;,b-specific     
claims identifiers1 and the provision of
 claims-level data by covered entities  
to ,states as well as manufacturers of  
covered outpatient drugs sufficient to  
identify claims that include drugs      
subject to an agreement under this      
section and to prevent duplicate        
discounts4  4  7d7 ,amount charged to   
low-,income patients  7#a7 ,in general  
,subsection 7a77#e7 of section #cdj;,b  

of the ,public ,health ,service ,act    
7#db ,u4,s4,c4 #bef;b7 is amended by    
adding at the end the following new     
subparagraphs3  7,e7 ,amount charged to 
low-income patients ,as a condition of  
certification or recertification under  
subparagraph 7,e7 of paragraph 7#g71    
each covered entity described in        
subparagraph 7,l7 or 7,m7 of subsection 
7a77#d7 must establish a sliding scale  
fee schedule for providing covered      
outpatient drugs that are subject to an 
agreement under this section1 directly  
or under a contractual arrangement      
pursuant to which a third party         
dispenses such drugs1 to patients of the
 covered entity who are--  7i7          
low-income individuals2 and  7ii7 not   
covered under minimum essential         
coverage1 as defined in section         
#ejjj;,a7f7 of the ,internal ,revenue   
,code4  7,f7 ,regulations ,not later    
than #ahj days after the date of        
enactment of this subparagraph1 the     
,secretary shall promulgate final       

regulations through notice-and-comment  
rulemaking1 to implement the            
requirements under subparagraph 7,e74   
,such regulations shall--  7i7 define   
the term low-income individual2  7ii7   
provide a methodology for establishing  
the sliding scale fee schedule1 which   
shall apply1 where otherwise applicable 
to a covered entity1 regardless of      
whether the covered outpatient drug is  
dispensed by the covered entity directly
 or a child site of the covered entity  
or by a contracted entity described in  
paragraph 7#aa72 and  7iii7 ensure the  
security and protection of privileged or
 otherwise confidential data from       
unauthorized disclosure or              
re-disclosure4  4  7e7 ,private         
non-,profit ,,dsh hospitals and         
outpatient hospital facilities  7#a7    
,definition ,subparagraph 7,l7 of       
section #cdj;,b7a77#d7 of the ,public   
,health ,service ,act 7#db ,u4,s4,c4    
#bef;b7a77#d77 is amended to read as    
follows3  7,l7 ,a subsection 7d7        

hospital 7as defined in section         
#ahhf7;d77#a77;,b7 of the ,social       
,security ,act7 that-- 7i7 is--  7,i7   
owned or operated by a unit of ,state or
 local government2  7,,ii7 a public or  
private non-profit corporation which is 
formally granted governmental powers by 
a unit of ,state or local government2 or
  7,,iii7 a private non-profit hospital 
which has a contract with a ,state or   
local government to provide health care 
services1 which include the ordering or 
prescribing of covered outpatient drugs 
that are subject to an agreement under  
this section1 to low-income individuals 
who are not entitled to benefits under  
title ,,xviii of the ,social ,security  
,act or eligible for assistance under   
the ,state plan for medical assistance  
under title ,,xix of such ,act2  7ii7   
for the most recent cost reporting      
period that ended before the calendar   
quarter involved1 had a disproportionate
 share adjustment percentage 7as        
determined under section                

#ahhf7;d77#e77;,f7 of the ,social       
,security ,act7 greater than #aa4ge     
percent or was described in section     
#ahhf7;d77#e77;,f77i77,,ii7 of such     
,act2 and  7iii7 does not obtain covered
 outpatient drugs through a group       
purchasing organization or other group  
purchasing arrangement4  ,if the        
,secretary determines that a hospital   
that is eligible for participation in   
the #cdj;,b program under this          
subparagraph obtained covered outpatient
 drugs through a group purchasing       
organization or another group purchasing
 arrangement while that hospital was    
participating in the drug discount      
program under this section1 then the    
,secretary shall remove such hospital   
from such program and the hospital shall
 not be permitted to seek re-enrollment 
for a period of at least #ab months     
after its removal from the program4  4  
7#b7 ,study and report2 moratorium2     
outpatient hospital facilities2 audits  
,subsection 7c7 of section #cdj;,b of   

the ,public ,health ,service ,act 7#db  
,u4,s4,c4 #bef;b7 is amended to read as 
follows3  7c7 ,covered entities that are
 private1 non-,profit ,,dsh hospitals   
7#a7 ,study and report  7,a7 ,study ,the
 ,comptroller ,general of the ,united   
,states shall conduct a study on the    
relationship between the                
disproportionate share adjustment       
percentages of private covered entities 
described in subclauses 7,,ii7 and      
7,,iii7 of subsection 7a77#d77,l77i7 and
 the levels of charity care provided by 
such entities to outpatients4  7,b7     
,report ,not later than #ahj days after 
the date of enactment of the #cdj;,b    
,protection and ,accountability ,act of 
#bjai1 the ,comptroller ,general shall  
submit to the appropriate committees of 
,congress a report on the results of the
 study conducted under subparagraph     
7,a71 including recommendations on a    
metric that1 as applied to a private    
covered entity described in such        
subparagraph1 reflects a high level of  

charity care provided to outpatients as 
a percentage of the covered entity's    
overall expenses for outpatient care1   
and could replace the metric described  
in subclause 7ii7 of subsection         
7a77#d77,l74 ,the ,comptroller ,general 
shall recommend the metric that best    
aligns with the level of charity care   
provided to outpatients as a percentage 
of overall hospital operating expenses  
on outpatient care if no metric is      
identified that provides a precise      
measure of such percentage4  7#b7       
,moratorium  7,a7 ,in general ,for the  
period described in subparagraph 7,b7-- 
7i7 a private covered entity described  
in subclauses 7,,ii7 or 7,,iii7 of      
subsection 7a77#d77,l77i7 may           
participate in the drug discount program
 under this section as a covered entity 
only if it was properly enrolled as a   
covered entity in the drug discount     
program under this section as of the    
date of the enactment of the #cdj;,b    
,protection and ,accountability ,act of 

#bjai and continuously enrolled         
thereafter2 and  7ii7 with respect to a 
facility or organization described in   
paragraph 7#c7 of this subsection that  
is wholly owned by a private covered    
entity described in subclause 7,,ii7 or 
7,,iii7 of subsection 7a77#d77,l77i71   
only a facility or organization that was
 properly enrolled as a child site in   
the drug discount program under this    
section as of the date of the enactment 
of the #cdj;,b ,protection and          
,accountability ,act of #bjai and       
continuously enrolled thereafter may    
participate in the drug discount program
 under this section4  7,b7 ,period      
described ,for purposes of subparagraph 
7,a71 the period described in this      
subparagraph is the period beginning on 
the date of enactment of the #cdj;,b    
,protection and ,accountability ,act of 
#bjai and ending on the effective date  
described in subparagraph 7,c74  7,c7   
,effective date of replacement metric   
7i7 ,in general ,for purposes of        

subparagraph 7,b71 subject to clause    
7ii71 the effective date described in   
this subparagraph is the effective date 
specified in legislation that1 with     
respect to private covered entities     
described in subclauses 7,,ii7 and      
7,,iii7 of subsection 7a77#d77,l77i7--  
7,i7 replaces the metric described in   
clause 7ii7 of subsection 7a77#d77,l7   
with a metric that more accurately      
reflects the levels of outpatient       
charity care as a percentage of overall 
expenses for outpatient care provided by
 such entities2 and  7,,ii7 takes into  
account the report submitted under      
paragraph 7#a71 including by addressing 
the ,comptroller ,general's             
recommendations included in such report4
  7ii7 ,exception ,if legislation       
described in clause 7i7 is not enacted  
by the date that is one year after the  
date of submission of the report under  
paragraph 7#a7--  7,i7 the ,secretary   
shall promulgate final regulations that 
implement1 to the extent practicable1   

the ,comptroller ,general's             
recommendations included within such    
report not later than the date that is  
#ahj days after such one-year date2 and 
7,,ii7 for purposes of subparagraph     
7,b71 the effective date described in   
this subparagraph is the effective date 
of such final regulations4  7#c7        
,outpatient hospital facilities ,a      
facility or organization may participate
 in the drug discount program under this
 section as a child site of a covered   
entity described in subparagraph 7,l7 or
 7,m7 of subsection 7a77#d7 only if such
 facility or organization--  7,a7 is    
wholly owned by a covered entity        
described in subparagraph 7,l7 or 7,m7  
of subsection 7a77#d72  7,b7 except in  
the case in which the parent covered    
entity is a children's hospital         
described in subparagraph 7,m7 of       
subsection 7a77#d7 which does not file a
 ,medicare cost report1 is listed on the
 ,medicare cost report most recently    
filed by the parent covered entity on a 

line that is reimbursable under this    
title1 if such cost report demonstrates 
that the services provided at the       
facility or organization have associated
 outpatient costs and charges under this
 title1 and if the parent covered entity
 has provided a copy of such cost report
 to the ,office of ,pharmacy ,affairs of
 the ,health ,resources and ,services   
,administration2  7,c7 in the case that 
the parent covered entity is a          
children's hospital described in        
subparagraph 7,m7 of subsection 7a77#d7 
which does not file a ,medicare cost    
report1 would be correctly included on a
 reimbursable line with associated      
outpatient costs and charges under title
 ,,xviii on a ,medicare cost report of  
the parent covered entity1 if filed1 and
 the parent covered entity authorizing  
official has submitted a signed         
statement to the ,secretary which       
certifies the foregoing and that the    
requested outpatient facility is an     
integral part of the children's hospital

 and is providing health care services  
to patients of such hospital2  7,d7     
meets the provider-based status         
requirements under section #dac4fe of   
title #db1 ,code of ,federal            
,regulations or under any successor to  
such section2  7,e7 provides outpatient 
health care services and is not limited 
to providing only drugs or drug         
administration2  7,f7 provides a level  
of free or discounted health care       
services to individuals who meet the    
parent covered entity's criteria for    
financial assistance and are unable to  
pay for all or a portion of the         
services1 as reported at cost to the    
,internal ,revenue ,service under       
section #eja7r77#d7 of the ,internal    
,revenue ,code for the calendar year1   
that is similar to that of the parent   
covered entity2 and  7,g7 adheres to the
 parent covered entity's sliding scale  
fee schedule for providing covered      
outpatient drugs that are subject to an 
agreement under this section to patients

 who are 7i7 low-income individuals2 and
 7ii7 not covered under minimum         
essential coverage1 as defined in       
section #ejjj;,a7f7 of the ,internal    
,revenue ,code4 ,such sliding fee       
schedules must be made publicly         
available in a similar manner to a      
#eja7;c77#c7 hospital's financial       
assistance policy as required under     
section #eja7r7 of the ,internal        
,revenue ,code of #aihf4  7#d7          
,certification and auditing  7,a7 ,a    
covered entity described in subclause   
7,,iii7 of subsection 7a77#d77,l77i7    
shall-- 7i7 not less than annually1     
provide to the ,secretary a             
certification executed by the hospital's
 #cdj;,b ,program authorizing official  
and an appropriate government official  
7such as the governor1 county executive1
 mayor1 or an individual authorized to  
represent and bind the governmental     
entity71 certifying that--  7,i7 a      
contract is currently in force between  
such covered entity and the ,state or   

local government to provide health care 
services1 to include direct medical care
 and the ordering or prescribing of     
covered outpatient drugs that are       
subject to an agreement under this      
section1 to low-income individuals who  
are not entitled to benefits under title
 ,,xviii of the ,social ,security ,act  
or eligible for assistance under the    
,state plan under title ,,xix of such   
,act2  7,,ii7 such contract creates     
enforceable expectations for such       
covered entity for the provision of the 
health care services described in       
subclause 7,i7 to the individuals       
described in such subclause2 and        
7,,iii7 the health care services        
described in subclause 7,i7 represent a 
significant portion of the hospital's   
operating revenues1 and are not for     
services the covered entity is otherwise
 obligated to provide under ,state or   
,federal law2  7ii7 make available the  
contract described in subclause 7,,iii7 
of subsection 7a77#d77,l77i7 to the     

,secretary for publication on the public
 internet website of the ,department of 
,health and ,human ,services relating to
 this section2 and  7iii7 permit the    
,secretary to audit the records of the  
covered entity that pertain to its      
compliance with the requirements        
described in subclause 7,,iii7 of       
subsection 7a77#d77,l77i7 and this      
subparagraph4  7,b7 ,a facility or      
organization that participates in the   
drug discount program under this section
 pursuant to paragraph 7#c7 shall permit
 the ,secretary to audit the records of 
such facility or organization that      
pertain to its compliance with the      
requirements described in such          
paragraph4  7,c7 ,the ,secretary shall  
issue guidelines to implement the       
requirements described in this          
paragraph1 which shall1 at a minimum1   
define the term low-income individuals  
for purposes of subclause 7,i7 of       
subparagraph 7,a77i71 and identify the  
applicable methodology and threshold for

 determining that the health care       
services described in such subclause    
represent a significant portion of the  
hospital's operating revenues4  4  7f7  
,reporting requirements ,section #cdj;,b
 of the ,public ,health ,service ,act   
7#db ,u4,s4,c4 #bef;b7 is amended by    
adding at the end the following new     
subsections3  7f7 ,reporting            
requirements for covered entities  7#a7 
,in general ,a covered entity described 
in subparagraph 7,l7 or 7,m7 of         
subsection 7a77#d7 shall annually submit
 to the ,secretary an electronic and    
searchable data report in a             
machine-readable format4 ,such report   
shall contain1 with respect to the year 
covered by the report1 information on-- 
7,a7 the number and percentage of       
patients of the covered entity1         
disaggregated by insurance status       
7including at least the ,medicare       
program under title ,,xviii of the      
,social ,security ,act1 the ,medicaid   
program under title ,,xix of such ,act1 

the ,children's ,health ,insurance      
,program under title ,,xxi of such ,act1
 the ,,tricare program under chapter #ee
 of title #aj1 ,united ,states ,code1   
health insurance coverage or a group    
health plan1 and uninsured71 and by the 
type of site of the dispensing of the   
covered outpatient drug subject to an   
agreement under this section 7parent    
covered entity1 facility or organization
 described in subsection 7c77#c71       
contracted entity described in          
subsection 7a77#aa772  7,b7 the         
aggregate amount of gross reimbursement 
received by the covered entity          
7calculated before subtracting any      
administrative or other fees using a    
methodology provided by the ,secretary7 
for covered outpatient drugs subject to 
an agreement under this section1        
including reimbursement received through
 facilities or organizations described  
in subsection 7c77#c7 or pursuant to    
contractual arrangements described in   
subsection 7a77#aa72  7,c7 the aggregate

 acquisition cost for covered outpatient
 drugs subject to an agreement under    
this section dispensed during the year2 
7,d7 the aggregate amount paid by the   
covered entity1 or any agent of the     
covered entity1 to contracted entities  
described in subsection 7a77#aa7 for    
dispensing covered outpatient drugs     
subject to an agreement under this      
section or for any other service related
 to the drug discount program under this
 section2  7,e7 how the entity prevents 
duplicate discounts under subparagraph  
7,a7 of subsection 7a77#e7 and drug     
diversion under subparagraph 7,b7 of    
such subsection2  7,f7 the volume of    
covered outpatient drugs subject to an  
agreement under this section dispensed  
by the covered entity and1 in the case  
of a covered entity that has entered    
into a contractual arrangement pursuant 
to which a third party dispenses covered
 outpatient drugs subject to an         
agreement under this section to patients
 of the covered entity1 by each such    

contracted entity2  7,g7 quantitative   
data in terms of the amount and         
percentage of charitable care1 as such  
term is defined for purposes of         
,medicare cost reporting or other       
reporting requirements identified by the
 ,secretary1 provided to patients of the
 covered entity by the covered entity in
 the form of covered outpatient drugs   
subject to an agreement under this      
section2  7,h7 the name of any          
third-party vendor or other similar     
entity 7if any7 that the covered entity 
retains to administer the covered       
entity's inventory management system or 
contract pharmacy arrangement2 and  7,i7
 other reporting requirements as the    
,secretary determines is necessary or   
appropriate for effective management and
 oversight of the drug discount program 
under this section4  7#b7 ,timing of    
first report ,the first report submitted
 under paragraph 7#a7 shall be submitted
 not later than #ah months after the    
date of enactment of this subsection4   

7#c7 ,attestation ,each report submitted
 under paragraph 7#a7 shall be          
accompanied by an attestation1 in a form
 and manner specified by the ,secretary1
 that the information submitted in such 
report is complete and accurate4 ,such  
attestation shall be subject to section 
#ajja of title #ah1 ,united ,states     
,code4  7#d7 ,sanctions ,if the         
,secretary finds that a covered entity  
is in violation of the requirement under
 paragraph 7#a7 and the ,secretary      
determines that such violation was      
knowing and intentional1 the ,secretary 
shall remove the entity from the drug   
discount program under this section and 
disqualify the entity from re-entry into
 such program for a reasonable period of
 time to be determined by the           
,secretary4  7#e7 ,regulations ,not     
later than #ahj days after the date of  
enactment of this subsection1 the       
,secretary shall promulgate final       
regulations through notice-and-comment  
rulemaking to implement the requirements

 under paragraphs 7#a7 through 7#d74    
7#f7 ,public database ,the ,secretary   
shall make the data reported by covered 
entities under this subsection available
 to the public on the website of the    
,department of ,health and ,human       
,services in an electronic and          
searchable format1 which shall make each
 category of data reported available    
both in the aggregate and broken down by
 parent covered entities1 child sites1  
and contract pharmacies1 but shall not  
identify specific parent covered        
entities1 child sites1 or contract      
pharmacies4  7g7 ,reports to ,congress  
7#a7 ,report by the ,secretary ,not     
later than two years after the date of  
the enactment of this subsection1 the   
,secretary shall submit to the          
,committee on ,energy and ,commerce of  
the ,house of ,representatives and the  
,committee on ,health1 ,education1      
,labor1 and ,pensions of the ,senate a  
report1 which shall contain--  7,a7 with
 respect to covered entities described  

in subparagraph 7,l7 or 7,m7 of         
subsection 7a77#d71 the information     
contained in the first report submitted 
by such entities to the ,secretary under
 subsection 7f72 and  7,b7 a description
 of the audits conducted by the         
,secretary pursuant to subparagraph 7,c7
 of subsection 7a77#e71 including the   
methodology used for conducting such    
audits1 the results of such audits1 and 
actions taken by the ,secretary in      
response to such audits1 as well as     
actions taken by the ,secretary in      
response to audits conducted by         
manufacturers pursuant to such          
subparagraph4  7#b7 ,report by the      
,comptroller ,general ,not later than   
one year after the date of the enactment
 of this subsection1 the ,comptroller   
,general of the ,united ,states shall   
submit to the ,committee on ,energy and 
,commerce of the ,house of              
,representatives and the ,committee on  
,health1 ,education1 ,labor1 and        
,pensions of the ,senate a report on the

 use by covered entities of contractual 
arrangements pursuant to which a third  
party dispenses covered outpatient drugs
 subject to an agreement under this     
section to patients of the covered      
entity1 disaggregated by covered entity 
types and the physical distance of the  
contracted entity's location from the   
respective parent covered entity        
location4  7#c7 ,annual reports by the  
,inspector ,general ,not later than     
,july #a of each year 7beginning with   
#bjah71 the ,inspector ,general of the  
,department of ,health and ,human       
,services shall submit to appropriate   
committees of ,congress a report on the 
contractual arrangements between covered
 entities and third parties described in
 paragraph 7#aa7 of subsection 7a71     
including the methods and amounts of    
remuneration exchanged between such     
covered entities and such contracted    
entities1 and the extent to which       
contract pharmacies are improving access
 to medicines by patients of such       

covered entities4 ,the first such annual
 report shall include recommendations1  
as the ,inspector ,general determines   
appropriate1 that address safeguards to 
reduce duplicate discounting and        
diversion within contract pharmacy      
arrangements and reforms to ensure these
 arrangements are targeted exclusively  
at improving access to medicines for    
low-income or vulnerable patients of    
covered entities4 ,subsequent reports   
under this paragraph should continue to 
monitor such issues and be updated as   
changes are made to the drug discount   
program under this section4  4  7g7     
,user fees under the #cdj;,b drug       
discount program ,section #cdj;,b of the
 ,public ,health ,service ,act 7#db     
,u4,s4,c4 #bef;b71 as previously        
amended1 is further amended by adding at
 the end the following new subsection3  
7h7 ,user fees  7#a7 ,in general        
,subject to paragraph 7#f71 the         
,secretary shall assess and collect a   
user fee from covered entities described

 in subparagraph 7,l71 7,m71 7,n71 or   
7,o7 of subsection 7a77#d74 ,in carrying
 out this subsection1 the ,secretary    
shall not require manufacturers to      
collect any user fee or to administer   
the user fee program established under  
this subsection4  7#b7 ,payment ,a      
covered entity described in subparagraph
 7,l71 7,m71 7,n71 or 7,o7 of subsection
 7a77#d7 shall pay to the ,secretary a  
fee assessed under paragraph 7#a7 by    
such date that is the later of--  7,a7  
the date of the certification or        
recertification of the covered entity1  
as applicable2 or  7,b7 the date that is
 #cj days after the date of the         
enactment of an appropriations ,act     
providing for the collection and        
obligation of fees under this subsection
 for a fiscal year4  7#c7 ,amount of fee
 ,the amount of a fee under paragraph   
7#a7 shall be equal to the amount       
determined by the ,secretary under      
paragraph 7#d74  7#d7 ,determination of 
amount of fee  7,a7 ,in general ,the    

,secretary shall1 not later than #ahj   
days before the start of each fiscal    
year that begins after ,september #cj1  
#bjai1 establish1 for the next fiscal   
year1 the amount of the fee payable     
under this subsection by a covered      
entity using purchase data submitted by 
covered entities described in paragraph 
7#a71 and using data submitted by       
manufacturers on sales to covered       
entities of covered outpatient drugs    
subject to an agreement under this      
section1 pursuant to regulations to be  
issued by the ,secretary4 ,such amount1 
with respect to a covered entity and    
year1 shall not exceed #j4a percent of  
the total paid during the previous year 
by such covered entity to manufacturers 
for purchases of covered outpatient     
drugs subject to an agreement under this
 section4  7#e7 ,use of fees  7,a7 ,in  
general ,any fee collected under        
paragraph 7#a7 shall be used for        
purposes of administering this section1 
enhancing program integrity and         

oversight activities under this section 
7including through audits under this    
section of covered entities and         
manufacturers71 and promoting access to 
clinical and cost-effective pharmacy    
services among safety net clinics and   
hospitals that participate under this   
section1 such as through--  7i7 the     
development of a multi-functional       
web-based system to collect fees under  
paragraph 7#a72  7ii7 the improvement of
 the integrity1 transparency1 security1 
and reliability of the ,office of       
,pharmacy ,affairs ,information ,system1
 including to ensure that the database  
continues to meet the needs of external 
stakeholders2 and  7iii7 improvements to
 the compliance tool of the ,office of  
,pharmacy ,affairs1 used to integrate   
all information related to covered      
entities and manufacturers with         
agreements under this section4  7,b7    
,supplement not supplant ,any fee       
collected under paragraph 7#a7 shall be 
used to supplement and not supplant the 

amount otherwise provided in            
appropriations ,acts to carry out this  
section4  7#f7 ,availability of fees    
,fees authorized under paragraph 7#a7   
shall be collected and available for    
obligation only to the extent and in the
 amount provided in advance in          
appropriations ,acts4 ,such fees are    
authorized to remain available until    
expended4  7#g7 ,regulations ,not later 
than #ahj days after the date of        
enactment of this subsection1 the       
,secretary shall promulgate final       
regulations through notice-and-comment  
rulemaking to implement the user fee    
collection pursuant to this subsection4 
7#h7 ,oversight of user fee program     
7,a7 ,study ,the ,inspector ,general of 
the ,department of ,health and ,human   
,services shall conduct an annual review
 of the user fee program established by 
this subsection4  7,b7 ,report ,not     
later than ,july #a of each year        
7beginning with #bjai71 the ,inspector  
,general of the ,department of ,health  

and ,human ,services shall submit to the
 appropriate committees of ,congress a  
report on the study conducted under     
subparagraph 7,a71 together with such   
recommendations as the ,inspector       
,general determines appropriate4  4  7h7
 ,direct-,hire authority ,section       
#cdj;,b7d7 of the ,public ,health       
,service ,act 7#db ,u4,s4,c4 #bef;b7d77 
is amended by adding at the end the     
following new paragraph3  7#e7          
,direct-hire authority ,notwithstanding 
section #ccjd7;a77#c7 of title #e1      
,united ,states ,code1 and sections     
#ccji through #ccah of such title1 and  
section #ccg of title #e of the ,code of
 ,federal ,regulations 7or any successor
 regulations71 the ,secretary may1      
beginning on the date of the enactment  
of this paragraph1 exercise direct-hire 
authority to appoint a minimum of ten   
qualified candidates to permanent       
positions within the competitive service
 in order to carry out management and   
oversight activities under this section4

  4  7i7 ,applicability ,except as      
otherwise indicated1 the provisions of1 
including amendments made by1 this ,act 
shall not apply to covered entities     
defined under subparagraphs 7,a7 through
 7,k71 7,n71 or 7,o7 of subsection      
7a77#d74