,,ii #aafth ,,congress #ast ,session ,s4 #c ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #c1 #bjai,mr4 ,cardin introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to bring stability to the individual insurance market1 make insurance coverage more affordable1 lower prescription drug prices1 and improve ,medicaid4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,keeping ,health ,insurance ,affordable ,act of #bjai4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,,title ,i--,marketplace stability and security ,sec4 #aja4 ,public health insurance option4 ,,title ,,ii--,health care financial assistance ,sec4 #bja4 ,increase in eligibility for premium assistance tax credits4 ,,title ,,iii--,drug ,pricing ,sec4 #cja4 ,requiring drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals4 ,sec4 #cjb4 ,negotiation of prices for ,medicare prescription drugs4 ,sec4 #cjc4 ,guaranteed prescription drug benefits4 ,sec4 #cjd4 ,full reimbursement for qualified retiree prescription drug plans4 ,i ,marketplace stability and security #aja4 ,public health insurance option 7a7 ,in general ,part #c of subtitle ,d of title ,i of the ,patient ,protection and ,affordable ,care ,act 7,public ,law #aaa-adh7 is amended by adding at the end the following new section3 #acbe4 ,public health insurance option 7a7 ,establishment and administration of a public health insurance option 7#a7 ,establishment ,for years beginning with #bjbj1 the ,secretary of ,health and ,human ,services 7in this section referred to as the ,secretary7 shall provide for the offering through ,exchanges established under this title of a health benefits plan 7in this ,act referred to as the public health insurance option7 that ensures choice1 competition1 and stability of affordable1 high-quality coverage throughout the ,united ,states in accordance with this section4 ,in designing the option1 the ,secretary's primary responsibility is to create a low-cost plan without compromising quality or access to care4 7#b7 ,offering through ,exchanges 7,a7 ,exclusive to ,exchanges ,the public health insurance option shall be made available only through ,exchanges established under this title4 7,b7 ,ensuring a level playing field ,consistent with this section1 the public health insurance option shall comply with requirements that are applicable under this title to health benefits plans offered through such ,exchanges1 including requirements related to benefits1 benefit levels1 provider networks1 notices1 consumer protections1 and cost sharing4 7,c7 ,provision of benefit levels ,the public health insurance option-- 7i7 shall offer bronze1 silver1 and gold plans2 and 7ii7 may offer platinum plans4 7#c7 ,administrative contracting ,the ,secretary may enter into contracts for the purpose of performing administrative functions 7including functions described in subsection 7a77#d7 of section #ahgd;,a of the ,social ,security ,act7 with respect to the public health insurance option in the same manner as the ,secretary may enter into contracts under subsection 7a77#a7 of such section4 ,the ,secretary has the same authority with respect to the public health insurance option as the ,secretary has under subsections 7a77#a7 and 7b7 of section #ahgd;,a of the ,social ,security ,act with respect to title ,,xviii of such ,act4 ,contracts under this subsection shall not involve the transfer of insurance risk to such entity4 7#d7 ,ombudsman ,the ,secretary shall establish an office of the ombudsman for the public health insurance option which shall have duties with respect to the public health insurance option similar to the duties of the ,medicare ,beneficiary ,ombudsman under section #ahjh7;c77#b7 of the ,social ,security ,act4 ,in addition1 such office shall work with ,states to ensure that information and notice is provided that the public health insurance option is one of the health plans available through an ,exchange4 7#e7 ,data collection ,the ,secretary shall collect such data as may be required to establish premiums and payment rates for the public health insurance option and for other purposes under this section1 including to improve quality and to reduce racial1 ethnic1 and other disparities in health and health care4 7#f7 ,access to ,federal courts ,the provisions of ,medicare 7and related provisions of title ,,ii of the ,social ,security ,act7 relating to access of ,medicare beneficiaries to ,federal courts for the enforcement of rights under ,medicare1 including with respect to amounts in controversy1 shall apply to the public health insurance option and individuals enrolled under such option under this title in the same manner as such provisions apply to ,medicare and ,medicare beneficiaries4 7b7 ,premiums and financing 7#a7 ,establishment of premiums 7,a7 ,in general ,the ,secretary shall establish geographically adjusted premium rates for the public health insurance option-- 7i7 in a manner that complies with the premium rules under paragraph 7#c72 and 7ii7 at a level sufficient to fully finance the costs of-- 7,i7 health benefits provided by the public health insurance option2 and 7,,ii7 administrative costs related to operating the public health insurance option4 7,b7 ,contingency margin ,in establishing premium rates under subparagraph 7,a71 the ,secretary shall include an appropriate amount for a contingency margin4 7#b7 ,account 7,a7 ,establishment ,there is established in the ,treasury of the ,united ,states an account for the receipts and disbursements attributable to the operation of the public health insurance option1 including the start-up funding under subparagraph 7,b74 ,section #ahed7;g7 of the ,social ,security ,act shall apply to receipts described in the previous sentence in the same manner as such section applies to payments or premiums described in such section4 7,b7 ,start-up funding 7i7 ,in general ,in order to provide for the establishment of the public health insurance option there is hereby appropriated to the ,secretary1 out of any funds in the ,treasury not otherwise appropriated1 #b1jjj1jjj1jjj4 ,in order to provide for initial claims reserves before the collection of premiums1 there is hereby appropriated to the ,secretary1 out of any funds in the ,treasury not otherwise appropriated1 such sums as necessary to cover #ij days worth of claims reserves based on projected enrollment4 7ii7 ,amortization of start-up funding ,the ,secretary shall provide for the repayment of the startup funding provided under clause 7i7 to the ,treasury in an amortized manner over the #aj-year period beginning with #bjbj4 7iii7 ,limitation on funding ,nothing in this subsection shall be construed as authorizing any additional appropriations to the account1 other than such amounts as are otherwise provided with respect to other health benefits plans participating under the ,exchange involved4 7#c7 ,insurance rating rules ,the premium rate charged for the public health insurance option may not vary except as provided under section #bgja of the ,public ,health ,service ,act4 7c7 ,payment rates for items and services 7#a7 ,rates established by ,secretary 7,a7 ,in general ,the ,secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this subsection and may change such payment rates in accordance with subsection 7d74 7,b7 ,initial payment rules 7i7 ,in general ,during #bjbj1 #bjba1 and #bjbb1 the ,secretary shall set the payment rates under this subsection for services and providers described in subparagraph 7,a7 equal to the payment rates for equivalent services and providers under parts ,a and ,b of ,medicare1 subject to clause 7ii71 paragraph 7#d71 and subsection 7d74 7ii7 ,exceptions ,the ,secretary may determine the extent to which ,medicare adjustments applicable to base payment rates under parts ,a and ,b of ,medicare for graduate medical education and disproportionate share hospitals shall apply under this section4 7,c7 ,for new services ,the ,secretary shall modify payment rates described in subparagraph 7,b7 in order to accommodate payments for services1 such as well-child visits1 that are not otherwise covered under ,medicare4 7,d7 ,prescription drugs ,payment rates under this subsection for prescription drugs that are not paid for under part ,a or part ,b of ,medicare shall be at rates negotiated by the ,secretary4 7#b7 ,subsequent periods2 provider network 7,a7 ,subsequent periods ,beginning with #bjbc and for subsequent years1 the ,secretary shall continue to use an administrative process to set such rates in order to promote payment accuracy1 to ensure adequate beneficiary access to providers1 and to promote affordability and the efficient delivery of medical care consistent with subsection 7a77#a74 ,such rates shall not be set at levels expected to increase average medical costs per enrollee covered under the public health insurance option beyond what would be expected if the process under paragraph 7#a77;,b7 were continued1 as certified by the ,office of the ,actuary of the ,centers for ,medicare ,medicaid ,services4 7,b7 ,establishment of a provider network ,health care providers participating under ,medicare are participating providers in the public health insurance option unless they opt out in a process established by the ,secretary4 7#c7 ,administrative process for setting rates ,chapter #e of title #e1 ,united ,states ,code shall apply to the process for the initial establishment of payment rates under this subsection but not to the specific methodology for establishing such rates or the calculation of such rates4 7#d7 ,construction ,nothing in this section shall be construed as limiting the ,secretary's authority to correct for payments that are excessive or deficient1 taking into account the provisions of subsection 7a77#a7 and any appropriate adjustments based on the demographic characteristics of enrollees covered under the public health insurance option1 but in no case shall the correction of payments under this paragraph result in a level of expenditures per enrollee that exceeds the level of expenditures that would have occurred under paragraph 7#a77;,b71 as certified by the ,office of the ,actuary of the ,centers for ,medicare ,medicaid ,services4 7#e7 ,construction ,nothing in this section shall be construed as affecting the authority of the ,secretary to establish payment rates1 including payments to provide for the more efficient delivery of services1 such as the initiatives provided for under subsection 7d74 7#f7 ,limitations on review ,there shall be no administrative or judicial review of a payment rate or methodology established under this subsection or under subsection 7d74 7d7 ,modernized payment initiatives and delivery system reform 7#a7 ,in general ,for plan years beginning with #bjbj1 the ,secretary may utilize innovative payment mechanisms and policies to determine payments for items and services under the public health insurance option4 ,the payment mechanisms and policies under this subsection may include patient-centered medical home and other care management payments1 accountable care organizations1 value-based purchasing1 bundling of services1 differential payment rates1 performance or utilization based payments1 partial capitation1 and direct contracting with providers4 ,payment rates under such payment mechanisms and policies shall not be set at levels expected to increase average medical costs per enrollee covered under the public health insurance option beyond what would be expected if the process under subsection 7c77#a77;,b7 were continued1 as certified by the ,office of the ,actuary of the ,centers for ,medicare ,medicaid ,services4 7#b7 ,requirements for innovative payments ,the ,secretary shall design and implement the payment mechanisms and policies under this subsection in a manner that-- 7,a7 seeks to-- 7i7 improve health outcomes2 7ii7 reduce health disparities 7including racial1 ethnic1 and other disparities72 7iii7 provide efficient and affordable care2 7iv7 address geographic variation in the provision of health services2 or 7v7 prevent or manage chronic illness2 and 7,b7 promotes care that is integrated1 patient-centered1 high-quality1 and efficient4 7#c7 ,encouraging the use of high value services ,to the extent allowed by the benefit standards applied to all health benefits plans participating under the ,exchange involved1 the public health insurance option may modify cost sharing and payment rates to encourage the use of services that promote health and value4 7#d7 ,non-uniformity permitted ,nothing in this section shall prevent the ,secretary from varying payments based on different payment structure models 7such as accountable care organizations and medical homes7 under the public health insurance option for different geographic areas4 7e7 ,provider participation 7#a7 ,in general ,the ,secretary shall establish conditions of participation for health care providers under the public health insurance option4 7#b7 ,licensure or certification ,the ,secretary shall not allow a health care provider to participate in the public health insurance option unless such provider is appropriately licensed or certified under ,state law4 7#c7 ,payment terms for providers 7,a7 ,physicians ,the ,secretary shall provide for the annual participation of physicians under the public health insurance option1 for which payment may be made for services furnished during the year1 in one of #b classes3 7i7 ,preferred physicians ,those physicians who agree to accept the payment rate established under this section 7without regard to cost-sharing7 as the payment in full4 7ii7 ,participating1 non-preferred physicians ,those physicians who agree not to impose charges 7in relation to the payment rate described in subsection 7c7 for such physicians7 that exceed the ratio permitted under section #ahdh7;g77#b77;,c7 of the ,social ,security ,act4 7,b7 ,other providers ,the ,secretary shall provide for the participation 7on an annual or other basis specified by the ,secretary7 of health care providers 7other than physicians7 under the public health insurance option under which payment shall only be available if the provider agrees to accept the payment rate established under subsection 7c7 7without regard to cost-sharing7 as the payment in full4 7#d7 ,exclusion of certain providers ,the ,secretary shall exclude from participation under the public health insurance option a health care provider that is excluded from participation in a ,federal health care program 7as defined in section #aabh;,b7f7 of the ,social ,security ,act74 7f7 ,application of fraud and abuse provisions ,provisions of law 7other than criminal law provisions7 identified by the ,secretary by regulation1 in consultation with the ,inspector ,general of the ,department of ,health and ,human ,services1 that impose sanctions with respect to waste1 fraud1 and abuse under ,medicare1 such as the ,false ,claims ,act 7#ca ,u4,s4,c4 #cgbi et seq471 shall also apply to the public health insurance option4 7g7 ,medicare defined ,for purposes of this section1 the term ,medicare means the health insurance programs under title ,,xviii of the ,social ,security ,act4 4 7b7 ,conforming amendments 7#a7 ,treatment as qualified health plan ,section #acja7;a77#b7 of the ,patient ,protection and ,affordable ,care ,act is amended-- 7,a7 in the heading1 by inserting 1 the public health insurance option1 before and2 and 7,b7 by inserting the public health insurance option under section #acbe1 before and a multi-,state plan4 7#b7 ,level playing field ,section #acbd7;a7 of such ,act is amended by inserting the public health insurance option under section #acbe1 before or a multi-,state qualified health plan4 ,,ii ,health care financial assistance #bja4 ,increase in eligibility for premium assistance tax credits 7a7 ,in general ,subparagraph 7,a7 of section #cf;,b7c77#a7 of the ,internal ,revenue ,code of #aihf is amended by striking #djj percent and inserting #fjj percent4 7b7 ,conforming amendment ,the table contained in clause 7i7 of section #cf;,b7b77#c77;,a77i7 of the ,internal ,revenue ,code of #aihf is amended by striking #djj and inserting #fjj4 7c7 ,reconciliation of credit and advance credit ,clause 7i7 of section #cf;,b7f77#b77;,b7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking ,in the case of and all that follows through the amount of and inserting ,the amount of2 and 7#b7 by striking but less than #djj in the table4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 ,,iii ,drug ,pricing #cja4 ,requiring drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals 7a7 ,in general ,section #ahfj;,d-#b of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7 is amended-- 7#a7 in subsection 7e77#a71 in the matter preceding subparagraph 7,a71 by inserting and subsection 7f7 after this subsection2 and 7#b7 by adding at the end the following new subsection3 7f7 ,prescription drug rebate agreement for rebate eligible individuals 7#a7 ,requirement 7,a7 ,in general ,for plan years beginning on or after ,january #a1 #bjba1 in this part1 the term covered part ,d drug does not include any drug or biological product that is manufactured by a manufacturer that has not entered into and have in effect a rebate agreement described in paragraph 7#b74 7,b7 #bjbj plan year requirement ,any drug or biological product manufactured by a manufacturer that declines to enter into a rebate agreement described in paragraph 7#b7 for the period beginning on ,january #a1 #bjbj1 and ending on ,december #ca1 #bjbj1 shall not be included as a covered part ,d drug for the subsequent plan year4 7#b7 ,rebate agreement ,a rebate agreement under this subsection shall require the manufacturer to provide to the ,secretary a rebate for each rebate period 7as defined in paragraph 7#f77;,b77 ending after ,december #ca1 #bjai1 in the amount specified in paragraph 7#c7 for any covered part ,d drug of the manufacturer dispensed after ,december #ca1 #bjai1 to any rebate eligible individual 7as defined in paragraph 7#f77;,a77 for which payment was made by a ,,pdp sponsor or ,,ma organization under this part for such period1 including payments passed through the low-income and reinsurance subsidies under sections #ahfj;,d-#ad and #ahfj;,d-#ae7;b71 respectively4 ,such rebate shall be paid by the manufacturer to the ,secretary not later than #cj days after the date of receipt of the information described in section #ahfj;,d-#ab7;b77#h71 including as such section is applied under section #aheg7;f77#c71 or #cj days after the receipt of information under subparagraph 7,d7 of paragraph 7#c71 as determined by the ,secretary4 ,insofar as not inconsistent with this subsection1 the ,secretary shall establish terms and conditions of such agreement relating to compliance1 penalties1 and program evaluations1 investigations1 and audits that are similar to the terms and conditions for rebate agreements under paragraphs 7#c7 and 7#d7 of section #aibg7;b74 7#c7 ,rebate for rebate eligible ,medicare drug plan enrollees 7,a7 ,in general ,the amount of the rebate specified under this paragraph for a manufacturer for a rebate period1 with respect to each dosage form and strength of any covered part ,d drug provided by such manufacturer and dispensed to a rebate eligible individual1 shall be equal to the product of-- 7i7 the total number of units of such dosage form and strength of the drug so provided and dispensed for which payment was made by a ,,pdp sponsor or an ,,ma organization under this part for the rebate period1 including payments passed through the low-income and reinsurance subsidies under sections #ahfj;,d-#ad and #ahfj;,d-#ae7;b71 respectively2 and 7ii7 the amount 7if any7 by which-- 7,i7 the ,medicaid rebate amount 7as defined in subparagraph 7,b77 for such form1 strength1 and period1 exceeds 7,,ii7 the average ,medicare drug program rebate eligible rebate amount 7as defined in subparagraph 7,c77 for such form1 strength1 and period4 7,b7 ,medicaid rebate amount ,for purposes of this paragraph1 the term ,medicaid rebate amount means1 with respect to each dosage form and strength of a covered part ,d drug provided by the manufacturer for a rebate period-- 7i7 in the case of a single source drug or an innovator multiple source drug1 the amount specified in paragraph 7#a77;,a77ii77,,ii7 or 7#b77;,c7 of section #aibg7;c7 plus the amount1 if any1 specified in subparagraph 7,a77ii7 of paragraph 7#b7 of such section1 for such form1 strength1 and period2 or 7ii7 in the case of any other covered outpatient drug1 the amount specified in paragraph 7#c77;,a77i7 of such section for such form1 strength1 and period4 7,c7 ,average ,medicare drug program rebate eligible rebate amount ,for purposes of this subsection1 the term average ,medicare drug program rebate eligible rebate amount means1 with respect to each dosage form and strength of a covered part ,d drug provided by a manufacturer for a rebate period1 the sum1 for all ,,pdp sponsors under part ,d and ,,ma organizations administering an ,,ma-,,pd plan under part ,c1 of-- 7i7 the product1 for each such sponsor or organization1 of-- 7,i7 the sum of all rebates1 discounts1 or other price concessions 7not taking into account any rebate provided under paragraph 7#b7 or any discounts under the program under section #ahfj;,d-#ad;,a7 for such dosage form and strength of the drug dispensed1 calculated on a per-unit basis1 but only to the extent that any such rebate1 discount1 or other price concession applies equally to drugs dispensed to rebate eligible ,medicare drug plan enrollees and drugs dispensed to ,,pdp and ,,ma-,,pd enrollees who are not rebate eligible individuals2 and 7,,ii7 the number of the units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in the prescription drug plans administered by the ,,pdp sponsor or the ,,ma-,,pd plans administered by the ,,ma organization2 divided by 7ii7 the total number of units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in all prescription drug plans administered by ,,pdp sponsors and all ,,ma-,,pd plans administered by ,,ma organizations4 7,d7 ,use of estimates ,the ,secretary may establish a methodology for estimating the average ,medicare drug program rebate eligible rebate amounts for each rebate period based on bid and utilization information under this part and may use these estimates as the basis for determining the rebates under this section4 ,if the ,secretary elects to estimate the average ,medicare drug program rebate eligible rebate amounts1 the ,secretary shall establish a reconciliation process for adjusting manufacturer rebate payments not later than #c months after the date that manufacturers receive the information collected under section #ahfj;,d-#ab7;b77#h77;,b74 7#d7 ,length of agreement ,the provisions of paragraph 7#d7 of section #aibg7;b7 7other than clauses 7iv7 and 7v7 of subparagraph 7,b77 shall apply to rebate agreements under this subsection in the same manner as such paragraph applies to a rebate agreement under such section4 7#e7 ,other terms and conditions ,the ,secretary shall establish other terms and conditions of the rebate agreement under this subsection1 including terms and conditions related to compliance1 that are consistent with this subsection4 7#f7 ,definitions ,in this subsection and section #ahfj;,d-#ab7;b77#h73 7,a7 ,rebate eligible individual ,the term rebate eligible individual means-- 7i7 a subsidy eligible individual 7as defined in section #ahfj;,d-#ad7;a77#c77;,a772 7ii7 a ,medicaid beneficiary treated as a subsidy eligible individual under clause 7v7 of section #ahfj;,d-#ad7;a77#c77;,b72 and 7iii7 any part ,d eligible individual not described in clause 7i7 or 7ii7 who is determined for purposes of the ,state plan under title ,,xix to be eligible for medical assistance under clause 7i71 7iii71 or 7iv7 of section #aijb7;a77#aj77;,e74 7,b7 ,rebate period ,the term rebate period has the meaning given such term in section #aibg7k77#h74 4 7b7 ,reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible ,medicare drug plan enrollees 7#a7 ,requirements for ,,pdp sponsors ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended by adding at the end the following new paragraph3 7#h7 ,reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible ,medicare drug plan enrollees 7,a7 ,in general ,for purposes of the rebate under section #ahfj;,d-#b7;f7 for contract years beginning on or after ,january #a1 #bjba1 each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan shall require that the sponsor comply with subparagraphs 7,b7 and 7,c74 7,b7 ,report form and contents ,not later than a date specified by the ,secretary1 a ,,pdp sponsor of a prescription drug plan under this part shall report to each manufacturer-- 7i7 information 7by ,national ,drug ,code number7 on the total number of units of each dosage1 form1 and strength of each drug of such manufacturer dispensed to rebate eligible ,medicare drug plan enrollees under any prescription drug plan operated by the ,,pdp sponsor during the rebate period2 7ii7 information on the price discounts1 price concessions1 and rebates for such drugs for such form1 strength1 and period2 7iii7 information on the extent to which such price discounts1 price concessions1 and rebates apply equally to rebate eligible ,medicare drug plan enrollees and ,,pdp enrollees who are not rebate eligible ,medicare drug plan enrollees2 and 7iv7 any additional information that the ,secretary determines is necessary to enable the ,secretary to calculate the average ,medicare drug program rebate eligible rebate amount 7as defined in paragraph 7#c77;,c7 of such section71 and to determine the amount of the rebate required under this section1 for such form1 strength1 and period4 ,such report shall be in a form consistent with a standard reporting format established by the ,secretary4 7,c7 ,submission to ,secretary ,each ,,pdp sponsor shall promptly transmit a copy of the information reported under subparagraph 7,b7 to the ,secretary for the purpose of audit oversight and evaluation4 7,d7 ,confidentiality of information ,the provisions of subparagraph 7,d7 of section #aibg7;b77#c71 relating to confidentiality of information1 shall apply to information reported by ,,pdp sponsors under this paragraph in the same manner that such provisions apply to information disclosed by manufacturers or wholesalers under such section1 except-- 7i7 that any reference to this section in clause 7i7 of such subparagraph shall be treated as being a reference to this section2 7ii7 the reference to the ,director of the ,congressional ,budget ,office in clause 7iii7 of such subparagraph shall be treated as including a reference to the ,medicare ,payment ,advisory ,commission2 and 7iii7 clause 7iv7 of such subparagraph shall not apply4 7,e7 ,oversight ,information reported under this paragraph may be used by the ,inspector ,general of the ,department of ,health and ,human ,services for the statutorily authorized purposes of audit1 investigation1 and evaluations4 7,f7 ,penalties for failure to provide timely information and provision of false information ,in the case of a ,,pdp sponsor-- 7i7 that fails to provide information required under subparagraph 7,b7 on a timely basis1 the sponsor is subject to a civil money penalty in the amount of #aj1jjj for each day in which such information has not been provided2 or 7ii7 that knowingly 7as defined in section #aabh;,a7i77 provides false information under such subparagraph1 the sponsor is subject to a civil money penalty in an amount not to exceed #ajj1jjj for each item of false information4 ,such civil money penalties are in addition to other penalties as may be prescribed by law4 ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil money penalty under this subparagraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 4 7#b7 ,application to ,,ma organizations ,section #aheg7;f77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bg7;f77#c77 is amended by adding at the end the following3 7,e7 ,reporting requirement related to rebate for rebate eligible ,medicare drug plan enrollees ,section #ahfj;,d-#ab7;b77#h74 4 7c7 ,deposit of rebates into ,medicare ,prescription ,drug ,account ,section #ahfj;,d-#af7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaf7;c77 is amended by adding at the end the following new paragraph3 7#f7 ,rebate for rebate eligible ,medicare drug plan enrollees ,amounts paid under a rebate agreement under section #ahfj;,d-#b7;f7 shall be deposited into the ,account4 4 7d7 ,exclusion from determination of best price and average manufacturer price under ,medicaid 7#a7 ,exclusion from best price determination ,section #aibg7;c77#a77;,c77ii77,i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;c77#a77;,c77ii77,i77 is amended by inserting and amounts paid under a rebate agreement under section #ahfj;,d-#b7;f7 after this section4 7#b7 ,exclusion from average manufacturer price determination ,section #aibg7k77#a77;,b77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#a77;,b77i77 is amended-- 7,a7 in subclause 7,,iv71 by striking and after the semicolon2 7,b7 in subclause 7,v71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following3 7,,vi7 amounts paid under a rebate agreement under section #ahfj;,d-#b7;f74 4 #cjb4 ,negotiation of prices for ,medicare prescription drugs ,section #ahfj;,d-#aa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is amended by striking subsection 7i7 7relating to noninterference7 and inserting the following3 7i7 ,negotiation2 no national formulary or price structure 7#a7 ,negotiation of prices with manufacturers ,in order to ensure that beneficiaries enrolled under prescription drug plans and ,,ma-,,pd plans pay the lowest possible price1 the ,secretary shall have and exercise authority similar to that of other ,federal entities that purchase prescription drugs in bulk to negotiate contracts with manufacturers of covered part ,d drugs1 consistent with the requirements and in furtherance of the goals of providing quality care and containing costs under this part4 7#b7 ,no national formulary or price structure ,in order to promote competition under this part and in carrying out this part1 the ,secretary may not require a particular formulary or institute a price structure for the reimbursement of covered part ,d drugs4 4 #cjc4 ,guaranteed prescription drug benefits 7a7 ,in general ,section #ahfj;,d-#c of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajc7 is amended to read as follows3 #ahfj;,d-#c4 ,access to a choice of qualified prescription drug coverage 7a7 ,assuring access to a choice of coverage 7#a7 ,choice of at least three plans in each area ,beginning on ,january #a1 #bjba1 the ,secretary shall ensure that each part ,d eligible individual has available1 consistent with paragraph 7#b71 a choice of enrollment in-- 7,a7 a nationwide prescription drug plan offered by the ,secretary in accordance with subsection 7b72 and 7,b7 at least #b qualifying plans 7as defined in paragraph 7#c77 in the area in which the individual resides1 at least one of which is a prescription drug plan4 7#b7 ,requirement for different plan sponsors ,the requirement in paragraph 7#a77;,b7 is not satisfied with respect to an area if only one entity offers all the qualifying plans in the area4 7#c7 ,qualifying plan defined ,for purposes of this section1 the term qualifying plan means-- 7,a7 a prescription drug plan2 7,b7 an ,,ma-,,pd plan described in section #ahea7;a77#b77;,a77i7 that provides-- 7i7 basic prescription drug coverage2 or 7ii7 qualified prescription drug coverage that provides supplemental prescription drug coverage so long as there is no ,,ma monthly supplemental beneficiary premium applied under the plan1 due to the application of a credit against such premium of a rebate under section #ahed7;b77#a77;,c72 or 7,c7 a nationwide prescription drug plan offered by the ,secretary in accordance with subsection 7b74 7b7 ,,hhs as ,,pdp sponsor for a nationwide prescription drug plan 7#a7 ,in general ,the ,secretary1 acting through the ,administrator of the ,centers for ,medicare ,medicaid ,services1 shall take such steps as may be necessary to qualify and serve as a ,,pdp sponsor and to offer a prescription drug plan that offers basic prescription drug coverage throughout the ,united ,states4 ,such a plan shall be in addition to1 and not in lieu of1 other prescription drug plans offered under this part4 7#b7 ,premium2 solvency2 authorities ,in carrying out paragraph 7#a71 the ,secretary-- 7,a7 shall establish a premium in the amount of #cg for months in #bjba and1 for months in subsequent years1 in the amount specified in this paragraph for months in the previous year increased by the annual percentage increase described in section #ahfj;,d-#b7;b77#f7 7relating to growth in ,medicare prescription drug costs per beneficiary7 for the year involved2 7,b7 is deemed to have met any applicable solvency and capital adequacy standards2 and 7,c7 shall exercise such authorities 7including the use of regional or other pharmaceutical benefit managers7 as the ,secretary determines necessary to offer the prescription drug plan in the same or a comparable manner as is the case for prescription drug plans offered by private ,,pdp sponsors4 7c7 ,flexibility in risk assumed ,in order to ensure access pursuant to subsection 7a7 in an area the ,secretary may approve limited risk plans under section #ahfj;,d-#aa7;f7 for the area4 4 7b7 ,conforming amendment ,section #ahfj;,d-#aa7;g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;g77 is amended by adding at the end the following new paragraph3 7#h7 ,application ,this subsection shall not apply on or after ,january #a1 #bjba4 4 7c7 ,effective date ,the amendments made by this section shall apply to plan years beginning on or after ,january #a1 #bjba4 #cjd4 ,full reimbursement for qualified retiree prescription drug plans 7a7 ,elimination of true ,out-of-,pocket limitation ,section #ahfj;,d-#b7;b77#d77;,c77iii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#d77;,c77iii77 is amended-- 7#a7 in subclause 7,,iii71 by striking or at the end2 7#b7 in subclause 7,,iv71 by striking the period at the end and inserting 2 or2 and 7#c7 by adding at the end the following new subclause3 7,v7 under a qualified retiree prescription drug plan 7as defined in section #ahfj;,d-#bb7;a77#b774 4 7b7 ,equalization of subsidies ,notwithstanding any other provision of law1 the ,secretary of ,health and ,human ,services shall provide for such increase in the special subsidy payment amounts under section #ahfj;,d-#bb7;a77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#acb7;a77#c77 as may be appropriate to provide for payments in the aggregate equivalent to the payments that would have been made under section #ahfj;,d-#ae of such ,act 7#db ,u4,s4,c4 #aciew-#aae7 if the individuals were not enrolled in a qualified retiree prescription drug plan4 ,in making such computation1 the ,secretary shall not take into account the application of the amendments made by section #abjb of the ,medicare ,prescription ,drug1 ,improvement1 and ,modernization ,act of #bjjc 7,public ,law #ajh-agc2 #aag ,stat4 #bdhj74 7c7 ,effective date ,this section1 and the amendments made by this section1 shall take effect on ,january #a1 #bjba4