,,ii #aag? ,,congress #a/ ,session ,s4 #bcbg ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,july #ac1 #bjba,mr4 ,cassidy 7= himself & ,mr4 ,m55dez7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to am5d title ,,xviii ( ! ,social ,security ,act to provide = a ,m$ic>e "p ,d mod]nization r$esign & to e/abli% a mon?ly out-(-pocket co/ %>+ maximum = enrollees :o incur a significant portion ( co/s t[>ds ! annual out-(-pocket ?re%old "u ,m$ic>e "p ,d4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,s5iors ,prescription ,drug ,relief ,act4 #b4 ,m$ic>e "p ,d mod]nization r$esign 7a7 ,b5efit /ructure r$esign ,section #ahfj;,d-#b7;b7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77 is am5d$-- 7#a7 9 p>agraph 7#b7-- 7,a7 9 subp>agraph 7,a71 9 ! matt] prec$+ clause 7i71 by ins]t+ = a ye> prec$+ #bjbd & = co/s above ! annual d$uctible specifi$ 9 p>agraph 7#a7 & up to ! annual out-(-pocket ?re%old specifi$ 9 p>agraph 7#d77;,b7 = #bjbd & ea* subsequ5t ye> aft] p>agraph 7#c72 7,b7 9 subp>agraph 7,c7-- 7i7 9 clause 7i71 9 ! matt] prec$+ subclause 7,i71 by ins]t+ = a ye> prec$+ #bjbd1 aft] p>agraph 7#d712 & 7ii7 9 clause 7ii77,,iii71 by /rik+ & ea* subsequ5t ye> & ins]t+ 1 #bjba1 #bjbb1 & #bjbc2 & 7,c7 9 subp>agraph 7,d7-- 7i7 9 clause 7i7-- 7,i7 9 ! matt] prec$+ subclause 7,i71 by ins]t+ = a ye> prec$+ #bjbd1 aft] p>agraph 7#d712 & 7,,ii7 9 subclause 7,i77bb71 by /rik+ a ye> aft] #bjah & ins]t+ ea* ( ye>s #bjah ?r\gh #bjbc2 & 7ii7 9 clause 7ii77,v71 by /rik+ #bjai & ea* subsequ5t ye> & ins]t+ ea* ( ye>s #bjai ?r\gh #bjbc2 7#b7 9 p>agraph 7#c77;,a7-- 7,a7 9 ! matt] prec$+ clause 7i71 by ins]t+ = a ye> prec$+ #bjbd1 aft] & 7#d712 & 7,b7 9 clause 7ii71 by /rik+ = a subsequ5t ye> & ins]t+ = ea* ( ye>s #bjjg ?r\gh #bjbc2 7#c7 9 p>agraph 7#d7-- 7,a7 9 subp>agraph 7,a7-- 7i7 9 clause 7i7-- 7,i7 by r$esignat+ subclauses 7,i7 & 7,,ii7 z items 7aa7 & 7bb71 respectively1 & ind5t+ appropriately2 7,,ii7 9 ! matt] prec$+ item 7aa71 z r$esignat$ by subclause 7,i71 by /rik+ is equal to ! great] (-- & ins]t+ 8is equal to-- 7,i7 = a ye> prec$+ #bjbd1 ! great] (-- 2 7,,iii7 by /rik+ ! p]iod at ! end ( item 7bb71 z r$esignat$ by subclause 7,i71 & ins]t+ 2 &2 & 7,,iv7 by add+ at ! end ! foll[+3 7,,ii7 = #bjbd & ea* succe$+ ye>1 #j4 2 & 7ii7 9 clause 7ii7-- 7,i7 by /rik+ clause 7i77,i7 & ins]t+ clause 7i77,i77aa72 & 7,,ii7 by add+ at ! end ! foll[+ new s5t5ce3 ,! ,secret>y %all cont9ue to calculate ! doll> am\nts specifi$ 9 clause 7i77,i77aa71 includ+ ) ! adju/m5t "u ?is clause1 aft] #bjbc = purposes ( section #ahfj;,d-#ad7;a77#a77;,d77iii742 7,b7 9 subp>agraph 7,b7-- 7i7 9 clause 7i7-- 7,i7 9 subclause 7,v71 by /rik+ or at ! end2 7,,ii7 9 subclause 7,,vi7-- 7aa7 by /rik+ = a subsequ5t ye> & ins]t+ = #bjba1 #bjbb1 & #bjbc2 & 7bb7 by /rik+ ! p]iod at ! end & ins]t+ a semicolon2 & 7,,iii7 by add+ at ! end ! foll[+ new subclauses3 7,,vii7 = #bjbd1 is equal to #c1ajj2 or 7,,viii7 = a subsequ5t ye>1 is equal to ! am\nt specifi$ 9 ?is subp>agraph = ! previ\s ye>1 increas$ by ! annual p]c5tage increase describ$ 9 p>agraph 7#f7 = ! ye> involv$4 2 & 7ii7 9 clause 7ii71 by /rik+ clause 7i77,,ii7 & ins]t+ clause 7i72 7,c7 9 subp>agraph 7,c77i71 by /rik+ & = am\nts & ins]t+ & = a ye> prec$+ #bjbd = am\nts2 & 7,d7 9 subp>agraph 7,e71 by /rik+ ,9 apply+ & ins]t+ ,= ea* ( #bjaa ?r\gh #bjbc1 9 apply+4 7b7 ,r$uction 9 b5efici>y co9surance 7#a7 ,9 g5]al ,section #ahfj;,d-#b7;b77#b77;,a7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#b77;,a771 z am5d$ by subsection 7a71 is am5d$-- 7,a7 by r$esignat+ clauses 7i7 & 7ii7 z subclauses 7,i7 & 7,,ii7 & mov+ su* subclauses #b ems to ! "r2 7,b7 by /rik+ #be p]c5t co9surance4--,subject to & ins]t+ 8,co9surance4-- 7i7 ,9 g5]al ,subject to 2 7,c7 9 ea* ( subclauses 7,i7 & 7,,ii71 z r$esignat$ by subp>agraph 7,a71 by /rik+ #be p]c5t & ins]t+ ! applicable p]c5tage 7z def9$ 9 clause 7ii772 & 7,d7 by add+ at ! end ! foll[+ new clause3 7ii7 ,applicable p]c5tage def9$ ,= purposes ( clause 7i71 ! t]m applicable p]c5tage means-- 7,i7 = a ye> prec$+ #bjbd1 #be p]c5t2 & 7,,ii7 = #bjbd & ea* subsequ5t ye>1 #bj p]c5t4 4 7#b7 ,con=m+ am5dm5t ,section #ahfj;,d-#ad7;a77#b77;,d7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#b77;,d77 is am5d$ by /rik+ #be p]c5t & ins]t+ ! applicable p]c5tage4 7c7 ,decreas+ re9surance paym5t am\nt ,section #ahfj;,d-#ae7;b7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77 is am5d$-- 7#a7 9 p>agraph 7#a7-- 7,a7 by /rik+ equal to #hj p]c5t & ins]t+ 8equal to-- 7,a7 = a ye> prec$+ #bjbd1 #hj p]c5t 2 7,b7 9 subp>agraph 7,a71 z add$ by p>agraph 7#a71 by /rik+ ! p]iod at ! end & ins]t+ 2 &2 & 7,c7 by add+ at ! end ! foll[+ new subp>agraph3 7,b7 = #bjbd & ea* subsequ5t ye>1 ! sum (-- 7i7 an am\nt equal to ! applicable p]c5tage specifi$ 9 p>agraph 7#e77;,a7 ( su* all[able re9surance co/s attributable to t portion ( gross prescription drug co/s z specifi$ 9 p>agraph 7#c7 incurr$ 9 ! cov]age ye> aft] su* individual has incurr$ co/s t exce$ ! annual out-(-pocket ?re%old specifi$ 9 section #ahfj;,d-#b7;b77#d77;,b7 ) respect to applicable drugs 7z def9$ 9 section #ahfj;,d-#ad;,b7g77#b772 & 7ii7 an am\nt equal to ! applicable p]c5tage specifi$ 9 p>agraph 7#e77;,b7 ( all[able re9surance co/s attributable to t portion ( gross prescription drug co/s z specifi$ 9 p>agraph 7#c7 incurr$ 9 ! cov]age ye> aft] su* individual has incurr$ co/s t exce$ ! annual out-(-pocket ?re%old specifi$ 9 section #ahfj;,d-#b7;b77#d77;,b7 ) respect to cov]$ "p ,d drugs t are n applicable drugs 7z s def9$74 2 & 7#b7 by add+ at ! end ! foll[+ new p>agraph3 7#e7 ,applicable p]c5tage specifi$ ,= purposes ( p>agraph 7#a77;,b71 ! applicable p]c5tage specifi$ 9 ?is p>agraph is-- 7,a7 ) respect to applicable drugs 7z def9$ 9 section #ahfj;,d-#ad;,b7g77#b77-- 7i7 = #bjbd1 #fj p]c5t2 7ii7 = #bjbe1 #dj p]c5t2 & 7iii7 = #bjbf & ea* subsequ5t ye>1 #bj p]c5t2 & 7,b7 ) respect to cov]$ "p ,d drugs t are n applicable drugs 7z s def9$7-- 7i7 = #bjbd1 #hj p]c5t2 7ii7 = #bjbe1 #fj p]c5t2 & 7iii7 = #bjbf & ea* subsequ5t ye>1 #dj p]c5t4 4 7d7 ,manufactur] disc\nt program dur+ initial & cata/rophic phases ( cov]age 7#a7 ,9 g5]al ,"p ,d ( title ,,xviii ( ! ,social ,security ,act is am5d$ by ins]t+ aft] section #ahfj;,d-#ad;,a 7#db ,u4,s4,c4 #adiew-#aad7 ! foll[+ new section3 #ahfj;,d-#ad;,b4 ,manufactur] disc\nt program 7a7 ,e/abli%m5t ,! ,secret>y %all e/abli% a manufactur] disc\nt program 79 ?is section ref]r$ to z ! program74 ,"u ! program1 ! ,secret>y %all ent] into agreem5ts describ$ 9 subsection 7b7 ) manufactur]s & provide = ! p]=mance ( ! duties describ$ 9 subsection 7c74 ,! ,secret>y %all e/abli% a model agreem5t = use "u ! program by n lat] ?an ,janu>y #a1 #bjbc1 9 consultation ) manufactur]s1 & all[ = comm5t on su* model agreem5t4 7b7 ,t]ms ( agreem5t 7#a7 ,9 g5]al 7,a7 ,agreem5t ,an agreem5t "u ?is section %all require ! manufactur] to provide applicable b5efici>ies access to disc\nt$ prices = applicable drugs ( ! manufactur] t are disp5s$ on or aft] ,janu>y #a1 #bjbd4 7,b7 ,provision ( disc\nt$ prices at ! po9t-(-sale ,! disc\nt$ prices describ$ 9 subp>agraph 7,a7 %all be provid$ to ! applicable b5efici>y at ! ph>macy or by ! mail ord] s]vice at ! po9t-(-sale ( an applicable drug4 7#b7 ,provision ( appropriate data ,ea* manufactur] ) an agreem5t 9 effect "u ?is section %all collect & h available appropriate data1 z det]m9$ by ! ,secret>y1 to ensure t x c demon/rate to ! ,secret>y compliance ) ! requirem5ts "u ! program4 7#c7 ,compliance ) requirem5ts = adm9i/ration ( program ,ea* manufactur] ) an agreem5t 9 effect "u ?is section %all comply ) requirem5ts impos$ by ! ,secret>y or a ?ird p>ty ) a contract "u subsection 7d77#c71 z applicable1 = purposes ( adm9i/]+ ! program1 includ+ any det]m9ation "u subp>agraph 7,a7 ( subsection 7c77#a7 or proc$ures e/abli%$ "u su* subsection 7c77#a74 7#d7 ,l5g? ( agreem5t 7,a7 ,9 g5]al ,an agreem5t "u ?is section %all be effective = an initial p]iod ( n less ?an #ab mon?s & %all be automatically r5ew$ = a p]iod ( n less ?an #a ye> unless t]m9at$ "u subp>agraph 7,b74 7,b7 ,t]m9ation 7i7 ,by ! ,secret>y ,! ,secret>y may provide = t]m9ation ( an agreem5t "u ?is section = a kn[+ & willful violation ( ! requirem5ts ( ! agreem5t or o!r good cause %[n4 ,su* t]m9ation %all n be effective e>li] ?an #cj days aft] ! date ( notice to ! manufactur] ( su* t]m9ation4 ,! ,secret>y %all provide1 ^u reque/1 a manufactur] ) a he>+ conc]n+ su* a t]m9ation1 & su* he>+ %all take place prior to ! effective date ( ! t]m9ation ) suffici5t "t = su* effective date to be repeal$ if ! ,secret>y det]m9es appropriate4 7ii7 ,by a manufactur] ,a manufactur] may t]m9ate an agreem5t "u ?is section = any reason4 ,any su* t]m9ation %all be effective1 ) respect to a plan ye>-- 7,i7 if ! t]m9ation occurs be=e ,janu>y #cj ( a plan ye>1 z ( ! day aft] ! end ( ! plan ye>2 & 7,,ii7 if ! t]m9ation occurs on or aft] ,janu>y #cj ( a plan ye>1 z ( ! day aft] ! end ( ! succe$+ plan ye>4 7iii7 ,effectiv5ess ( t]m9ation ,any t]m9ation "u ?is subp>agraph %all n affect disc\nts = applicable drugs ( ! manufactur] t are due "u ! agreem5t be=e ! effective date ( its t]m9ation4 7iv7 ,notice to ?ird p>ty ,! ,secret>y %all provide notice ( su* t]m9ation to a ?ird p>ty ) a contract "u subsection 7d77#c7 )9 n less ?an #cj days be=e ! effective date ( su* t]m9ation4 7#e7 ,effective date ( agreem5t ,an agreem5t "u ?is section %all take effect on a date det]m9$ appropriate by ! ,secret>y1 :i* may be at ! />t ( a cal5d> qu>t]4 7c7 ,duties describ$ ,! duties describ$ 9 ?is subsection are ! foll[+3 7#a7 ,adm9i/ration ( program ,adm9i/]+ ! program1 includ+-- 7,a7 ! det]m9ation ( ! am\nt ( ! disc\nt$ price ( an applicable drug ( a manufactur]2 7,b7 ! e/abli%m5t ( proc$ures "u :i* disc\nt$ prices are provid$ to applicable b5efici>ies at ph>macies or by mail ord] s]vice at ! po9t-(-sale ( an applicable drug2 7,c7 ! e/abli%m5t ( proc$ures to ensure t1 n lat] ?an ! applicable numb] ( cal5d> days aft] ! disp5s+ ( an applicable drug by a ph>macy or mail ord] s]vice1 ! ph>macy or mail ord] s]vice is reimburs$ = an am\nt equal to ! diff]5ce betwe5-- 7i7 ! negotiat$ price ( ! applicable drug2 & 7ii7 ! disc\nt$ price ( ! applicable drug2 7,d7 ! e/abli%m5t ( proc$ures to ensure t ! disc\nt$ price = an applicable drug "u ?is section is appli$ be=e any cov]age or f9ancial assi/ance "u o!r heal? b5efit plans or programs t provide cov]age or f9ancial assi/ance = ! pur*ase or provision ( prescription drug cov]age on behalf ( applicable b5efici>ies z ! ,secret>y may specify2 & 7,e7 provid+ a reasonable dispute resolution me*anism to resolve disagreem5ts betwe5 manufactur]s1 applicable b5efici>ies1 & ! ?ird p>ty ) a contract "u subsection 7d77#c74 7#b7 ,monitor+ compliance 7,a7 ,9 g5]al ,! ,secret>y %all monitor compliance by a manufactur] ) ! t]ms ( an agreem5t "u ?is section4 7,b7 ,notification ,if a ?ird p>ty ) a contract "u subsection 7d77#c7 det]m9es t ! manufactur] is n 9 compliance ) su* agreem5t1 ! ?ird p>ty %all notify ! ,secret>y ( su* noncompliance = appropriate en=cem5t "u subsection 7e74 7#c7 ,collection ( data f prescription drug plans & ma-pd plans ,! ,secret>y may collect appropriate data f prescription drug plans & ,,ma-,,pd plans 9 a timeframe t all[s = disc\nt$ prices to be provid$ = applicable drugs "u ?is section4 7d7 ,adm9i/ration 7#a7 ,9 g5]al ,subject to p>agraph 7#b71 ! ,secret>y %all provide = ! implem5tation ( ?is section1 includ+ ! p]=mance ( ! duties describ$ 9 subsection 7c74 7#b7 ,limitation ,9 provid+ = ! implem5tation ( ?is section1 ! ,secret>y %all n receive or di/ribute any funds ( a manufactur] "u ! program4 7#c7 ,contract ) ?ird p>ties ,! ,secret>y %all ent] into a contract ) #a or m ?ird p>ties to adm9i/] ! requirem5ts e/abli%$ by ! ,secret>y 9 ord] to c>ry out ?is section4 ,at a m9imum1 ! contract ) a ?ird p>ty "u ! prec$+ s5t5ce %all require t ! ?ird p>ty-- 7,a7 receive & transmit in=mation betwe5 ! ,secret>y1 manufactur]s1 & o!r individuals or entities ! ,secret>y det]m9es appropriate2 7,b7 receive1 di/ribute1 or facilitate ! di/ribution ( funds ( manufactur]s to appropriate individuals or entities 9 ord] to meet ! obligations ( manufactur]s "u agreem5ts "u ?is section2 7,c7 provide adequate & timely in=mation to manufactur]s1 consi/5t ) ! agreem5t ) ! manufactur] "u ?is section1 z necess>y = ! manufactur] to fulfill its obligations "u ?is section2 & 7,d7 p]mit manufactur]s to conduct p]iodic audits1 directly or ?r\gh contracts1 ( ! data & in=mation us$ by ! ?ird p>ty to det]m9e disc\nts = applicable drugs ( ! manufactur] "u ! program4 7#d7 ,p]=mance requirem5ts ,! ,secret>y %all e/abli% p]=mance requirem5ts = a ?ird p>ty ) a contract "u p>agraph 7#c7 & safegu>ds to protect ! indep5d5ce & integrity ( ! activities c>ri$ out by ! ?ird p>ty "u ! program "u ?is section4 7#e7 ,adm9i/ration ,*apt] #ce ( title #dd1 ,unit$ ,/ates ,code1 %all n apply to ! program "u ?is section4 7#f7 ,fund+ ,= purposes ( c>ry+ out ?is section1 ! ,secret>y %all provide = ! transf]1 f ! ,f$]al ,supplem5t>y ,m$ical ,insurance ,tru/ ,fund "u section #ahda to ! ,c5t]s = ,m$ic>e ,m$icaid ,s]vices ,program ,managem5t ,acc\nt1 ( #d1jjj1jjj = ea* ( fiscal ye>s #bjba ?r\gh #bjbd1 to rema9 available until exp5d$404 7e7 ,en=cem5t 7#a7 ,audits ,ea* manufactur] ) an agreem5t 9 effect "u ?is section %all be subject to p]iodic audit by ! ,secret>y4 7#b7 ,civil money p5alty 7,a7 ,9 g5]al ,! ,secret>y %all impose a civil money p5alty on a manufactur] t fails to provide applicable b5efici>ies disc\nts = applicable drugs ( ! manufactur] 9 accordance ) su* agreem5t = ea* su* failure 9 an am\nt ! ,secret>y det]m9es is comm5surate ) ! sum (-- 7i7 ! am\nt t ! manufactur] w\ld h paid ) respect to su* disc\nts "u ! agreem5t1 :i* w !n be us$ to pay ! disc\nts :i* ! manufactur] _h fail$ to provide2 & 7ii7 #be p]c5t ( su* am\nt4 7,b7 ,application ,! provisions ( section #aabh;,a 7o!r ?an subsections 7a7 & 7b77 %all apply to a civil money p5alty "u ?is p>agraph 9 ! same mann] z su* provisions apply to a p5alty or proce$+ "u section #aabh;,a7a74 7f7 ,cl>ification reg>d+ availability ( o!r cov]$ "p d drugs ,no?+ 9 ?is section %all prev5t an applicable b5efici>y f pur*as+ a cov]$ "p ,d drug t is n an applicable drug 7includ+ a g5]ic drug or a drug t is n on ! =mul>y ( ! prescription drug plan or ,,ma-,,pd plan t ! applicable b5efici>y is enroll$ 974 7g7 ,def9itions ,9 ?is section3 7#a7 ,applicable b5efici>y ,! t]m applicable b5efici>y means an individual :o1 on ! date ( disp5s+ a cov]$ "p ,d drug-- 7,a7 is enroll$ 9 a prescription drug plan or an ,,ma-,,pd plan2 7,b7 is n enroll$ 9 a qualifi$ retiree prescription drug plan2 & 7,c7 has incurr$ co/s = cov]$ "p ,d drugs 9 ! ye> t are above ! annual d$uctible specifi$ 9 section #ahfj;,d-#b7;b77#a7 = su* ye>4 7#b7 ,applicable drug ,! t]m applicable drug means1 ) respect to an applicable b5efici>y1 a cov]$ "p ,d drug-- 7,a7 approv$ "u a new drug application "u section #eje7;c7 ( ! ,f$]al ,food1 ,drug1 & ,cosmetic ,act or1 9 ! case ( a biologic product1 lic5s$ "u section #cea ( ! ,public ,heal? ,s]vice ,act 7includ+ a product lic5s$ "u subsection 7k7 ( su* section #cea72 & 7,b7 7i7 if ! ,,pdp sponsor ( ! prescription drug plan or ! ,,ma organization (f]+ ! ,,ma-,,pd plan uses a =mul>y1 :i* is on ! =mul>y ( ! prescription drug plan or ,,ma-,,pd plan t ! applicable b5efici>y is enroll$ 92 7ii7 if ! ,,pdp sponsor ( ! prescription drug plan or ! ,,ma organization (f]+ ! ,,ma-,,pd plan does n use a =mul>y1 = :i* b5efits are available "u ! prescription drug plan or ,,ma-,,pd plan t ! applicable b5efici>y is enroll$ 92 or 7iii7 is provid$ ?r\gh an exception or appeal4 7#c7 ,applicable numb] ( cal5d> days ,! t]m applicable numb] ( cal5d> days means-- 7,a7 ) respect to claims = reimbursem5t submitt$ electronically1 #ad days2 & 7,b7 ) respect to claims = reimbursem5t submitt$ o!rwise1 #cj days4 7#d7 ,disc\nt$ price 7,a7 ,9 g5]al ,except z provid$ 9 subp>agraph 7,b71 ! t]m disc\nt$ price means #ij p]c5t ( ! negotiat$ price ( ! applicable drug ( a manufactur]4 7,b7 ,phase-9 = c]ta9 drugs disp5s$ = subsidy eligible individuals 7i7 ,9 g5]al ,9 ! case ( an applicable drug ( a specifi$ manufactur] 7z def9$ 9 clause 7ii77 t is disp5s$ = an applicable b5efici>y :o is a subsidy eligible individual 7z def9$ 9 section #ahfj;,d-#ad7;a77#c771 ! t]m disc\nt$ price means ! specifi$ ,,lis p]c5t 7z def9$ 9 clause 7iii77 ( ! negotiat$ price ( ! applicable drug ( ! manufactur]4 7ii7 ,specifi$ manufactur] ,9 ?is subp>agraph1 ! t]m specifi$ manufactur] means a manufactur] ( an applicable drug = :i*1 9 ! cal5d> ye> #b ye>s prior to ! curr5t plan ye> 7ref]r$ to 9 ?is clause z ! applicable p]iod71 ! total reimbursem5t "u ?is title dur+ ! applicable p]iod repres5t$ less ?an #a p]c5t ( ! total reimbursem5t "u ?is title = all prescription drugs dur+ su* p]iod4 7iii7 ,specifi$ ,,lis p]c5t ,9 ?is subp>agraph1 ! t]m specifi$ ,,lis p]c5t means-- 7,i7 = #bjbd1 #ih p]c5t2 7,,ii7 = #bjbe1 #ig p]c5t2 7,,iii7 = #bjbf1 #if p]c5t2 7,,iv7 = #bjbg1 #ie p]c5t2 7,v7 = #bjbh1 #id p]c5t2 7,,vi7 = #bjbi1 #ic p]c5t2 7,,vii7 = #bjcj1 #ib p]c5t2 7,,viii7 = #bjca1 #ia p]c5t2 & 7,,ix7 = #bjcb & ea* subsequ5t ye>1 #ij p]c5t4 7,c7 ,cl>ification ,no?+ 9 ?is section %all be con/ru$ z affect+ ! responsibility ( an applicable b5efici>y = paym5t ( a disp5s+ fee = an applicable drug4 7#e7 ,manufactur] ,! t]m manufactur] means any entity :i* is engag$ 9 ! production1 prep>ation1 propagation1 comp\nd+1 conv]sion1 or process+ ( prescription drug products1 ei!r directly or indirectly by extraction f sub/ances ( natural orig91 or indep5d5tly by means ( *emical syn!sis1 or by a comb9ation ( extraction & *emical syn!sis4 ,su* t]m does n include a :olesale di/ributor ( drugs or a retail ph>macy lic5s$ "u ,/ate law4 7#f7 ,negotiat$ price ,! t]m negotiat$ price has ! mean+ giv5 su* t]m 9 section #ahfj;,d-#b7;d77#a77;,b71 except t su* negotiat$ price %all n include any disp5s+ fee = ! applicable drug4 7#g7 ,qualifi$ retiree prescription drug plan ,! t]m qualifi$ retiree prescription drug plan has ! mean+ giv5 su* t]m 9 section #ahfj;,d-#bb7;a77#b74 4 7#b7 ,sunset ( ,m$ic>e cov]age gap disc\nt program ,section #ahfj;,d-#ad;,a ( ! ,social ,security ,act 7#db ,u4,s4,c4 #acie-aad;a7 is am5d$-- 7,a7 9 subsection 7a71 9 ! fir/ s5t5ce1 by /rik+ ,! ,secret>y & ins]t+ ,subject to subsection 7h71 ! ,secret>y2 & 7,b7 by add+ at ! end ! foll[+ new subsection3 7h7 ,sunset ( program 7#a7 ,9 g5]al ,! program %all n apply to applicable drugs disp5s$ on or aft] ,janu>y #a1 #bjbd1 &1 subject to p>agraph 7#b71 agreem5ts "u ?is section %all be t]m9at$ z ( su* date4 7#b7 ,cont9u$ application = applicable drugs disp5s$ prior to sunset ,! provisions ( ?is section 7includ+ all responsibilities & duties7 %all cont9ue to apply aft] ,janu>y #a1 #bjbd1 ) respect to applicable drugs disp5s$ prior to su* date4 4 7#c7 ,inclusion ( actu>ial value ( manufactur] disc\nts 9 bids ,section #ahfj;,d-#aa ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is am5d$-- 7,a7 9 subsection 7b77#b77;,c77iii7-- 7i7 by /rik+ assumptions reg>d+ ! re9surance & ins]t+ 8assumptions reg>d+-- 7,i7 ! re9surance 2 & 7ii7 by add+ at ! end ! foll[+3 7,,ii7 = #bjbd & ea* subsequ5t ye>1 ! manufactur] disc\nts provid$ "u section #ahfj;,d-#ad;,b subtract$ f ! actu>ial value to produce su* bid2 & 2 & 7,b7 9 subsection 7c77#a77;,c7-- 7i7 by /rik+ an actu>ial valuation ( ! re9surance & ins]t+ 8an actu>ial valuation (-- 7i7 ! re9surance 2 7ii7 9 clause 7i71 z add$ by clause 7i7 ( ?is subp>agraph1 by add+ & at ! end2 & 7iii7 by add+ at ! end ! foll[+3 7ii7 = #bjbd & ea* subsequ5t ye>1 ! manufactur] disc\nts provid$ "u section #ahfj;,d-#ad;,b2 4 7#d7 ,cl>ification reg>d+ exclusion ( manufactur] disc\nts f ,tr,o,o,p ,section #ahfj;,d-#b7;b77#d7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#d77 is am5d$-- 7,a7 9 subp>agraph 7,c71 by ins]t+ & subject to subp>agraph 7,f7 aft] subp>agraph 7,e72 & 7,b7 by add+ at ! end ! foll[+ new subp>agraph3 7,f7 ,cl>ification reg>d+ exclusion ( manufactur] disc\nts ,9 apply+ subp>agraph 7,a71 incurr$ co/s %all n include any manufactur] disc\nts provid$ "u section #ahfj;,d-#ad;,b4 4 7e7 ,det]m9ation ( all[able re9surance co/s ,section #ahfj;,d-#ae7;b7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77 is am5d$-- 7#a7 9 p>agraph 7#b7-- 7,a7 by /rik+ co/s4--,= purposes & ins]t+ 8co/s4-- 7,a7 ,9 g5]al ,subject to subp>agraph 7,b71 = purposes 2 & 7,b7 by add+ at ! end ! foll[+ new subp>agraph3 7,b7 ,inclusion ( manufactur] disc\nts on applicable drugs ,= purposes ( apply+ subp>agraph 7,a71 ! t]m all[able re9surance co/s %all include ! portion ( ! negotiat$ price 7z def9$ 9 section #ahfj;,d-#ad;,b7g77#f77 ( an applicable drug 7z def9$ 9 section #ahfj;,d-#ad;,b7g77#b77 t 0 paid by a manufactur] "u ! manufactur] disc\nt program "u section #ahfj;,d-#ad;,b4 2 & 7#b7 9 p>agraph 7#c7-- 7,a7 9 ! fir/ s5t5ce1 by /rik+ ,= purposes & ins]t+ ,subject to p>agraph 7#b77;,b71 = purposes2 & 7,b7 9 ! second s5t5ce1 by ins]t+ or1 9 ! case ( an applicable drug1 by a manufactur] aft] by ! individual or "u ! plan4 7f7 ,updat+ risk adju/m5t me?odologies ,to acc\nt = "p ,d mod]nization r$esign ,section #ahfj;,d-#ae7;c7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;c77 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#c7 ,updat+ risk adju/m5t me?odologies to acc\nt = "p ,d mod]nization r$esign ,! ,secret>y %all update ! risk adju/m5t me?odologies us$ to adju/ bid am\nts pursuant to ?is subsection z appropriate to take into acc\nt *anges 9 b5efits "u ?is "p pursuant to ! am5dm5ts made by section #b ( ! ,s5iors ,prescription ,drug ,relief ,act4 4 7g7 ,conditions = cov]age ( drugs "u ?is "p ,section #ahfj;,d-#dc ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aec7 is am5d$-- 7#a7 9 subsection 7a7-- 7,a7 9 p>agraph 7#b71 by /rik+ & at ! end2 7,b7 9 p>agraph 7#c71 by /rik+ ! p]iod at ! end & ins]t+ a semicolon2 & 7,c7 by add+ at ! end ! foll[+ new p>agraphs3 7#d7 p>ticipate 9 ! manufactur] disc\nt program "u section #ahfj;,d-#ad;,b2 7#e7 h ent]$ into & h 9 effect an agreem5t describ$ 9 subsection 7b7 ( su* section #ahfj;,d-#ad;,b ) ! ,secret>y2 & 7#f7 h ent]$ into & h 9 effect1 "u t]ms & conditions specifi$ by ! ,secret>y1 a contract ) a ?ird p>ty t ! ,secret>y has ent]$ into a contract ) "u subsection 7d77#c7 ( su* section #ahfj;,d-#ad;,b4 2 7#b7 by /rik+ subsection 7b7 & ins]t+ ! foll[+3 7b7 ,effective date ,p>agraphs 7#a7 ?r\gh 7#c7 ( subsection 7a7 %all apply to cov]$ "p ,d drugs disp5s$ "u ?is "p on or aft] ,janu>y #a1 #bjaa1 & be=e ,janu>y #a1 #bjbd1 & p>agraphs 7#d7 ?r\gh 7#f7 ( su* subsection %all apply to cov]$ "p ,d drugs disp5s$ on or aft] ,janu>y #a1 #bjbd4 2 & 7#c7 9 subsection 7c71 by /rik+ p>agraph 7#b7 & ins]t+ ! foll[+3 7#b7 ! ,secret>y det]m9es t 9 ! p]iod beg9n+ on ,janu>y #a1 #bjaa1 & end+ on ,decemb] #ca1 #bjaa 7) respect to p>agraphs 7#a7 ?r\gh 7#c7 ( subsection 7a771 or ! p]iod beg9n+ on ,janu>y #a1 #bjbd1 & end+ ,decemb] #ca1 #bjbd 7) respect to p>agraphs 7#d7 ?r\gh 7#f7 ( su* subsection71 !re 7 ext5uat+ circum/ances4 4 7h7 ,con=m+ am5dm5ts 7#a7 ,section #ahfj;,d-#b ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7 is am5d$-- 7,a7 9 subsection 7a77#b77;,a77i77,i71 by /rik+ 1 or an increase 9 ! initial & ins]t+ or = a ye> prec$+ #bjbd an increase 9 ! initial2 7,b7 9 subsection 7c77#a77;,c7-- 7i7 9 ! subp>agraph head+1 by /rik+ at initial cov]age limit2 & 7ii7 by ins]t+ = a ye> prec$+ #bjbd or ! annual out-(-pocket ?re%old specifi$ 9 subsection 7b77#d77;,b7 = ! ye> = #bjbd & ea* subsequ5t ye> aft] subsection 7b77#c7 = ! ye> ea* place x appe>s2 & 7,c7 9 subsection 7d77#a77;,a71 by /rik+ or an initial & ins]t+ or = a ye> prec$+ #bjbd an initial4 7#b7 ,section #ahfj;,d-#d7;a77#d77;,b77i7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;a77#d77;,b77i77 is am5d$ by /rik+ ! initial & ins]t+ = a ye> prec$+ #bjbd1 ! initial4 7#c7 ,section #ahfj;,d-#ad7;a7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77 is am5d$-- 7,a7 9 p>agraph 7#a7-- 7i7 9 subp>agraph 7,c71 by /rik+ ,! cont9uation & ins]t+ ,= a ye> prec$+ #bjbd1 ! cont9uation2 7ii7 9 subp>agraph 7,d77iii71 by /rik+ #ahfj;,d-#b7;b77#d77;,a77i77,i7 & ins]t+ #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 & 7iii7 9 subp>agraph 7,e71 by /rik+ ,! elim9ation & ins]t+ ,= a ye> prec$+ #bjbd1 ! elim9ation2 & 7,b7 9 p>agraph 7#b7-- 7i7 9 subp>agraph 7,c71 by /rik+ ,! cont9uation & ins]t+ ,= a ye> prec$+ #bjbd1 ! cont9uation2 & 7ii7 9 subp>agraph 7,e7-- 7,i7 by ins]t+ = a ye> prec$+ #bjbd1 aft] subsection 7c72 & 7,,ii7 by /rik+ #ahfj;,d-#b7;b77#d77;,a77i77,i7 & ins]t+ #ahfj;,d-#b7;b77#d77;,a77i77,i77aa74 7#d7 ,section #ahfj;,d-#ba7;d77#g7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aca7;d77#g77 is am5d$ by /rik+ section #ahfj;,d-#b7;b77,b77#d77;,b77i7 & ins]t+ section #ahfj;,d-#b7;b77,b77#d77;,c77i74 7#e7 ,section #ahfj;,d-#bb7;a77#b77;,a7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#acb7;a77#b77;,a77 is am5d$-- 7,a7 by /rik+ ! value ( any disc\nt & ins]t+ ! foll[+3 8! value (-- 7i7 = ye>s prior to #bjbd1 any disc\nt 2 7,b7 9 clause 7i71 z ins]t$ by subp>agraph 7,a7 ( ?is p>agraph1 by /rik+ ! p]iod at ! end & ins]t+ 2 &2 & 7,c7 by add+ at ! end ! foll[+ new clause3 7ii7 = #bjbd & ea* subsequ5t ye>1 any disc\nt provid$ pursuant to section #ahfj;,d-#ad;,b4 4 7#f7 ,section #ahfj;,d-#da7;a77#f7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aea7;a77#f77 is am5d$-- 7,a7 by ins]t+ = a ye> be=e #bjbd aft] #ahfj;,d-#b7;b77#c72 & 7,b7 by ins]t+ = su* ye> be=e ! p]iod4 7i7 ,effective date ,! am5dm5ts made by ?is section %all apply to plan ye> #bjbd & subsequ5t plan ye>s4 #c4 ,mon?ly out-(-pocket co/ %>+ maximum = enrollees :o incur a significant portion ( co/s t[>ds annual out-(-pocket ?re%old 7a7 ,9 g5]al ,section #ahfj;,d-#b7;b7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b771 z am5d$ by section #b1 is am5d$-- 7#a7 9 p>agraph 7#b7-- 7,a7 9 subp>agraph 7,a71 by /rik+ & 7,d7 & ins]t+ 1 7,d71 & 7,e72 & 7,b7 by add+ at ! end ! foll[+ new subp>agraph3 7,e7 ,mon?ly out-(-pocket co/ %>+ maximum = enrollees :o incur a significant portion ( co/s t[>ds annual out-(-pocket ?re%old 7i7 ,e/abli%m5t ( process 7,i7 ,9 g5]al ,= plan ye>s beg9n+ on or aft] ,janu>y #a1 #bjbd1 ! ,secret>y %all1 ?r\gh notice & comm5t rulemak+1 e/abli% a process "u :i* ea* ,,pdp sponsor (f]+ a prescription drug plan & ea* ,,ma organization (f]+ an ,,ma-,,pd plan %all ea* plan ye> automatically enroll applicable enrollees 9 ! option to h _! mon?ly out-(-pocket co/-%>+ "u ! plan capp$ & paid 9 mon?ly in/allm5ts 9 accordance ) ?is subp>agraph 7ref]r$ to 9 ?is subp>agraph z ! mon?ly out-(-pocket co/ %>+ maximum option74 7,,ii7 ,opt out ,! process e/abli%$ "u ?is clause %all p]mit an applicable enrollee1 prior to ! beg9n+ ( ! plan ye> or at any po9t dur+ ! plan ye>1 to opt out ( enrollm5t 9 ! mon?ly out-(-pocket co/ %>+ maximum option & pay any out-(-pocket co/-%>+ o!rwise applicable = any cov]$ "p ,d drug 9 full at ! "t ( ! disp5s+ ( su* drug 7or at ! "t ( su* opt out 9 ! case ( co/s incurr$ dur+ su* enrollm5t t h n yet be5 bill$ to ! enrollee74 7ii7 ,def9itions 7,i7 ,applicable enrollee ,9 ?is subp>agraph1 ! t]m applicable enrollee means any enrollee 9 a prescription drug plan or an ,,ma-,,pd plan1 includ+ an enrollee :o is a subsidy eligible individual 7z def9$ 9 p>agraph 7#c7 ( section #ahfj;,d-#ad7;a771 :o incurs or is likely to incur a significant p]c5tage ( co/s = cov]$ "p ,d drugs4 7,,ii7 ,significant p]c5tage ,= purposes ( subclause 7,i71 ! ,secret>y %all1 9 ! rulemak+ "u clause 7i71 def9e ! t]m significant p]c5tage ) respect to a p]c5tage ( ! annual out-(-pocket ?re%old specifi$ 9 p>agraph 7#d77;,b7 b 9 no case %all ! significant p]c5tage be less ?an #ej p]c5t or m ?an #ajj p]c5t ( ! annual out-(-pocket ?re%old4 7iii7 ,det]m9ation ( mon?ly out-(-pocket co/ %>+ maximum ,= ea* mon? 9 a plan ye> 9 :i* an applicable enrollee is enroll$ 9 ! mon?ly out-(-pocket co/ %>+ maximum option1 ! ,,pdp sponsor or ,,ma organization %all det]m9e a mon?ly out-(-pocket co/ %>+ maximum 7z def9$ 9 clause 7v77 = su* enrollee4 7iv7 ,b5efici>y mon?ly paym5ts ,) respect to an applicable enrollee :o is enroll$ 9 ! mon?ly out-(-pocket co/ %>+ maximum option1 = ea* mon? describ$ 9 clause 7iii71 ! ,,pdp sponsor or ,,ma organization %all bill su* enrollee an am\nt 7n to exce$ ! mon?ly out-(-pocket co/ %>+ maximum7 = ! out-(-pocket co/s ( su* enrollee 9 su* mon?4 7v7 ,mon?ly out-(-pocket co/ %>+ maximum def9$ ,9 ?is subp>agraph1 ! t]m mon?ly out-(-pocket co/ %>+ maximum means1 ) respect to an enrollee-- 7,i7 = ! fir/ mon? 9 :i* ?is subp>agraph applies1 an am\nt det]m9$ by calculat+-- 7aa7 ! annual out-(-pocket ?re%old specifi$ 9 p>agraph 7#d77;,b7 m9us ! incurr$ co/s ( ! enrollee z describ$ 9 p>agraph 7#d77;,c72 divid$ by 7bb7 ! numb] ( mon?s rema9+ 9 ! plan ye>2 & 7,,ii7 = a subsequ5t mon?1 an am\nt det]m9$ by calculat+-- 7aa7 ! sum ( any rema9+ out-(-pocket co/s ow$ by ! enrollee f a previ\s mon? t h n yet be5 bill$ to ! enrollee & any additional co/s incurr$ by ! enrollee2 divid$ by 7bb7 ! numb] ( mon?s rema9+ 9 ! plan ye>4 7vi7 ,additional requirem5ts ,! foll[+ requirem5ts %all apply ) respect to ! mon?ly out-(-pocket co/ %>+ maximum option "u ?is subp>agraph3 7,i7 ,secret>ial responsibilities ,! ,secret>y %all provide in=mation to "p ,d eligible individuals on ! mon?ly out-(-pocket co/ %>+ maximum option ?r\gh educational mat]ials1 includ+ ?r\gh ! notices provid$ "u section #ahjd7;a74 7,,ii7 ,,pdp sponsor & ,,ma organization responsibilities ,ea* ,,pdp sponsor (f]+ a prescription drug plan or ,,ma organization (f]+ an ,,ma-,,pd plan-- 7aa7 %all n limit ! application ( ! mon?ly out-(-pocket co/ %>+ maximum option to c]ta9 cov]$ "p ,d drugs2 7bb7 %all1 prior to ! plan ye>1 notify prospective enrollees ( su* option1 includ+ ! availability ( ! opt out "u clause 7i77,,ii72 7cc7 %all include in=mation on su* option 9 enrollee educational mat]ials1 includ+ ! availability ( ! opt out "u clause 7i77,,ii72 7dd7 %all h 9 place a me*anism to notify a ph>macy dur+ ! plan ye> :5 an enrollee incurs out-(-pocket co/s ) respect to cov]$ "p ,d drugs t make x likely ! enrollee is an applicable enrollee2 7ee7 %all provide t a ph>macy1 aft] receiv+ a notification describ$ 9 item 7dd7 ) respect to an enrollee1 in=ms ! enrollee ( su* notification2 7ff7 %all ensure t ! application ( ?is subp>agraph has no effect on ! am\nt paid to ph>macies 7or ! tim+ ( su* paym5ts7 ) respect to cov]$ "p ,d drugs disp5s$ to ! enrollee2 & 7gg7 %all h 9 place a f9ancial reconciliation process to correct inaccuracies 9 paym5ts made by an enrollee "u ?is subp>agraph ) respect to cov]$ "p ,d drugs dur+ ! plan ye>4 7,,iii7 ,failure to pay am\nt bill$ "u mon?ly out-(-pocket co/ %>+ maximum option ,if an applicable enrollee fails to pay ! am\nt bill$ = a mon? z requir$ "u ?is subp>agraph1 ! applicable enrollee's enrollm5t 9 ! mon?ly out-(-pocket co/ %>+ maximum option %all be t]m9at$ & ! enrollee %all pay ! co/-%>+ o!rwise applicable = any cov]$ "p ,d drugs subsequ5tly disp5s$ to ! enrollee up to ! annual out-(-pocket ?re%old specifi$ 9 p>agraph 7#d77;,b74 7,,iv7 ,cl>ification reg>d+ pa/ due am\nts ,no?+ 9 ?is subp>agraph %all be con/ru$ z prohibit+ a ,,pdp sponsor or an ,,ma organization f bill+ an enrollee = an am\nt ow$ "u ?is subp>agraph4 7,v7 ,treatm5t ( unsettl$ balances ,any unsettl$ balances ) respect to am\nts ow$ "u ?is subp>agraph %all be treat$ z plan losses & ! ,secret>y %all n be liable = any su* balances outside ( ^? assum$ z losses e/imat$ 9 plan bids4 2 & 7#b7 9 p>agraph 7#d7-- 7,a7 9 subp>agraph 7,c71 by /rik+ & subject to subp>agraph 7,f7 & ins]t+ & subject to subp>agraphs 7,f7 & 7,g72 & 7,b7 by add+ at ! end ! foll[+ new subp>agraph3 7,g7 ,inclusion ( co/s paid "u mon?ly out-(-pocket co/ %>+ maximum option ,9 apply+ subp>agraph 7,a71 ) respect to an applicable enrollee :o is enroll$ 9 ! mon?ly out-(-pocket co/ %>+ maximum option describ$ 9 clause 7i77,i7 ( p>agraph 7#b77;,e71 co/s %all be treat$ z incurr$ if su* co/s are paid by a ,,pdp sponsor or an ,,ma organization "u ! process provid$ "u su* p>agraph4 4 7b7 ,application to alt]native prescription drug cov]age ,section #ahfj;,d-#b7;c7 ( ! ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;c77 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#d7 ,same mon?ly out-(-pocket co/ %>+ maximum ,= plan ye>s beg9n+ on or aft] ,janu>y #a1 #bjbd1 ! mon?ly out-(-pocket co/ %>+ maximum = applicable enrollees "u ! process provid$ "u subsection 7b77#b77;,e7 %all apply to su* cov]age4 4