,i #aaith ,,congress #b;d ,session ,h4 ,r4 #ieii ,,in ,,the ,,house ,,of ,,representatives ,july #f1 #bjbf,mr4 ,peters 7for himself1 ,mr4 ,joyce of ,pennsylvania1 ,mr4 ,auchincloss1 ,mr4 ,crenshaw1 and ,ms4 ,barragn7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committees on ,ways and ,means1 and ,education and ,workforce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to strengthen the #cdj;,b drug discount program4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,strengthening the ,exercise of ,controls and ,upgrading ,requirements for ,efficiency in #cdj;,b ,act or the ,,secure #cdj;,b ,act4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,establishing a clear patient definition4 ,sec4 #c4 ,allowable use and robust oversight of contract pharmacies4 ,sec4 #d4 ,eligibility for child sites4 ,sec4 #e4 ,improving patient affordability and protections4 ,sec4 #f4 ,data reporting for transparency4 ,sec4 #g4 ,enhancing program integrity4 ,sec4 #h4 ,facilitating data exchange to improve program integrity4 ,sec4 #i4 ,prohibition on discriminatory practices and contracting4 ,sec4 #aj4 ,ensuring ,,hrsa has adequate resources to oversee the program4 ,sec4 #aa4 ,studies and reports4 ,sec4 #ab4 ,meanings4 ,sec4 #ac4 ,requirements for nonhospital covered entities and subgrantees4 ,sec4 #ad4 ,effective date4 #b4 ,establishing a clear patient definition 7a7 ,in general ,section #cdj;,b7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77 is amended by adding at the end the following3 7#aa7 ,patient defined 7,a7 ,in general ,in this section1 the term patient means an individual who-- 7i7 has received an outpatient health care service from a prescribing provider at a covered entity within the preceding #bd months1 and such health care service-- 7,i7 is a service that was reimbursable under title ,,xviii of the ,social ,security ,act when furnished by a prescribing provider or1 in the case of an individual who is not eligible for benefits under such title1 would have been so reimbursable had the individual been so eligible2 a service shall be considered reimbursable if it is of a type eligible for reimbursement under title ,,xviii2 and 7,,ii7 in the case of a covered entity described in subparagraphs 7,a7 through 7,k7 of subsection 7a77#d71 is a service that is within the scope of the grant or designation described in such subparagraph4 7ii7 received the prescription or order for the covered outpatient drug related to the service described in clause 7i72 and 7iii7 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 maintains a provider-to-patient relationship with the individual for the healthcare service related to the covered outpatient prescription or order2 7,,ii7 the prescribing provider has clinical responsibility and oversight for the individual's health care service related to the prescription or order for the covered outpatient drug with the covered entity2 and 7,,iii7 any other information specified by the ,secretary through notice and comment rulemaking4 7,b7 ,application ,for each prescription or order for a covered outpatient drug1 an individual shall qualify as a patient under subparagraph 7,a7 only if the requirements of such subparagraph are independently satisfied with respect to that prescription or order4 7,c7 ,record retention and auditing ,a covered entity shall-- 7i7 retain auditable health care records in a form and manner specified by the ,secretary through notice and comment rulemaking which demonstrate the existence of a patient relationship in accordance with this paragraph for each prescription or order for a covered outpatient drug for a period of the greater of #e years or such period as required under applicable ,state and ,federal laws governing medical or pharmacy records2 and 7ii7 no more than one time annually1 in accordance with subsection 7a77#e77;,c71 permit the ,secretary and the manufacturer of a covered outpatient drug that is subject to an agreement under this subsection1 to audit1 at the ,secretary's or the manufacturer's expense1 the records of the entity which demonstrate the existence of a patient relationship in accordance with this paragraph and which directly pertain to the entity's compliance with the requirements of subsection 7a77#e77;,b74 4 7b7 ,additional amendments ,section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 is amended-- 7#a7 in subsection 7a71 by adding at the end the following3 7#ab7 ,prescribing provider ,in this section1 the term prescribing provider means a health care provider who1 at the time the health care provider orders or prescribes a covered outpatient drug-- 7,a7 7i7 is an employee or independent contractor of the covered entity such that the covered entity bills for services furnished by the health care provider and is responsible for the care furnished by such provider2 or 7ii7 is an employee or independent contractor of a physician organization affiliate of the covered entity1 has assigned their right to bill and collect for professional services to such physician organization affiliate1 and furnishes outpatient health care services to patients of the covered entity4 7,b7 has clinical responsibility over the care related to the order or prescription for the covered outpatient drug1 as demonstrated by the provider's signature on the relevant order or prescription for the covered outpatient drug2 7,c7 is enrolled as a provider in the ,medicare program under title ,,xviii of the ,social ,security ,act1 or the ,medicaid program under title ,,xix of the ,social ,security ,act2 and 7,d7 is not excluded by the ,secretary from participation in ,medicare and ,state health care programs pursuant to section #aabh of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g74 2 and 7#b7 in subsection 7b71 by adding at the end the following3 7#c7 ,physician organization affiliate defined ,for purposes of subparagraph 7,a77ii71 the term physician organization affiliate means an entity that-- 7,a7 is lawfully organized for the purpose of employing or contracting with licensed professionals to furnish clinical services2 7,b7 has an ongoing1 legally binding agreement with the covered entity to provide health care services to patients of the covered entity at the covered entity's locations2 and 7,c7 the outpatient healthcare services are provided such that responsibility for the care provided remains with the covered entity and meets the other requirements in this paragraph4 4 7c7 ,referral requirements ,section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b71 as amended1 is amended by adding at the end the following new subsection3 7f7 ,referral qualifications 7#a7 ,in general ,subject to the requirements of this subsection1 in the case of a patient of an eligible covered entity who is referred by such covered entity to a provider outside such covered entity1 and such non-covered entity provider prescribes a covered outpatient drug within #bd months of the date of such referral1 the eligible covered entity may provide such drug to such patient as a covered outpatient drug pursuant to the drug discount program under this section1 in the same manner and under the same conditions as the covered entity would provide such drug had such drug been prescribed by a prescribing provider of such covered entity4 7#b7 ,covered entity eligibility ,for purposes of this subsection the covered entity that dispenses or administers the covered outpatient drug must be-- 7,a7 a federally qualified health center1 as described in subsection 7a77#d77;,a71 that is also a comprehensive primary care medical home1 certified as a ,patient-,centered ,medical ,home by a national accrediting organization2 7,b7 a critical access hospital1 as described in subsection 7a77#d77,n72 or 7,c7 a sole community hospital1 as described in subsection 7a77#d77,o74 7#c7 ,patient eligibility ,for purposes of this subsection-- 7,a7 the individual to whom a covered outpatient drug is dispensed or administered must be a patient of the covered entity meeting the requirements under 7a77#aa72 7,b7 the individual must have received direct care from the covered entity within #bd months prior to the date on which the individual was referred to receive care by the prescribing entity2 7,c7 the care furnished to the individual by the covered entity that resulted in the referral must be-- 7i7 in the case of a federally qualified health center described in paragraph 7#b77;,a71 within the scope of the grant application made to the ,secretary under section #ccj7k77#a72 7ii7 in the case of a critical access hospital described in paragraph 7#b77;,b71 within the scope of the agreement with the ,state under section #ahbj7;c77#b7 of the ,social ,security ,act2 and 7iii7 in the case of a sole community hospital described in paragraph 7#b77;,c71 within the scope of the request made to the ,secretary for such classification under section #ahhf7;d77#e77;,c77iii7 of the ,social ,security ,act2 7,d7 the covered entity must have-- 7i7 ,referred the individual to the prescribing entity2 7ii7 ,consulted with a clinician at the prescribing entity regarding the individual's care2 and 7iii7 ,provided care to the individual after dispensing or administering the prescription1 as appropriate2 and 7,e7 in the case of a federally qualified health center described in paragraph 7#b77;,a71 a prescription generated as a direct result of an emergency department visit or hospital discharge4 7#d7 ,exclusions ,the following categories of drugs shall not be eligible for discounts under this subsection-- 7,a7 orphan-designated drugs2 or 7,b7 in the case of a prescription written by a federally qualified health center described in paragraph 7#b77;,a71 a drug that is infused or that requires a clinician to administer1 except for those entities providing infusions as of the date of enactment of this ,act and subject to the limitation described in paragraph 7#e74 7#e7 ,documentation requirements 7,a7 ,in general ,in association with any covered outpatient drug receiving a discount under this subsection1 the individual's medical record must include documentation to demonstrate compliance with the requirements of paragraph 7#c71 including-- 7i7 documentation of the direct care provided to the individual by the covered entity prior to the referral to the prescribing entity2 7ii7 documentation of the referral from the covered entity to the prescribing entity2 7iii7 documentation of direct care received by the individual from the covered entity that resulted in the referral and that occurred within #bd months prior to the initial referral2 7iv7 documentation of care received by the individual from the prescribing entity within #bd months of the covered entity referral1 which may take the form of receipt of consult notes or documentation of a discussion between the covered entity and prescribing entity regarding the care furnished by the prescribing entity2 7v7 documentation of ongoing consultation between the covered entity and the prescribing entity as appropriate for the covered entity's ongoing responsibility of the individual's care1 consistent with the scope of care described in paragraph 7#c77;,c72 and 7vi7 documentation of the prescribing entity's prescription to be dispensed or administered by the covered entity and updated through the qualified entity's medication list for the patient4 7,b7 ,document retention ,all documentation described under this paragraph shall be maintained for a period of the greater of #e years or such period as required under applicable ,state and ,federal laws governing medical or pharmacy records as auditable records that demonstrate compliance with the requirements of this subsection4 7#f7 ,referral audits based on volume 7,a7 ,in general ,the ,secretary shall conduct audits of any eligible covered entity that meets the following conditions in a given year-- 7i7 referral prescriptions described in paragraph 7#a7 exceed #be percent of the total number of covered outpatient drugs purchased and dispensed by the covered entity for the year2 7ii7 referral prescriptions described in paragraph 7#a7 are in the #geth percentile of all reporting covered entities by covered entity classification2 or 7iii7 referral prescriptions exceeding the average annual percentage for that covered entity classification over the most recent #c-year period1 of the total number of covered outpatient drugs purchased and dispensed by the qualified referral covered entity4 7,b7 ,transparency of information ,the ,secretary shall make public aggregate information on eligible covered entities audited under subparagraph 7,a7 available on a website of the ,health ,resources and ,services ,administration1 in such form and manner that the ,secretary determines appropriate4 7#g7 ,additional audits 7,a7 ,in addition to audits conducted under paragraph 7#f71 the ,secretary shall audit any covered entity receiving discounts under this subsection for compliance with requirements of this subsection every four years and1 in the case of covered entities receiving abnormal volumes of discounts as compared to such covered entity's discounts over the previous three year period1 more frequently 7but no more than one time annually74 7,b7 ,the ,secretary shall through notice and comment rulemaking establish a process for manufacturers to request audits of discounts provided under this subsection at any time the manufacturer provides documentation to the ,secretary of suspected non-compliance with the requirements of this subsection1 with information received by the manufacturer from the clearinghouse established under section #aaej;,d of the ,social ,security ,act that provides credible evidence of non-compliance serving as acceptable documentation for this purpose4 7#h7 ,enforcement 7,a7 ,loss of referral authorization 7i7 ,a covered entity for which the ,secretary determines through an audit conducted pursuant to or otherwise authorized under this section that the share of referral prescriptions during the previous calendar year exceeds #ce percent of the covered entity's total number of covered outpatient drugs purchased and dispensed by the covered entity in the applicable year1 may be subject to a ,corrective ,action ,plan in accordance with the corrective action plan process established under subsection 7d77#b77;,b77vii74 7ii7 ,a covered entity that fails to implement a ,corrective ,action ,plan required under clause 7i7 and comply with the timeline for correction set forth in such ,corrective ,action ,plan shall immediately lose eligibility under this subsection for a period determined by the ,secretary through notice and comment rulemaking1 but no more than #a year4 7iii7 ,the ,secretary and the ,administrator of the ,health ,resources and ,services ,administration shall develop a process through notice and comment rulemaking for covered entities that lose eligibility for discounts under this section pursuant to clause 7ii7 to complete the ,corrective ,action ,plan and resume referrals under the program4 7,b7 ,monetary penalties ,the ,secretary may impose civil monetary penalties on covered entities for any discounts under this section later deemed ineligible on the grounds the covered entity is found to be noncompliant with the requirements of this subsection with respect to the relevant prescription4 ,the amount of such civil monetary penalties shall be paid to the affected manufacturer4 4 #c4 ,allowable use and robust oversight of contract pharmacies 7a7 ,use of contract pharmacies ,section #cdj;,b7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77 is further amended by adding at the end the following3 7#ac7 ,contract pharmacies 7,a7 ,in general ,in the case of a covered entity that elects to contract with a pharmacy or pharmacies to dispense covered outpatient drugs purchased by a covered entity at or below the applicable ceiling price described in paragraph 7#a7 to patients of the covered entity1 a manufacturer of a covered outpatient drug that is subject to an agreement with the ,secretary under paragraph 7#a7 shall-- 7i7 offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price described in paragraph 7#a7 regardless of whether the drug is dispensed directly by the covered entity or via a contract pharmacy arrangement2 7ii7 deliver or allow the delivery of covered outpatient drugs purchased by covered entity sites to pharmacy locations as requested by a covered entity1 in accordance with the covered entity's contract pharmacy agreements2 7iii7 not place any of the following conditions on the ability of a covered entity to purchase a covered outpatient drug at or below the applicable ceiling price described in paragraph 7#a7 for dispensing according to its written contract pharmacy arrangements3 7,i7 ,restricting distribution options only with respect to covered outpatient drugs1 covered entities1 or contract pharmacies4 7,,ii7 ,requiring the submission of claims data directly to the manufacturer out of submissions to the entity receiving the contract to maintain the clearinghouse under section #aaej;,d of the ,social ,security ,act4 7,,iii7 ,conditioning1 restricting1 or refusing participation in such an arrangement solely on the basis that the covered entity elected to use a contract pharmacy4 7,,iv7 ,any such other conditions specified by the ,secretary through notice and comment rulemaking4 7,b7 ,registration of contract ,each covered entity shall register with the ,secretary any contract described in subparagraph 7,a71 in accordance with such registration requirements established by the ,secretary through notice and comment rulemaking4 ,such registration requirements shall include requiring covered entities to-- 7i7 submit all contract pharmacy agreements to the ,secretary in a timely manner2 7ii7 register each contract pharmacy arrangement with the ,secretary1 as applicable1 prior to implementing the contract pharmacy agreement2 and 7iii7 attest to their compliance with the requirements under this subsection at the time of contract pharmacy registration and annually thereafter4 7,c7 ,contract review process ,the ,secretary shall establish through notice and comment rulemaking a process to review all written agreements between a covered entity and each of its contract pharmacies1 as described in subparagraph 7,a71 to ensure compliance with the requirements under this subsection4 ,in connection with such review process1 there shall be no limitation on the number of contract pharmacies a covered entity may contract with nor any geographic limitation on the location of such contract pharmacies4 7,d7 ,transparency ,the ,secretary shall make the following information about contract pharmacy arrangements that have been approved under subparagraphs 7,a7 and 7,b7 available on the public internet website of the ,department of ,health and ,human ,services3 7i7 ,name7s7 of each covered entity1 including the name of its child site7s7 that uses contract pharmacy7ies74 7ii7 ,name7s7 and address7es7 of each contract pharmacy location to which the contract pharmacy arrangement applies4 7iii7 ,effective date7s7 of the contract pharmacy arrangement7s74 7iv7 ,the last year a drug was dispensed under the contract pharmacy arrangement7s7 from each location4 7v7 ,the volume of dispensed drugs under this section per reporting period4 7vi7 ,the geographic distance between the covered entity reported under 7i7 and each contract pharmacy reported under 7ii74 7vii7 ,information on the contract pharmacy's status as a mail-order or specialty pharmacy4 7viii7 ,details on the location of the contract pharmacy1 including whether the contract pharmacy is located in-- 7,i7 an urban area 7under ,census definition72 7,,ii7 a rural area 7under ,census definition72 7,,iii7 a frontier county or frontier ,state 7as defined in ,section #ahhf7;d77#c77;,e77iii77,,ii7 of the ,social ,security ,act72 7,,iv7 a medically underserved area 7,,mua7 as defined in section #biep7#f72 7,v7 a ,healthcare ,provider ,shortage ,area 7,,hpsa7 as defined in section #bed;e2 or 7,,vi7 an area classified as one for a medically underserved population 7,,mup7 as defined in section #bed;b7b77#c74 7,e7 ,improvements in contract pharmacy arrangement integrity ,to ensure the integrity of contract pharmacy arrangements described in subparagraph 7,a71 including to prevent diversion and duplicate discounts described in paragraph 7#e77;,a71 the ,secretary shall promulgate rules to carry out the following3 7i7 ,require a written agreement between a covered entity and any pharmacy with which the covered entity has a contract pharmacy arrangement4 ,each such agreement shall-- 7,i7 list the address of each contract pharmacy location that will dispense drugs on behalf of the covered entity1 including all covered entity sites that plan to use the contract pharmacy2 7,,ii7 be signed and in effect not later than the day before the contract pharmacy begins dispensing covered outpatient drugs purchased under this section on behalf of the covered entity2 and 7,,iii7 include the standard contract provisions established under clause 7ii74 7ii7 ,develop standard contract provisions that are required to be included in each written agreement described in clause 7i71 including provisions providing that-- 7,i7 the covered entity will purchase the drug and maintain title to the drug pursuant to the terms of the award or designation from the ,department of ,health and ,human ,services that qualifies such entity as a covered entity and any applicable ,federal1 ,state1 or local law2 7,,ii7 the contract pharmacy is responsible for providing pharmacy services and providing data to covered entities to support their submission of covered outpatient drug data to a clearinghouse contracted entity described in section #aaej;,d of the ,social ,security ,act2 7,,iii7 the covered entity will not interfere with patient choice of their pharmacy provider nor require patients to use a certain pharmacy1 including to obtain a prescription from the covered entity and obtain the drug from the pharmacy provider of his or her choice2 7,,iv7 the contract pharmacy may provide other services to the covered entity or its patients at the option of the covered entity1 such as home care1 delivery1 and reimbursement services2 7,v7 regardless of the services provided by the contract pharmacy1 access to covered outpatient drugs purchased under this section will be restricted to patients of the covered entity2 7,,vi7 the covered entity and the contract pharmacy will adhere to all ,federal1 ,state1 and local laws and requirements2 7,,vii7 the contract pharmacy will provide the covered entity with any information requested consistent with customary business practices1 such as quarterly billing statements1 status reports of collections1 receiving and dispensing records1 and information required for audits under subsection 7a77#e77;,c72 7,,viii7 the covered entity and the contract pharmacy will utilize the clearinghouse to verify patient eligibility1 as defined by the ,secretary1 and will establish and maintain safeguards to prevent diversion of covered outpatient drugs purchased under this section2 7,,ix7 the contract pharmacy may not use covered outpatient drugs purchased under this section to dispense prescriptions that are reimbursed under the ,medicaid program under title ,,xix of the ,social ,security ,act1 unless the covered entity1 the contract pharmacy1 and the ,state ,medicaid agency have established1 in writing and made available to pharmaceutical manufacturers upon request1 an arrangement to prevent duplicate discounts1 consistent with paragraph 7#e77;,a72 7,x7 both the covered entity and the contract pharmacy shall be subject to audits1 by the ,secretary and drug manufacturers1 of records that pertain to the covered entity's compliance with paragraph 7#e71 to prevent diversion and violations of the duplicate discount prohibition2 and 7,,xi7 the contract pharmacy is required to submit to the covered entity all data elements the covered entity is required to report to the clearinghouse pursuant to section #aaej;,d of the ,social ,security ,act4 7iii7 ,review written agreements1 at the time of registration or recertification1 or more frequently if the ,secretary determines necessary1 between covered entities and contract pharmacies to ensure compliance with the requirements under this section1 to analyze program operations1 and to provide program oversight4 7iv7 ,provide specific guidance to covered entities regarding the needed practices and procedures for contract pharmacy oversight1 including the scope and frequency of such oversight4 7v7 ,establish a retention period of the greater of #e years or such period as required under applicable ,state and ,federal laws governing medical or pharmacy records during which covered entities and contract pharmacies are required to maintain all relevant auditable records in relation to contract pharmacy arrangements1 including records relating to transactions of drugs purchased pursuant to an agreement under paragraph 7#a71 sufficient to demonstrate compliance with the requirements to prevent diversion and violations of the duplicate discount prohibition4 4 7b7 ,program integrity ,section #cdj;,b7d77#a77;,b77vi77,,iii7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77;,b77vi77,,iii77 is amended-- 7#a7 by striking intentionally charges a and inserting the following3 intentionally-- 7aa7 charges a covered entity a price for purchase of a covered outpatient drug that exceeds the maximum applicable price under subsection 7a77#a72 2 7#b7 by striking the period and inserting a semicolon2 and 7#c7 by adding at the end the following3 7bb7 refuses to offer a covered outpatient drug for purchase at or below the maximum applicable price under subsection 7a77#a7 or deliver or allow to be delivered a covered outpatient drug purchased by a covered entity at or below such maximum applicable price2 and 7cc7 places conditions on the ability of a covered entity to purchase a covered outpatient drug at or below the maximum applicable price under subsection 7a77#a74 4 #d4 ,eligibility for child sites ,section #cdj;,b7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77 is further amended by adding at the end the following3 7#ad7 ,child sites 7,a7 ,in general ,a covered entity described in subparagraph 7,l71 7,m71 7,n71 or 7,o7 of paragraph 7#d7 that owns and operates a child site that participates in the drug discount program under this section shall maintain documentation of1 and annually certify to the ,secretary through such certification processes established under the ,medicare enrollment and cost reporting rules1 that each such child site is wholly owned by the entity and clinically and financially integrated with the covered entity and providing care consistent with the policies of the covered entity1 including by-- 7i7 registering each child site with the ,secretary2 7ii7 applying the same financial assistance policy and patient assistance policy as apply with respect to other sites operated by the covered entity2 and 7iii7 ensuring that each child site complies with the ,medicare provider-based rules under section #dac4fe of title #db1 ,code of ,federal ,regulations 7or any successor regulations7 or meets the requirements of subparagraph 7,b77i74 7,b7 ,eligibility for child sites 7i7 ,in general ,a child site is eligible for participation in the drug discount program under this section1 through the eligibility of the covered entity that owns and operates such child site1 only if the covered entity demonstrates that the child site meets the following requirements3 7,i7 ,the child site applies the same patient financial assistance policy as the covered entity4 7,,ii7 ,the child site participates as a provider or supplier in both the ,medicare program under title ,,xviii of the ,social ,security ,act1 and the ,medicaid program under title ,,xix of such ,act of the ,state in which the child site is located1 without discrimination against patients of such programs at such locations4 7,,iii7 ,the child site ensures that the providers who order or dispense covered outpatient drugs purchased under this section at the child site have clinical responsibility for health care services that are related to the use of the covered outpatient drug purchased under this section that is dispensed4 7,,iv7 ,the child site provides a clinically meaningful range of services within the scope of the services that prescribing providers employed by or contracted with the child site1 covered entity1 or a physician organization affiliate of the covered entity are qualified to deliver4 7,v7 ,if the child site is owned by a covered entity described in paragraph 7#d77,l71 the child site shall ensure that the provider who prescribes a covered outpatient drug purchased under this section meets the requirements in paragraph 7#ab74 7,,vi7 ,the child site and the covered entity are operated under the same license1 except in areas where the ,state requires a separate license for the child site1 or in ,states where ,state law does not permit licensure of the child site and the covered entity under a single license4 ,if a ,state health facilities cost review commission or other agency that has authority to regulate the rates charged by providers in a ,state finds that a child site is not part of the covered entity1 the child site shall not be eligible for the drug discount program under this section4 7,,vii7 ,the clinical services of the child site and the covered entity are integrated as evidenced by the following3 7aa7 ,professional staff of the child site have clinical privileges at the covered entity4 7bb7 ,the covered entity maintains the same monitoring and oversight of the child site as for any other owned entity or subsidiary of the covered entity4 7cc7 ,the medical director of the child site maintains a reporting relationship with the chief medical officer or other similar official of the covered entity that has the same frequency1 intensity1 and level of accountability that exists in the relationship between the medical director of a department of the covered entity and the chief medical officer or other similar official of the covered entity1 and is under the same type of supervision and accountability as any other director1 medical or otherwise1 of the covered entity4 7dd7 ,medical staff committees or other professional committees at the covered entity are responsible for medical activities in the child site1 including quality assurance1 utilization review1 and the coordination and integration of services1 to the extent practicable1 between the child site and covered entity4 7ee7 ,medical records for patients treated in the child site are integrated into a unified retrieval system1 or have the ability to be readily accessed by the covered entity4 7ff7 ,inpatient and outpatient services of the child site and the covered entity are integrated1 and patients treated at the child site who require further care have full access to all services of the covered entity and are referred where appropriate to the corresponding inpatient or outpatient department or service of the covered entity4 7,,viii7 ,the financial operations of the child site are fully integrated within the financial system of the covered entity1 as evidenced by shared income and expenses between the covered entity and the child site4 ,for purposes of the ,medicare program under title ,,xviii of the ,social ,security ,act1 the costs of a child site are reported in the appropriate cost center or cost centers of the covered entity1 and the financial status of any child site is incorporated and readily identified in the covered entity's trial balance4 7,,ix7 ,the child site is held out to the public as part of the covered entity4 ,when patients enter the child site1 they are aware that they are entering the covered entity4 7,x7 ,the child site is operated under the ownership and control of the covered entity1 as evidenced by the following3 7aa7 ,the business enterprise that constitutes the child site is #ajj percent owned by the covered entity2 except that a child site may be jointly owned if3 7,,aa7 the covered entity holds a majority ownership interest of not less than #ea percent2 7,,bb7 each co-owner is either3 7i7 an organization described in section #eja7;c77#c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code1 or 7ii7 a ,state or local governmental entity1 including a public university or academic medical center2 7,,cc7 each co-owner that is not a covered entity has1 independent of the joint venture1 a bona fide charitable1 public health1 or governmental mission that includes the direct provision of health care services to low-income1 uninsured1 or medically underserved individuals2 7,,dd7 no co-owner is a for-profit entity2 7,,ee7 no co-owner that is not a covered entity was formed1 reorganized1 converted1 or materially restructured for the purpose of qualifying as an eligible co-owner under this subparagraph2 and 7,,ff7 the ,administrator of the ,health ,resources and ,services ,administration has not determined1 after notice and an opportunity to respond1 that the joint venture structure was constituted for the purpose of obtaining eligibility under the drug discount program under this section or expanding claims for discounts under such program1 rather than to further the health care mission of the covered entity and the health care needs of the patient population served by the child site4 7bb7 ,the covered entity and the child site have the same governing body4 7cc7 ,the child site is operated under the same organizational documents as the covered entity1 and is subject to common bylaws and operating decisions of the governing body of the covered entity4 7dd7 ,the covered entity has final responsibility for administrative decisions1 final approval for contracts with outside parties1 final approval for personnel actions1 final responsibility for personnel policies 7such as fringe benefits or code of conduct71 and final approval for medical staff appointments at the child site4 7,,xi7 ,the reporting relationship between the child site and the covered entity have the same frequency1 intensity1 and level of accountability that exists in the relationship between the covered entity and its other departments1 as evidenced by compliance with all of the following requirements3 7aa7 ,the child site is under the direct supervision of the covered entity4 7bb7 ,the child site is operated under the same monitoring and oversight by the covered entity as any other department of the covered entity1 and is operated as any other department of the covered entity with regard to supervision and accountability4 ,the director or individual responsible for daily operations at the child site-- 7,,aa7 maintains a reporting relationship with a manager at the covered entity that has the same frequency1 intensity1 and level of accountability that exists in the relationship between the covered entity and its existing departments2 and 7,,bb7 is accountable to the governing body of the covered entity1 in the same manner as any department head of the covered entity4 7,,xii7 ,the following administrative functions of the child site are integrated with the functions of the covered entity3 billing services1 records1 human resources1 payroll1 employee benefit package1 salary structure1 and purchasing services4 ,either the same employees or group of employees handle such administrative functions for the child site and the covered entity1 or the administrative functions for both the child site and the covered entity are-- 7aa7 contracted out under the same contract agreement2 or 7bb7 handled under different contract agreements1 with the contract of the child site being managed by the covered entity4 7,,xiii7 ,the child site is listed on the covered entity's most recently filed ,medicare cost report on a line that is reimbursable under the ,medicare program 7or1 if the covered entity is a children's hospital that does not file a ,medicare cost report1 the covered entity submits to the ,secretary a signed statement certifying that the site would be correctly included on a reimbursable line of a ,medicare cost report if the covered entity filed a cost report74 ,such cost report demonstrates that the services provided at the child site have associated costs and charges for covered entity outpatient department services under title ,,xviii of the ,social ,security ,act 7or1 if the covered entity is a children's hospital that does not file a ,medicare cost report1 the covered entity submits to the ,secretary a signed statement certifying that the services provided at the child site include or consist solely of outpatient services74 7ii7 ,,hrsa deeming 7,i7 ,in general ,if the ,administrator of the ,centers for ,medicare ,medicaid ,services has determined a site to be qualified as a provider-based entity and in compliance with the provider-based requirements under section #dac4fe of title #db1 ,code of ,federal ,regulations 7or any successor regulations71 the ,secretary shall deem the site to have met the requirements described in clause 7i74 7,,ii7 ,rule of construction ,this clause shall authorize the ,secretary to establish a process through notice and comment rulemaking to determine whether a child site1 as determined by the ,administrator of the ,center for ,medicare ,medicaid ,services1 complies with the ,medicare provider-based rules4 7iii7 ,child site registration3 community need standard 7,i7 ,definitions ,for purposes of this subsection3 7aa7 ,the term child site has the definition set forth in ,section #cdj;,b7b77#d74 7bb7 ,the term ,community ,vulnerability ,score means the percentile ranking assigned to a ,,zip ,code ,tabulation ,area under the ,social ,vulnerability ,index maintained by the ,centers for ,disease ,control and ,prevention and the ,agency for ,toxic ,substances and ,disease ,registry 7,,cdc_/,,atsdr ,,svi71 or such successor or supplementary validated index as the ,secretary may designate by regulation1 on a scale of #j to #a in which a score of #a represents maximum social vulnerability4 ,the ,secretary shall1 through notice and comment rulemaking1 establish a method for mapping or aggregating the underlying index to the ,,zip ,code ,tabulation ,area level4 ,where the ,secretary designates a supplementary or successor index1 the ,secretary shall ensure that such index is based on publicly available ,,zip ,code ,tabulation ,area-level or equivalent data1 updated at least biennially1 and validated for use in identifying medically underserved or socially vulnerable communities4 7cc7 ,the term parent entity means the covered entity whose eligibility status under subsection 7a77#d7 forms the basis for a child site's registration4 7dd7 ,the term qualifying ,,zip ,code means a ,,zip ,code ,tabulation ,area with a ,community ,vulnerability ,score at or above the #ejth percentile threshold when ranked nationally--meaning the ,,zip ,code ,tabulation ,area falls within the more vulnerable half of all ,,zip ,code ,tabulation ,areas in the ,united ,states--or at or above the #djth percentile threshold when ranked against all ,,zip ,code ,tabulation ,areas within the same ,state1 whichever threshold the covered entity elects to apply4 ,if the ,,zip ,code ,tabulation ,area in which a child site's street address is located has not been assigned a ,community ,vulnerability ,score1 including because the area is unpopulated1 non-residential1 or otherwise lacks the underlying data necessary to compute such a score1 the qualifying status of such area shall be determined based on the ,community ,vulnerability ,score of the census tract in which the street address is located1 or if no such score is available for that census tract1 the county in which the street address is located1 applying the same national and ,state-relative percentile thresholds described in this subparagraph4 ,the ,secretary shall1 through notice and comment rulemaking1 define the circumstances under which a ,,zip ,code ,tabulation ,area is treated as unscored and establish another method for assigning a ,community ,vulnerability ,score4 7ee7 ,the term ,,zip ,code ,tabulation ,area means the geographic unit designated by the ,united ,states ,census ,bureau corresponding to a #e-;digit ,,zip code1 consistent with the geographic units used by the ,secretary under this subsection4 ,for purposes of this subsection1 a child site's ,,zip ,code ,tabulation ,area shall be determined based on the first five digits of the child site's street address ,,zip code as registered with the ,secretary4 7,,ii7 ,community need standard for child sites 7aa7 ,general requirement ,a child site shall meet the community need standard established under this paragraph as a condition of initial registration and continued participation under this section4 ,a child site meets such standard if the covered entity demonstrates that the child site is physically located in a qualifying ,,zip ,code ,tabulation ,area1 as determined using the street address of the child site in a manner specified by the ,secretary through notice and comment rulemaking4 7bb7 ,application to new child sites ,for a child site seeking registration on or after the date of enactment of this subsection1 compliance with item 7aa7 shall be determined by the ,secretary at the time of initial registration based on the ,,zip ,code ,tabulation ,area in which the child site's street address is situated1 as submitted by the covered entity4 7cc7 ,application to existing child sites ,for a child site registered as of the date of enactment of this subsection1 compliance with item 7aa7 shall be evaluated at the time of the next applicable recertification of the covered entity4 ,for the purposes of applying the community need standard to a child site registered as of the date of enactment of this subsection1 the ,secretary shall determine eligibility based on the ,,zip ,code ,tabulation ,area in which the child site's street address is situated at the time of such recertification4 7dd7 ,ongoing validation ,compliance with the community need standard under item 7aa7 shall be verified for all child sites on an ongoing basis through the annual recertification process1 or such other periodic review as the ,secretary may establish4 7ee7 ,failure to meet standard ,a child site that does not satisfy the community need standard under item 7aa71 as determined by the ,secretary1 shall be subject to removal from the covered entity's registration in accordance with procedures established by the ,secretary1 including notice and an opportunity to respond4 ,removal of a child site from registration under this paragraph shall not affect the continued eligibility of the parent entity or any other child site of the parent entity that satisfies the applicable standard4 7ff7 ,payor-mix exception ,notwithstanding item 7aa71 a child site that does not independently meet the community need standard described in item 7aa7 shall nonetheless be deemed to meet such standard if the covered entity demonstrates1 to the satisfaction of the ,secretary1 that not less than #dj percent of patients served by the child site are enrolled in ,medicaid1 are uninsured1 or have incomes at or below #bjj percent of the ,federal poverty level1 as determined using patient data for the most recent #ab-month period4 7gg7 ,safety-net exception ,the ,secretary may grant a temporary exception from the community need standard under item 7aa7 for a child site that does not otherwise qualify under item 7aa7 or 7ff71 if the covered entity demonstrates that-- 7,,aa7 the child site provides primary care1 behavioral health1 substance use treatment services or other services specifically directed at individuals who are low income1 uninsured1 or otherwise medically underserved and for which there is no adequate alternative provider within a reasonable geographic proximity--to a patient population that includes a significant proportion of low-income1 uninsured1 or otherwise medically underserved individuals2 and 7,,bb7 removal of the child site from registration under this section would materially reduce access to such services for such patient population4 ,any exception granted under this subparagraph shall be for a period not to exceed #b years1 subject to renewal upon re-demonstration4 ,the ,secretary shall promulgate regulations specifying the criteria and application process for exceptions under this subparagraph4 7hh7 ,rule of construction ,a child site shall not fail to satisfy the community need standard solely because the parent entity is located in a different ,,zip ,code ,tabulation ,area1 provided the child site independently satisfies the requirements of this paragraph4 7,,iii7 ,rulemaking ,not later than #f months after the date of enactment of this subsection1 the ,secretary shall promulgate regulations to implement this subsection1 including the method for determining the ,,zip ,code ,tabulation ,area in which a child site is located under item 7aa7 and1 where such area is unscored1 the method for assigning a ,community ,vulnerability ,score4 ,in promulgating such regulations1 the ,secretary shall account for geographic disparities in national ,,svi rankings by providing for a ,state-relative eligibility determination1 consistent with the ,state-relative threshold established in subparagraph 7,i77dd71 ensuring that child sites serving communities with relatively high social vulnerability within their ,state are not disadvantaged solely by lower absolute national percentile rankings4 7iv7 ,limitation ,only a child site that meets each of the requirements under this subparagraph may purchase covered outpatient drugs under the #cdj;,b program or use covered outpatient drugs purchased under the #cdj;,b program by another part of the covered entity that is authorized to participate in such program4 ,any transfer of #cdj;,b drugs to another facility or another part of a covered entity that is not authorized to participate in the #cdj;,b program shall be deemed a violation of paragraph 7#e77;,b74 4 #e4 ,improving patient affordability and protections ,section #cdj;,b7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77 is further amended by adding at the end the following3 7#ae7 ,patient assistance programs 7,a7 ,in general ,covered entities shall maintain and extend their patient financial assistance policy to patients served by their child sites and contract pharmacies4 ,the covered entity shall ensure that its financial assistance policy is transparent to patients at point of care1 satisfies the notice requirements in paragraph 7,c71 and publicly reported4 ,the ,secretary shall establish a process1 through notice and comment rulemaking1 to require covered entities to maintain auditable records related to the implementation and enforcement of this paragraph4 ,nothing in this section shall be construed to require a covered entity to waive or eliminate all patient cost-sharing or other out-of-pocket obligations1 or to provide covered outpatient drugs or related services at no cost1 except to the extent required under the covered entity's generally applicable financial assistance policy4 7,b7 ,financial assistance policy defined ,in this paragraph1 a financial assistance policy means a written financial assistance policy described in section #eja7r77#d77;,a7 of the ,internal ,revenue ,code of #aihf1 provided to patients-- 7i7 up to at least #djj percent of the ,federal poverty level1 for covered entities described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d72 7ii7 up to at least #bjj percent of the ,federal poverty level1 for all covered entities not described in paragraph #ad7;b77i7 that are not otherwise subject to sliding fee schedule or grant requirements by law2 and 7iii7 a sliding fee scale for covered outpatient drugs dispensed to patients under the drug discount program under this section1 as applicable1 provided that-- 7,i7 for covered entities described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d7-- 7aa7 such sliding fee schedule must be made available for all patients up to at least #djj percent of the ,federal poverty level2 and 7bb7 copayment requirements under such sliding fee schedule must be nominal in amount2 or 7,,ii7 such other alternative policy as the ,secretary may determine through notice and comment rulemaking with respect to a specific covered entity4 7,c7 ,notice 7i7 ,covered entities shall provide adequate notice and application of any financial assistance policy described in subparagraph 7,a74 7ii7 ,in order to ensure meaningful understanding of eligibility of a patient for a financial assistance policy1 any notice described in clause 7i7 must be made available to patients of the covered entity-- 7,i7 in a plain-language summary 7as defined in #db ,u4,s4 ,code #ahjca7;e77#c77;,b77 in ,english2 and 7,,ii7 if ,english is not the primary language in the community served by the covered entity1 in the primary language served by such community4 7,d7 ,implementation for contract pharmacies ,the financial assistance policies under this section shall apply to contract pharmacies by the following timeline3 7i7 prospectively to all newly registered contract pharmacy locations after the enactment of this clause2 or 7ii7 not later than #c years after the date of enactment of this clause for all other contract pharmacy locations4 7,e7 ,oversight ,the ,comptroller ,general of the ,united ,states shall conduct a study and report to ,congress on the impact of requirements of this paragraph on patient access to covered outpatient drugs purchased under this section4 7,f7 ,rule of construction ,compliance with this paragraph shall not be considered a prohibited act under section #aabh;,a1 #aabh;,b7b71 or #ahgg of the ,social ,security ,act4 7#af7 ,medical debt 7,a7 ,prohibitions 7i7 ,in general ,covered entities described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d7 shall not-- 7,i7 sell a patient's debt to another party2 7,,ii7 report adverse information about an individual to consumer credit reporting agencies or credit bureaus2 and 7,,iii7 defer or deny1 or require a payment before providing1 medically necessary care1 because of an individual's non-payment of one or more bills4 7ii7 ,exception ,a covered entity described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d7 may sell an individual's debt to another party if the party's sole purpose is to pay for the individual's debt in full4 7,b7 ,debt collection 7i7 ,in general ,except as provided in clause 7ii71 covered entities described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d7 shall not take any legal action to collect debt from a patient at such covered entity4 7ii7 ,exception ,a covered entity described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d7 may collect debt only from patients with a clear ability to pay1 as demonstrated by the greater of-- 7,i7 income at or above #fjj percent of the ,federal poverty level2 or 7,,ii7 assets valued at more than #djj percent of the patient's outstanding balance of debt owed to the covered entity4 7iii7 ,interest ,a covered entity described under subparagraph 7,l71 7,m71 7,n71 and 7,o7 of subsection 7a77#d7 shall be prohibited from charging interest on any outstanding balance of debt owed by a patient to such covered entity that is more than the allowable percentage specified in the applicable usury laws or regulations of the ,state in which the covered entity is located4 7,c7 ,monitoring compliance 7i7 ,in general ,the ,secretary shall conduct an annual review1 in a form and manner established in regulations to be promulgated by the ,secretary not later than #ahj days after the date of enactment of this subparagraph1 to monitor covered entity compliance with the requirements of this paragraph4 7ii7 ,enforcement ,if the ,secretary finds that1 as a result of a review described in clause 7i71 a covered entity is not in compliance with the requirements of this paragraph1 the ,secretary shall-- 7,i7 impose civil monetary penalties1 which-- 7aa7 shall be assessed according to standards established in regulations to be promulgated by the ,secretary not later than #ahj days after the date of enactment of this subclause2 and 7bb7 shall not exceed #e1jjj for each instance of noncompliance that may have occurred2 7,,ii7 where the ,secretary determines that a violation of this paragraph was systematic and egregious as well as knowing and intentional1 refer matters to appropriate authorities within the ,office of ,inspector ,general of the ,department of ,health and ,human ,services2 and 7,,iii7 where the ,secretary determines that a covered entity may not be in compliance with the requirements of section #eja7r7 of the ,internal ,revenue ,code of #aihf1 refer matters to appropriate authorities within the ,internal ,revenue ,service4 7,d7 ,,gao report ,not later than #b years after the enactment of this subparagraph1 and every #b years thereafter1 the ,comptroller ,general of the ,united ,states shall submit to the ,secretary and to the appropriate committees of ,congress a report that-- 7i7 analyzes covered entity compliance with the requirements described in this paragraph2 and 7ii7 makes recommendations with respect to policies intended to improve compliance with the requirements described in this paragraph4 7,e7 ,inspector general report ,the ,inspector ,general of the ,department of ,health and ,human ,services shall conduct an annual risk-based assessment of covered entity compliance with the requirements of this paragraph4 4 #f4 ,data reporting for transparency ,section #cdj;,b7d7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77 is amended by adding at the end the following3 7#e7 ,reporting of program savings 7,a7 ,in general ,not later than #a year after the date of enactment of this paragraph1 and annually thereafter1 each covered entity shall report to the ,secretary1 as an addendum to the ,medicare cost report most recently submitted by such entity1 or in the case of a covered entity that does not submit a ,medicare cost report1 by direct report to the ,secretary1 the following information with respect to the entity1 including all sites and contract pharmacy arrangements of the entity1 for the preceding year3 7i7 ,the total number of individuals who were dispensed or administered covered outpatient drugs purchased under this section during such preceding year that were subject to an agreement under subsection 7a77#a74 7ii7 ,the total number of prescriptions filled with covered outpatient drugs purchased under this section and billed to insurance1 organized by type of health insurance coverage 7as specified by the ,secretary through notice and comment rulemaking1 including by 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 health insurance coverage offered in the individual or group market or a group health plan 7as such terms are defined in section #bgia71 and uninsured74 7iii7 7,i7 ,the cost incurred at each site for charity care1 based on the charity care level of the covered entity1 defined as a fraction1 the numerator of which is the amount of charity care reported on worksheet ,s-#aj of the ,medicare cost report 7or any successor71 and the denominator of which is the total operating cost of the hospital1 as reported for the most recent cost reporting period2 or 7,,ii7 in the case of a covered entity that is not required to submit a ,medicare cost report that indicates charity care levels1 a qualitative description of the charity care provided by such entity1 in the aggregate1 in such manner that is not overly burdensome to covered entities1 as the ,secretary may require through notice and comment rulemaking4 7iv7 ,a description of the covered entity's use of the savings received through participation in the drug discount program under this section1 including a description of health care services or health-related benefits used to benefit the patients and communities served by the covered entity1 delineated by categories of services and benefits and populations served1 including such services and benefits provided to underserved and uninsured patients and communities4 7v7 ,the financial demographics of patients of the covered entity1 including-- 7,i7 the percentage of patients eligible for financial assistance programs and sliding scale fees2 7,,ii7 the percentage of patients who reside in a health professional shortage area 7as defined in section #ccb7 or a medically underserved community 7as defined in section #gii;,b71 or who are part of a medically underserved population 7as defined in section #ccj7;b77#c771 and the percentage of uninsured patients2 7,,iii7 the percentage patients who are ,medicaid beneficiaries2 7,,iv7 the percentage of patients who are ,children's ,health ,insurance ,program beneficiaries2 7,v7 to the extent data are available1 the percentage of patients earning below each of each of the following levels of the ,federal ,poverty ,level3 #ajj percent1 #bjj percent1 #cjj percent1 and #djj percent2 and 7,,vi7 the number of patients who receive assistance from another party in paying for a prescription drug and the mean amount of discount or benefit received4 7vi7 ,policies of the covered entity to-- 7,i7 promote access and adherence to prescribed medications2 and 7,,ii7 promote access to prescription medicines for patients earning under #bjj percent of the ,federal ,poverty ,level4 7vii7 ,in the case of a nongovernmental hospital1 any contracts between such hospital and a ,state or local governmental entity1 and any modifications to any such contract4 7viii7 ,any third-party administrators in contract with the covered entity for the administration of the drug discount program4 7ix7 ,the funding shortfall for the covered entity attributable to services provided to ,medicare and ,medicaid beneficiaries1 as reported on the ,internal ,revenue ,service ,form #iij4 7x7 ,the number of patients using the outpatient services of the covered entity4 7xi7 ,operation costs to the covered entity related to the drug discount program under this section4 7xii7 ,the names and addresses of all contract pharmacy locations4 7xii7 ,utilization rates of outpatient hospital services furnished to patients earning below each of the following level of the ,federal ,poverty ,level3 #ajj percent1 #bjj percent1 #cjj percent1 and #djj percent4 7,b7 ,records retention ,covered entities shall retain such records for a period of at least #c years and provide such records and reports pursuant to standards established by the ,secretary through notice and comment rulemaking for purposes of carrying out this paragraph4 7,c7 ,availability of information 7i7 ,in general ,not later than #cj days after receiving the information reported by covered entities under subparagraph 7,a71 the ,secretary shall publish such information on the public website of the ,department of ,health and ,human ,services1 which may include the website of the #cdj;,b ,office of ,pharmacy ,affairs ,information ,system 7or a successor to such system74 7ii7 ,format ,data published under clause 7i7 shall be published in an electronic and searchable format that shows each category of data reported both in the aggregate and identified by individual covered entity7ies7 described in subsection 7a77#d74 ,in carrying out this paragraph1 with respect to data reported pursuant to subparagraph 7,a71 the ,secretary shall ensure that any proprietary information be redacted from contracts submitted pursuant to paragraph 7#e77;,a77vii7 before posting such contracts4 7,d7 ,reports to congress ,not later than #a year after the date of the enactment of this subparagraph1 and annually thereafter1 the ,secretary shall submit a report to ,congress on the information collected under subparagraph 7,a74 7,e7 ,regulations ,the ,secretary shall promulgate regulations to carry out this paragraph4 4 #g4 ,enhancing program integrity 7a7 ,audits 7#a7 ,in general ,section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 is further amended by adding at the end the following new subsection3 7g7 ,audits by the secretary 7#a7 ,in general ,in addition to the audits otherwise authorized under this section1 the ,secretary may audit covered entities1 including the contract pharmacies and child sites of such entities1 and manufacturers to assess compliance with requirements under this section1 including identifying any statutory violations related to3 improperly claiming eligibility for the program under this section1 drug diversion1 duplicate discounts1 use of contract pharmacies1 claiming of a discount under this section on a drug that is not a covered outpatient drug purchased under this section1 or failing to provide an accurate ceiling price4 7#b7 ,standards ,the ,secretary shall conduct audits described in this section in accordance with generally accepted standards1 as may be prescribed by the ,comptroller ,general of the ,united ,states1 and shall make the protocol for such audits publicly available4 7#c7 ,requirements ,the ,secretary may not close an audit described in paragraph 7#a7 before a corrective action plan required by the ,secretary has been fully implemented1 as applicable4 7#d7 #cdj;b vendor information ,to meet the requirements for submission of information for audits under this clause1 covered entities shall contract only with vendors agreeing to-- 7,a7 submit data to the ,secretary and independent auditors contracting with covered entities necessary to determine the covered entity's compliance with statutory and regulatory requirements under this program1 prohibitions on drug diversion and duplicate discounts1 use of contract pharmacies1 and claims for discounts on covered outpatient drugs purchased pursuant to agreements under subsection 7a77#a72 and 7,b7 respond to requests from auditors in a timely manner4 7#e7 ,consequences of audit ,the ,secretary shall ensure that1 in the case of an audit finding that an entity did not meet one or more of the eligibility criteria for being a covered entity1 as defined in subsection 7a77#d71 the full period under review in an audit1 the audit results in consequences that are consistent and appropriate with the violation1 which may include disenrollment1 and that do not treat the failure to meet eligibility criteria as an issue that can be corrected retroactively4 ,nothing in this subsection shall be construed to limit the authority of the ,secretary to impose any remedy or consequence otherwise available under this ,section4 7#f7 ,regulations ,not later than #a year after the date of enactment of this paragraph1 the ,secretary shall promulgate regulations to establish the audit and reporting procedures required by this subsection4 7h7 ,independent audits of covered entities and contract pharmacy locations 7#a7 ,on a biennial basis1 each covered entity shall engage an independent auditor to conduct an audit of the covered entity's and each of its child site's and contract pharmacy location's compliance with this section4 ,the independent auditor shall not-- 7,a7 have any direct or indirect financial interest in the covered entity or its contract pharmacy2 7,b7 have any decision-making authority with respect to the covered entity2 or 7,c7 intervene with the governance of the covered entity4 7#b7 ,upon conclusion of each audit1 each covered entity shall-- 7,a7 review the methodology used by the auditor to identify the full scope of any noncompliance2 7,b7 identify and fully correct all violations that have been identified in such independent audit of the covered entity2 7,c7 take steps to prevent such violations effectively in the future2 7,d7 specifically disclose to the ,secretary-- 7i7 the methodology used by the independent auditor described in subparagraph 7,a72 7ii7 the nature and extent of any identified non-compliance2 and 7iii7 steps taken to prevent such violations effectively in the future2 7,e7 assign responsibility to certify the audit results make corrections under subparagraph 7,b7 to a corporate officer of the covered entity2 and 7,f7 within a reasonable time period1 disclose to the manufacturer of the affected covered outpatient drug any purchase made under the drug discount program under this section that1 at the time of the purchase of such drug1 did not fully satisfy the requirements of the program4 ,if the aggregate amount owed to a manufacturer as a result of an audit under this subsection exceeds the de minimis threshold established by the ,secretary through notice and comment rulemaking1 the covered entity shall repay the manufacturer an amount equal to the reduction in the price of the affected drugs1 plus interest on such amount calculated using the applicable short-term interest rate determined by the ,secretary of the ,treasury under section #abgd7;d7 of the ,internal ,revenue ,code of #aihf for the period for which the covered entity is liable4 ,in establishing the de minimis threshold1 the ,secretary shall consider the administrative costs associated with calculating1 processing1 and receiving repayments4 ,amounts may not be divided1 allocated1 or otherwise structured for the purpose of avoiding the repayment requirement under this subparagraph4 7#c7 ,not later than #a year after the date of enactment of this paragraph1 the ,secretary shall-- 7,a7 promulgate regulations governing how auditors engaged by covered entities under this subsection shall determine whether and to what extent a covered entity is meeting its requirements under this section1 including requirements regarding nonprofit status and any contract required under subsection 7a77#d77,l77i71 as applicable2 and 7,b7 promulgate regulations to establish the audit and reporting procedures required by this subsection4 4 7#b7 ,additional sanctions authority ,section #cdj;,b7d77#b77;,b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#b77;,b77 is amended-- 7,a7 in clause 7v77,,ii71 by inserting or where the covered entity fails to implement a corrective action plan relating to a violation involving improperly claiming eligibility for the drug discount program under this section1 drug diversion1 duplicate discounts1 compliance with contract pharmacy requirements1 or claiming a discount or rebate on a drug that is not a covered outpatient drug1 within #f months of the ,secretary notifying the entity of the requirement for such plan after knowing and intentional12 and 7,b7 by adding at the end the following3 7vi7 ,increasing the frequency of audits conducted for entities previously found to be in violation of requirements of the drug discount program under this section that relate to eligibility1 drug diversion1 duplicate discounts1 compliance with contract pharmacy requirements1 or claiming a discount or rebate on a drug that is not a covered outpatient drug1 and assigning responsibility for making corrections relating to such a violation to a corporate officer of the entity4 7vii7 ,establishing-- 7,i7 a process by which the ,secretary provides for proper and timely notification of a potential violation by a covered entity1 including the specific basis for the potential violation and the information relied upon by the ,secretary in identifying such potential violation2 7,,ii7 a process for a covered entity to develop1 submit1 and implement a corrective action plan1 subject to approval and monitoring by the ,secretary1 which shall-- 7aa7 provide two months to submit a corrective action plan following notification of a potential violation under subclause 7,i72 7bb7 require the ,secretary1 not later than #b months after the date of submission of such plan1 to approve the plan or request changes to the plan2 and 7cc7 require such plan to identify the specific basis for the finding of noncompliance and the actions the covered entity will take to correct such noncompliance1 prevent recurrence1 and demonstrate ongoing compliance2 7,,iii7 standards for timelines for correction and demonstration of compliance that are reasonable and proportionate to the nature1 scope1 and severity of the violation1 including the extent of any affected claims1 the risk of diversion or duplicate discounts1 and whether the violation reflects isolated error1 repeated conduct1 or willful disregard of applicable requirements2 7,,iv7 circumstances under which1 during the period in which a corrective action plan is in effect1 the ,secretary may temporarily suspend the covered entity's eligibility to participate in the drug discount program under this section1 if the ,secretary determines that such suspension is necessary to protect program integrity1 including cases involving willful disregard1 repeated or egregious noncompliance1 failure to respond to a ,secretary-approved audit1 or failure to implement a prior corrective action plan2 and 7,v7 a process for the ,secretary to publicly report1 in a de-identified manner1 on the types and scope of violations found in audits conducted under this section4 7viii7 ,disenrolling from the program covered entities that fail to implement a corrective action plan and correct violations in accordance with the time frame set forth in the ,corrective ,action ,plan pursuant to the process described in subparagraph 7,b77vii71 related to any statutory violation of this section4 7ix7 ,the imposition of civil monetary penalties1 which shall be assessed according to standards established in regulations to be promulgated by the ,secretary1 for covered entities that knowingly or intentionally continue to contract with third-party administrators or contract pharmacies that are not in compliance with the requirements of subsection 7a77#ac74 7x7 ,notwithstanding the foregoing1 if the ,secretary determines that a covered entity has engaged in a pattern of noncompliance1 as evidenced by3 7#a7 #c or more separate final audit reports finding violations of the requirements of this section within a #b-year period1 or 7#b7 #e or more such reports within a #e-year period4 ,the ,secretary may take any one or more of the following actions with respect to such repeat noncompliant entity3 7,a7 require the entity to implement an accelerated corrective action plan within a timeframe determined appropriate by the ,secretary2 7,b7 impose civil monetary penalties without providing an additional period for corrective action2 or 7,c7 remove the entity from the drug discount program under this section and disqualify the entity from re-entry into such program for a period of time determined by the ,secretary4 4 7b7 ,private non-,profit hospital eligibility based on contracts with state or local governments meeting specified criteria ,section #cdj;,b7a77#e7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#e771 as amended by the preceding sections1 is further amended by adding at the end the following3 7,e7 ,private non-profit hospital eligibility based on contracts with state or local governments meeting specified criteria ,in the case of a hospital1 whether registered or seeking to register for the drug discount program under this section as a covered entity described under subparagraph 7,l71 7,m71 7,n71 or 7,o7 of paragraph 7#d71 that claims to be eligible for the program by virtue of being a private non-profit hospital that has a contract with a ,state or local government to provide health care services to low-income individuals who are not eligible for ,medicaid or ,medicare1 the ,secretary shall take all of the following steps1 each of which shall be documented3 7i7 ,prior to registering or approving annual recertification of such a hospital 7or while carrying out any program audit of such a hospital71 the ,secretary shall obtain and review the hospital's contract with a ,state or local government and shall verify and document that-- 7,i7 the document provided by the hospital is a contract1 in that it is a mutually binding agreement for the hospital to provide health care services or supplies in exchange for something of value2 7,,ii7 the contract clearly lists the name of the hospital and the unit of ,state or local government that are parties to the contract and is signed and appropriately dated by appropriate officials of the hospital and the unit of ,state or local government2 7,,iii7 the contract specifies an effective date2 7,,iv7 the contract clearly is in effect and not expired at the time of registration 7or at the time of recertification1 in the case of annual recertification1 or for the full period examined in an audit1 in the case of an audit72 and 7,v7 the contract explicitly requires that the hospital provide health care services1 and that such services must be provided to individuals who are both low-income and not eligible for either the ,medicaid program or the ,medicare program4 7ii7 ,the ,secretary shall verify the existence of contracts meeting the requirements of clause 7i7 for all covered entities described in this subparagraph and registered as of the date of enactment of this clause by no later than #a year after the date of enactment of this clause4 7iii7 ,the ,secretary shall not register or recertify any covered entity described in this subparagraph if the entity's contract with a ,state or local government does not satisfy subclauses 7,i7 through 7,v7 of clause 7i74 4 7c7 ,verification of certain covered entities ,section #cdj;,b7a77#d77,l77i7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#d77,l77i77 is amended by inserting 7provided that such a private non-profit hospital annually submits to the ,secretary verification of such an active contract with a ,state or local government and verification of its non-profit status7 before the semicolon4 7d7 ,amendment ,section #cdj;,b7a77#g7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#g77 is amended by inserting at the end the following3 7,f7 ,non-profit status ,the ,secretary shall verify the non-profit status of any hospital1 whether registered or seeking to register for the drug discount program as a covered entity described under subparagraph 7,l71 7,m71 7,n71 or 7,o7 of subsection 7a77#d71 that claims1 in connection with drug discount program registration1 annual recertification1 or an audit1 to meet drug discount program eligibility criteria in part by being a private non-profit hospital4 ,the ,secretary shall verify the non-profit status of all such hospitals using reliable publicly available information1 such as by matching data reported by hospitals against data from the ,internal ,revenue ,service or from the ,centers for ,medicare and ,medicaid ,services on the hospital's ,federal tax status4 ,the ,secretary shall verify all registered covered entities described under this section are in compliance with these requirements within one year of the enactment of this subparagraph4 4 #h4 ,facilitating data exchange to improve program integrity ,part ,a of title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq47 is amended by adding the following new section3 #aaej;,d4 #cdj;,b drug discount program data clearinghouse 7a7 ,general ,for a period of four 7#d7 years from the enactment of this section1 a manufacturer shall offer covered outpatient drugs at the ceiling price required under section #cdj;,b7a77#a7 of the ,public ,health ,service ,act as a reduction in the purchase price and not through retrospective rebates or other post-sale payments4 ,this obligation shall not apply to rebates for the ,,aids ,drug ,assistance ,programs who have implemented a rebate model prior to the effective date of this section4 7b7 ,clearinghouse performance ,notwithstanding any other provision of this section1 the obligation under subsection 7a7 shall automatically conclude at the end of the period described in such subsection if the ,secretary has not certified1 in a public report validated by the ,office of ,inspector ,general1 that the conditions described in paragraphs 7#a7 through 7#d7 have been satisfied4 ,if such certification is not made as of the end of the period described in subsection 7a71 no provision of this subsection shall be construed to impose any additional or continuing limitation on the form1 timing1 or mechanism by which a manufacturer makes available the ceiling price required under section #cdj;,b7a77#a7 of the ,public ,health ,service ,act-- 7#a7 all claims for #cdj;,b drugs described in subsection 7g7 are submitted to1 and processed through1 the clearinghouse entity with a contract in effect under subsection 7f72 7#b7 not less than #ij percent of the value of such claims submitted during the most recent #ab-month period are identified by such clearinghouse entity as unique transactions that do not result in duplicate discounts or other applicable overlapping price concessions2 7#c7 not less than #ij percent of the value of claims for #cdj;,b drugs as described in subsection 7g7 are adjudicated1 including identification of any duplicate discounts1 rebates1 or other overlapping price concessions1 within timeframes established by the ,secretary through notice and comment rulemaking2 and 7#d7 not less than #ie percent of the value of claims for #cdj;,b drugs as described in subsection 7g7 contain the data elements required by the ,secretary and are determined to be complete and accurate at the time of initial submission4 7c7 ,ongoing validation of clearinghouse performance 7#a7 ,periodic oig reports ,if the obligation under subsection 7a7 remains in effect after the end of the #d-year period described in subsection 7a71 the ,inspector ,general of the ,department of ,health and ,human ,services shall issue public reports evaluating whether the clearinghouse entity with a contract in effect under subsection 7f7 continues to satisfy the performance benchmarks described in subsection 7b74 ,such reports shall be issued-- 7,a7 not later than #b years after the end of the #d-year period described in subsection 7a72 7,b7 not later than #e years after the end of the #d-year period described in subsection 7a72 and 7,c7 every #e years thereafter4 7#b7 ,contents ,each report under paragraph 7#a7 shall assess1 with respect to the most recent #ab-month period for which data are available1 whether the performance benchmarks described in subsection 7b7 continue to be satisfied4 7#c7 ,corrective period ,if a report issued under paragraph 7#a7 determines that one or more of the performance benchmarks described in subsection 7b7 are not being maintained1 the clearinghouse entity shall have #f months from the date of issuance of such report to cure the deficiency4 7#d7 ,follow-up report ,not later than #fj days after the end of the #f-month corrective period described in paragraph 7#c71 the ,inspector ,general shall issue a follow-up public report evaluating whether the deficiency has been cured and whether the applicable performance benchmarks are being maintained4 7#e7 ,failure to maintain performance benchmarks ,the obligation under subsection 7a7 shall cease to apply if the follow-up report issued under paragraph 7#d7 determines that the deficiency has not been cured or that one or more of the applicable performance benchmarks are not being maintained4 7d7 ,interim performance report ,not later than #b years after the date of enactment of this section1 the ,secretary shall issue a preliminary public report1 validated by the ,office of ,inspector ,general1 detailing the progress made towards accomplishing the goals and standards in subsection 7b74 ,the report shall include the data1 methodology1 and assumptions used by the ,secretary and identify any material operational1 data-quality1 or compliance barriers affecting achievement of such benchmarks4 7e7 ,special rule for selected drugs ,notwithstanding subsection 7b7 and any other provision of this section requiring a covered entity to submit data to the third-party entity with a contract in effect under subsection 7f71 with respect to a drug that is a selected drug 7as defined in section #aaib7;c77-- 7#a7 each covered entity shall transmit directly to the manufacturer1 in a timely manner and in accordance with standards established by the ,secretary through notice and comment rulemaking1 claims-level data sufficient to enable the manufacturer to prevent duplicate discounts1 rebates1 or other overlapping price concessions and to validate compliance with the requirements of this section and section #aaia1 et seq42 and 7#b7 a covered entity that fails to comply with paragraph 7#a7 shall1 following written notice from the ,secretary identifying the specific failure and a #cj-;day period to cure such failure1 be subject to civil monetary penalties in an amount of #e1jjj per day during the period of such non-compliance following the expiration of such cure period4 ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil monetary penalty under this section in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7f7 ,clearinghouse contracting entity ,not later than #a year after the date of enactment of this section1 the ,secretary shall enter into a contract with an independent1 third-party clearinghouse entity 7who shall be free of conflicts of interest with covered entities1 manufacturers1 health plans1 pharmacy benefit managers1 and of other conflicts of interest as specified by the ,secretary7 for purposes of carrying out the clearinghouse duties under subsection 7g7 with respect to the drug discount program under section #cdj;,b of the ,public ,health ,service ,act to facilitate robust and verifiable data exchange between relevant parties in order to improve program integrity under section #cdj;,b of the ,public ,health ,service ,act4 ,such contract shall provide that the third-party entity shall perform the duties described in subsection 7g7 and shall be for a #d-year term that may be renewed after a subsequent bidding process or using competitive procedures1 as defined in section #acb of title #da1 ,united ,states ,code4 7g7 ,duties ,with respect to any #cdj;,b drug dispensed or administered to an individual1 without regard to the individual's insurance status or the type or source of payment for the drug1 a third-party entity with a contract in effect under subsection 7f7 shall-- 7#a7 establish a procedure for collecting data elements specified in subparagraph 7,a71 including any additional data elements required by the secretary pursuant to subparagraph 7,a77iv7 to improve program integrity of the drug discount program under section #cdj;,b of the ,public ,health ,service ,act1 such that-- 7,a7 pharmacy benefit and medical benefit claims-level data elements reported under this section shall include the data elements specified in clauses 7i7 through 7iv7 of this subparagraph-- 7i7 with respect to a pharmacy benefit claim-- 7,i7 the date of service2 7,,ii7 the date on which the drug was prescribed2 7,,iii7 the prescription number2 7,,iv7 the fill number2 7,v7 the #aa-;digit ,national ,drug ,code for the drug dispensed2 7,,vi7 the quantity dispensed2 7,,vii7 the prescriber identifier2 7,,viii7 the identifier of the dispensing pharmacy or other service provider1 including the ,national ,provider ,identifier1 as applicable2 7,,ix7 the #cdj;,b identification number of the covered entity2 7,x7 the prescription benefit bank identification number2 and 7,,xi7 the prescription benefit processor control number2 7ii7 with respect to a medical benefit claim-- 7,i7 the date of service2 7,,ii7 the claim number2 7,,iii7 the claim line number2 7,,iv7 the quantity of the drug furnished2 7,v7 the unit of measure2 7,,vi7 the physician or other furnishing provider identifier2 7,,vii7 the applicable ,healthcare ,common ,procedure ,coding ,system code and any applicable modifiers2 7,,viii7 the #aa-;digit ,national ,drug ,code for the drug furnished2 7,,ix7 the ,national ,provider ,identifier of the billing provider2 7,x7 the #cdj;,b identification number of the covered entity2 7,,xi7 the health plan identifier2 and 7,,xii7 the name of the health plan2 7iii7 with respect to a pharmacy benefit claim or medical benefit claim described in clause 7i7 or 7ii7-- 7,i7 the name of the wholesaler2 7,,ii7 the wholesaler account number2 7,,iii7 the invoice date2 7,,iv7 the invoice number2 7,v7 the ,national ,provider ,identifier of the pharmacy or other location to which the drug was shipped2 7,,vi7 the #aa-;digit ,national ,drug ,code for the drug purchased2 7,,vii7 the number of package units purchased2 and 7,,viii7 the #cdj;,b identification number of the covered entity2 and 7iv7 such additional data elements as the ,secretary determines necessary to carry out this section to improve the integrity of the drug discount program under section #cdj;,b of the ,public ,health ,service ,act2 7,b7 claims-level data under this section shall be submitted and must be adjudicated within timeframes established by the ,secretary through notice and comment rulemaking1 with such timeframes taking into account operational capabilities of covered entities2 and 7,c7 reclassification of historical claims by covered entities from non-#cdj;,b to #cdj;,b beyond #f months after the drug is furnished is prohibited1 except that the ,secretary may permit such reclassification upon a showing of good cause by the covered entity2 7#b7 request and receive1 in the most efficient and least burdensome manner practicable1 with an established timeframe for such reporting-- 7,a7 claims-level rebate file data under section #aibg1 from ,state ,medicaid agencies2 7,b7 claims-level data from covered entities and1 to the extent necessary1 contract pharmacies1 health plans1 entities providing pharmacy benefit management services to health plans2 7,c7 claims-level rebate file data from commercially paid claims that are eligible under ,section #cdj;,b2 and 7,d7 any other data specified by the ,secretary as necessary to carry out this section2 7#c7 request1 receive1 and maintain data described in paragraph 7#a7 in a confidential manner2 7#d7 ensure that claims-level data submissions by covered entities are complete and accurate1 and if not1 obtain complete and accurate data from the covered entity2 7#e7 notify the covered entity1 the ,secretary1 the ,state ,medicaid agency1 and the manufacturer of any violation described in section #cdj;,b7a77#e77;,a7 of the ,public ,health ,service ,act to allow for remediation2 7#f7 provide the manufacturer of a #cdj;,b drug with claims-level data submitted by a covered entity1 so that the manufacturer may identify units of a #cdj;,b drug that may generate a rebate or discount under a voluntary rebate or discount arrangement1 such as those related to commercial plans2 7#g7 where feasible1 share with a covered entity1 the ,secretary1 a ,state ,medicaid agency1 and a manufacturer1 data the third-party entity identifies in a timely manner with the purpose of preventing any of the violations described in section #bgbi;,a7b77#b7 of the ,public ,health ,service ,act or duplicate discounts for a selected drug under section #ahdg;,a7i71 section #ahfj;,d-#ad;,b1 section #aaib2 7#h7 allow covered entities except those described under subparagraph 7,l71 7,m71 7,n71 or 7,o7 of section #cdj;,b7a77#d7 of the ,public ,health ,service ,act the option of submitting claims-level data in a batched1 retrospective basis that does not require the application of modifiers on individual claims or point-of-sale identification2 7#i7 determine total sales of #cdj;,b drugs to such individuals for purposes of being used as the basis for determining user fees under section #cdj;,b7a77#ag7 of such ,act2 7#aj7 identify claims and provide manufacturer access to claims data for covered outpatient drugs purchased under the drug discount program under ,section #cdj;,b of the ,public ,health ,service ,act that-- 7,a7 are selected drugs 7as defined in section #aaib7;c77 to enable manufacturers to meet the nonduplication requirements of section #aaic7;d72 7,b7 are subject to inflation rebates under section #ahdg;,a7i7 or section #ahfj;,d-#ad;,b2 7,c7 for a rebate or discount submitted by two or more covered entities or child sites with respect to the same unit of a covered outpatient drug purchased under the drug discount program2 or 7,d7 received reimbursement under a ,state plan 7or waiver of such plan7 and ensuring such claims are or were not included in any ,state rebate request under section #aibg in violation of sections #aijc7m77#b77;,a77xiii7 or #aibg7;j77#a7 or section #cdj;,b7a77#e77;,a7 of the ,public ,health ,service ,act2 7#aa7 connect claims data and purchasing order data received under this section in a streamlined1 timely1 and efficient way2 7#ab7 provide access to ,state ,medicaid agencies to data that is reasonably necessary to prevent duplicate discounts prohibited by section #cdj;,b7a77#e7 of the ,public ,health ,service ,act2 7#ac7 establish procedures for covered entity reporting that may provide the same function for ,state ,medicaid agencies as covered entity reporting to ,state ,medicaid agencies2 7#ad7 respond to requests from covered entities or manufacturers within a number of days established by the ,secretary through notice and comment rulemaking2 7#ae7 facilitate manufacturer reasonable good faith inquiries1 reasonable manufacturer audits1 duplicate-discount reviews1 diversion reviews1 and other program integrity activities under section #cdj;,b of the ,public ,health ,service ,act by receiving1 validating1 matching1 analyzing1 and producing claims-level data1 validation results1 or other outputs necessary to resolve such inquiries1 audits1 reviews1 or activities within timeframes established by the ,secretary through notice and comment rulemaking1 as well as all standards specified by the ,secretary to be promulgated pursuant to section #aaej;,d7g77#af72 7#af7 establish1 subject to standards established by the ,secretary through notice and comment rulemaking1 which standards shall be consistent with applicable law1 including applicable ,federal and ,state data privacy and security laws and regulations 7including1 without limitation1 the ,health ,insurance ,portability and ,accountability ,act of #aiif and its implementing regulations71 uniform confidentiality1 access1 use1 retention1 and data-security terms applicable to information submitted to1 maintained by1 or transmitted through the clearinghouse1 including terms governing manufacturer access to and receipt of claims-level data1 validation results1 or other outputs under this section2 7#ag7 ensure that the terms described in paragraph 7#af7 apply uniformly to covered entities1 manufacturers1 health plans1 pharmacy benefit managers1 and other participating entities and are not subject to individualized negotiation as a condition of submitting information to1 receiving information from1 or otherwise participating in the clearinghouse process2 7#ah7 establish procedures to document any failure by a covered entity to timely submit complete and accurate information required under this section and to notify the ,secretary and any affected manufacturer of such failure2 and 7#ai7 maintain1 with appropriate safeguards1 submitted data elements for a period of #aj years4 7h7 ,restrictions on clearinghouse contracting entity ,the entity receiving a contract under subsection 7f7 shall-- 7#a7 ensure that it has no conflicts of interest1 including no direct contractual involvement with any covered entity1 or manufacturer participating in the drug discount program under section #cdj;,b of the ,public ,health ,service ,act or any payer that makes payments for drugs purchased through such program2 7#b7 not disclose confidential information obtained through carrying out the clearinghouse duties under this section other than as necessary to carry out the purposes of this section1 including for program integrity functions2 7#c7 not sell or otherwise generate revenue by licensing or making available the data described in subsection 7g77#a72 and 7#d7 not collect pricing information regarding drugs that are not #cdj;,b drugs from covered entities4 7i7 ,duties of covered entity 7#a7 ,in general ,covered entities shall facilitate and participate in data transmission with the third-party clearinghouse entity with a contract in effect under subsection 7f71 including submission of data elements established by the ,secretary through notice and comment rulemaking4 ,such data transmission requirements shall also apply with respect to data relating to #cdj;,b drugs dispensed through any external contract pharmacy arrangement1 and shall include data maintained by or on behalf of the covered entity by a contract pharmacy or third-party administrator4 7#b7 ,timely and complete submission ,a covered entity shall timely submit complete and accurate information required under this section to the clearinghouse contracting entity in the form1 manner1 and time specified by the ,secretary through notice and comment rulemaking4 7#c7 ,failure to timely submit information ,if a covered entity fails to timely submit complete and accurate information required under this section to the clearinghouse contracting entity1 such failure shall be treated as a failure to participate in the clearinghouse process and the affected manufacturer shall provide written notice to the covered entity and the ,secretary identifying the specific deficiency4 ,if the covered entity does not cure such failure within #cj days of receipt of such notice1 the affected manufacturer may suspend the availability of discounts under section #cdj;,b7a77#a7 of the ,public ,health ,service ,act with respect to such covered entity1 in whole or in part1 until the covered entity cures such failure4 7#d7 ,limitation on separate confidentiality terms ,a covered entity may not condition1 delay1 or deny submission of information to the clearinghouse contracting entity1 or otherwise condition1 delay1 or deny participation in the clearinghouse process1 on the execution or individualized negotiation of a confidentiality agreement1 data use agreement1 or similar agreement that is duplicative of1 inconsistent with1 or more restrictive than the uniform confidentiality1 access1 use1 retention1 and data-security terms established by the ,secretary through notice and comment rulemaking under this section4 7j7 ,restrictions on manufacturer and pbm use of data 7#a7 ,in general ,a manufacturer who receives data under subsection 7g7 may use such data only for the purpose of preventing duplicate discounts and diversion under section #cdj;,b7a77#e7 of the ,public ,health ,service ,act1 preventing duplicate discounts in connection with inflation rebates under section #ahdg7;,a77i7 and #ahfj;,d-#ad;,b as well as for selected drugs 7as defined in section #aaib7;c77 to enable a manufacturer to meet the nonduplication requirements of section #aaic7;d71 and validating compliance with other requirements under the drug discount program under section #cdj;,b of the ,public ,health ,service ,act4 7#b7 ,restrictions on plans1 issuers1 and pbms ,a health plan1 third party administrator of a health plan1 or entity providing pharmacy benefit management services may use data received from the clearinghouse only for the purpose of preventing duplicate discounts and diversion under this section4 7#c7 ,enforcement ,any manufacturer or other person found by the ,secretary to have used data received under subsection 7g7 for uses other than those described in paragraphs 7#a7 and 7#b71 such as for pricing or marketing1 shall be subject to civil monetary penalties1 established by the ,secretary through notice and comment rulemaking4 7k7 ,privacy1 confidentiality1 and data security requirements 7#a7 ,in general ,the information exchange required under this section shall occur pursuant to standards established by the ,secretary through notice and comment rulemaking1 including uniform confidentiality1 access1 use1 retention1 and data-security terms applicable to information submitted to1 maintained by1 or transmitted through the clearinghouse contracting entity1 including terms governing manufacturer access to claims-level data1 validation results1 or other outputs under this section1 and in a manner consistent with applicable ,federal and ,state data privacy1 security1 and breach notification laws4 7#b7 ,purpose of clearinghouse ,the use of the clearinghouse contracting entity under this section is intended to facilitate secure exchange of information for #cdj;,b program integrity activities1 and the clearinghouse contracting entity shall be required to qualify as a covered entity under the privacy1 security1 and breach notification regulations promulgated under section #bfd7;c7 of the ,health ,insurance ,portability and ,accountability ,act of #aiif1 provided1 however1 that no manufacturer shall be required to qualify as a covered entity or business associate under ,,hipaa in order to obtain and use data from the clearinghouse for only the purposes identified in this ,act4 7#c7 ,rule of construction ,nothing in this section shall be construed to-- 7,a7 limit1 narrow1 or create any new precondition to the disclosure of claims-level1 utilization1 or other information that may otherwise be disclosed under applicable law for purposes of #cdj;,b program integrity activities2 or 7,b7 require the execution or individualized negotiation of a confidentiality agreement1 data use agreement1 or similar agreement not otherwise required by law as a condition of disclosing1 submitting1 receiving1 maintaining1 or using information in accordance with this section4 7l7 ,repayment to manufacturers ,the ,secretary shall1 establish through notice and comment rulemaking1 establish a process to require covered entities to work with affected manufacturers regarding identified duplicate discounts and diversion of #cdj;,b drugs1 regardless of the method used to dispense the #cdj;,b drug1 which shall include repayment plus accrued interest-- 7#a7 by the covered entity as a result of the covered entity's noncompliance with section #cdj;,b of the ,public ,health ,service ,act2 or 7#b7 by a ,state ,medicaid program of rebates improperly requested by the ,state ,medicaid program4 7m7 ,prohibited actions of group health plans and pbms 7#a7 ,in general ,a group health plan1 a health insurance issuer offering group or individual coverage 7as such terms are defined in section #bgia of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg-#ia771 or an entity providing pharmacy benefit management services may not interfere with the ability of covered entities1 contract pharmacies 7as such terms are defined in section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b771 or manufacturers of drugs to prevent duplicate discounts or to recoup the full amount of any identified duplicate discounts pursuant to the drug discount program under section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bed;b74 7#b7 ,enforcement ,the ,secretary of ,health and ,human ,services shall impose civil monetary penalties on any group health plan1 health insurance issuer1 or entity providing pharmacy benefit management services that violates paragraph 7#a74 7n7 ,state medicaid agencies ,in accordance with requirements established by the ,secretary through notice and comment rulemaking1 each ,state's agency responsible for the administration of a ,state plan under section #aijb7;a77#e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;a7a77#e77 shall establish and publish written procedures that-- 7#a7 specify the extent to which a #cdj;,b drug may be dispensed to a ,medicaid beneficiary1 including beneficiaries of managed care programs2 7#b7 effectively identify when a #cdj;,b drug is dispensed to a ,medicaid beneficiary2 and 7#c7 exclude #cdj;,b drugs dispensed to ,medicaid beneficiaries from requests for rebates under section #aibg4 7o7 ,definitions ,in this section3 7#a7 ,covered entity ,the term covered entity means an entity described in section #cdj;,b7a77#d7 of the ,public ,health ,service ,act4 7#b7 ,federal health care program ,the term ,federal health care program has the meaning given that term in section #aabh;,b7f74 7#c7 ,health plans ,the term health plan has the meaning given that term in section #aabh;,c7c74 7#d7 ,manufacturer ,the term manufacturer has the meaning given that term in section #aibg7k77#e74 7#e7 #cdj;,b drug ,the term #cdj;,b drug means a drug that is-- 7,a7 a covered outpatient drug 7as defined for purposes of section #cdj;,b of the ,public ,health ,service ,act72 and 7,b7 purchased under an agreement in effect under such section4 7p7 ,oversight ,not later than #a year after implementation of the clearinghouse1 the ,secretary shall3 7#a7 engage an independent auditor to conduct an annual audit of the clearinghouse contracting entity to ensure compliance with this section1 including but not limited to timely and accurate adjudication of claims2 timely and complete transmission of data to relevant parties2 and timely and substantive engagement with covered entities and manufacturers1 when requested4 ,if the ,secretary finds through these audits that the clearinghouse contracting entity is not in compliance with this section1 the ,secretary shall take appropriate action to ensure compliance1 which may include the imposition of civil monetary penalties against the clearinghouse contracting entity1 or early termination of its contract1 provided another compliant solution is available4 7#b7 issue a report to ,congress detailing coordinated efforts1 including through the use of existing resources to address requests from covered entities 7as defined in section #cdj;,b7a77#d7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#d777 for payment under title ,,xix of the ,social ,security ,act 7#db ,u4,s4,c4 #acif et seq47 for medical assistance for a drug that is subject to an agreement under section #cdj;,b7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77 if the drug is subject to the payment of a rebate to the ,state under section #aibg of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h71 as prohibited under section #cdj;,b7a77#e77;,a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#e77;,a771 and to prevent the duplicate discounts for covered outpatient drugs that are--selected drugs 7as defined in section #aaib7;c7 of the ,social ,security ,act7 to enable manufacturers to meet the nonduplication requirements of section #aaic7;d7 of such ,act2 or subject to inflation rebates under as defined by section #ahdg;,a7i7 or section #ahfj;,d-#ad;,b of the ,social ,security ,act4 7q7 ,regulations ,the ,secretary of ,health and ,human ,services1 in consultation with the ,administrator of the ,centers for ,medicare ,medicaid ,services and the ,administrator of the ,health ,resources and ,services ,administration1 shall1 through notice and comment rulemaking1 promulgate such regulations as are necessary to implement the provisions of this section1 advance the purpose of the drug discount program under section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 and prevent duplicate discounts and diversion through the clearinghouse established by the amendment made by this section4 4 #i4 ,prohibition on discriminatory practices and contracting 7a7 ,in general ,part ,a of title ,,xxvii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg et seq47 is amended by inserting after section #bgbi 7#db ,u4,s4,c4 #cjj;gg-#ai;b7 the following3 #bgcj4 ,anti-discrimination and permissible #cdj;b arrangements 7a7 ,in general ,a group health plan1 a health insurance issuer offering group or individual health insurance coverage1 or a pharmacy benefit manager may not discriminate against a covered entity 7as defined in section #cdj;,b7a77#d77 or a contract pharmacy 7as defined in section #cdj;,b7b77#e771 or a participant1 beneficiary1 or enrollee of such plan or coverage by imposing requirements1 exclusions1 reimbursement terms1 or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses covered outpatient drugs 7as defined in section #aibg7k7 of the ,social ,security ,act71 including by taking any action prohibited under subsection 7b74 7b7 ,specified prohibited actions ,a group health plan1 a health insurance issuer offering group or individual health insurance coverage1 or a pharmacy benefit manager may not discriminate against a covered entity1 a contract pharmacy1 or a participant or beneficiary in a group health plan or health insurance offered by a health insurance issuer offering group or individual health insurance by doing any of the following3 7#a7 ,reimbursing a covered entity or contract pharmacy for a quantity of a covered outpatient drug purchased under section #cdj;,b in an amount less than such plan1 issuer1 or pharmacy benefit manager1 as applicable1 would pay to any other similarly situated 7as specified by the ,secretary through notice and comment rulemaking7 entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses covered outpatient drugs purchased under section #cdj;,b4 7#b7 ,imposing any terms or conditions on covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses covered outpatient drugs purchased under this section-- 7,a7 fees1 chargebacks1 clawbacks1 adjustments1 or other assessments2 7,b7 professional dispensing fees2 7,c7 restrictions or requirements regarding participation in standard or preferred pharmacy networks2 7,d7 requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles2 or 7,e7 any other restrictions1 conditions1 practices1 or policies that1 as specified by the ,administrator of the ,health ,resources and ,services ,administration through notice and comment rulemaking1 interfere with the ability of a covered entity to maximize the value of discounts provided under section #cdj;,b4 7#c7 ,interfering with an individual's choice to receive a drug purchased under ,section #cdj;,b from a covered entity or contract pharmacy1 whether in person or via direct delivery1 mail1 or other form of shipment4 7#d7 ,requiring a covered entity or specified pharmacy to identify1 either directly or through a third party1 covered outpatient drug purchased under the #cdj;,b program4 ,other than through the #cdj;,b ,data ,clearinghouse established at section #aaej;,d4 7#e7 ,refusing to contract with a covered entity or contract pharmacy for reasons other than those that apply equally to entities or pharmacies that are not covered entities or contract pharmacies1 or on the basis that the covered entity is described in section #cdj;,b7a77#d74 7#f7 ,denying coverage of a covered outpatient drug purchased under the #cdj;,b program on the basis of its status as a #cdj;,b eligible drug if the group health plan or health insurance issuer otherwise covers the identical drug not purchased under #cdj;,b4 7c7 ,prohibition ,a group health plan1 a health insurance issuer offering group or individual health insurance coverage1 or a pharmacy benefit manager may not enter into a contract or other agreement1 or any other arrangement regardless of whether such arrangement is memorialized in writing1 with a covered entity 7as defined in section #cdj;,b7a77#d77 in which the covered entity provides a share of any discount or savings for a covered outpatient drug under section #cdj;,b to the group health plan1 health insurance issuer1 or pharmacy benefit manager1 and may not condition network participation1 preferred formulary placement1 claim routing1 or any other benefit on the covered entity's agreement to share any such discount or savings4 7d7 ,enforcement mechanism ,the ,secretary shall impose a civil monetary penalty on any pharmacy benefit manager that violates the requirements of this section4 ,such penalty shall not exceed #e1jjj per violation per day4 ,the ,secretary shall issue proposed regulations to implement this subsection not later than #fj days after the date of the enactment of this subsection and shall finalize such regulations not later than #ahj days after such date of enactment4 4 7b7 ,,ssa ,section #ahfj;,d7#ab7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7 is amended by adding at the end the following new subsection3 7i7 ,nondiscrimination ,,pdp sponsors may not include any provision in a prescription drug plan that requires covered entities under ,section #cdj;,b of the ,public ,health ,service ,act to make use of contract pharmacy sites that do not meet the requirements set forth in ,section #cdj;,b for the use of contract pharmacies or are otherwise inconsistent with patient need and access4 4 7c7 #cdj;,b ,section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b71 as amended1 is amended by adding at the end the following new subsection3 7i7 ,permitted third party administrator arrangements 7#a7 ,a covered entity under this section may only contract with a third-party administrator for the purposes of administering the dispensing of covered drugs under this section if compensation for the third-party administrator is in the form of bona fide services fees4 7#b7 ,bona fide service fees as described in paragraph 7#a7 may not be determined as a percentage of revenue to the covered entity for covered drugs under this section or by any other metric tied to revenue for covered drugs to the covered entity or volume of covered drugs dispensed by the covered entity4 7#c7 ,,hrsa may1 pursuant to standards established through notice and comment rulemaking1 levy ,civil ,monetary ,penalties upon covered entities for knowing and intentional non-compliance with requirements under paragraphs 7#a7 and 7#b74 4 7d7 ,conforming amendments 7#a7 ,employee retirement income security act 7erisa7 ,section #gae7;a77#a7 of ,,erisa 7#bi ,u4,s4,c4 #aahe;d7a77#a77 is amended by inserting and subsequent legislation after as amended by the ,patient ,protection and ,affordable ,care ,act4 7#b7 ,internal revenue code ,section #ihae7;a77#a7 of the ,internal ,revenue ,code of #aihf 7#bf ,u4,s4,c4 #ihae7;a77#a77 is amended by inserting and subsequent legislation after as amended by the ,patient ,protection and ,affordable ,care ,act4 #aj4 ,ensuring ,,hrsa has adequate resources to oversee the program 7a7 ,in general ,section #cdj;,b7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a771 as amended by the preceding sections1 is further amended by adding at the end the following3 7#ag7 ,user fee program 7,a7 ,in general ,beginning in fiscal year #bjbg1 the ,secretary shall assess and collect fees from covered entities participating in the program under this section1 in accordance with this paragraph4 7,b7 ,fee amounts ,the fees described in subparagraph 7,a7 shall be assessed and collected from each covered entity on an annual basis1 in an amount determined by the ,secretary through procedures established through notice and comment rulemaking4 ,in general1 the fee shall be #j4a percent of the dollar amount paid by the covered entity for covered outpatient drugs under this section in the previous year4 7,c7 ,use of fees ,any fees collected under this paragraph from covered entities shall be used by the ,secretary for purposes of administering this section and enhancing program integrity and oversight activities under this section1 including-- 7i7 the development of a multi-functional web-based system to collect fees under this paragraph2 7ii7 the establishment1 use1 and maintenance of the data clearinghouse under section #aaej;,d of the ,social ,security ,act2 7iii7 the improvement of the integrity1 transparency1 security1 searchability1 and reliability of the #cdj;,b ,office of ,pharmacy ,affairs ,information ,system 7or a successor to such system71 including to ensure that such system continues to meet the needs of external stakeholders2 7iv7 improvements to the compliance tool used to integrate all information related to manufacturers that have entered into agreements with the ,secretary under paragraph 7#a7 and covered entities2 7v7 audits under this section of covered entities and such manufacturers2 and 7vi7 any other uses for the purposes of program integrity1 as the ,secretary determines appropriate4 7,d7 ,supplement not supplant ,any fees collected under this paragraph shall be used to supplement and not supplant amounts otherwise provided in appropriations ,acts to carry out this section4 7,e7 ,regulations ,the ,secretary shall promulgate regulations as necessary to implement the user fee program under this paragraph1 which shall include establishment of a process to provide for exceptions to the fee amount under subparagraph 7,b71 including the circumstances under which such exceptions may apply to certain covered entities4 7,f7 ,oversight of user fee program ,the ,inspector ,general of the ,department of ,health and ,human ,services shall-- 7i7 conduct an annual review of the user fee program under this paragraph for the first #e years of such program2 and 7ii7 not later than ,september #cj of each year for which a review is required under clause 7i71 submit to ,congress a report on the review conducted under clause 7i71 together with such recommendations as the ,inspector ,general determines appropriate4 4 7b7 ,conforming amendment ,section #cdj;,b7a77#d7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#d77 is amended1 in the matter preceding subparagraph 7,a71 by inserting 1 has submitted user fees to the ,secretary in the amount assessed under paragraph 7#ag7 for the current year1 after paragraph 7#e74 ,section #cdj;,b7a77#a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#a77 is further amended by inserting 1 and has submitted user fees to the ,secretary in the amount assessed under paragraph 7#ag7 for the current year1 after the first reference to agreement in such paragraph4 7c7 ,funding ,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 subsection3 7j7 ,authorizations of appropriations 7#a7 ,authorization of appropriations for audits1 investigations1 and other oversight and enforcement activities ,in addition to amounts made available under subsection 7d77#d71 there are authorized to be appropriated #c1jjj1jjj for each of fiscal years #bjbg through #bjca1 for purposes of conducting audits1 investigations1 and other oversight and enforcement activities with respect to the drug discount program under this section1 including audits of covered entities and manufacturers4 7#b7 ,authorization of appropriation for general purposes ,in addition to amounts made available under paragraph 7#a7 and subsection 7d77#d71 there are authorized to be appropriated #i1jjj1jjj for each of fiscal years #bjbh through #bjca1 for purposes of implementing the activities under this section1 including audits of covered entities and manufacturers4 4 7d7 ,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#f7 ,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 twenty qualified candidates to permanent positions within the competitive service in order to carry out management and oversight activities under this section1 with respect to covered entities and manufacturers participating in the drug discount program under this section4 4 #aa4 ,studies and reports 7a7 ,cost of dispensing studies and report 7#a7 ,study ,not later than #a year after the date of the enactment of this section1 the ,secretary shall conduct a study on dispensing fees and reimbursements that health plans and pharmacy benefit managers pay to pharmacies1 separated by each category of payer 7at a minimum1 ,medicare1 ,medicaid1 and commercial payors7 and whether the drug is purchased under section #cdj;,b4 ,the ,secretary shall repeat this study not less than every #bd months thereafter4 7#b7 ,report ,not later than #ij days after the completion of each study conducted under paragraph 7#a71 the ,secretary shall submit to ,congress a report containing the results of such study1 including-- 7,a7 the amount of dispensing fees for covered outpatient drugs purchased under section #cdj;,b and covered outpatient drugs not purchased under section #cdj;,b2 7,b7 whether such fees are reasonable2 and 7,c7 any recommendations for further ,congressional action with respect to dispensing fees and the establishment of acceptable standards for dispensing fees4 7b7 ,comptroller general study and report on #cdj;,b discount 7#a7 ,study ,not later than #a year after the date of the enactment of this section1 the ,comptroller ,general of the ,united ,states shall conduct a study of the #cdj;,b discount 7the unit rebate amount referenced in section #cdj;,b7a77#a7 of the ,public ,health ,service ,act7 that is retained by-- 7,a7 contract pharmacies2 7,b7 health plans2 7,c7 pharmacy benefit managers2 7,d7 third-party vendors2 7,e7 patients2 and 7,f7 covered entities4 7#b7 ,report ,not later than #b years after enactment1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report detailing the results of this study4 7,a7 ,information shall be aggregated for each type of covered entity1 and by arrangements the covered entity has with each different entity specified in subparagraphs 7,a7 through 7,d7 of paragraph 7#a71 describing the amount of the #cdj;,b discount retained by the covered entity and the entities specified in subparagraphs 7,a7 through 7,d7 of paragraph 7#a74 7,b7 ,the report shall include recommendations to ,congress on a standardized set of definitions to collect this information and a calculation methodology4 7c7 ,,gao report ,not later than #b years after the date of enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report on the debt collection practices of hospitals1 including hospitals that participate in the drug discount program under section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 as covered entities described in subparagraphs 7,l7 through 7,o7 of subsection 7a77#d7of such section4 7d7 ,reports to congress 7#a7 ,initial report ,not later than #a year after the date of the enactment of this subsection1 the ,comptroller ,general of the ,united ,states shall submit a report to ,congress on the following3 7,a7 analyzing such contracts between ,state and local governments and covered entities described in subparagraph 7,l71 7,m71 7,n71 or 7,o7 of subsection 7a77#d7 that claim to be eligible for the drug discount program under this section by virtue of being a private non-profit hospital that has a contract with a ,state or local government to provide health care services to low-income individuals who are not eligible for ,medicaid or ,medicare2 7,b7 assessing the amount of care the contracts described in subparagraph 7,a7 obligate the covered entity to provide to individuals at or below #djj percent of the ,federal ,poverty ,level1 who are ineligible for ,medicare under title ,,xviii of the ,social ,security ,act and ,medicaid under title ,,xix of such ,act2 7,c7 assessing the amount of charity care and uncompensated care covered entities reporting under this section provide to individuals earning at or below #djj percent of the ,federal ,poverty ,level2 7,d7 analyzing the difference between the aggregate gross reimbursement and aggregate acquisition costs received by each covered entity for covered outpatient drugs purchased under the #cdj;,b program2 7,e7 analyzing the degree to which ,federally ,qualified ,health ,centers1 as such term is defined in subsection 7a77#d77;,a71 are subject to the violations under section #bgcj7;b7 of the ,public ,health ,service ,act1 and the effect of these violations on ,federally ,qualified ,health ,centers' ability to provide affordable care to underserved populations2 and 7,f7 analyzing how the contracts described in subparagraph 7,a7 define low-income individuals and whether the ,secretary reviews such determinations4 7#b7 ,subsequent report ,not later than #b years after the date of the enactment of this subsection1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a final report on the information collected under paragraph 7#a7 regarding the difference between the aggregate payment received by each such covered entity 7including child sites of such entity and adding information on all sources of payment received by the covered entity and its child sites7 for drugs purchased under this section and the aggregate costs paid by the covered entity 7including its child sites7 to acquire such drugs4 7#c7 ,clarification ,when submitting these reports1 the ,comptroller ,general of the ,united ,states shall not provide copies of unredacted contracts or any work materials to ,congress or any other parties4 #ab4 ,meanings ,section #cdj;,b7b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7b771 as amended by the preceding sections1 is further amended by adding at the end the following3 7#d7 ,child site ,in this section1 the term child site means any outpatient department1 clinic1 or facility that is separately registered under this section as an outpatient facility of a covered entity described in subparagraph 7,l71 7,m71 7,n71 or 7,o7 of subsection 7a77#d7 and that is not itself the covered entity's principal operating location or the location through which the covered entity satisfies the requirements for eligibility under subsection 7a77#d74 7#e7 ,contract pharmacy ,in this section1 the term contract pharmacy means a pharmacy that1 pursuant to a contract or other arrangement with a covered entity1 dispense or otherwise furnishes covered outpatient drugs to patients on behalf of the covered entity1 whether in person1 by mail1 or through any other delivery method4 4 #ac4 ,requirements for nonhospital covered entities and subgrantees ,section #cdj;,b7a77#e7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#e77 is further amended by adding at the end the following3 7,f7 ,additional requirements for nonhospital covered entities2 requirements for subgrantees 7i7 ,additional requirements for nonhospital covered entities ,a covered entity described in one of subparagraphs 7,a7 through 7,k7 of paragraph 7#d7 shall1 as a condition of participation in the program under this section-- 7,i7 be a nonprofit or public entity 7as determined by the ,secretary72 7,,ii7 be eligible to purchase a covered outpatient drug subject to an agreement under this section only with respect to a patient receiving a health care service at a registered covered entity site1 and such service and such drug are within the scope and time period of the ,federal grant1 project1 or ,federal grant-authorizing statute1 as applicable1 that qualifies such covered entity for participation in the program under this section2 7,,iii7 oversee the participation in the program under this section of any subgrantee with which such covered entity enters into an enforceable written agreement in accordance with subclause 7,,iv7 and be directly liable for noncompliance by any such subgrantee with any requirement under this section2 7,,iv7 have an enforceable written agreement with any subgrantee1 which shall apply to all registered sites of such subgrantee1 and require such subgrantee to comply with all requirements under this section otherwise applicable to the covered entity and to maintain written records1 which shall be made available to the ,secretary upon request1 sufficient to demonstrate such subgrantee's receipt of eligible ,federal funds or an in-kind contribution purchased with such funds1 as described in clause 7iii71 and the grant under which such subgrantee receives such funds or contribution2 and 7,v7 maintain written records sufficient to demonstrate such entity authorized such subgrantee to1 prior to purchasing covered outpatient drugs subject to an agreement under this section1 register each subgrantee site in the covered entity identification system established under subsection 7d77#b77;,b77iv7 to participate in the program under this section as a subgrantee of such entity and provide the ,secretary with such registration information as requested to demonstrate such subgrantee's receipt of eligible ,federal funds or an in-kind contribution purchased with such funds1 as described in clause 7iii71 and the grant under which the subgrantee receives such funds or contribution4 7ii7 ,requirements for subgrantees ,notwithstanding any other provision in this section1 a subrecipient of a ,federal grant shall be eligible to participate in the program under this section only if such subrecipient is a subgrantee 7as defined in clause 7iii77 and such subgrantee-- 7,i7 is a nonprofit or public entity 7as determined by the ,secretary72 7,,ii7 prior to purchasing covered outpatient drugs subject to an agreement under this section-- 7aa7 enters into an enforceable written agreement with the covered entity providing eligible ,federal funds or an in-kind contribution1 pursuant to clause 7i77,,iv72 7bb7 maintains written records1 which shall be made available to the ,secretary upon request1 sufficient to demonstrate such subgrantee's receipt of eligible ,federal funds or an in-kind contribution purchased with such funds1 as described in clause 7iii71 and the grant under which such subgrantee receives such funds or contribution2 and 7cc7 registers each subgrantee site to participate in the program under this section in the covered entity identification system established under subsection 7d77#b77;,b77iv72 7,,iii7 purchases covered outpatient drugs subject to an agreement under this section only with respect to a patient receiving a health care service at a registered subgrantee site1 and such service and such drug are within the scope and time period of the ,federal grant1 project1 or grant-authorizing statute1 as applicable1 that qualifies such subgrantee for participation in the program under this section2 7,,iv7 in the case of a subgrantee that receives an in-kind contribution from a covered entity described in paragraph 7#d77,k71 demonstrates to such covered entity and to the ,secretary1 upon initial registration to participate in the program under this section and on an annual basis thereafter1 that the number of individuals aged #ai to #fd years receiving a health care service at the registered subgrantee site during the most recent calendar year who are enrolled under a ,state plan under title ,,xix of the ,social ,security ,act 7or a waiver of such plan71 as a share of all individuals aged #ai to #fd years receiving a health care service at the registered subgrantee site during such calendar year1 exceeds the number of individuals aged #ai to #fd years who reside in the ,state where such subgrantee site is located and are enrolled under a ,state plan under title ,,xix of such ,act 7or a waiver of such plan71 as a share of all individuals aged #ai to #fd who reside in such ,state1 each as measured by data available from the ,american ,community ,survey of the ,bureau of the ,census for the calendar year preceding the most recent calendar year2 7,v7 in the case of a subgrantee that receives an in-kind contribution from a covered entity described in paragraph 7#d77,k71 submits to such covered entity and to the ,secretary1 upon receipt of each in-kind contribution described in clause 7iii7-- 7aa7 a written plan in a form specified by the ,secretary describing how such contribution will be used to further the goals of the relevant ,federal grant1 how such subgrantee will ensure that purchases of covered outpatient drugs under the program under this section are consistent with the goals of such grant1 and how such subgrantee will ensure compliance with the requirements under subparagraph 7,a7 and 7,b72 and 7bb7 a written plan in a form specified by the ,secretary and using criteria established by the ,secretary through notice and comment rulemaking to determine the date upon which its eligibility to participate in the program under this section1 as a result of such contribution1 shall terminate 7absent such subgrantee's receipt of additional funds or contributions described in clause 7iii772 7,,vi7 subject to subclause 7,,vii71 immediately notifies the ,secretary1 disenrolls from the program under this section1 and discontinues making purchases under such program and representing to third parties that it may purchase under such program as of the date described in subclause 7,v77bb7 or if1 at any time during its participation in the program under this section1 it no longer meets one or more applicable requirements under this section2 and 7,,vii7 not later than #cj days following the date on which the covered entity with which such subgrantee has an agreement pursuant to clause 7i7 ceases participation in the program under this section1 such subgrantee either-- 7aa7 disenrolls from the program under this section and discontinues making purchases under such program and representing to third parties that such subgrantee may purchase under such program2 or 7bb7 enters into an enforceable written agreement with a different covered entity described in one of subparagraphs 7,a7 through 7,k7 of paragraph 7#d7 that is participating in the program under this section1 and satisfies all applicable requirements under this section with respect to such different covered entity4 7iii7 ,subgrantee defined 7,i7 ,in general ,in this subparagraph1 the term subgrantee means a subrecipient of a ,federal grant that-- 7aa7 receives eligible ,federal funds from a covered entity described in one of subparagraphs 7,a7 through 7,k7 of paragraph 7#d7 in the form of nonnominal and ongoing payments by such covered entity directly to such subrecipient to directly support the provision of health care services by such subrecipient to individuals within the scope and time period of the ,federal grant1 project1 or ,federal grant-authorizing statute1 as applicable1 that qualifies such covered entity for participation in the program under this section2 or 7bb7 receives in-kind contributions from a covered entity described in paragraph 7#d77,k7 and such contributions-- 7,,aa7 are ongoing and are in the form of real property1 equipment1 supplies1 or services2 7,,bb7 subject to subclause 7,,ii71 have a value exceeding #be1jjj per year1 which shall be adjusted for inflation annually to reflect the rate of change in the ,consumer ,price ,index for ,all ,urban ,consumers published by the ,bureau of ,labor ,statistics and determined by the subrecipient and approved by the covered entity providing such contribution in a manner specified by the ,secretary2 7,,cc7 are specifically identifiable and provided by such covered entity directly to such subrecipient2 and 7,,dd7 directly support the provision of health care items and services by such subrecipient solely to individuals within the scope and time period of the ,federal grant that qualifies such covered entity for participation in the program under this section4 7,,ii7 ,exclusion ,the requirement specified in subclause 7,i77bb77,,bb7 shall not apply with respect to a subrecipient of a ,federal grant that receives in-kind contributions from a covered entity described in paragraph 7#d77,k7 if-- 7aa7 as of ,january #a1 #bjbe1 such subrecipient is participating in the program under this section as such a subrecipient and is in compliance with all requirements under this section otherwise applicable to such subrecipient2 and 7bb7 with respect to any in-kind contribution such subrecipient receives after ,january #a1 #bjbe1 such subrecipient has continuously participated in the program under this section as such a subrecipient in compliance with all requirements under this section for the period beginning on ,january #a1 #bjbe1 and continuing through the date on which program participation ends as determined in the plan submitted to the ,secretary pursuant to clause 7ii77,v77bb7 or any such earlier date on which program participation ends4 7iv7 ,rule of construction ,for purposes of this section1 any subgrantee that is not itself a covered entity described in one of subparagraphs 7,a7 through 7,k7 of paragraph 7#d7 shall be subject to the obligations under this section applicable to the covered entity with which such subgrantee has an enforceable written agreement pursuant to clause 7i74 ,further1 for purposes of this section1 each registered site of such subgrantee shall be subject to the requirements set forth in subparagraph 7,f7 as if such site were the covered entity with which such subgrantee has an enforceable written agreement pursuant to clause 7i74 4 #ad4 ,effective date 7a7 ,in general ,except as otherwise expressly provided in this ,act1 the amendments made by this ,act shall take effect on the date of enactment of this ,act4 7b7 ,regulations2 transition period 7#a7 ,regulations ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary shall1 through notice and comment rulemaking1 promulgate such final regulations as are necessary to implement this ,act and the amendments made by this ,act1 including any such regulations required elsewhere in this ,act or in amendments made by this ,act4 7#b7 ,transition period ,in promulgating the regulations required under paragraph 7#a71 the ,secretary shall establish appropriate transition periods for covered entities1 manufacturers1 contract pharmacies1 and other affected parties to come into compliance with the requirements imposed by this ,act and the amendments made by this ,act4 ,such transition periods shall not be less than #ahj days from the date of enactment for any substantive new compliance obligation imposed on a covered entity or manufacturer by this ,act1 unless a longer or shorter transition period is specifically provided elsewhere in this ,act4 7c7 ,construction ,any reference in this ,act to the date of enactment of this section shall be construed as referring to the date of enactment of this ,act unless the context clearly requires otherwise4