42 USC 1395w-104 - Beneficiary protections for qualified prescription drug coverage

U.S Code last checked for updates: Jan 19, 2025

§ 1395w–104.

Beneficiary protections for qualified prescription drug coverage

(a)

Dissemination of information

(1)

General information

(A)

Application of MA information

(B)

Drug specific information

The information described in this subparagraph is information concerning the following:

(i)

Access to specific covered part D drugs, including access through pharmacy networks.

(ii)

How any formulary (including any tiered formulary structure) used by the sponsor functions, including a description of how a part D eligible individual may obtain information on the formulary consistent with paragraph (3).

(iii)

Beneficiary cost-sharing requirements and how a part D eligible individual may obtain information on such requirements, including tiered or other copayment level applicable to each drug (or class of drugs), consistent with paragraph (3).

(iv)

The medication therapy management program required under subsection (c).

(v)

The drug management program for at-risk beneficiaries under subsection (c)(5).

(vi)

For plan year 2021 and each subsequent plan year, subject to subparagraph (C), with respect to the treatment of pain—

(I)

the risks associated with prolonged opioid use; and

(II)

coverage of nonpharmacological therapies, devices, and nonopioid medications—

(aa)

in the case of an MA–PD plan under part C, under such plan; and

(bb)

in the case of a prescription drug plan, under such plan and under parts A and B.

(C)

Targeted provision of information

(2)

Disclosure upon request of general coverage, utilization, and grievance information

(3)

Provision of specific information

(A)

Response to beneficiary questions

(B)

Availability of information on changes in formulary through the Internet

(4)

Claims information

A PDP sponsor offering a prescription drug plan must furnish to each enrollee in a form easily understandable to such enrollees—

(A)

an explanation of benefits (in accordance with section 1395b–7(a) of this title or in a comparable manner); and

(B)

when prescription drug benefits are provided under this part, a notice of the benefits in relation to—

(i)

for a year preceding 2025, the initial coverage limit for the current year; and

(ii)

the annual out-of-pocket threshold for the current year.

Notices under subparagraph (B) need not be provided more often than as specified by the Secretary and notices under subparagraph (B)(ii) shall take into account the application of section 1395w–102(b)(4)(C) of this title to the extent practicable, as specified by the Secretary.

(b)

Access to covered part D drugs

(1)

Assuring pharmacy access

(A)

Participation of any willing pharmacy

(B)

Discounts allowed for network pharmacies

(C)

Convenient access for network pharmacies

(i)

In general

(ii)

Application of TRICARE standards

(iii)

Adequate emergency access

(iv)

Convenient access in long-term care facilities

(D)

Level playing field

(E)

Not required to accept insurance risk

(2)

Use of standardized technology

(A)

In general

(B)

Standards

(i)

In general

(ii)

Consultation

(iii)

Implementation

(3)

Requirements on development and application of formularies

If a PDP sponsor of a prescription drug plan uses a formulary (including the use of tiered cost-sharing), the following requirements must be met:

(A)

Development and revision by a pharmacy and therapeutic (P&T) committee

(i)

In general

(ii)

Inclusion of independent experts

Such committee shall include at least one practicing physician and at least one practicing pharmacist, each of whom—

(I)

is independent and free of conflict with respect to the sponsor and plan; and

(II)

has expertise in the care of elderly or disabled persons.

(B)

Formulary development

(i)

base clinical decisions on the strength of scientific evidence and standards of practice, including assessing peer-reviewed medical literature, such as randomized clinical trials, pharmacoeconomic studies, outcomes research data, and on such other information as the committee determines to be appropriate; and

(ii)

take into account whether including in the formulary (or in a tier in such formulary) particular covered part D drugs has therapeutic advantages in terms of safety and efficacy.

(C)

Inclusion of drugs in all therapeutic categories and classes

(i)

In general

(ii)

Model guidelines

(iii)

Limitation on changes in therapeutic classification

(D)

Provider and patient education

(E)

Notice before removing drug from formulary or changing preferred or tier status of drug

(F)

Periodic evaluation of protocols

(G)

Required inclusion of drugs in certain categories and classes

(i)

Formulary requirements

(I)

In general

(II)

Exceptions

(ii)

Identification of drugs in certain categories and classes

(I)

In general

(II)

Criteria

(iii)

Implementation

(iv)

Requirement for certain categories and classes until criteria established

Until such time as the Secretary establishes the criteria under clause (ii)(II) the following categories and classes of drugs shall be identified under clause (ii)(I):

(I)

Anticonvulsants.

(II)

Antidepressants.

(III)

Antineoplastics.

(IV)

Antipsychotics.

(V)

Antiretrovirals.

(VI)

Immunosuppressants for the treatment of transplant rejection.

(H)

Use of single, uniform exceptions and appeals process

Notwithstanding any other provision of this part, each PDP sponsor of a prescription drug plan shall—

(i)

use a single, uniform exceptions and appeals process (including, to the extent the Secretary determines feasible, a single, uniform model form for use under such process) with respect to the determination of prescription drug coverage for an enrollee under the plan; and

(ii)

provide instant access to such process by enrollees through a toll-free telephone number and an Internet website.

(I)

Required inclusion of selected drugs

(i)

In general

(ii)

Clarification

(4)

Ensuring access during COVID–19 public health emergency period

(A)

In general

(B)

Safety edit exception

(c)

Cost and utilization management; quality assurance; medication therapy management program

(1)

In general

The PDP sponsor shall have in place, directly or through appropriate arrangements, with respect to covered part D drugs, the following:

(A)

A cost-effective drug utilization management program, including incentives to reduce costs when medically appropriate, such as through the use of multiple source drugs (as defined in section 1396r–8(k)(7)(A)(i) of this title).

(B)

Quality assurance measures and systems to reduce medication errors and adverse drug interactions and improve medication use.

(C)

A medication therapy management program described in paragraph (2).

(D)

A program to control fraud, abuse, and waste.

(E)

A utilization management tool to prevent drug abuse (as described in paragraph (6)(A)).1

 So in original. Probably means first par. (6).

(F)

With respect to plan years beginning on or after January 1, 2022, a drug management program for at-risk beneficiaries described in paragraph (5).

Nothing in this section shall be construed as impairing a PDP sponsor from utilizing cost management tools (including differential payments) under all methods of operation.

(2)

Medication therapy management program

(A)

Description

(i)

In general

(ii)

Targeted beneficiaries described

Targeted beneficiaries described in this clause are the following:

(I)

Part D eligible individuals who—

(aa)

have multiple chronic diseases (such as diabetes, asthma, hypertension, hyperlipidemia, and congestive heart failure);

(bb)

are taking multiple covered part D drugs; and

(cc)

are identified as likely to incur annual costs for covered part D drugs that exceed a level specified by the Secretary.

(II)

Beginning January 1, 2021, at-risk beneficiaries for prescription drug abuse (as defined in paragraph (5)(C)).

(B)

Elements

Such program—

(i)

may include elements that promote—

(I)

enhanced enrollee understanding to promote the appropriate use of medications by enrollees and to reduce the risk of potential adverse events associated with medications, through beneficiary education, counseling, and other appropriate means;

(II)

increased enrollee adherence with prescription medication regimens through medication refill reminders, special packaging, and other compliance programs and other appropriate means; and

(III)

detection of adverse drug events and patterns of overuse and underuse of prescription drugs; and

(ii)

with respect to plan years beginning on or after January 1, 2021, shall provide for—

(I)

the provision of information to the enrollee on the safe disposal of prescription drugs that are controlled substances that meets the criteria established under section 1395w–22(n)(2) of this title, including information on drug takeback programs that meet such requirements determined appropriate by the Secretary and information on in-home disposal; and

(II)

cost-effective means by which an enrollee may so safely dispose of such drugs.

(C)

Required interventions

For plan years beginning on or after the date that is 2 years after March 23, 2010, prescription drug plan sponsors shall offer medication therapy management services to targeted beneficiaries described in subparagraph (A)(ii) that include, at a minimum, the following to increase adherence to prescription medications or other goals deemed necessary by the Secretary:

(i)

An annual comprehensive medication review furnished person-to-person or using telehealth technologies (as defined by the Secretary) by a licensed pharmacist or other qualified provider. The comprehensive medication review—

(I)

shall include a review of the individual’s medications and may result in the creation of a recommended medication action plan or other actions in consultation with the individual and with input from the prescriber to the extent necessary and practicable; and

(II)

shall include providing the individual with a written or printed summary of the results of the review.

The Secretary, in consultation with relevant stakeholders, shall develop a standardized format for the action plan under subclause (I) and the summary under subclause (II).

(ii)

Follow-up interventions as warranted based on the findings of the annual medication review or the targeted medication enrollment and which may be provided person-to-person or using telehealth technologies (as defined by the Secretary).

(D)

Assessment

(E)

 So in original. Two subpars. (E) have been enacted.

Automatic enrollment with ability to opt-out

The prescription drug plan sponsor shall have in place a process to—

(i)

subject to clause (ii), automatically enroll targeted beneficiaries described in subparagraph (A)(ii), including beneficiaries identified under subparagraph (D), in the medication therapy management program required under this subsection; and

(ii)

permit such beneficiaries to opt-out of enrollment in such program.

(E)

 ² Development of program in cooperation with licensed pharmacists

(F)

Coordination with care management plans

(G)

Considerations in pharmacy fees

(3)

Reducing wasteful dispensing of outpatient prescription drugs in long-term care facilities

(4)

Requiring valid prescriber National Provider Identifiers on pharmacy claims

(A)

In general

(B)

Procedures

(i)

Validity of prescriber National Provider Identifiers

(ii)

Informing beneficiaries of reason for denial

(C)

Report

(D)

Notification and additional requirements with respect to outlier prescribers of opioids

(i)

Notification

(ii)

Identification of outlier prescribers of opioids

(I)

In general

(II)

Establishment of thresholds

(III)

Exclusions

The following shall not be included in the analysis for identifying outlier prescribers of opioids under this clause:

(aa)

Claims for covered part D drugs for part D eligible individuals who are receiving hospice care under this subchapter.

(bb)

Claims for covered part D drugs for part D eligible individuals who are receiving oncology services under this subchapter.

(cc)

Prescribers who are the subject of an investigation by the Centers for Medicare & Medicaid Services or the Inspector General of the Department of Health and Human Services.

(iii)

Contents of notification

The Secretary shall include the following information in the notifications provided under clause (i):

(I)

Information on how such prescriber compares to other prescribers within the same specialty and geographic area.

(II)

Information on opioid prescribing guidelines, based on input from stakeholders, that may include the Centers for Disease Control and Prevention guidelines for prescribing opioids for chronic pain and guidelines developed by physician organizations.

(III)

Other information determined appropriate by the Secretary.

(iv)

Modifications and expansions

(I)

Frequency

(II)

Expansion to other prescriptions

(v)

Additional requirements for persistent outlier prescribers

In the case of a prescriber who the Secretary determines is persistently identified under clause (ii) as an outlier prescriber of opioids, the following shall apply:

(I)

Such prescriber may be required to enroll in the program under this subchapter under section 1395cc(j) of this title if such prescriber is not otherwise required to enroll, but only after other appropriate remedies have been provided, such as the provision of education funded through section 6052 of the SUPPORT for Patients and Communities Act, for a period determined by the Secretary as sufficient to correct the prescribing patterns that lead to identification of such prescriber as a persistent outlier prescriber of opioids. The Secretary shall determine the length of the period for which such prescriber is required to maintain such enrollment, which shall be the minimum period necessary to correct such prescribing patterns.

(II)

Not less frequently than annually (and in a form and manner determined appropriate by the Secretary), the Secretary, consistent with clause(iv)(I), shall communicate information on such prescribers to sponsors of a prescription drug plan and Medicare Advantage organizations offering an MA–PD plan.

(vi)

Public availability of information

(vii)

Opioids defined

(viii)

Other activities

(5)

Drug management program for at-risk beneficiaries

(A)

Authority to establish

(B)

Requirement for notices

(i)

In general

A PDP sponsor may not limit the access of an at-risk beneficiary for prescription drug abuse to coverage for frequently abused drugs under a prescription drug plan until such sponsor—

(I)

provides to the beneficiary an initial notice described in clause (ii) and a second notice described in clause (iii); and

(II)

verifies with the providers of the beneficiary that the beneficiary is an at-risk beneficiary for prescription drug abuse.

(ii)

Initial notice

An initial notice described in this clause is a notice that provides to the beneficiary—

(I)

notice that the PDP sponsor has identified the beneficiary as potentially being an at-risk beneficiary for prescription drug abuse;

(II)

information describing all State and Federal public health resources that are designed to address prescription drug abuse to which the beneficiary has access, including mental health services and other counseling services;

(III)

notice of, and information about, the right of the beneficiary to appeal such identification under subsection (h), including notice that if on reconsideration a PDP sponsor affirms its denial, in whole or in part, the case shall be automatically forwarded to the independent, outside entity contracted with the Secretary for review and resolution;

(IV)

a request for the beneficiary to submit to the PDP sponsor preferences for which prescribers and pharmacies the beneficiary would prefer the PDP sponsor to select under subparagraph (D) in the case that the beneficiary is identified as an at-risk beneficiary for prescription drug abuse as described in clause (iii)(I);

(V)

an explanation of the meaning and consequences of the identification of the beneficiary as potentially being an at-risk beneficiary for prescription drug abuse, including an explanation of the drug management program established by the PDP sponsor pursuant to subparagraph (A);

(VI)

clear instructions that explain how the beneficiary can contact the PDP sponsor in order to submit to the PDP sponsor the preferences described in subclause (IV) and any other communications relating to the drug management program for at-risk beneficiaries established by the PDP sponsor; and

(VII)

contact information for other organizations that can provide the beneficiary with assistance regarding such drug management program (similar to the information provided by the Secretary in other standardized notices provided to part D eligible individuals enrolled in prescription drug plans under this part).

(iii)

Second notice

A second notice described in this clause is a notice that provides to the beneficiary notice—

(I)

that the PDP sponsor has identified the beneficiary as an at-risk beneficiary for prescription drug abuse;

(II)

that such beneficiary is subject to the requirements of the drug management program for at-risk beneficiaries established by such PDP sponsor for such plan;

(III)

of the prescriber (or prescribers) and pharmacy (or pharmacies) selected for such individual under subparagraph (D);

(IV)

of, and information about, the beneficiary’s right to appeal such identification under subsection (h), including notice that if on reconsideration a PDP sponsor affirms its denial, in whole or in part, the case shall be automatically forwarded to the independent, outside entity contracted with the Secretary for review and resolution;

(V)

that the beneficiary can, in the case that the beneficiary has not previously submitted to the PDP sponsor preferences for which prescribers and pharmacies the beneficiary would prefer the PDP sponsor select under subparagraph (D), submit such preferences to the PDP sponsor; and

(VI)

that includes clear instructions that explain how the beneficiary can contact the PDP sponsor.

(iv)

Timing of notices

(I)

In general

(II)

Exception

(C)

At-risk beneficiary for prescription drug abuse

(i)

In general

Except as provided in clause (v), for purposes of this paragraph, the term “at-risk beneficiary for prescription drug abuse” means a part D eligible individual who is not an exempted individual described in clause (ii) and—

(I)

who is identified as such an at-risk beneficiary through the use of clinical guidelines that indicate misuse or abuse of prescription drugs described in subparagraph (G) and that are developed by the Secretary in consultation with PDP sponsors and other stakeholders, including individuals entitled to benefits under part A or enrolled under part B, advocacy groups representing such individuals, physicians, pharmacists, and other clinicians, retail pharmacies, plan sponsors, entities delegated by plan sponsors, and biopharmaceutical manufacturers; or

(II)

with respect to whom the PDP sponsor of a prescription drug plan, upon enrolling such individual in such plan, received notice from the Secretary that such individual was identified under this paragraph to be an at-risk beneficiary for prescription drug abuse under the prescription drug plan in which such individual was most recently previously enrolled and such identification has not been terminated under subparagraph (F).

(ii)

Exempted individual described

An exempted individual described in this clause is an individual who—

(I)

receives hospice care under this subchapter;

(II)

is a resident of a long-term care facility, of a facility described in section 1396d(d) of this title, or of another facility for which frequently abused drugs are dispensed for residents through a contract with a single pharmacy; or

(III)

the Secretary elects to treat as an exempted individual for purposes of clause (i).

(iii)

Program size

(iv)

Clinical contact

(v)

Treatment of enrollees with a history of opioid-related overdose

(I)

In general

(II)

Identification and notice

For purposes of this clause, the Secretary shall—

(aa)

identify part D eligible individuals with a history of opioid-related overdose (as so defined); and

(bb)

notify the PDP sponsor of the prescription drug plan in which such an individual is enrolled of such identification.

(D)

Selection of prescribers and pharmacies

(i)

In general

With respect to each at-risk beneficiary for prescription drug abuse enrolled in a prescription drug plan offered by such sponsor, a PDP sponsor shall, based on the preferences submitted to the PDP sponsor by the beneficiary pursuant to clauses (ii)(IV) and (iii)(V) of subparagraph (B) (except as otherwise provided in this subparagraph) select—

(I)

one, or, if the PDP sponsor reasonably determines it necessary to provide the beneficiary with reasonable access under clause (ii), more than one, individual who is authorized to prescribe frequently abused drugs (referred to in this paragraph as a “prescriber”) who may write prescriptions for such drugs for such beneficiary; and

(II)

one, or, if the PDP sponsor reasonably determines it necessary to provide the beneficiary with reasonable access under clause (ii), more than one, pharmacy that may dispense such drugs to such beneficiary.

For purposes of subclause (II), in the case of a pharmacy that has multiple locations that share real-time electronic data, all such locations of the pharmacy shall collectively be treated as one pharmacy.

(ii)

Reasonable access

In making the selections under this subparagraph—

(I)

a PDP sponsor shall ensure that the beneficiary continues to have reasonable access to frequently abused drugs (as defined in subparagraph (G)), taking into account geographic location, beneficiary preference, impact on costsharing, and reasonable travel time; and

(II)

a PDP sponsor shall ensure such access (including access to prescribers and pharmacies with respect to frequently abused drugs) in the case of individuals with multiple residences, in the case of natural disasters and similar situations, and in the case of the provision of emergency services.

(iii)

Beneficiary preferences

If an at-risk beneficiary for prescription drug abuse submits preferences for which in-network prescribers and pharmacies the beneficiary would prefer the PDP sponsor select in response to a notice under subparagraph (B), the PDP sponsor shall—

(I)

review such preferences;

(II)

select or change the selection of prescribers and pharmacies for the beneficiary based on such preferences; and

(III)

inform the beneficiary of such selection or change of selection.

(iv)

Exception regarding beneficiary preferences

In the case that the PDP sponsor determines that a change to the selection of prescriber or pharmacy under clause (iii)(II) by the PDP sponsor is contributing or would contribute to prescription drug abuse or drug diversion by the beneficiary, the PDP sponsor may change the selection of prescriber or pharmacy for the beneficiary without regard to the preferences of the beneficiary described in clause (iii). If the PDP sponsor changes the selection pursuant to the preceding sentence, the PDP sponsor shall provide the beneficiary with—

(I)

at least 30 days written notice of the change of selection; and

(II)

a rationale for the change.

(v)

Confirmation

(E)

Terminations and appeals

(F)

Termination of identification

(i)

In general

The Secretary shall develop standards for the termination of identification of an individual as an at-risk beneficiary for prescription drug abuse under this paragraph. Under such standards such identification shall terminate as of the earlier of—

(I)

the date the individual demonstrates that the individual is no longer likely, in the absence of the restrictions under this paragraph, to be an at-risk beneficiary for prescription drug abuse described in subparagraph (C)(i); and

(II)

the end of such maximum period of identification as the Secretary may specify.

(ii)

Rule of construction

(G)

Frequently abused drug

(H)

Data disclosure

(i)

Data on decision to impose limitation

(ii)

Data to reduce fraud, abuse, and waste

(I)

Sharing of information for subsequent plan enrollments

(J)

Privacy issues

(K)

Education

The Secretary shall provide education to enrollees in prescription drug plans of PDP sponsors and providers regarding the drug management program for at-risk beneficiaries described in this paragraph, including education—

(i)

provided by Medicare administrative contractors through the improper payment outreach and education program described in section 1395kk–1(h) of this title; and

(ii)

through current education efforts (such as State health insurance assistance programs described in subsection (a)(1)(A) of section 119 of the Medicare Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395b–3 note)) and materials directed toward such enrollees.

(L)

Application under MA–PD plans

(M)

CMS compliance review

(6)

 So in original. Two pars. (6) have been enacted.

Utilization management tool to prevent drug abuse

(A)

In general

A tool described in this paragraph is any of the following:

(i)

A utilization tool designed to prevent the abuse of frequently abused drugs by individuals and to prevent the diversion of such drugs at pharmacies.

(ii)

Retrospective utilization review to identify—

(I)

individuals that receive frequently abused drugs at a frequency or in amounts that are not clinically appropriate; and

(II)

providers of services or suppliers that may facilitate the abuse or diversion of frequently abused drugs by beneficiaries.

(iii)

Consultation with the contractor described in subparagraph (B) to verify if an individual enrolling in a prescription drug plan offered by a PDP sponsor has been previously identified by another PDP sponsor as an individual described in clause (ii)(I).

(B)

Reporting

A PDP sponsor offering a prescription drug plan (and an MA organization offering an MA–PD plan) in a State shall submit to the Secretary and the Medicare drug integrity contractor with which the Secretary has entered into a contract under section 1395ddd of this title with respect to such State a report, on a monthly basis, containing information on—

(i)

any provider of services or supplier described in subparagraph (A)(ii)(II) that is identified by such plan sponsor (or organization) during the 30-day period before such report is submitted; and

(ii)

the name and prescription records of individuals described in paragraph (5)(C).

(C)

CMS compliance review

(6)

 ³ Providing prescription drug plans with parts A and B claims data to promote the appropriate use of medications and improve health outcomes

(A)

Process

(B)

Purposes

A PDP sponsor may use the data provided to the sponsor pursuant to subparagraph (A) for any of the following purposes:

(i)

To optimize therapeutic outcomes through improved medication use, as such phrase is used in clause (i) of paragraph (2)(A).

(ii)

To improving care coordination so as to prevent adverse health outcomes, such as preventable emergency department visits and hospital readmissions.

(iii)

For any other purpose determined appropriate by the Secretary.

(C)

Limitations on data use

A PDP sponsor shall not use data provided to the sponsor pursuant to subparagraph (A) for any of the following purposes:

(i)

To inform coverage determinations under this part.

(ii)

To conduct retroactive reviews of medically accepted indications determinations.

(iii)

To facilitate enrollment changes to a different prescription drug plan or an MA–PD plan offered by the same parent organization.

(iv)

To inform marketing of benefits.

(v)

For any other purpose that the Secretary determines is necessary to include in order to protect the identity of individuals entitled to, or enrolled for, benefits under this subchapter and to protect the security of personal health information.

(D)

Data described

(d)

Consumer satisfaction surveys

(e)

Electronic prescription program

(1)

Application of standards

(2)

Program requirements

Consistent with uniform standards established under paragraph (3)—

(A)

Provision of information to prescribing health care professional and dispensing pharmacies and pharmacists

An electronic prescription drug program shall provide for the electronic transmittal to the prescribing health care professional and to the dispensing pharmacy and pharmacist of the prescription and information on eligibility and benefits (including the drugs included in the applicable formulary, any tiered formulary structure, and any requirements for prior authorization) and of the following information with respect to the prescribing and dispensing of a covered part D drug:

(i)

Information on the drug being prescribed or dispensed and other drugs listed on the medication history, including information on drug-drug interactions, warnings or cautions, and, when indicated, dosage adjustments.

(ii)

Information on the availability of lower cost, therapeutically appropriate alternatives (if any) for the drug prescribed.

(B)

Application to medical history information

(C)

Limitations

(D)

Timing

(E)

Electronic prior authorization

(i)

In general

Not later than January 1, 2021, the program shall provide for the secure electronic transmission of—

(I)

a prior authorization request from the prescribing health care professional for coverage of a covered part D drug for a part D eligible individual enrolled in a part D plan (as defined in section 1395w–133(a)(5) of this title) to the PDP sponsor or Medicare Advantage organization offering such plan; and

(II)

a response, in accordance with this subparagraph, from such PDP sponsor or Medicare Advantage organization, respectively, to such professional.

(ii)

Electronic transmission

(I)

Exclusions

(II)

Standards

(III)

Application

(3)

Standards

(A)

In general

(B)

Objectives

Such standards shall be consistent with the objectives of improving—

(i)

patient safety;

(ii)

the quality of care provided to patients; and

(iii)

efficiencies, including cost savings, in the delivery of care.

(C)

Design criteria

Such standards shall—

(i)

be designed so that, to the extent practicable, the standards do not impose an undue administrative burden on prescribing health care professionals and dispensing pharmacies and pharmacists;

(ii)

be compatible with standards established under part C of subchapter XI, standards established under subsection (b)(2)(B)(i), and with general health information technology standards; and

(iii)

be designed so that they permit electronic exchange of drug labeling and drug listing information maintained by the Food and Drug Administration and the National Library of Medicine.

(D)

Permitting use of appropriate messaging

(E)

Permitting patient designation of dispensing pharmacy

(i)

In general

(ii)

No change in benefits

Clause (i) shall not be construed as affecting—

(I)

the access required to be provided to pharmacies by a prescription drug plan; or

(II)

the application of any differences in benefits or payments under such a plan based on the pharmacy dispensing a covered part D drug.

(4)

Development, promulgation, and modification of standards

(A)

Initial standards

(B)

Role of NCVHS

The National Committee on Vital and Health Statistics shall develop recommendations for uniform standards relating to such requirements in consultation with the following:

(i)

Standard setting organizations (as defined in section 1320d(8) of this title) 4

 So in original. Probably should be followed by a period.

(ii)

Practicing physicians.

(iii)

Hospitals.

(iv)

Pharmacies.

(v)

Practicing pharmacists.

(vi)

Pharmacy benefit managers.

(vii)

State boards of pharmacy.

(viii)

State boards of medicine.

(ix)

Experts on electronic prescribing.

(x)

Other appropriate Federal agencies.

(C)

Pilot project to test initial standards

(i)

In general

(ii)

Exception

(iii)

Voluntary participation of physicians and pharmacies

(iv)

Evaluation and report

(I)

Evaluation

(II)

Report to Congress

(D)

Final standards

(5)

Relation to State laws

The standards promulgated under this subsection shall supersede any State law or regulation that—

(A)

is contrary to the standards or restricts the ability to carry out this part; and

(B)

pertains to the electronic transmission of medication history and of information on eligibility, benefits, and prescriptions with respect to covered part D drugs under this part.

(6)

Establishment of safe harbor

The Secretary, in consultation with the Attorney General, shall promulgate regulations that provide for a safe harbor from sanctions under paragraphs (1) and (2) of section 1320a–7b(b) of this title and an exception to the prohibition under subsection (a)(1) of section 1395nn of this title with respect to the provision of nonmonetary remuneration (in the form of hardware, software, or information technology and training services) necessary and used solely to receive and transmit electronic prescription information in accordance with the standards promulgated under this subsection—

(A)

in the case of a hospital, by the hospital to members of its medical staff;

(B)

in the case of a group practice (as defined in section 1395nn(h)(4) of this title), by the practice to prescribing health care professionals who are members of such practice; and

(C)

in the case of a PDP sponsor or MA organization, by the sponsor or organization to pharmacists and pharmacies participating in the network of such sponsor or organization, and to prescribing health care professionals.

(7)

Requirement of e-prescribing for controlled substances

(A)

In general

(B)

Exception for certain circumstances

The Secretary shall, through rulemaking, specify circumstances and processes by which the Secretary may waive the requirement under subparagraph (A), with respect to a covered part D drug, including in the case of—

(i)

a prescription issued when the practitioner and dispensing pharmacy are the same entity;

(ii)

a prescription issued that cannot be transmitted electronically under the most recently implemented version of the National Council for Prescription Drug Programs SCRIPT Standard;

(iii)

a prescription issued by a practitioner who received a waiver or a renewal thereof for a period of time as determined by the Secretary, not to exceed one year, from the requirement to use electronic prescribing due to demonstrated economic hardship, technological limitations that are not reasonably within the control of the practitioner, or other exceptional circumstance demonstrated by the practitioner;

(iv)

a prescription issued by a practitioner under circumstances in which, notwithstanding the practitioner’s ability to submit a prescription electronically as required by this subsection, such practitioner reasonably determines that it would be impractical for the individual involved to obtain substances prescribed by electronic prescription in a timely manner, and such delay would adversely impact the individual’s medical condition involved;

(v)

a prescription issued by a practitioner prescribing a drug under a research protocol;

(vi)

a prescription issued by a practitioner for a drug for which the Food and Drug Administration requires a prescription to contain elements that are not able to be included in electronic prescribing, such as a drug with risk evaluation and mitigation strategies that include elements to assure safe use;

(vii)

a prescription issued by a practitioner—

(I)

for an individual who receives hospice care under this subchapter; and

(II)

that is not covered under the hospice benefit under this subchapter; and

(viii)

a prescription issued by a practitioner for an individual who is—

(I)

a resident of a nursing facility (as defined in section 1396r(a) of this title); and

(II)

dually eligible for benefits under this subchapter and subchapter XIX.

(C)

Dispensing

(i)

Nothing in this paragraph shall be construed as requiring a sponsor of a prescription drug plan under this part, MA organization offering an MA–PD plan under part C, or a pharmacist to verify that a practitioner, with respect to a prescription for a covered part D drug, has a waiver (or is otherwise exempt) under subparagraph (B) from the requirement under subparagraph (A).

(ii)

Nothing in this paragraph shall be construed as affecting the ability of the plan to cover or the pharmacists’ ability to continue to dispense covered part D drugs from otherwise valid written, oral, or fax prescriptions that are consistent with laws and regulations.

(iii)

Nothing in this paragraph shall be construed as affecting the ability of an individual who is being prescribed a covered part D drug to designate a particular pharmacy to dispense the covered part D drug to the extent consistent with the requirements under subsection (b)(1) and under this paragraph.

(D)

Enforcement

(f)

Grievance mechanism

(g)

Coverage determinations and reconsiderations

(1)

Application of coverage determination and reconsideration provisions

(2)

Request for a determination for the treatment of tiered formulary drug

(h)

Appeals

(1)

In general

(2)

Limitation in cases on nonformulary determinations

(3)

Treatment of nonformulary determinations

(i)

Privacy, confidentiality, and accuracy of enrollee records

(j)

Treatment of accreditation

Subparagraph (A) of section 1395w–22(e)(4) of this title (relating to treatment of accreditation) shall apply to a PDP sponsor under this part with respect to the following requirements, in the same manner as it applies to an MA organization with respect to the requirements in subparagraph (B) (other than clause (vii) thereof) of such section:

(1)

Subsection (b) of this section (relating to access to covered part D drugs).

(2)

Subsection (c) of this section (including quality assurance and medication therapy management).

(3)

Subsection (i) of this section (relating to confidentiality and accuracy of enrollee records).

(k)

Public disclosure of pharmaceutical prices for equivalent drugs

(1)

In general

(2)

Timing of notice

(A)

In general

(B)

Waiver

(l)

Requirements with respect to sales and marketing activities

The following provisions shall apply to a PDP sponsor (and the agents, brokers, and other third parties representing such sponsor) in the same manner as such provisions apply to a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization):

(1)

The prohibition under section 1395w–21(h)(4)(C) of this title on conducting activities described in section 1395w–21(j)(1) of this title.

(2)

The requirement under section 1395w–21(h)(4)(D) of this title to conduct activities described in section 1395w–21(j)(2) of this title in accordance with the limitations established under such subsection.

(3)

The inclusion of the plan type in the plan name under section 1395w–21(h)(6) of this title.

(4)

The requirements regarding the appointment of agents and brokers and compliance with State information requests under subparagraphs (A) and (B), respectively, of section 1395w–21(h)(7) of this title.

(m)

Prohibition on limiting certain information on drug prices

(n)

Program integrity transparency measures

(o)

Real-time benefit information

(1)

In general

(2)

Requirements

For purposes of paragraph (1), the requirements described in this paragraph, with respect to an electronic real-time benefit tool, are that the tool is capable of—

(A)

integrating with electronic prescribing and electronic health record systems of prescribing health care professionals for the transmission of formulary and benefit information in real time to such professionals; and

(B)

with respect to a covered part D drug, transmitting such information specific to an individual enrolled in a prescription drug plan, including the following:

(i)

A list of any clinically-appropriate alternatives to such drug included in the formulary of such plan.

(ii)

Cost-sharing information and the negotiated price for such drug and such alternatives at multiple pharmacy options, including the individual’s preferred pharmacy and, as applicable, other retail pharmacies and a mail order pharmacy.

(iii)

The formulary status of such drug and such alternatives and any prior authorization or other utilization management requirements applicable to such drug and such alternatives included in the formulary of such plan.

(3)

Standards

(4)

Rules of construction

Nothing in this subsection shall be construed—

(A)

to prohibit the application of paragraph (b)(7) of section 423.160 of title 42, Code of Federal Regulations, as is to be added to such section pursuant to the final rule published in the Federal Register on May 23, 2019, and titled “Modernizing Part D and Medicare Advantage To Lower Drug Prices and Reduce Out-of-Pocket Expenses” (84 Fed. Reg. 23832 through 23884); or

(B)

to allow a PDP sponsor to use a real-time benefit tool to steer an individual, without the consent of the individual, to a particular pharmacy or pharmacy type over their preferred pharmacy or pharmacy type nor prohibit the designation of an individual’s preferred pharmacy under such tool.

(Aug. 14, 1935, ch. 531, title XVIII, § 1860D–4, as added Pub. L. 108–173, title I, § 101(a)(2), Dec. 8, 2003, 117 Stat. 2082; amended Pub. L. 110–275, title I, §§ 103(a)(2), (b)(2), (c)(2), (d)(2), 176, July 15, 2008, 122 Stat. 2499–2501, 2581; Pub. L. 111–148, title III, §§ 3307(a), 3310(a), 3312(a), title X, § 10328(a), Mar. 23, 2010, 124 Stat. 471, 475, 476, 964; Pub. L. 114–10, title V, § 507, Apr. 16, 2015, 129 Stat. 168; Pub. L. 114–198, title VII, § 704(a)(1), (2), (b), July 22, 2016, 130 Stat. 742–748; Pub. L. 115–123, div. E, title III, § 50354, Feb. 9, 2018, 132 Stat. 213; Pub. L. 115–262, § 2(a), Oct. 10, 2018, 132 Stat. 3670; Pub. L. 115–271, title II, §§ 2003(a), 2004, 2006, 2007(a), title VI, §§ 6062, 6063(c)–6065, 6102, 6103(b), Oct. 24, 2018, 132 Stat. 3926, 3928, 3930, 3986, 3989, 4004, 4005; Pub. L. 116–136, div. A, title III, § 3714(a), Mar. 27, 2020, 134 Stat. 424; Pub. L. 116–260, div. CC, title I, § 119(a), Dec. 27, 2020, 134 Stat. 2951; Pub. L. 117–169, title I, §§ 11001(b)(1)(E), 11201(e)(2), Aug. 16, 2022, 136 Stat. 1852, 1891.)

cite as: 42 USC 1395w-104

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