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U.S. Code as of:
01/19/04
Section 1396u-5. Special provisions relating to medicare prescription drug benefit
(a) Requirements relating to medicare prescription drug low-income
subsidies and medicare transitional prescription drug assistance
As a condition of its State plan under this subchapter under
section 1396a(a)(66) of this title and receipt of any Federal
financial assistance under section 1396b(a) of this title subject
to subsection (e) of this section, a State shall do the following:
(1) Information for transitional prescription drug assistance
verification
The State shall provide the Secretary with information to carry
out section 1395w-141(f)(3)(B)(i) of this title.
(2) Eligibility determinations for low-income subsidies
The State shall -
(A) make determinations of eligibility for premium and
cost-sharing subsidies under and in accordance with section
1395w-114 of this title;
(B) inform the Secretary of such determinations in cases in
which such eligibility is established; and
(C) otherwise provide the Secretary with such information as
may be required to carry out part D, other than subpart 4, of
subchapter XVIII of this chapter (including section 1395w-114
of this title).
(3) Screening for eligibility, and enrollment of, beneficiaries
for medicare cost-sharing
As part of making an eligibility determination required under
paragraph (2) for an individual, the State shall make a
determination of the individual's eligibility for medical
assistance for any medicare cost-sharing described in section
1396d(p)(3) of this title and, if the individual is eligible for
any such medicare cost-sharing, offer enrollment to the
individual under the State plan (or under a waiver of such plan).
(b) Regular Federal subsidy of administrative costs
The amounts expended by a State in carrying out subsection (a) of
this section are expenditures reimbursable under the appropriate
paragraph of section 1396b(a) of this title.
(c) Federal assumption of medicaid prescription drug costs for
dually eligible individuals
(1) Phased-down State contribution
(A) In general
Each of the 50 States and the District of Columbia for each
month beginning with January 2006 shall provide for payment
under this subsection to the Secretary of the product of -
(i) the amount computed under paragraph (2)(A) for the
State and month;
(ii) the total number of full-benefit dual eligible
individuals (as defined in paragraph (6)) for such State and
month; and
(iii) the factor for the month specified in paragraph (5).
(B) Form and manner of payment
Payment under subparagraph (A) shall be made in a manner
specified by the Secretary that is similar to the manner in
which State payments are made under an agreement entered into
under section 1395v of this title, except that all such
payments shall be deposited into the Medicare Prescription Drug
Account in the Federal Supplementary Medical Insurance Trust
Fund.
(C) Compliance
If a State fails to pay to the Secretary an amount required
under subparagraph (A), interest shall accrue on such amount at
the rate provided under section 1396b(d)(5) of this title. The
amount so owed and applicable interest shall be immediately
offset against amounts otherwise payable to the State under
section 1396b(a) of this title subject to subsection (e) of
this section, in accordance with the Federal Claims Collection
Act of 1996 )1(! and applicable regulations.
(D) Data match
The Secretary shall perform such periodic data matches as may
be necessary to identify and compute the number of full-benefit
dual eligible individuals for purposes of computing the amount
under subparagraph (A).
(2) Amount
(A) In general
The amount computed under this paragraph for a State
described in paragraph (1) and for a month in a year is equal
to -
(i) 1/12 of the product of -
(I) the base year State medicaid per capita expenditures
for covered part D drugs for full-benefit dual eligible
individuals (as computed under paragraph (3)); and
(II) a proportion equal to 100 percent minus the Federal
medical assistance percentage (as defined in section
1396d(b) of this title) applicable to the State for the
fiscal year in which the month occurs; and
(ii) increased for each year (beginning with 2004 up to and
including the year involved) by the applicable growth factor
specified in paragraph (4) for that year.
(B) Notice
The Secretary shall notify each State described in paragraph
(1) not later than October 15 before the beginning of each year
(beginning with 2006) of the amount computed under subparagraph
(A) for the State for that year.
(3) Base year state medicaid per capita expenditures for covered
part D drugs for full-benefit dual eligible individuals
(A) In general
For purposes of paragraph (2)(A), the "base year State
medicaid per capita expenditures for covered part D drugs for
full-benefit dual eligible individuals" for a State is equal to
the weighted average (as weighted under subparagraph (C)) of -
(i) the gross per capita medicaid expenditures for
prescription drugs for 2003, determined under subparagraph
(B); and
(ii) the estimated actuarial value of prescription drug
benefits provided under a capitated managed care plan per
full-benefit dual eligible individual for 2003, as determined
using such data as the Secretary determines appropriate.
(B) Gross per capita medicaid expenditures for prescription
drugs
(i) In general
The gross per capita medicaid expenditures for prescription
drugs for 2003 under this subparagraph is equal to the
expenditures, including dispensing fees, for the State under
this subchapter during 2003 for covered outpatient drugs,
determined per full-benefit-dual-eligible-individual for such
individuals not receiving medical assistance for such drugs
through a medicaid managed care plan.
(ii) Determination
In determining the amount under clause (i), the Secretary
shall -
(I) use data from the Medicaid Statistical Information
System (MSIS) and other available data;
(II) exclude expenditures attributable to covered
outpatient prescription drugs that are not covered part D
drugs (as defined in section 1395w-102(e) of this title);
and
(III) reduce such expenditures by the product of such
portion and the adjustment factor (described in clause
(iii)).
(iii) Adjustment factor
The adjustment factor described in this clause for a State
is equal to the ratio for the State for 2003 of -
(I) aggregate payments under agreements under section
1396r-8 of this title; to
(II) the gross expenditures under this subchapter for
covered outpatient drugs referred to in clause (i).
Such factor shall be determined based on information reported
by the State in the medicaid financial management reports (form
CMS-64) for the 4 quarters of calendar year 2003 and such other
data as the Secretary may require.
(C) Weighted average
The weighted average under subparagraph (A) shall be
determined taking into account -
(i) with respect to subparagraph (A)(i), the average number
of full-benefit dual eligible individuals in 2003 who are not
described in clause (ii); and
(ii) with respect to subparagraph (A)(ii), the average
number of full-benefit dual eligible individuals in such year
who received in 2003 medical assistance for covered
outpatient drugs through a medicaid managed care plan.
(4) Applicable growth factor
The applicable growth factor under this paragraph for -
(A) each of 2004, 2005, and 2006, is the average annual
percent change (to that year from the previous year) of the per
capita amount of prescription drug expenditures (as determined
based on the most recent National Health Expenditure
projections for the years involved); and
(B) a succeeding year, is the annual percentage increase
specified in section 1395w-102(b)(6) of this title for the
year.
(5) Factor
The factor under this paragraph for a month -
(A) in 2006 is 90 percent;
(B) in 2007 is 88 1/3 percent;
(C) in 2008 is 86 2/3 percent;
(D) in 2009 is 85 percent;
(E) in 2010 is 83 1/3 percent;
(F) in 2011 is 81 2/3 percent;
(G) in 2012 is 80 percent;
(H) in 2013 is 78 1/3 percent;
(I) in 2014 is 76 2/3 percent; or
(J) after December 2014, is 75 percent.
(6) Full-benefit dual eligible individual defined
(A) In general
For purposes of this section, the term "full-benefit dual
eligible individual" means for a State for a month an
individual who -
(i) has coverage for the month for covered part D drugs
under a prescription drug plan under part D of subchapter
XVIII of this chapter, or under an MA-PD plan under part C of
such subchapter; and
(ii) is determined eligible by the State for medical
assistance for full benefits under this subchapter for such
month under section 1396a(a)(10)(A) or 1396a(a)(10)(C) of
this title, by reason of section 1396a(f) of this title, or
under any other category of eligibility for medical
assistance for full benefits under this subchapter, as
determined by the Secretary.
(B) Treatment of medically needy and other individuals required
to spend down
In applying subparagraph (A) in the case of an individual
determined to be eligible by the State for medical assistance
under section 1396a(a)(10)(C) of this title or by reason of
section 1396a(f) of this title, the individual shall be treated
as meeting the requirement of subparagraph (A)(ii) for any
month if such medical assistance is provided for in any part of
the month.
(d) Coordination of prescription drug benefits
(1) Medicare as primary payor
In the case of a part D eligible individual (as defined in
section 1395w-101(a)(3)(A) of this title) who is described in
subsection (c)(6)(A)(ii) of this section, notwithstanding any
other provision of this subchapter, medical assistance is not
available under this subchapter for such drugs (or for any
cost-sharing respecting such drugs), and the rules under this
subchapter relating to the provision of medical assistance for
such drugs shall not apply. The provision of benefits with
respect to such drugs shall not be considered as the provision of
care or services under the plan under this subchapter. No payment
may be made under section 1396b(a) of this title for prescribed
drugs for which medical assistance is not available pursuant to
this paragraph.
(2) Coverage of certain excludable drugs
In the case of medical assistance under this subchapter with
respect to a covered outpatient drug (other than a covered part D
drug) furnished to an individual who is enrolled in a
prescription drug plan under part D of subchapter XVIII of this
chapter or an MA-PD plan under part C of such subchapter, the
State may elect to provide such medical assistance in the manner
otherwise provided in the case of individuals who are not
full-benefit dual eligible individuals or through an arrangement
with such plan.
(e) Treatment of territories
(1) In general
In the case of a State, other than the 50 States and the
District of Columbia -
(A) the previous provisions of this section shall not apply
to residents of such State; and
(B) if the State establishes and submits to the Secretary a
plan described in paragraph (2) (for providing medical
assistance with respect to the provision of prescription drugs
to part D eligible individuals), the amount otherwise
determined under section 1308(f) of this title (as increased
under section 1308(g) of this title) for the State shall be
increased by the amount for the fiscal period specified in
paragraph (3).
(2) Plan
The Secretary shall determine that a plan is described in this
paragraph if the plan -
(A) provides medical assistance with respect to the provision
of covered part D drugs (as defined in section 1395w-102(e) of
this title) to low-income part D eligible individuals;
(B) provides assurances that additional amounts received by
the State that are attributable to the operation of this
subsection shall be used only for such assistance and related
administrative expenses and that no more than 10 percent of the
amount specified in paragraph (3)(A) for the State for any
fiscal period shall be used for such administrative expenses;
and
(C) meets such other criteria as the Secretary may establish.
(3) Increased amount
(A) In general
The amount specified in this paragraph for a State for a year
is equal to the product of -
(i) the aggregate amount specified in subparagraph (B); and
(ii) the ratio (as estimated by the Secretary) of -
(I) the number of individuals who are entitled to
benefits under part A )1(! or enrolled under part B )1(!
and who reside in the State (as determined by the Secretary
based on the most recent available data before the
beginning of the year); to
(II) the sum of such numbers for all States that submit a
plan described in paragraph (2).
(B) Aggregate amount
The aggregate amount specified in this subparagraph for -
(i) the last 3 quarters of fiscal year 2006, is equal to
$28,125,000;
(ii) fiscal year 2007, is equal to $37,500,000; or
(iii) a subsequent year, is equal to the aggregate amount
specified in this subparagraph for the previous year
increased by annual percentage increase specified in section
1395w-102(b)(6) of this title for the year involved.
(4) Report
The Secretary shall submit to Congress a report on the
application of this subsection and may include in the report such
recommendations as the Secretary deems appropriate.
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