REFUND Act of 2019

II 116TH CONGRESS 1ST SESSION S. 551 To amend title XVIII of the Social Security Act to require manufacturers of certain single-dose vial drugs payable under part B of the Medicare program to provide rebates with respect to amounts of such drugs dis- carded, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 25, 2019 Mr. DURBIN (for himself and Mr. PORTMAN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to require manufacturers of certain single-dose vial drugs payable under part B of the Medicare program to provide rebates with respect to amounts of such drugs discarded, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Recovering Excessive 4 Funds for Unused and Needless Drugs Act of 2019’’ or 5 the ‘‘REFUND Act of 2019’’. 6 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 2 •S 551 IS SEC. 2. REQUIRING MANUFACTURERS OF CERTAIN SINGLE- 1 DOSE VIAL DRUGS PAYABLE UNDER PART B 2 OF THE MEDICARE PROGRAM TO PROVIDE 3 REBATES WITH RESPECT TO DISCARDED 4 AMOUNTS OF SUCH DRUGS. 5 (a) IN GENERAL.—Section 1834 of the Social Secu- 6 rity Act (42 U.S.C. 1395m) is amended by adding at the 7 end the following new subsection: 8 ‘‘(w) REBATE FOR CERTAIN DISCARDED SINGLE- 9 DOSE VIAL DRUGS.— 10 ‘‘(1) IN GENERAL.—The manufacturer (as de- 11 fined in section 1847A(c)(6)(A)) of a rebatable sin- 12 gle-dose vial drug furnished in a calendar quarter 13 shall, not later than 30 days after the date of receipt 14 of information described in paragraph (2)(A)(iii) 15 with respect to such quarter, provide to the Sec- 16 retary a rebate that is equal to the amount specified 17 in paragraph (3) for such drug for such quarter. 18 ‘‘(2) SECRETARIAL DUTIES.— 19 ‘‘(A) IN GENERAL.—For each calendar 20 quarter, the Secretary shall, with respect to a 21 rebatable single-dose vial drug of a manufac- 22 turer furnished during such quarter— 23 ‘‘(i) require, through use of a modifier 24 such as the JW modifier used as of the 25 date of enactment of this subsection (or 26 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 3 •S 551 IS any such successor code that includes such 1 data as determined appropriate by the Sec- 2 retary), an indication on a claim for such 3 drug of the amount of such drug that was 4 discarded after such drug was furnished, if 5 any; 6 ‘‘(ii) determine the rebatable amount 7 (as defined in subparagraph (B)) with re- 8 spect to such drug; and 9 ‘‘(iii) not later than 60 days after the 10 end of such quarter, provide to such manu- 11 facturer notice of— 12 ‘‘(I) the total number of units of 13 such drug discarded during such 14 quarter (as determined by the Sec- 15 retary based on the aggregate 16 rebatable amount (as so defined) with 17 respect to such drug for such quar- 18 ter), if any; and 19 ‘‘(II) the rebate amount specified 20 in paragraph (3) for such drug and 21 such quarter. 22 ‘‘(B) REBATABLE AMOUNT.—The term 23 ‘rebatable amount’ means, with respect to a 24 rebatable single-dose vial drug of a manufac- 25 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 4 •S 551 IS turer furnished during a quarter, 90 percent of 1 the amount (if any) of such drug that was dis- 2 carded as indicated pursuant to subparagraph 3 (A)(i). 4 ‘‘(3) REBATE AMOUNT.—The amount of the re- 5 bate specified in this paragraph is, with respect to 6 a rebatable single-dose vial drug of a manufacturer 7 furnished in a calendar quarter, an amount equal to 8 the product of— 9 ‘‘(A) the total number of units of such 10 drug discarded during such quarter as deter- 11 mined under paragraph (2)(A)(iii)(I); and 12 ‘‘(B) the lesser of— 13 ‘‘(i) the average sales price (as de- 14 fined in section 1847A(c)(1)) for a unit of 15 such drug for such quarter (or, in the case 16 of a drug subject to an agreement with 17 such manufacturer under section 340B of 18 the Public Health Service Act, the price 19 for a unit of such drug for such quarter 20 under such agreement); or 21 ‘‘(ii) the wholesale acquisition cost (as 22 defined in section 1847A(c)(6)(B)) for a 23 unit of such drug. 24 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 5 •S 551 IS ‘‘(4) REBATE DEPOSITS.—Amounts paid as re- 1 bates pursuant to paragraph (1) shall be deposited 2 into the Federal Supplementary Medical Insurance 3 Trust Fund established under section 1841. 4 ‘‘(5) ENFORCEMENT.— 5 ‘‘(A) AUDITS.—Each manufacturer of a 6 rebatable single dose-vial drug that is required 7 to provide a rebate under this subsection shall 8 be subject to periodic audit with respect to such 9 drug and such rebates by the Secretary. 10 ‘‘(B) CIVIL MONEY PENALTY.— 11 ‘‘(i) IN GENERAL.—The Secretary 12 shall impose a civil money penalty on a 13 manufacturer of a rebatable single dose- 14 vial drug who has failed to comply with the 15 requirement under paragraph (1) for such 16 drug for a calendar quarter in an amount 17 the Secretary determines is commensurate 18 with the sum of— 19 ‘‘(I) the amount that the manu- 20 facturer would have paid under such 21 paragraph with respect to such drug 22 for such quarter; and 23 ‘‘(II) 25 percent of such amount. 24 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 6 •S 551 IS ‘‘(ii) APPLICATION.—The provisions 1 of section 1128A (other than subsections 2 (a) and (b)) shall apply to a civil money 3 penalty under this subparagraph in the 4 same manner as such provisions apply to a 5 penalty or proceeding under section 6 1128A(a). 7 ‘‘(6) DEFINITIONS.—In this subsection: 8 ‘‘(A) REBATABLE SINGLE-DOSE VIAL 9 DRUG.—The term ‘rebatable single-dose vial 10 drug’ means a single source drug or biological 11 (as defined in section 1847A(c)(6)(D)) paid for 12 under this part and furnished on or after Janu- 13 ary 1, 2020, from a single-dose vial. 14 ‘‘(B) UNIT.—The term ‘unit’ has the 15 meaning given such term in section 16 1847A(b)(2)(B).’’. 17 (b) COLLECTION OF COINSURANCE ONLY FOR POR- 18 TION OF REBATABLE SINGLE-DOSE VIAL DRUG ADMINIS- 19 TERED.—Section 1833(a) of the Social Security Act (42 20 U.S.C. 1395l) is amended— 21 (1) in subsection (a)(1)(S), by inserting subject 22 to subsection (cc), before with respect to; and 23 (2) by adding at the end the following new sub- 24 section: 25 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 7 •S 551 IS ‘‘(cc) COLLECTION OF COINSURANCE ONLY FOR 1 PORTION OF REBATABLE SINGLE-DOSE VIAL DRUG AD- 2 MINISTERED.—When processing a claim for a rebatable 3 single-dose vial drug (as defined in section 1834(w)(6)), 4 the Secretary, acting through the relevant Medicare ad- 5 ministrative contractor with respect to such claim, shall 6 only collect coinsurance from a beneficiary, taking into ac- 7 count any coverage under a Medicare supplemental policy 8 certified under section 1882 or any other supplemental in- 9 surance coverage of the beneficiary, with respect to the 10 portion of the drug administered (as indicated by the J- 11 portion of the claim for the drug used as of the date of 12 enactment of this subsection, or any successor code that 13 includes such data as determined appropriate by the Sec- 14 retary), in an amount equal to 20 percent of the amount 15 of payment that would be made if payment for the claim 16 was based only on the portion of the drug administered 17 (as so indicated). Nothing in the preceding sentence shall 18 affect the amount paid to the provider of services or sup- 19 plier with respect to the drug under this part (as deter- 20 mined based on the total amount of the drug for which 21 the claim was submitted, including the portion of the drug 22 administered and the portion discarded, as indicated by 23 the J-portion of the claim and the JW modifier, respec- 24 tively, used as of such date of enactment or any successor 25 VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS 8 •S 551 IS codes that include such data as determined appropriate 1 by the Secretary).’’. 2 Æ VerDate Sep 11 2014 02:15 Mar 01, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S551.IS S551 kjohnson on DSK79L0C42 with BILLS