(2) Greater equity among providers. (3) More predictable benchmark amounts for Medicare advantage plans. (b) CONSULTATIONS.-In conducting the study, the Administrator shall consult with the following: (1) Experts in health care financing. (2) Representatives of foundations and other nonprofit entities that have conducted or supported research on Medicare financing issues. (3) Representatives from Medicare Advantage plans. (4) Such other entities or people as determined by the Secretary. (c) REPORT.-Not later than one year after the date of the enactment of this Act, the Administrator shall transmit a report to the Congress on the study conducted under this section. The report shall contain a detailed statement of findings and conclusions of the study, together with its recommendations for such legislation and administrative actions as the Administrator considers appropriate. PART 2-BENEFICIARY PROTECTIONS AND ANTI-FRAUD SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL HEALTH SERVICES. (a) IN GENERAL.-Section 1852(a)(1) of the Social Security Act (42 U.S.C. 1395w22(a)(1)) is amended (1) in subparagraph (A), by inserting before the period at the end the following: "with cost-sharing that is no greater (and may be less) than the costsharing that would otherwise be imposed under such program option"; (2) in subparagraph (B)(i), by striking "or an actuarially equivalent level of cost-sharing as determined in this part"; and (3) by amending clause (ii) of subparagraph (B) to read as follows: "(ii) PERMITTING USE OF FLAT COPAYMENT OR PER DIEM RATE.-Nothing in clause (i) shall be construed as prohibiting a Medicare Advantage plan from using a flat copayment or per diem rate, in lieu of the costsharing that would be imposed under part A or B, so long as the amount of the cost-sharing imposed does not exceed the amount of the cost-sharing that would be imposed under the respective part if the individual were not enrolled in a plan under this part.". (b) LIMITATION FOR DUAL ELIGIBLES AND QUALIFIED MEDICARE BENEFICIARIES.— Section 1852(a) of such Act is amended to read as follows: “(7) LIMITATION ON COST-SHARING FOR DUAL ELIGIBLES AND QUALIFIED MEDICARE BENEFICIARIES.-In the case of a individual who is a full-benefit dual eligible individual (as defined in section 1935(c)(6)) or a qualified medicare beneficiary (as defined in section 1905(p)(1)) who is enrolled in a Medicare Advantage plan, the plan may not impose cost-sharing that exceeds the amount of cost-sharing that would be permitted with respect to the individual under this title and title XIX if the individual were not enrolled with such plan.". (c) EFFECTIVE DATES. (1) The amendments made by subsection (a) shall apply to plan years beginning on or after January 1, 2011. (2) The amendments made by subsection (b) shall apply to plan years beginning on or after January 1, 2011. SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLLEES IN PLANS WITH ENROLLMENT SUSPENSION. Section 1851(e)(4) of the Social Security Act (42 U.S.C. 1395w(e)(4)) is amended— (1) in subparagraph (C), by striking at the end "or"; (2) in subparagraph (D)— (A) by inserting ", taking into account the health or well-being of the individual" before the period; and (B) by redesignating such subparagraph as subparagraph (E); and (3) by inserting after subparagraph (C) the following new subparagraph: "(D) the individual is enrolled in an MA plan and enrollment in the plan is suspended under paragraph (2)(B) or (3)(C) of section 1857(g) because of a failure of the plan to meet applicable requirements; or". SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN ADMINISTRATIVE COSTS. (a) DISCLOSURE OF MEDICAL LOSS RATIOS AND OTHER EXPENSE DATA.-Section 1851 of the Social Security Act (42 U.S.C. 1395w-21), as previously amended by this subtitle, is amended by adding at the end the following new subsection: "(p) PUBLICATION OF MEDICAL LOSS RATIOS AND OTHER COST-RELATED INFORMA TION. "(1) IN GENERAL.-The Secretary shall publish, not later than November 1 of each year (beginning with 2011), for each MA plan contract, the medical loss ratio of the plan in the previous year. "(2) SUBMISSION OF DATA. “(A) IN GENERAL.-Each MA organization shall submit to the Secretary, in a form and manner specified by the Secretary, data necessary for the Secretary to publish the medical loss ratio on a timely basis. "(B) DATA FOR 2010 AND 2011.-The data submitted under subparagraph (A) for 2010 and for 2011 shall be consistent in content with the data reported as part of the MA plan bid in June 2009 for 2010. "(C) USE OF STANDARDIZED ELEMENTS AND DEFINITIONS.-The data to be submitted under subparagraph (A) relating to medical loss ratio for a year, beginning with 2012, shall be submitted based on the standardized elements and definitions developed under paragraph (3). "(3) DEVELOPMENT OF DATA REPORTING STANDARDS. “(A) IN GENERAL.-The Secretary shall develop and implement standardized data elements and definitions for reporting under this subsection, for contract years beginning with 2012, of data necessary for the calculation of the medical loss ratio for MA plans. Not later than December 31, 2010, the Secretary shall publish a report describing the elements and definitions so developed. "(B) CONSULTATION.-The Secretary shall consult with the Health Choices Commissioner, representatives of MA organizations, experts on health plan accounting systems, and representatives of the National Association of Insurance Commissioners, in the development of such data elements and definitions. "(4) MEDICAL LOSS RATIO TO BE DEFINED.—For purposes of this part, the term 'medical loss ratio' has the meaning given such term by the Secretary, taking into account the meaning given such term by the Health Choices Commissioner under section 116 of the America's Affordable Health Choices Act of 2009.". (b) MINIMUM MEDICAL LOSS RATIO.-Section 1857(e) of the Social Security Act (42 U.S.C. 1395w-27(e)) is amended by adding at the end the following new paragraph: "(4) REQUIREMENT FOR MINIMUM MEDICAL LOSS RATIO.-If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio (as defined in section 1851(p)(4)) of at least .85 "(A) the Secretary shall require the Medicare Advantage organization offering the plan to give enrollees a rebate (in the second succeeding contract year) of premiums under this part (or part B or part D, if applicable) by such amount as would provide for a benefits ratio of at least .85; "(B) for 3 consecutive contract years, the Secretary shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and "(C) the Secretary shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.". SEC. 1174. STRENGTHENING AUDIT AUTHORITY. (a) FOR PART C PAYMENTS RISK ADJUSTMENT.-Section 1857(d)(1) of the Social Security Act (42 U.S.C. 1395w-27(d)(1)) is amended by inserting after "section 1858(c))" the following: ", and data submitted with respect to risk adjustment under section 1853(a)(3)”. (b) ENFORCEMENT OF AUDITS AND DEFICIENCIES. (1) IN GENERAL.-Section 1857(e) of such Act, as amended by section 1173, is amended by adding at the end the following new paragraph: “(5) ENFORCEMENT OF AUDITS AND DEFICIENCIES. "(A) INFORMATION IN CONTRACT.-The Secretary shall require that each contract with an MA organization under this section shall include terms that inform the organization of the provisions in subsection (d). "(B) ENFORCEMENT AUTHORITY.-The Secretary is authorized, in connection with conducting audits and other activities under subsection (d), to take such actions, including pursuit of financial recoveries, necessary to address deficiencies identified in such audits or other activities.". (2) APPLICATION UNDER PART D.-For provision applying the amendment made by paragraph (1) to prescription drug plans under part D, see section 1860D-12(b)(3)(D) of the Social Security Act. (c) EFFECTIVE DATE.-The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to audits and activities conducted for contract years beginning on or after January 1, 2011. SEC. 1175. AUTHORITY TO DENY PLAN BIDS. (a) IN GENERAL.-Section 1854(a)(5) of the Social Security Act (42 U.S.C. 1395w24(a)(5)) is amended by adding at the end the following new subparagraph: "(C) REJECTION OF BIDS.-Nothing in this section shall be construed as requiring the Secretary to accept any or every bid by an MA organization under this subsection.". (b) APPLICATION UNDER PART D.-Section 1860D-11(d) of such Act (42 U.S.C. 1395w-111(d)) is amended by adding at the end the following new paragraph: “(3) REJECTION OF BIDS.-Paragraph (5)(C) of section 1854(a) shall apply with respect to bids under this section in the same manner as it applies to bids by an MA organization under such section.". (c) EFFECTIVE DATE.-The amendments made by this section shall apply to bids for contract years beginning on or after January 1, 2011. PART 3-TREATMENT OF SPECIAL NEEDS PLANS SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN ENROLLMENT PERIOD OF INDIVIDUALS INTO CHRONIC CARE SPECIALIZED MA PLANS FOR SPECIAL NEEDS INDIVIDUALS. Section 1859(f)(4) of the Social Security Act (42 U.S.C. 1395w-28(f)(4)) is amended by adding at the end the following new subparagraph: "(C) The plan does not enroll an individual on or after January 1, 2011, other than during an annual, coordinated open enrollment period or when at the time of the diagnosis of the disease or condition that qualifies the individual as an individual described in subsection (b)(6)(B)(iii).”. SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS PLANS TO RESTRICT ENROLLMENT. (a) IN GENERAL.-Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w28(f)(1)) is amended by striking "January 1, 2011" and inserting "January 1, 2013 (or January 1, 2016, in the case of a plan described in section 1177(b)(1) of the America's Affordable Health Choices Act of 2009)". (b) GRANDFATHERING OF CERTAIN PLANS. (1) PLANS DESCRIBED.-For purposes of section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w-28(f)(1)), a plan described in this paragraph is a plan that had a contract with a State that had a State program to operate an integrated Medicaid-Medicare program that had been approved by the Centers for Medicare & Medicaid Services as of January 1, 2004. (2) ANALYSIS; REPORT.—The Secretary of Health and Human Services shall provide, through a contract with an independent health services evaluation organization, for an analysis of the plans described in paragraph (1) with regard to the impact of such plans on cost, quality of care, patient satisfaction, and other subjects as specified by the Secretary. Not later than December 31, 2011, the Secretary shall submit to Congress a report on such analysis and shall include in such report such recommendations with regard to the treatment of such plans as the Secretary deems appropriate. Subtitle E-Improvements to Medicare Part D SEC. 1181. ELIMINATION OF COVERAGE GAP. (a) IN GENERAL.-Section 1860D-2(b) of such Act (42 U.S.C. 1395w-102(b)) is amended (1) in paragraph (3)(A), by striking "paragraph (4)" and inserting "paragraphs (4) and (7)"; (2) in paragraph (4)(B)(i), by inserting "subject to paragraph (7)," after "purposes of this part,”; and (3) by adding at the end the following new paragraph: “(A) IN GENERAL.-For each year beginning with 2011, the Secretary shall consistent with this paragraph progressively increase the initial coverage limit (described in subsection (b)(3)) and decrease the annual out-of-pocket threshold from the amounts otherwise computed until there is a continuation of coverage from the initial coverage limit for expenditures incurred through the total amount of expenditures at which benefits are available under paragraph (4). "(B) INCREASE IN INITIAL COVERAGE LIMIT.-For a year beginning with 2011, the initial coverage limit otherwise computed without regard to this paragraph shall be increased by 2 of the cumulative phase-in percentage (as defined in subparagraph (D)(ii) for the year) times the out-of-pocket gap amount (as defined in subparagraph (E)) for the year. "(C) DECREASE IN ANNUAL OUT-OF-POCKET THRESHOLD. For a year beginning with 2011, the annual out-of-pocket threshold otherwise computed without regard to this paragraph shall be decreased by 2 of the cumulative phase-in percentage of the out-of-pocket gap amount for the year multiplied by 1.75. "(D) PHASE-IN.-For purposes of this paragraph: "(i) ANNUAL PHASE-IN PERCENTAGE.-The term 'annual phase-in percentage' means "(I) for 2011, 13 percent; "(II) for 2012, 2013, 2014, and 2015, 5 percent; "(IV) for 2019 and each subsequent year, 10 percent. "(ii) CUMULATIVE PHASE-IN PERCENTAGE.-The term 'cumulative phase-in percentage' means for a year the sum of the annual phase-in percentage for the year and the annual phase-in percentages for each previous year beginning with 2011, but in no case more than 100 percent. "(E) OUT-OF-POCKET GAP AMOUNT.-For purposes of this paragraph, the term 'out-of-pocket gap amount' means for a year the amount by which— "(i) the annual out-of-pocket threshold specified in paragraph (4)(B) for the year (as determined as if this paragraph did not apply), exceeds "(ii) the sum of "(I) the annual deductible under paragraph (1) for the year; and "(II) 1/4 of the amount by which the initial coverage limit under paragraph (3) for the year (as determined as if this paragraph did not apply) exceeds such annual deductible.". (b) REQUIRING DRUG MANUFACTURERS TO PROVIDE DRUG REBATES FOR FULL-BENEFIT DUAL ELIGIBLES.— (1) IN GENERAL.-Section 1860D-2 of the Social Security Act (42 U.S.C. 1396r-8) is amended (A) in subsection (e)(1), in the matter before subparagraph (A), by inserting "and subsection (f)" after "this subsection"; and (B) by adding at the end the following new subsection: "(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS. "(1) IN GENERAL.-In this part, the term 'covered part D drug' does not include any drug or biologic that is manufactured by a manufacturer that has not entered into and have in effect a rebate agreement described in paragraph (2). "(2) REBATE AGREEMENT.-A rebate agreement under this subsection shall require the manufacturer to provide to the Secretary a rebate for each rebate period (as defined in paragraph (6)(B)) ending after December 31, 2010, in the amount specified in paragraph (3) for any covered part D drug of the manufacturer dispensed after December 31, 2010, to any full-benefit dual eligible individual (as defined in paragraph (6)(A)) for which payment was made by a PDP sponsor under part D or a MA organization under part C for such period. Such rebate shall be paid by the manufacturer to the Secretary not later than 30 days after the date of receipt of the information described in section 1860D12(b)(7), including as such section is applied under section 1857(f)(3). “(3) REBATE FOR FULL-BENEFIT DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLL EES. "(A) IN GENERAL.-The amount of the rebate specified under this paragraph for a manufacturer for a rebate period, with respect to each dosage form and strength of any covered part D drug provided by such manufacturer and dispensed to a full-benefit dual eligible individual, shall be equal to the product of— (i) the total number of units of such dosage form and strength of the drug so provided and dispensed for which payment was made by a PDP sponsor under part D or a MA organization under part C for the rebate period (as reported under section 1860D-12(b)(7), including as such section is applied under section 1857(f)(3)); and "(ii) the amount (if any) by which— "(I) the Medicaid rebate amount (as defined in subparagraph (B)) for such form, strength, and period, exceeds “(II) the average Medicare drug program full-benefit dual eligible rebate amount (as defined in subparagraph (C)) for such form, strength, and period. "(B) MEDICAID REBATE AMOUNT.-For purposes of this paragraph, the term 'Medicaid rebate amount' means, with respect to each dosage form and strength of a covered part D drug provided by the manufacturer for a rebate period "(i) in the case of a single source drug or an innovator multiple source drug, the amount specified in paragraph (1)(A)(ii) of section 1927(c) plus the amount, if any, specified in paragraph (2)(A)(ii) of such section, for such form, strength, and period; or "(ii) in the case of any other covered outpatient drug, the amount specified in paragraph (3)(A)(i) of such section for such form, strength, and period. "(C) AVERAGE MEDICARE DRUG PROGRAM FULL-BENEFIT DUAL ELIGIBLE REBATE AMOUNT.-For purposes of this subsection, the term 'average Medicare drug program full-benefit dual eligible rebate amount' means, with respect to each dosage form and strength of a covered part D drug provided by a manufacturer for a rebate period, the sum, for all PDP sponsors under part D and MA organizations administering a MA-PD plan under part C, of"(i) the product, for each such sponsor or organization, of "(I) the sum of all rebates, discounts, or other price concessions (not taking into account any rebate provided under paragraph (2) for such dosage form and strength of the drug dispensed, calculated on a per-unit basis, but only to the extent that any such rebate, discount, or other price concession applies equally to drugs dispensed to full-benefit dual eligible Medicare drug plan enrollees and drugs dispensed to PDP and MA-PD enrollees who are not full-benefit dual eligible individuals; and "(II) the number of the units of such dosage and strength of the drug dispensed during the rebate period to full-benefit dual eligible individuals enrolled in the prescription drug plans administered by the PDP sponsor or the MA-PD plans administered by the MA-PĎ organization; divided by "(ii) the total number of units of such dosage and strength of the drug dispensed during the rebate period to full-benefit dual eligible individuals enrolled in all prescription drug plans administered by PDP sponsors and all MA-PD plans administered by MA-PD organizations. "(4) LENGTH OF AGREEMENT.-The provisions of paragraph (4) of section 1927(b) (other than clauses (iv) and (v) of subparagraph (B)) shall apply to rebate agreements under this subsection in the same manner as such paragraph applies to a rebate agreement under such section. "(5) OTHER TERMS AND CONDITIONS.-The Secretary shall establish other terms and conditions of the rebate agreement under this subsection, including terms and conditions related to compliance, that are consistent with this subsection. "(6) DEFINITIONS.-In this subsection and section 1860D-12(b)(7): "(A) FULL-BENEFIT DUAL ELIGIBLE INDIVIDUAL.-The term 'full-benefit dual eligible individual' has the meaning given such term in section 1935(c)(6). "(B) REBATE PERIOD.-The term 'rebate period' has the meaning given such term in section 1927(k)(8).". (2) REPORTING REQUIREMENT FOR THE DETERMINATION AND PAYMENT OF REBATES BY MANUFACTURES RELATED TO REBATE FOR FULL-BENEFIT DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLLEES. (A) REQUIREMENTS FOR PDP SPONSORS.-Section 1860D-12(b) of the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by adding at the end the following new paragraph: "(7) REPORTING REQUIREMENT FOR THE DETERMINATION AND PAYMENT OF REBATES BY MANUFACTURERS RELATED TO REBATE FOR FULL-BENEFIT DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLLEES. "(A) IN GENERAL.-For purposes of the rebate under section 1860D-2(f) for contract years beginning on or after January 1, 2011, each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan shall require that the sponsor comply with subparagraphs (B) and (C). "(B) REPORT FORM AND CONTENTS.-Not later than 60 days after the end of each rebate period (as defined in section 1860D-2(f)(6)(B)) within such a contract year to which such section applies, a PDP sponsor of a prescription drug plan under this part shall report to each manufacturer— "(i) information (by National Drug Code number) on the total number of units of each dosage, form, and strength of each drug of such manu |