article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Independent Pharmacy Protection Act of 2006''. SEC. 2. IMPROVING MEDICARE PRESCRIPTION DRUG PLAN PAYMENTS TO PHARMACIES. (a) In General.--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: ``(4) Payments to pharmacies.-- ``(A) In general.--Each contract entered into with a PDP sponsor under this section with respect to a prescription drug plan offered by such sponsor shall provide for the following: ``(i) Availability of direct deposit payments.--The option for any participating pharmacy to elect for the plan to make payments by direct deposits to the pharmacy for covered part D drugs dispensed through the pharmacy. ``(ii) Increased dispensing fee for generic drugs.--The payment of dispensing fees by the plan to each participating pharmacy for covered part D drugs dispensed through the participating pharmacy, in accordance with subparagraph (B). ``(iii) Payments within 10 days for certain pharmacies.--In the case of a participating pharmacy that is not part of a chain of pharmacies that consists of more than three pharmacies at different locations, payment with respect to any non-disputed claim (as defined in subparagraph (C)) for a covered part D drug dispensed through the pharmacy to be made by the plan to the pharmacy in full by a date that is not more than 10 days after the date on which the claim is received by the plan. ``(B) Payment of dispensing fees to encourage use of generic drugs.-- ``(i) In general.--For purposes of subparagraph (A)(ii) and subject to clauses (ii) and (iii), with respect to a generic covered part D drug that is therapeutically equivalent and bioequivalent to a brand name drug that is a covered part D drug dispensed through a participating pharmacy, the amount of the dispensing fee paid to the pharmacy for the generic covered part D drug shall be an amount that is at least 50 percent greater than the amount of the dispensing fee for the brand name drug. ``(ii) Cap on amount of dispensing fees for generic drugs.--For purposes of subclause (i), the amount of the dispensing fee paid to a participating pharmacy for a generic covered part D drug shall not be more than $10. ``(iii) Safe harbor for brand name drug dispensing fee amounts.-- ``(I) In general.--For purposes of clause (i) and subject to subclause (II), a prescription drug plan under this section shall not decrease the amount of the dispensing fee paid by the plan to a participating pharmacy for a brand name drug described in such clause to an amount that is less than the amount of the dispensing fee paid by such plan to such pharmacy for such drug on the date of the enactment of the `Independent Pharmacy Protection Act of 2006'. ``(II) Exception.--The Secretary may waive the prohibition under subclause (I) with respect to a dispensing fee paid by a prescription drug plan for a brand name drug, as the Secretary determines appropriate. ``(C) Non-disputed claim defined.--For purposes of subparagraph (A)(iii), a `non-disputed claim' means a claim that has no defect or impropriety or particular circumstance requiring special treatment that prevents timely payment from being made under this part.''. (b) Application to MA-PD Plans.--Section 1857(e) of such Act (42 U.S.C. 1395w-27(e)) is amended by adding at the end the following new paragraph: ``(4) Incorporation of prescription drug plan contract requirements for pharmacy payments.--The provisions of section 1860D-12(b)(4) shall apply to contracts with a Medicare Advantage organization in the same manner as they apply to contracts with a PDP sponsor offering a prescription drug plan under part D.''. (c) Effective Date.--The amendments made by this Act shall apply to plan years beginning on or after the date of the enactment of this Act.
summary: Independent Pharmacy Protection Act of 2006 - Amends part D (Voluntary Prescription Drug Benefit Program) of title XVIII (Medicare) of the Social Security Act to require each prescription drug plan contract entered into with a plan sponsor to provide for: (1) the availability of direct deposit payments; (2) an increased dispensing fee for generic drugs; and (3) payments within 10 days for certain pharmacies. Requires the dispensing fee paid to a participating pharmacy for a generic covered part D drug therapeutically equivalent and bioequivalent to a brand name covered part D drug dispensed through the pharmacy to be at least 50% greater than the dispensing fee for the brand name drug. Limits to $10 the dispensing fee paid to a participating pharmacy for a generic covered part D drug. Prohibits a prescription drug plan, subject to exception by the Secretary of Health and Human Services, from decreasing the dispensing fee paid to a participating pharmacy for a brand name drug to an amount less than the dispensing fee paid for it on the date of enactment of this Act. Applies this Act to contracts with a Medicare Advantage organization in the same manner as they apply to those with a prescription drug plan sponsor.