---
kind: "section"
citation: "42 U.S.C. § 1395w–115"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1395w–115"
heading: "Subsidies for part D eligible individuals for qualified prescription drug coverage"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1395w-115"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter XVIII — Health Insurance for Aged and Disabled"
  - "Part D — Voluntary Prescription Drug Benefit Program"
  - "Subpart 2 — prescription drug plans; pdp sponsors; financing"
---

# §1395w–115. Subsidies for part D eligible individuals for qualified prescription drug coverage

- (a) **Subsidy payment—** In order to reduce premium levels applicable to [qualified prescription drug coverage](/usc/42/1395w–151.md?p=a-15) for [part D eligible individuals](/usc/42/1395w–151.md?p=a-4) consistent with an overall subsidy level of 74.5 percent (or, for each of 2024 through 2029, the percent applicable as a result of the application of [section 1395w–113(a)(8) of this title](/usc/42/1395w–113.md?p=a-8), or, for 2030 and each subsequent year, 100 percent minus the percent specified under [section 1395w–113(a)(9) of this title](/usc/42/1395w–113.md?p=a-9)) for [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1), to reduce adverse selection among [prescription drug plans](/usc/42/1395w–151.md?p=a-14) and [MA–PD plans](/usc/42/1395w–151.md?p=a-9), and to promote the participation of [PDP sponsors](/usc/42/1395w–151.md?p=a-13) under this part and MA organizations under part C, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for payment to a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) that offers a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) and an MA organization that offers an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) of the following subsidies in accordance with this section:
  - (1) **Direct subsidy—** A direct subsidy for each [part D eligible individual](/usc/42/1395w–151.md?p=a-4) enrolled in a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) for a month equal to—
    - (A) the amount of the plan’s standardized bid amount (as defined in [section 1395w–113(a)(5) of this title](/usc/42/1395w–113.md?p=a-5)), adjusted under [subsection (c)(1)](#c-1), reduced by
    - (B) the base beneficiary premium (as computed under paragraph (2) or (8) of [section 1395w–113(a) of this title](/usc/42/1395w–113.md?p=a) (as applicable) and as adjusted under [paragraph (1)(B)](/usc/42/1395w–113.md?p=a-1-B) of such section).
  - (2) **Subsidy through reinsurance—** The reinsurance payment amount (as defined in [subsection (b)](#b)).

  This section constitutes budget authority in advance of appropriations Acts and represents the obligation of the [Secretary](/usc/42/1301.md?p=a-6) to provide for the payment of amounts provided under this section.

- (b) **Reinsurance payment amount—**
  - (1) **In general—** The reinsurance payment amount under this subsection for a [part D eligible individual](/usc/42/1395w–151.md?p=a-4) enrolled in a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) for a coverage year is an amount equal to—
    - (A) for a year preceding 2025, 80 percent of the allowable reinsurance costs (as specified in [paragraph (2)](#b-2)) attributable to that portion of gross covered prescription [drug](/usc/42/11851.md?p=4) costs as specified in [paragraph (3)](#b-3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in [section 1395w–102(b)(4)(B) of this title](/usc/42/1395w–102.md?p=b-4-B); and
    - (B) for 2025 and each subsequent year, the sum of—
      - (i) with respect to applicable [drugs](/usc/42/11851.md?p=4) (as defined in [section 1395w–114c(g)(2) of this title](/usc/42/1395w–114c.md?p=g-2)), an amount equal to 20 percent of such allowable reinsurance costs attributable to that portion of gross covered prescription [drug](/usc/42/11851.md?p=4) costs as specified in [paragraph (3)](#b-3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in [section 1395w–102(b)(4)(B) of this title](/usc/42/1395w–102.md?p=b-4-B); and
      - (ii) with respect to [covered part D drugs](/usc/42/1395w–151.md?p=a-2) that are not applicable [drugs](/usc/42/11851.md?p=4) (as so defined), an amount equal to 40 percent of such allowable reinsurance costs attributable to that portion of gross covered prescription [drug](/usc/42/11851.md?p=4) costs as specified in [paragraph (3)](#b-3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in [section 1395w–102(b)(4)(B) of this title](/usc/42/1395w–102.md?p=b-4-B).
  - (2) **Allowable reinsurance costs—**
    - (A) **In general—** Subject to [subparagraph (B)](#b-2-B), for purposes of this section, the term “allowable reinsurance costs” means, with respect to gross covered prescription [drug](/usc/42/11851.md?p=4) costs under a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) offered by a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) offered by an MA organization, the part of such costs that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or organization or by (or on behalf of) an enrollee under the plan, but in no case more than the part of such costs that would have been paid under the plan if the prescription [drug](/usc/42/11851.md?p=4) coverage under the plan were [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1), or, in the case of a plan providing supplemental prescription [drug](/usc/42/11851.md?p=4) coverage, if such coverage were [standard prescription drug coverage](/usc/42/1395w–151.md?p=a-16).
    - (B) **Inclusion of manufacturer discounts on applicable drugs—** For purposes of applying [subparagraph (A)](#b-2-A), the term “allowable reinsurance costs” shall include the portion of the negotiated price (as defined in [section 1395w–114c(g)(6) of this title](/usc/42/1395w–114c.md?p=g-6)) of an applicable [drug](/usc/42/11851.md?p=4) (as defined in [section 1395w–114c(g)(2) of this title](/usc/42/1395w–114c.md?p=g-2)) that was paid by a manufacturer under the manufacturer discount program under [section 1395w–114c of this title](/usc/42/1395w–114c.md).
  - (3) **Gross covered prescription drug costs—** Subject to [paragraph (2)(B)](#b-2-B), for purposes of this section, the term “gross covered prescription [drug](/usc/42/11851.md?p=4) costs” means, with respect to a [part D eligible individual](/usc/42/1395w–151.md?p=a-4) enrolled in a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) during a coverage year, the costs incurred under the plan, not [including](/usc/42/1301.md?p=b) administrative costs, but [including](/usc/42/1301.md?p=b) costs directly related to the dispensing of [covered part D drugs](/usc/42/1395w–151.md?p=a-2) during the year and costs relating to the deductible. Such costs shall be determined whether they are paid by the individual or under the plan (or, with respect to 2025 and subsequent years, in the case of an applicable [drug](/usc/42/11851.md?p=4), as defined in [section 1395w–114c(g)(2) of this title](/usc/42/1395w–114c.md?p=g-2), by a manufacturer), regardless of whether the coverage under the plan exceeds [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1).
  - (4) **Coverage year defined—** For purposes of this section, the term “coverage year” means a calendar year in which [covered part D drugs](/usc/42/1395w–151.md?p=a-2) are dispensed if the claim for such [drugs](/usc/42/11851.md?p=4) (and payment on such claim) is made not later than such period after the end of such year as the [Secretary](/usc/42/1301.md?p=a-6) specifies.
- (c) **Adjustments relating to bids—**
  - (1) **Health status risk adjustment—**
    - (A) **Establishment of risk adjustors—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish an appropriate methodology for adjusting the standardized bid amount under [subsection (a)(1)(A)](#a-1-A) to take into account variation in costs for [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1) among [prescription drug plans](/usc/42/1395w–151.md?p=a-14) and [MA–PD plans](/usc/42/1395w–151.md?p=a-9) based on the differences in actuarial risk of different enrollees being served. Any such risk adjustment shall be designed in a manner so as not to result in a change in the aggregate amounts payable to such plans under [subsection (a)(1)](#a-1) and through that portion of the monthly beneficiary prescription [drug](/usc/42/11851.md?p=4) premiums described in [subsection (a)(1)(B)](#a-1-B) and MA monthly prescription [drug](/usc/42/11851.md?p=4) beneficiary premiums.
    - (B) **Considerations—** In establishing the methodology under [subparagraph (A)](#c-1-A), the [Secretary](/usc/42/1301.md?p=a-6) may take into account the similar methodologies used under [section 1395w–23(a)(3) of this title](/usc/42/1395w–23.md?p=a-3) to adjust payments to MA organizations for benefits under the original medicare fee-for-service program option.
    - (C) **Data collection—** In order to carry out this paragraph, the [Secretary](/usc/42/1301.md?p=a-6) shall require—
      - (i) [PDP sponsors](/usc/42/1395w–151.md?p=a-13) to submit data regarding [drug](/usc/42/11851.md?p=4) claims that can be linked at the individual level to part A and part B data and such other information as the [Secretary](/usc/42/1301.md?p=a-6) determines necessary; and
      - (ii) MA organizations that offer [MA–PD plans](/usc/42/1395w–151.md?p=a-9) to submit data regarding [drug](/usc/42/11851.md?p=4) claims that can be linked at the individual level to other data that such organizations are required to submit to the [Secretary](/usc/42/1301.md?p=a-6) and such other information as the [Secretary](/usc/42/1301.md?p=a-6) determines necessary.
    - (D) **Publication—** At the time of publication of risk adjustment factors under [section 1395w–23(b)(1)(B)(i)(II) of this title](/usc/42/1395w–23.md?p=b-1-B-i-II), the [Secretary](/usc/42/1301.md?p=a-6) shall publish the risk adjusters established under this paragraph for the succeeding year.
  - (2) **Geographic adjustment—**
    - (A) **In general—** Subject to [subparagraph (B)](#c-2-B), for purposes of [section 1395w–113(a)(1)(B)(iii) of this title](/usc/42/1395w–113.md?p=a-1-B-iii), the [Secretary](/usc/42/1301.md?p=a-6) shall establish an appropriate methodology for adjusting the national average monthly bid amount (computed under [section 1395w–113(a)(4) of this title](/usc/42/1395w–113.md?p=a-4)) to take into account differences in prices for [covered part D drugs](/usc/42/1395w–151.md?p=a-2) among [PDP regions](/usc/42/1395w–151.md?p=a-12).
    - (B) **De minimis rule—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that the price variations described in [subparagraph (A)](#c-2-A) among [PDP regions](/usc/42/1395w–151.md?p=a-12) are de minimis, the [Secretary](/usc/42/1301.md?p=a-6) shall not provide for adjustment under this paragraph.
    - (C) **Budget neutral adjustment—** Any adjustment under this paragraph shall be applied in a manner so as to not result in a change in the aggregate payments made under this part that would have been made if the [Secretary](/usc/42/1301.md?p=a-6) had not applied such adjustment.
- (d) **Payment methods—**
  - (1) **In general—** Payments under this section shall be based on such a method as the [Secretary](/usc/42/1301.md?p=a-6) determines. The [Secretary](/usc/42/1301.md?p=a-6) may establish a payment method by which interim payments of amounts under this section are made during a year based on the [Secretary](/usc/42/1301.md?p=a-6)’s best estimate of amounts that will be payable after obtaining all of the information.
  - (2) **Requirement for provision of information—**
    - (A) **Requirement—** Payments under this section to a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or MA organization are conditioned upon the furnishing to the [Secretary](/usc/42/1301.md?p=a-6), in a form and manner specified by the [Secretary](/usc/42/1301.md?p=a-6), of such information as may be required to carry out this section.
    - (B) **Restriction on use of information—** Information disclosed or obtained pursuant to [subparagraph (A)](#d-2-A) may be used by officers, employees, and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this section.
  - (3) **Source of payments—** Payments under this section shall be made from the [Medicare Prescription Drug Account](/usc/42/1395w–151.md?p=a-10).
  - (4) **Application of enrollee adjustment—** The provisions of [section 1395w–23(a)(2) of this title](/usc/42/1395w–23.md?p=a-2) shall apply to payments to [PDP sponsors](/usc/42/1395w–151.md?p=a-13) under this section in the same manner as they apply to payments to MA organizations under [section 1395w–23(a) of this title](/usc/42/1395w–23.md?p=a).
- (e) **Portion of total payments to a sponsor or organization subject to risk (application of risk corridors)—**
  - (1) **Computation of adjusted allowable risk corridor costs—**
    - (A) **In general—** For purposes of this subsection, the term “adjusted allowable risk corridor costs” means, for a plan for a coverage year (as defined in [subsection (b)(4)](#b-4))—
      - (i) the allowable risk corridor costs (as defined in [subparagraph (B)](#e-1-B)) for the plan for the year, reduced by
      - (ii) the sum of (I) the total reinsurance payments made under [subsection (b)](#b) to the sponsor of the plan for the year, and (II) the total subsidy payments made under [section 1395w–114 of this title](/usc/42/1395w–114.md) to the sponsor of the plan for the year.
    - (B) **Allowable risk corridor costs—** For purposes of this subsection, the term “allowable risk corridor costs” means, with respect to a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) offered by a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) offered by an MA organization, the part of costs (not [including](/usc/42/1301.md?p=b) administrative costs, but [including](/usc/42/1301.md?p=b) costs directly related to the dispensing of [covered part D drugs](/usc/42/1395w–151.md?p=a-2) during the year) incurred by the sponsor or organization under the plan that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or organization under the plan, but in no case more than the part of such costs that would have been paid under the plan if the prescription [drug](/usc/42/11851.md?p=4) coverage under the plan were [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1), or, in the case of a plan providing supplemental prescription [drug](/usc/42/11851.md?p=4) coverage, if such coverage were [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1) taking into account the adjustment under [section 1395w–111(c)(2) of this title](/usc/42/1395w–111.md?p=c-2). In computing allowable costs under this paragraph, the [Secretary](/usc/42/1301.md?p=a-6) shall compute such costs based upon imposition under paragraphs (1)(D) and (2)(E) of [section 1395w–114(a) of this title](/usc/42/1395w–114.md?p=a) of the maximum amount of copayments permitted under such paragraphs.
  - (2) **Adjustment of payment—**
    - (A) **No adjustment if adjusted allowable risk corridor costs within risk corridor—** If the adjusted allowable risk corridor costs (as defined in [paragraph (1)](#e-1)) for the plan for the year are at least equal to the first threshold lower limit of the risk corridor (specified in [paragraph (3)(A)(i)](#e-3-A-i)), but not greater than the first threshold upper limit of the risk corridor (specified in [paragraph (3)(A)(iii)](#e-3-A-iii)) for the plan for the year, then no payment adjustment shall be made under this subsection.
    - (B) **Increase in payment if adjusted allowable risk corridor costs above upper limit of risk corridor—**
      - (i) **Costs between first and second threshold upper limits—** If the adjusted allowable risk corridor costs for the plan for the year are greater than the first threshold upper limit, but not greater than the second threshold upper limit, of the risk corridor for the plan for the year, the [Secretary](/usc/42/1301.md?p=a-6) shall increase the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount equal to 50 percent (or, for 2006 and 2007, 75 percent or 90 percent if the conditions described in [clause (iii)](#e-2-B-iii) are met for the year) of the difference between such adjusted allowable risk corridor costs and the first threshold upper limit of the risk corridor.
      - (ii) **Costs above second threshold upper limits—** If the adjusted allowable risk corridor costs for the plan for the year are greater than the second threshold upper limit of the risk corridor for the plan for the year, the [Secretary](/usc/42/1301.md?p=a-6) shall increase the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount equal to the sum of—
        - (I) 50 percent (or, for 2006 and 2007, 75 percent or 90 percent if the conditions described in [clause (iii)](#e-2-B-iii) are met for the year) of the difference between the second threshold upper limit and the first threshold upper limit; and
        - (II) 80 percent of the difference between such adjusted allowable risk corridor costs and the second threshold upper limit of the risk corridor.
      - (iii) **Conditions for application of higher percentage for 2006 and 2007—** The conditions described in this clause are met for 2006 or 2007 if the [Secretary](/usc/42/1301.md?p=a-6) determines with respect to such year that—
        - (I) at least 60 percent of [prescription drug plans](/usc/42/1395w–151.md?p=a-14) and [MA–PD plans](/usc/42/1395w–151.md?p=a-9) to which this subsection applies have adjusted allowable risk corridor costs for the plan for the year that are more than the first threshold upper limit of the risk corridor for the plan for the year; and
        - (II) such plans represent at least 60 percent of [part D eligible individuals](/usc/42/1395w–151.md?p=a-4) enrolled in any [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9).
    - (C) **Reduction in payment if adjusted allowable risk corridor costs below lower limit of risk corridor—**
      - (i) **Costs between first and second threshold lower limits—** If the adjusted allowable risk corridor costs for the plan for the year are less than the first threshold lower limit, but not less than the second threshold lower limit, of the risk corridor for the plan for the year, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount (or otherwise recover from the sponsor or organization an amount) equal to 50 percent (or, for 2006 and 2007, 75 percent) of the difference between the first threshold lower limit of the risk corridor and such adjusted allowable risk corridor costs.
      - (ii) **Costs below second threshold lower limit—** If the adjusted allowable risk corridor costs for the plan for the year are less the second threshold lower limit of the risk corridor for the plan for the year, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount (or otherwise recover from the sponsor or organization an amount) equal to the sum of—
        - (I) 50 percent (or, for 2006 and 2007, 75 percent) of the difference between the first threshold lower limit and the second threshold lower limit; and
        - (II) 80 percent of the difference between the second threshold upper limit of the risk corridor and such adjusted allowable risk corridor costs.
  - (3) **Establishment of risk corridors—**
    - (A) **In general—** For each plan year the [Secretary](/usc/42/1301.md?p=a-6) shall establish a risk corridor for each [prescription drug plan](/usc/42/1395w–151.md?p=a-14) and each [MA–PD plan](/usc/42/1395w–151.md?p=a-9). The risk corridor for a plan for a year shall be equal to a range as follows:
      - (i) **First threshold lower limit—** The first threshold lower limit of such corridor shall be equal to—
        - (I) the target amount described in [subparagraph (B)](#e-3-B) for the plan; minus
        - (II) an amount equal to the first threshold risk percentage for the plan (as determined under [subparagraph (C)(i)](#e-3-C-i)) of such target amount.
      - (ii) **Second threshold lower limit—** The second threshold lower limit of such corridor shall be equal to—
        - (I) the target amount described in [subparagraph (B)](#e-3-B) for the plan; minus
        - (II) an amount equal to the second threshold risk percentage for the plan (as determined under [subparagraph (C)(ii)](#e-3-C-ii)) of such target amount.
      - (iii) **First threshold upper limit—** The first threshold upper limit of such corridor shall be equal to the sum of—
        - (I) such target amount; and
        - (II) the amount described in [clause (i)(II)](#e-3-A-i-II).
      - (iv) **Second threshold upper limit—** The second threshold upper limit of such corridor shall be equal to the sum of—
        - (I) such target amount; and
        - (II) the amount described in [clause (ii)(II)](#e-3-A-ii-II).
    - (B) **Target amount described—** The target amount described in this paragraph is, with respect to a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) in a year, the total amount of payments paid to the [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or MA–PD organization for the plan for the year, taking into account amounts paid by the [Secretary](/usc/42/1301.md?p=a-6) and enrollees, based upon the standardized bid amount (as defined in [section 1395w–113(a)(5) of this title](/usc/42/1395w–113.md?p=a-5) and as risk adjusted under [subsection (c)(1)](#c-1)), reduced by the total amount of administrative expenses for the year assumed in such standardized bid.
    - (C) **First and second threshold risk percentage defined—**
      - (i) **First threshold risk percentage—** Subject to [clause (iii)](#e-3-C-iii), for purposes of this section, the first threshold risk percentage is—
        - (I) for 2006 and 2007, and[^1] 2.5 percent;
        - (II) for 2008 through 2011, 5 percent; and
        - (III) for 2012 and subsequent years, a percentage established by the [Secretary](/usc/42/1301.md?p=a-6), but in no case less than 5 percent.
      - (ii) **Second threshold risk percentage—** Subject to [clause (iii)](#e-3-C-iii), for purposes of this section, the second threshold risk percentage is—
        - (I) for 2006 and 2007, 5 percent;
        - (II) for 2008 through 2011, 10 percent; and
        - (III) for 2012 and subsequent years, a percentage established by the [Secretary](/usc/42/1301.md?p=a-6) that is greater than the percent established for the year under [clause (i)(III)](#e-3-C-i-III), but in no case less than 10 percent.
      - (iii) **Reduction of risk percentage to ensure 2 plans in an area—** Pursuant to [section 1395w–111(b)(2)(E)(ii) of this title](/usc/42/1395w–111.md?p=b-2-E-ii), a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) may submit a bid that requests a decrease in the applicable first or second threshold risk percentages or an increase in the percents applied under [paragraph (2)](#e-2).
  - (4) **Plans at risk for entire amount of supplemental prescription drug coverage—** A [PDP sponsor](/usc/42/1395w–151.md?p=a-13) and MA organization that offers a plan that provides supplemental prescription [drug](/usc/42/11851.md?p=4) benefits shall be at full financial risk for the provision of such supplemental benefits.
  - (5) **No effect on monthly premium—** No adjustment in payments made by reason of this subsection shall affect the monthly beneficiary premium or the MA monthly prescription [drug](/usc/42/11851.md?p=4) beneficiary premium.
- (f) **Disclosure of information—**
  - (1) **In general—** Each contract under this part and under part C shall provide that—
    - (A) the [PDP sponsor](/usc/42/1395w–151.md?p=a-13) offering a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or an MA organization offering an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) shall provide the [Secretary](/usc/42/1301.md?p=a-6) with such information as the [Secretary](/usc/42/1301.md?p=a-6) determines is necessary to carry out this section; and
    - (B) the [Secretary](/usc/42/1301.md?p=a-6) shall have the right in accordance with [section 1395w–27(d)(2)(B) of this title](/usc/42/1395w–27.md?p=d-2-B) (as applied under [section 1395w–112(b)(3)(C) of this title](/usc/42/1395w–112.md?p=b-3-C)) to inspect and audit any books and records of a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or MA organization that pertain to the information regarding costs provided to the [Secretary](/usc/42/1301.md?p=a-6) under [subparagraph (A)](#f-1-A).
  - (2) **Restriction on use of information—** Information disclosed or obtained pursuant to the provisions of this section may be used—
    - (A) by officers, employees, and contractors of the Department of Health and Human Services for the purposes of, and to the extent necessary in—
      - (i) carrying out this section or part E of subchapter XI; and
      - (ii) conducting oversight, evaluation, and enforcement under this subchapter;
    - (B) by the Attorney General and the Comptroller General of the [United States](/usc/42/1301.md?p=a-2) for the purposes of, and to the extent necessary in, carrying out health oversight activities;
    - (C) by the Executive [Director](/usc/42/11851.md?p=5) of the Medicare Payment Advisory Commission for purposes of monitoring, making recommendations for, and analysis of the program under this subchapter and by the Executive [Director](/usc/42/11851.md?p=5) of the Medicaid and CHIP Payment and Access Commission for purposes of monitoring, making recommendations for, and analysis of the Medicaid program established under subchapter XIX and the Children’s Health Insurance Program under subchapter XXI; and
    - (D) by the [Director](/usc/42/11851.md?p=5) of the Congressional Budget Office for the purposes of analysis of programs authorized under this chapter, as applicable, and the fulfilment of such [Director](/usc/42/11851.md?p=5)’s duties under the Congressional Budget and Impoundment Control Act of 1974.
  - (3) **Additional restrictions on disclosure of information—**
    - (A) **In general—** The Executive [Directors](/usc/42/11851.md?p=5) described in [paragraph (2)(C)](#f-2-C) shall not disclose any of the following information disclosed to such Executive [Directors](/usc/42/11851.md?p=5) or obtained by such Executive [Directors](/usc/42/11851.md?p=5) pursuant to such paragraph, with respect to a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) offered by a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) offered by an MA organization:
      - (i) The specific amounts or the identity of the source of any rebates, discounts, price concessions, or other forms of direct or indirect remuneration under such [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or such [MA–PD plan](/usc/42/1395w–151.md?p=a-9).
      - (ii) Information submitted with the bid submitted under [section 1395w–111(b) of this title](/usc/42/1395w–111.md?p=b) by such [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or under [section 1395w–24(a) of this title](/usc/42/1395w–24.md?p=a) by such MA organization.
      - (iii) In the case of such information from prescription [drug](/usc/42/11851.md?p=4) event records, information in a form that would not be permitted under section 423.505(m) of title 42, Code of Federal Regulations, or any successor regulation, if released by the Centers for Medicare & Medicaid Services.
    - (B) **Clarification—** The restrictions on disclosures described in [subparagraph (A)](#f-3-A) shall also apply to disclosures to individual Commissioners of the Medicare Payment Advisory Commission or of the Medicaid and CHIP Payment and Access Commission.
- (g) **Payment for fallback prescription drug plans—** In lieu of the amounts otherwise payable under this section to a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) offering a [fallback prescription drug plan](/usc/42/1395w–151.md?p=a-5) (as defined in [section 1395w–111(g)(4) of this title](/usc/42/1395w–111.md?p=g-4)[^2]), the amount payable shall be the amounts determined under the contract for such plan pursuant to [section 1395w–111(g)(5) of this title](/usc/42/1395w–111.md?p=g-5).
- (h) **Temporary retrospective subsidy for reduction in cost-sharing and deductible for adult vaccines recommended by the Advisory Committee on Immunization Practices and Insulin During 2023—**
  - (1) **In general—** In addition to amounts otherwise payable under this section to a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) of a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or an MA organization offering an [MA–PD plan](/usc/42/1395w–151.md?p=a-9), for plan year 2023, the [Secretary](/usc/42/1301.md?p=a-6) shall provide the [PDP sponsor](/usc/42/1395w–151.md?p=a-13) or MA organization offering the plan subsidies in an amount equal to the aggregate reduction in cost-sharing and deductible by reason of the application of paragraph (8) or (9) of [section 1395w–102(b) of this title](/usc/42/1395w–102.md?p=b) for individuals under the plan during the year.
  - (2) **Timing—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide a subsidy under [paragraph (1)](#h-1), as applicable, not later than 18 months following the end of the applicable plan year.

## Footnotes

[^1]: So in original. The word “and” probably should not appear.
[^2]: See References in Text note below.

## Source credit

(Aug. 14, 1935, ch. 531, title XVIII, § 1860D–15, as added Pub. L. 108–173, title I, § 101(a)(2), Dec. 8, 2003, 117 Stat. 2113; amended Pub. L. 111–148, title VI, § 6402(b)(1), Mar. 23, 2010, 124 Stat. 756; Pub. L. 116–260, div. CC, title I, § 112(a), Dec. 27, 2020, 134 Stat. 2946; Pub. L. 117–169, title I, §§ 11001(b)(1)(H)(ii), 11201(b), (d)(3)(D), 11401(c)(1), 11406(c), Aug. 16, 2022, 136 Stat. 1853, 1879, 1891, 1897, 1904; Pub. L. 117–328, div. FF, title IV, § 4132, Dec. 29, 2022, 136 Stat. 5918.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsec. (f)(2)(D), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, was in the original “the Social Security Act”, which is classified generally to this chapter. For complete classification of the Social Security Act to the Code, see section 1305 of this title and Tables.

The Congressional Budget and Impoundment Control Act of 1974, referred to in subsec. (f)(2)(D), is Pub. L. 93–344, July 12, 1974, 88 Stat. 297. For complete classification of this Act to the Code, see Short Title note set out under section 621 of Title 2, The Congress, and Tables.

Section 1395w–111(g)(4) of this title, referred to in subsec. (g), was in the original “section 1860D–3(c)(4)”, and was translated as reading “section 1860D–11(g)(4)”, meaning section 1860D–11(g)(4) of the Social Security Act, to reflect the probable intent of Congress, because section 1860D–3, which is classified to section 1395w–103 of this title, does not contain a subsec. (c), and section 1395w–111(g)(4) of this title defines “fallback prescription drug plan” for purposes of this part.

### Amendments

2022—Subsec. (a). Pub. L. 117–169, § 11201(d)(3)(D)(i), inserted “(or, for each of 2024 through 2029, the percent applicable as a result of the application of section 1395w–113(a)(8) of this title, or, for 2030 and each subsequent year, 100 percent minus the percent specified under section 1395w–113(a)(9) of this title)” after “74.5 percent” in introductory provisions.

Subsec. (a)(1)(B). Pub. L. 117–169, § 11201(d)(3)(D)(ii), substituted “paragraph (2) or (8) of section 1395w–113(a) of this title (as applicable)” for “paragraph (2) of section 1395w–113(a) of this title”.

Subsec. (b)(1). Pub. L. 117–169, § 11201(b)(1), inserted dash after “equal to”, designated remainder of existing provisions as subpar. (A), substituted “for a year preceding 2025, 80 percent” for “80 percent”, and added subpar. (B).

Subsec. (b)(2). Pub. L. 117–169, § 11201(b)(2), designated existing provisions as subpar. (A) and inserted heading, substituted “Subject to subparagraph (B), for purposes” for “For purposes”, and added subpar. (B).

Subsec. (b)(3). Pub. L. 117–169, § 11201(b)(3), substituted “Subject to paragraph (2)(B), for purposes” for “For purposes” and inserted “(or, with respect to 2025 and subsequent years, in the case of an applicable drug, as defined in section 1395w–114c(g)(2) of this title, by a manufacturer)” after “by the individual or under the plan”.

Subsec. (f)(2)(A)(i). Pub. L. 117–169, § 11001(b)(1)(H)(ii), inserted “or part E of subchapter XI” after “this section”.

Subsec. (f)(2)(D). Pub. L. 117–328 added subpar. (D).

Subsec. (h). Pub. L. 117–169, § 11406(c)(1), inserted “and Insulin” after “Practices” in heading.

Pub. L. 117–169, § 11401(c)(1), added subsec. (h).

Subsec. (h)(1). Pub. L. 117–169, § 11406(c)(2), substituted “paragraph (8) or (9) of section 1395w–102(b) of this title” for “section 1395w–102(b)(8) of this title”.

2020—Subsec. (f)(2)(C). Pub. L. 116–260, § 112(a)(1), added subpar. (C).

Subsec. (f)(3). Pub. L. 116–260, § 112(a)(2), added par. (3).

2010—Subsec. (f)(2). Pub. L. 111–148 substituted “may be used—” for “may be used by officers, employees, and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this section.” in introductory provisions and added subpars. (A) and (B).

### Statutory Notes and Related Subsidiaries

### Construction of 2022 Amendment

Nothing in amendment by section 11401(c)(1) of Pub. L. 117–169 to be construed as limiting coverage under this part for vaccines that are not recommended by the Advisory Committee on Immunization Practices, see section 11401(d) of Pub. L. 117–169, set out as a note under section 1395w–102 of this title.