---
kind: "section"
citation: "42 U.S.C. § 1395w–141"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1395w–141"
heading: "Medicare prescription drug discount card and transitional assistance program"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1395w-141"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter XVIII — Health Insurance for Aged and Disabled"
  - "Part D — Voluntary Prescription Drug Benefit Program"
  - "Subpart 4 — medicare prescription drug discount card and transitional assistance program"
---

# §1395w–141. Medicare prescription drug discount card and transitional assistance program

- (a) **Establishment of program—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a program under this section—
    - (A) to endorse prescription [drug](/usc/42/11851.md?p=4) discount card programs that meet the requirements of this section in order to provide access to prescription [drug](/usc/42/11851.md?p=4) discounts through prescription [drug](/usc/42/11851.md?p=4) card sponsors for discount card eligible individuals throughout the [United States](/usc/42/1301.md?p=a-2); and
    - (B) to provide for transitional assistance for transitional assistance eligible individuals enrolled in such endorsed programs.
  - (2) **Period of operation—**
    - (A) **Implementation deadline—** The [Secretary](/usc/42/1301.md?p=a-6) shall implement the program under this section so that discount cards and transitional assistance are first available by not later than 6 months after December 8, 2003.
    - (B) **Expediting implementation—** The [Secretary](/usc/42/1301.md?p=a-6) shall promulgate regulations to carry out the program under this section which may be effective and final immediately on an interim basis as of the date of publication of the interim final regulation. If the [Secretary](/usc/42/1301.md?p=a-6) provides for an interim final regulation, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for a period of public comments on such regulation after the date of publication. The [Secretary](/usc/42/1301.md?p=a-6) may change or revise such regulation after completion of the period of public comment.
    - (C) **Termination and transition—**
      - (i) **In general—** Subject to [clause (ii)](#a-2-C-ii)—
        - (I) the program under this section shall not apply to covered discount card [drugs](/usc/42/11851.md?p=4) dispensed after December 31, 2005; and
        - (II) transitional assistance shall be available after such date to the extent the assistance relates to [drugs](/usc/42/11851.md?p=4) dispensed on or before such date.
      - (ii) **Transition—** In the case of an individual who is enrolled in an endorsed discount card program as of December 31, 2005, during the individual’s transition period (if any) under [clause (iii)](#a-2-C-iii), in accordance with transition rules specified by the [Secretary](/usc/42/1301.md?p=a-6)—
        - (I) such endorsed program may continue to apply to covered discount card [drugs](/usc/42/11851.md?p=4) dispensed to the individual under the program during such transition period;
        - (II) no annual enrollment fee shall be applicable during the transition period;
        - (III) during such period the individual may not change the endorsed program plan in which the individual is enrolled; and
        - (IV) the balance of any transitional assistance remaining on January 1, 2006, shall remain available for [drugs](/usc/42/11851.md?p=4) dispensed during the individual’s transition period.
      - (iii) **Transition period—** The transition period under this clause for an individual is the period beginning on January 1, 2006, and ending in the case of an individual who—
        - (I) is enrolled in 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) before the last date of the initial enrollment period under [section 1395w–101(b)(2)(A) of this title](/usc/42/1395w–101.md?p=b-2-A), on the effective date of the individual’s coverage under such part; or
        - (II) is not so enrolled, on the last day of such initial period.
  - (3) **Voluntary nature of program—** Nothing in this section shall be construed as requiring a discount card eligible individual to enroll in an endorsed discount card program under this section.
  - (4) **Glossary and definitions of terms—** For purposes of this section:
    - (A) **Covered discount card drug—** The term “covered discount card [drug](/usc/42/11851.md?p=4)” has the meaning given the term “[covered part D drug](/usc/42/1395w–151.md?p=a-2)” in [section 1395w–102(e) of this title](/usc/42/1395w–102.md?p=e).
    - (B) **Discount card eligible individual—** The term “discount card eligible individual” is defined in [subsection (b)(1)(A)](#b-1-A).
    - (C) **Endorsed discount card program; endorsed program—** The terms “endorsed discount card program” and “endorsed program” mean a prescription [drug](/usc/42/11851.md?p=4) discount card program that is endorsed (and for which the sponsor has a contract with the [Secretary](/usc/42/1301.md?p=a-6)) under this section.
    - (D) **Negotiated price—** Negotiated prices are described in [subsection (e)(1)(A)(ii)](#e-1-A-ii).
    - (E) **Prescription drug card sponsor; sponsor—** The terms “prescription [drug](/usc/42/11851.md?p=4) card sponsor” and “sponsor” are defined in [subsection (h)(1)(A)](#h-1-A).
    - (F) **State—** The term “[State](/usc/42/619.md?p=5)” has the meaning given such term for purposes of subchapter XIX.
    - (G) **Transitional assistance eligible individual—** The term “transitional assistance eligible individual” is defined in [subsection (b)(2)](#b-2).
- (b) **Eligibility for discount card and for transitional assistance—** For purposes of this section:
  - (1) **Discount card eligible individual—**
    - (A) **In general—** The term “discount card eligible individual” means an individual who—
      - (i) is entitled to benefits, or enrolled, under part A or enrolled under part B; and
      - (ii) subject to [paragraph (4)](#b-4), is not an individual described in [subparagraph (B)](#b-1-B).
    - (B) **Individual described—** An individual described in this subparagraph is an individual described in [subparagraph (A)(i)](#b-1-A-i) who is enrolled under subchapter XIX (or under a waiver under [section 1315 of this title](/usc/42/1315.md) of the requirements of such subchapter) and is entitled to any medical assistance for outpatient prescribed [drugs](/usc/42/11851.md?p=4) described in [section 1396d(a)(12) of this title](/usc/42/1396d.md?p=a-12).
  - (2) **Transitional assistance eligible individual—**
    - (A) **In general—** Subject to [subparagraph (B)](#b-2-B), the term “transitional assistance eligible individual” means a discount card eligible individual who resides in one of the 50 [States](/usc/42/619.md?p=5) or the District of Columbia and whose income (as determined under [subsection (f)(1)(B)](#f-1-B)) is not more than 135 percent of the [poverty line](/usc/42/1397jj.md?p=c-5) (as defined in [section 9902(2) of this title](/usc/42/9902.md?p=2), [including](/usc/42/1301.md?p=b) any revision required by such section) applicable to the family size involved (as determined under [subsection (f)(1)(B)](#f-1-B)).
    - (B) **Exclusion of individuals with certain prescription drug coverage—** Such term does not include an individual who has coverage of, or assistance for, covered discount card [drugs](/usc/42/11851.md?p=4) under any of the following:
      - (i) A [group health plan](/usc/42/1397jj.md?p=c-3) or [health insurance coverage](/usc/42/1397jj.md?p=c-3) (as such terms are defined in [section 300gg–91 of this title](/usc/42/300gg–91.md)), other than coverage under a plan under part C and other than coverage consisting only of excepted benefits (as defined in such section).
      - (ii) [Chapter 55](/usc/10/chstA/ptII/ch55.md) of title 10 (relating to medical and dental care for members of the uniformed services).
      - (iii) A plan under [chapter 89](/usc/5/chptIII/sptG/ch89.md) of title 5 (relating to the Federal employees’ health benefits program).
  - (3) **Special transitional assistance eligible individual—** The term “special transitional assistance eligible individual” means a transitional assistance eligible individual whose income (as determined under [subsection (f)(1)(B)](#f-1-B)) is not more than 100 percent of the [poverty line](/usc/42/1397jj.md?p=c-5) (as defined in [section 9902(2) of this title](/usc/42/9902.md?p=2), [including](/usc/42/1301.md?p=b) any revision required by such section) applicable to the family size involved (as determined under [subsection (f)(1)(B)](#f-1-B)).
  - (4) **Treatment of medicaid medically needy—** For purposes of this section, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for appropriate rules for the [treatment](/usc/42/11851.md?p=11) of medically needy individuals described in [section 1396a(a)(10)(C) of this title](/usc/42/1396a.md?p=a-10-C) as discount card eligible individuals and as transitional assistance eligible individuals.
- (c) **Enrollment and enrollment fees—**
  - (1) **Enrollment process—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a process through which a discount card eligible individual is enrolled and disenrolled in an endorsed discount card program under this section consistent with the following:
    - (A) **Continuous open enrollment—** Subject to the succeeding provisions of this paragraph and [subsection (h)(9)](#h-9), a discount card eligible individual who is not enrolled in an endorsed discount card program and is residing in a [State](/usc/42/619.md?p=5) may enroll in any such endorsed program—
      - (i) that serves residents of the [State](/usc/42/619.md?p=5); and
      - (ii) at any time beginning on the initial enrollment date, specified by the [Secretary](/usc/42/1301.md?p=a-6), and before January 1, 2006.
    - (B) **Use of standard enrollment form—** An enrollment in an endorsed program shall only be effected through completion of a [standard](/usc/42/1320d.md?p=7) enrollment form specified by the [Secretary](/usc/42/1301.md?p=a-6). Each sponsor of an endorsed program shall transmit 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)) information on individuals who complete such enrollment forms and, to the extent provided under [subsection (f)](#f), information regarding certification as a transitional assistance eligible individual.
    - (C) **Enrollment only in one program—**
      - (i) **In general—** Subject to clauses [(ii)](#c-1-C-ii) and [(iii)](#c-1-C-iii), a discount card eligible individual may be enrolled in only one endorsed discount card program under this section.
      - (ii) **Change in endorsed program permitted for 2005—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a process, similar to (and coordinated with) the process for annual, coordinated elections under [section 1395w–21(e)(3) of this title](/usc/42/1395w–21.md?p=e-3) during 2004, under which an individual enrolled in an endorsed discount card program may change the endorsed program in which the individual is enrolled for 2005.
      - (iii) **Additional exceptions—** The [Secretary](/usc/42/1301.md?p=a-6) shall permit an individual to change the endorsed discount card program in which the individual is enrolled in the case of an individual who changes residence to be outside the service area of such program and in such other exceptional cases as the [Secretary](/usc/42/1301.md?p=a-6) may provide (taking into account the circumstances for special election periods under [section 1395w–21(e)(4) of this title](/usc/42/1395w–21.md?p=e-4)). Under the previous sentence, the [Secretary](/usc/42/1301.md?p=a-6) may consider a change in residential setting (such as placement in a [nursing facility](/usc/42/1397j.md?p=17-A)) or enrollment in or disenrollment from a plan under part C through which the individual was enrolled in an endorsed program to be an exceptional circumstance.
    - (D) **Disenrollment—**
      - (i) **Voluntary—** An individual may voluntarily disenroll from an endorsed discount card program at any time. In the case of such a voluntary disenrollment, the individual may not enroll in another endorsed program, except under such exceptional circumstances as the [Secretary](/usc/42/1301.md?p=a-6) may recognize under [subparagraph (C)(iii)](#c-1-C-iii) or during the annual coordinated enrollment period provided under [subparagraph (C)(ii)](#c-1-C-ii).
      - (ii) **Involuntary—** An individual who is enrolled in an endorsed discount card program and not a transitional assistance eligible individual may be disenrolled by the sponsor of the program if the individual fails to pay any annual enrollment fee required under the program.
    - (E) **Application to certain enrollees—** In the case of a discount card eligible individual who is enrolled in a plan described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A) or under a reasonable cost reimbursement contract under [section 1395mm(h) of this title](/usc/42/1395mm.md?p=h) that is offered by an organization that also is a prescription discount card sponsor that offers an endorsed discount card program under which the individual may be enrolled and that has made an election to apply the special rules under [subsection (h)(9)(B)](#h-9-B) for such an endorsed program, the individual may only enroll in such an endorsed discount card program offered by that sponsor.
  - (2) **Enrollment fees—**
    - (A) **In general—** Subject to the succeeding provisions of this paragraph, a prescription [drug](/usc/42/11851.md?p=4) card sponsor may charge an annual enrollment fee for each discount card eligible individual enrolled in an endorsed discount card program offered by such sponsor. The annual enrollment fee for either 2004 or 2005 shall not be prorated for portions of a year. There shall be no annual enrollment fee for a year after 2005.
    - (B) **Amount—** No annual enrollment fee charged under [subparagraph (A)](#c-2-A) may exceed $30.
    - (C) **Uniform enrollment fee—** A prescription [drug](/usc/42/11851.md?p=4) card sponsor shall ensure that the annual enrollment fee (if any) for an endorsed discount card program is the same for all discount card eligible individuals enrolled in the program and residing in the [State](/usc/42/619.md?p=5).
    - (D) **Collection—** The annual enrollment fee (if any) charged for enrollment in an endorsed program shall be collected by the sponsor of the program.
    - (E) **Payment of fee for transitional assistance eligible individuals—** Under [subsection (g)(1)(A)](#g-1-A), the annual enrollment fee (if any) otherwise charged under this paragraph with respect to a transitional assistance eligible individual shall be paid by the [Secretary](/usc/42/1301.md?p=a-6) on behalf of such individual.
    - (F) **Optional payment of fee by State—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish an arrangement under which a [State](/usc/42/619.md?p=5) may provide for payment of some or all of the enrollment fee for some or all enrollees who are not transitional assistance eligible individuals in the [State](/usc/42/619.md?p=5), as specified by the [State](/usc/42/619.md?p=5) under the arrangement. Insofar as such a payment arrangement is made with respect to an enrollee, the amount of the enrollment fee shall be paid directly by the [State](/usc/42/619.md?p=5) to the sponsor.
      - (ii) **No Federal matching available under medicaid or SCHIP—** Expenditures made by a [State](/usc/42/619.md?p=5) for enrollment fees described in [clause (i)](#c-2-F-i) shall not be treated as [State](/usc/42/619.md?p=5) expenditures for purposes of Federal matching payments under subchapter XIX or XXI.
    - (G) **Rules in case of changes in program enrollment during a year—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide special rules in the case of payment of an annual enrollment fee for a discount card eligible individual who changes the endorsed program in which the individual is enrolled during a year.
  - (3) **Issuance of discount card—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor of an endorsed discount card program shall issue, in a [standard](/usc/42/1320d.md?p=7) format specified by the [Secretary](/usc/42/1301.md?p=a-6), to each discount card eligible individual enrolled in such program a card that establishes proof of enrollment and that can be used in a coordinated manner to identify the sponsor, program, and individual for purposes of the program under this section.
  - (4) **Period of access—** In the case of a discount card eligible individual who enrolls in an endorsed program, access to negotiated prices and transitional assistance, if any, under such endorsed program shall take effect on such date as the [Secretary](/usc/42/1301.md?p=a-6) shall specify.
- (d) **Provision of information on enrollment and program features—**
  - (1) **Secretarial responsibilities—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide for activities under this subsection to broadly disseminate information to discount card eligible individuals (and prospective eligible individuals) regarding—
      - (i) enrollment in endorsed discount card programs; and
      - (ii) the features of the program under this section, [including](/usc/42/1301.md?p=b) the availability of transitional assistance.
    - (B) **Promotion of informed choice—** In order to promote informed choice among endorsed prescription [drug](/usc/42/11851.md?p=4) discount card programs, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for the dissemination of information which—
      - (i) compares the annual enrollment fee and other features of such programs, which may include comparative prices for covered discount card [drugs](/usc/42/11851.md?p=4); and
      - (ii) [includes](/usc/42/1301.md?p=b) educational materials on the variability of discounts on prices of covered discount card [drugs](/usc/42/11851.md?p=4) under an endorsed program.

      The dissemination of information under [clause (i)](#d-1-B-i) shall, to the extent practicable, be coordinated with the dissemination of educational information on other medicare options.

    - (C) **Special rule for initial enrollment date under the program—** To the extent practicable, the [Secretary](/usc/42/1301.md?p=a-6) shall ensure, through the activities described in subparagraphs [(A)](#d-1-A) and [(B)](#d-1-B), that discount card eligible individuals are provided with such information at least 30 days prior to the initial enrollment date specified under [subsection (c)(1)(A)(ii)](#c-1-A-ii).
    - (D) **Use of medicare toll-free number—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide through the toll-free telephone number 1–800–MEDICARE for the receipt and response to inquiries and complaints concerning the program under this section and endorsed programs.
  - (2) **Prescription drug card sponsor responsibilities—**
    - (A) **In general—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor that offers an endorsed discount card program shall make available to discount card eligible individuals (through the Internet and otherwise) information that the [Secretary](/usc/42/1301.md?p=a-6) identifies as being necessary to promote informed choice among endorsed discount card programs by such individuals, [including](/usc/42/1301.md?p=b) information on enrollment fees and negotiated prices for covered discount card [drugs](/usc/42/11851.md?p=4) charged to such individuals.
    - (B) **Response to enrollee questions—** Each sponsor offering an endorsed discount card program shall have a mechanism ([including](/usc/42/1301.md?p=b) a toll-free telephone number) for providing upon request specific information (such as negotiated prices and the amount of transitional assistance remaining available through the program) to discount card eligible individuals enrolled in the program. The sponsor shall inform transitional assistance eligible individuals enrolled in the program of the availability of such toll-free telephone number to provide information on the amount of available transitional assistance.
    - (C) **Information on balance of transitional assistance available at point-of-sale—** Each sponsor offering an endorsed discount card program shall have a mechanism so that information on the amount of transitional assistance remaining under [subsection (g)(1)(B)](#g-1-B) is available (electronically or by telephone) at the point-of-sale of covered discount card [drugs](/usc/42/11851.md?p=4).
  - (3) **Public disclosure of pharmaceutical prices for equivalent drugs—**
    - (A) **In general—** A prescription [drug](/usc/42/11851.md?p=4) card sponsor offering an endorsed discount card program shall provide that each pharmacy that dispenses a covered discount card [drug](/usc/42/11851.md?p=4) shall inform a discount card eligible individual enrolled in the program of any differential between the price of the [drug](/usc/42/11851.md?p=4) to the enrollee and the price of the lowest priced generic covered discount card [drug](/usc/42/11851.md?p=4) under the program that is therapeutically equivalent and bioequivalent and available at such pharmacy.
    - (B) **Timing of notice—**
      - (i) **In general—** Subject to [clause (ii)](#d-3-B-ii), the information under [subparagraph (A)](#d-3-A) shall be provided at the time of purchase of the [drug](/usc/42/11851.md?p=4) involved, or, in the case of dispensing by mail order, at the time of delivery of such [drug](/usc/42/11851.md?p=4).
      - (ii) **Waiver—** The [Secretary](/usc/42/1301.md?p=a-6) may waive [clause (i)](#d-3-B-i) in such circumstances as the [Secretary](/usc/42/1301.md?p=a-6) may specify.
- (e) **Discount card features—**
  - (1) **Savings to enrollees through negotiated prices—**
    - (A) **Access to negotiated prices—**
      - (i) **In general—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor that offers an endorsed discount card program shall provide each discount card eligible individual enrolled in the program with access to negotiated prices.
      - (ii) **Negotiated prices—** For purposes of this section, negotiated prices shall take into account negotiated price concessions, such as discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations, for covered discount card [drugs](/usc/42/11851.md?p=4), and include any dispensing fees for such [drugs](/usc/42/11851.md?p=4).
    - (B) **Ensuring pharmacy access—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor offering an endorsed discount card program shall secure the participation in its network of a sufficient number of pharmacies that dispense (other than solely by mail order) [drugs](/usc/42/11851.md?p=4) directly to enrollees to ensure convenient access to covered discount card [drugs](/usc/42/11851.md?p=4) at negotiated prices (consistent with rules established by the [Secretary](/usc/42/1301.md?p=a-6)). The [Secretary](/usc/42/1301.md?p=a-6) shall establish convenient access rules under this clause that are no less favorable to enrollees than the [standards](/usc/42/1320d.md?p=7) for convenient access to pharmacies included in the statement of work of solicitation (#MDA906–03–R–0002) of the Department of Defense under the TRICARE Retail Pharmacy (TRRx) as of March 13, 2003.
    - (C) **Prohibition on charges for required services—**
      - (i) **In general—** Subject to [clause (ii)](#e-1-C-ii), a prescription [drug](/usc/42/11851.md?p=4) card sponsor (and any pharmacy contracting with such sponsor for the provision of covered discount card [drugs](/usc/42/11851.md?p=4) to individuals enrolled in such sponsor’s endorsed discount card program) may not charge an enrollee any amount for any items and services required to be provided by the sponsor under this section.
      - (ii) **Construction—** Nothing in [clause (i)](#e-1-C-i) shall be construed to prevent—
        - (I) the sponsor from charging the annual enrollment fee (except in the case of a transitional assistance eligible individual); and
        - (II) the pharmacy dispensing the covered discount card [drug](/usc/42/11851.md?p=4), from imposing a charge (consistent with the negotiated price) for the covered discount card [drug](/usc/42/11851.md?p=4) dispensed, reduced by the amount of any transitional assistance made available.
    - (D) **Inapplicability of medicaid best price rules—** The prices negotiated from [drug](/usc/42/11851.md?p=4) manufacturers for covered discount card [drugs](/usc/42/11851.md?p=4) under an endorsed discount card program under this section shall (notwithstanding any other provision of law) not be taken into account for the purposes of establishing the best price under [section 1396r–8(c)(1)(C) of this title](/usc/42/1396r–8.md?p=c-1-C).
  - (2) **Reduction of medication errors and adverse drug interactions—** Each endorsed discount card program shall implement a system to reduce the likelihood of medication errors and adverse [drug](/usc/42/11851.md?p=4) interactions and to improve medication use.
- (f) **Eligibility procedures for endorsed programs and transitional assistance—**
  - (1) **Determinations—**
    - (A) **Procedures—** The determination of whether an individual is a discount card eligible individual or a transitional assistance eligible individual or a special transitional assistance eligible individual (as defined in [subsection (b)](#b)) shall be determined under procedures specified by the [Secretary](/usc/42/1301.md?p=a-6) consistent with this subsection.
    - (B) **Income and family size determinations—** For purposes of this section, the [Secretary](/usc/42/1301.md?p=a-6) shall define the terms “income” and “family size” and shall specify the methods and period for which they are determined. If under such methods income or family size is determined based on the income or family size for prior periods of time, the [Secretary](/usc/42/1301.md?p=a-6) shall permit (whether through a process of reconsideration or otherwise) an individual whose income or family size has changed to elect to have eligibility for transitional assistance determined based on income or family size for a more recent period.
  - (2) **Use of self-certification for transitional assistance—**
    - (A) **In general—** Under the procedures specified under [paragraph (1)(A)](#f-1-A) an individual who wishes to be treated as a transitional assistance eligible individual or a special transitional assistance eligible individual under this section (or another qualified [person](/usc/42/1301.md?p=a-3) on such individual’s behalf) shall certify on the enrollment form under [subsection (c)(1)(B)](#c-1-B) (or similar form specified by the [Secretary](/usc/42/1301.md?p=a-6)), through a simplified means specified by the [Secretary](/usc/42/1301.md?p=a-6) and under penalty of perjury or similar sanction for false statements, as to the amount of the individual’s income, family size, and individual’s prescription [drug](/usc/42/11851.md?p=4) coverage (if any) insofar as they relate to eligibility to be a transitional assistance eligible individual or a special transitional assistance eligible individual. Such certification shall be deemed as consent to verification of respective eligibility under [paragraph (3)](#f-3). A certification under this paragraph may be provided before, on, or after the time of enrollment under an endorsed program.
    - (B) **Treatment of self-certification—** The [Secretary](/usc/42/1301.md?p=a-6) shall treat a certification under [subparagraph (A)](#f-2-A) that is verified under [paragraph (3)](#f-3) as a determination that the individual involved is a transitional assistance eligible individual or special transitional assistance eligible individual (as the case may be) for the entire period of the enrollment of the individual in any endorsed program.
  - (3) **Verification—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish methods (which may include the use of sampling and the use of information described in [subparagraph (B)](#f-3-B)) to verify eligibility for individuals who seek to enroll in an endorsed program and for individuals who provide a certification under [paragraph (2)](#f-2).
    - (B) **Information described—** The information described in this subparagraph is as follows:
      - (i) **Medicaid-related information—** Information on eligibility under subchapter XIX and provided to the [Secretary](/usc/42/1301.md?p=a-6) under arrangements between the [Secretary](/usc/42/1301.md?p=a-6) and [States](/usc/42/619.md?p=5) in order to verify the eligibility of individuals who seek to enroll in an endorsed program and of individuals who provide certification under [paragraph (2)](#f-2).
      - (ii) **Social security information—** Financial information made available to the [Secretary](/usc/42/1301.md?p=a-6) under arrangements between the [Secretary](/usc/42/1301.md?p=a-6) and the Commissioner of [Social](/usc/42/1397j.md?p=20) Security in order to verify the eligibility of individuals who provide such certification.
      - (iii) **Information from Secretary of the Treasury—** Financial information made available to the [Secretary](/usc/42/1301.md?p=a-6) under section 6103(l)(19) of the Internal Revenue Code of 1986 in order to verify the eligibility of individuals who provide such certification.
    - (C) **Verification in cases of medicaid enrollees—**
      - (i) **In general—** Nothing in this section shall be construed as preventing the [Secretary](/usc/42/1301.md?p=a-6) from finding that a discount card eligible individual meets the income requirements under [subsection (b)(2)(A)](#b-2-A) if the individual is within a category of discount card eligible individuals who are enrolled under subchapter XIX (such as qualified medicare beneficiaries (QMBs), specified low-income medicare beneficiaries (SLMBs), and certain qualified individuals (QI–1s)).
      - (ii) **Availability of information for verification purposes—** As a condition of provision of Federal financial participation to a [State](/usc/42/619.md?p=5) that is one of the 50 [States](/usc/42/619.md?p=5) or the District of Columbia under subchapter XIX, for purposes of carrying out this section, the [State](/usc/42/619.md?p=5) shall provide the information it submits to the [Secretary](/usc/42/1301.md?p=a-6) relating to such subchapter in a manner specified by the [Secretary](/usc/42/1301.md?p=a-6) that permits the [Secretary](/usc/42/1301.md?p=a-6) to identify individuals who are described in [subsection (b)(1)(B)](#b-1-B) or are transitional assistance eligible individuals or special transitional assistance eligible individuals.
  - (4) **Reconsideration—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a process under which a discount card eligible individual, who is determined through the certification and verification methods under paragraphs [(2)](#f-2) and [(3)](#f-3) not to be a transitional assistance eligible individual or a special transitional assistance eligible individual, may request a reconsideration of the determination.
    - (B) **Contract authority—** The [Secretary](/usc/42/1301.md?p=a-6) may enter into a contract to perform the reconsiderations requested under [subparagraph (A)](#f-4-A).
    - (C) **Communication of results—** Under the process under [subparagraph (A)](#f-4-A) the results of such reconsideration shall be communicated to the individual and the prescription [drug](/usc/42/11851.md?p=4) card sponsor involved.
- (g) **Transitional assistance—**
  - (1) **Provision of transitional assistance—** An individual who is a transitional assistance eligible individual (as determined under this section) and who is enrolled with an endorsed program is entitled—
    - (A) to have payment made of any annual enrollment fee charged under [subsection (c)(2)](#c-2) for enrollment under the program; and
    - (B) to have payment made, up to the amount specified in [paragraph (2)](#g-2), under such endorsed program of 90 percent (or 95 percent in the case of a special transitional assistance eligible individual) of the costs incurred for covered discount card [drugs](/usc/42/11851.md?p=4) obtained through the program taking into account the negotiated price (if any) for the [drug](/usc/42/11851.md?p=4) under the program.
  - (2) **Limitation on dollar amount—**
    - (A) **In general—** Subject to [subparagraph (B)](#g-2-B), the amount specified in this paragraph for a transitional assistance eligible individual—
      - (i) for costs incurred during 2004, is $600; or
      - (ii) for costs incurred during 2005, is—
        - (I) $600, plus
        - (II) except as provided in [subparagraph (E)](#g-2-E), the amount by which the amount available under this paragraph for 2004 for that individual exceeds the amount of payment made under [paragraph (1)(B)](#g-1-B) for that individual for costs incurred during 2004.
    - (B) **Proration—**
      - (i) **In general—** In the case of an individual not described in [clause (ii)](#g-2-B-ii) with respect to a year, the [Secretary](/usc/42/1301.md?p=a-6) may prorate the amount specified in [subparagraph (A)](#g-2-A) for the balance of the year involved in a manner specified by the [Secretary](/usc/42/1301.md?p=a-6).
      - (ii) **Individual described—** An individual described in this clause is a transitional assistance eligible individual who—
        - (I) with respect to 2004, enrolls in an endorsed program, and provides a certification under [subsection (f)(2)](#f-2), before the initial implementation date of the program under this section; and
        - (II) with respect to 2005, is enrolled in an endorsed program, and has provided such a certification, before February 1, 2005.
    - (C) **Accounting for available balances in cases of changes in program enrollment—** In the case of a transitional assistance eligible individual who changes the endorsed discount card program in which the individual is enrolled under this section, the [Secretary](/usc/42/1301.md?p=a-6) shall provide a process under which the [Secretary](/usc/42/1301.md?p=a-6) provides to the sponsor of the endorsed program in which the individual enrolls information concerning the balance of amounts available on behalf of the individual under this paragraph.
    - (D) **Limitation on use of funds—** Pursuant to [subsection (a)(2)(C)](#a-2-C), no assistance shall be provided under [paragraph (1)(B)](#g-1-B) with respect to covered discount card [drugs](/usc/42/11851.md?p=4) dispensed after December 31, 2005.
    - (E) **No rollover permitted in case of voluntary disenrollment—** Except in such exceptional cases as the [Secretary](/usc/42/1301.md?p=a-6) may provide, in the case of a transitional assistance eligible individual who voluntarily disenrolls from an endorsed plan, the provisions of [subclause (II)](#g-2-A-ii-II) of subparagraph (A)(ii) shall not apply.
  - (3) **Payment—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide a method for the reimbursement of prescription [drug](/usc/42/11851.md?p=4) card sponsors for assistance provided under this subsection.
  - (4) **Coverage of coinsurance—**
    - (A) **Waiver permitted by pharmacy—** Nothing in this section shall be construed as precluding a pharmacy from reducing or waiving the application of coinsurance imposed under [paragraph (1)(B)](#g-1-B) in accordance with [section 1320a–7b(b)(3)(G) of this title](/usc/42/1320a–7b.md?p=b-3-G).
    - (B) **Optional payment of coinsurance by State—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish an arrangement under which a [State](/usc/42/619.md?p=5) may provide for payment of some or all of the coinsurance under [paragraph (1)(B)](#g-1-B) for some or all enrollees in the [State](/usc/42/619.md?p=5), as specified by the [State](/usc/42/619.md?p=5) under the arrangement. Insofar as such a payment arrangement is made with respect to an enrollee, the amount of the coinsurance shall be paid directly by the [State](/usc/42/619.md?p=5) to the pharmacy involved.
      - (ii) **No Federal matching available under medicaid or SCHIP—** Expenditures made by a [State](/usc/42/619.md?p=5) for coinsurance described in [clause (i)](#g-4-B-i) shall not be treated as [State](/usc/42/619.md?p=5) expenditures for purposes of Federal matching payments under subchapter XIX or XXI.
      - (iii) **Not treated as medicare cost-sharing—** Coinsurance described in [paragraph (1)(B)](#g-1-B) shall not be treated as coinsurance under this subchapter for purposes of [section 1396d(p)(3)(B) of this title](/usc/42/1396d.md?p=p-3-B).
    - (C) **Treatment of coinsurance—** The amount of any coinsurance imposed under [paragraph (1)(B)](#g-1-B), whether paid or waived under this paragraph, shall not be taken into account in applying the limitation in dollar amount under [paragraph (2)](#g-2).
  - (5) **Ensuring access to transitional assistance for qualified residents of long-term care facilities and American Indians—**
    - (A) **Residents of long-term care facilities—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish procedures and may waive requirements of this section as necessary to negotiate arrangements with sponsors to provide arrangements with pharmacies that support [long-term care facilities](/usc/42/1397j.md?p=15) in order to ensure access to transitional assistance for transitional assistance eligible individuals who reside in [long-term care facilities](/usc/42/1397j.md?p=15).
    - (B) **American Indians—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish procedures and may waive requirements of this section to ensure that, for purposes of providing transitional assistance, pharmacies operated by the [Indian](/usc/42/619.md?p=4-A) Health Service, [Indian tribes](/usc/42/619.md?p=4-A) and [tribal organizations](/usc/42/619.md?p=4-A), and urban [Indian](/usc/42/619.md?p=4-A) organizations (as defined in [section 1603 of title 25](/usc/25/1603.md)) have the opportunity to participate in the pharmacy networks of at least two endorsed programs in each of the 50 [States](/usc/42/619.md?p=5) and the District of Columbia where such a pharmacy operates.
  - (6) **No impact on benefits under other programs—** The availability of negotiated prices or transitional assistance under this section shall not be treated as benefits or otherwise taken into account in determining an individual’s eligibility for, or the amount of benefits under, any other Federal program.
  - (7) **Disregard for purposes of part C—** Nonuniformity of benefits resulting from the implementation of this section ([including](/usc/42/1301.md?p=b) the provision or nonprovision of transitional assistance and the payment or waiver of any enrollment fee under this section) shall not be taken into account in applying [section 1395w–24(f) of this title](/usc/42/1395w–24.md?p=f).
- (h) **Qualification of prescription drug card sponsors and endorsement of discount card programs; beneficiary protections—**
  - (1) **Prescription drug card sponsor and qualifications—**
    - (A) **Prescription drug card sponsor and sponsor defined—** For purposes of this section, the terms “prescription [drug](/usc/42/11851.md?p=4) card sponsor” and “sponsor” mean any nongovernmental entity that the [Secretary](/usc/42/1301.md?p=a-6) determines to be appropriate to offer an endorsed discount card program under this section, which may include—
      - (i) a pharmaceutical benefit management company;
      - (ii) a wholesale or retail pharmacy delivery system;
      - (iii) an insurer ([including](/usc/42/1301.md?p=b) an insurer that offers medicare supplemental policies under [section 1395ss of this title](/usc/42/1395ss.md));
      - (iv) an organization offering a plan under part C; or
      - (v) any combination of the entities described in clauses [(i)](#h-1-A-i) through [(iv)](#h-1-A-iv).
    - (B) **Administrative qualifications—** Each endorsed discount card program shall be operated directly, or through arrangements with an affiliated organization (or organizations), by one or more entities that have demonstrated experience and expertise in operating such a program or a similar program and that meets such business stability and integrity requirements as the [Secretary](/usc/42/1301.md?p=a-6) may specify.
    - (C) **Accounting for transitional assistance—** The sponsor of an endorsed discount card program shall have arrangements satisfactory to the [Secretary](/usc/42/1301.md?p=a-6) to account for the assistance provided under [subsection (g)](#g) on behalf of transitional assistance eligible individuals.
  - (2) **Applications for program endorsement—**
    - (A) **Submission—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor that seeks endorsement of a prescription [drug](/usc/42/11851.md?p=4) discount card program under this section shall submit to the [Secretary](/usc/42/1301.md?p=a-6), at such time and in such manner as the [Secretary](/usc/42/1301.md?p=a-6) may specify, an application containing such information as the [Secretary](/usc/42/1301.md?p=a-6) may require.
    - (B) **Approval; compliance with applicable requirements—** The [Secretary](/usc/42/1301.md?p=a-6) shall review the application submitted under [subparagraph (A)](#h-2-A) and shall determine whether to endorse the prescription [drug](/usc/42/11851.md?p=4) discount card program. The [Secretary](/usc/42/1301.md?p=a-6) may not endorse such a program unless—
      - (i) the program and prescription [drug](/usc/42/11851.md?p=4) card sponsor offering the program comply with the applicable requirements under this section; and
      - (ii) the sponsor has entered into a contract with the [Secretary](/usc/42/1301.md?p=a-6) to carry out such requirements.
    - (C) **Termination of endorsement and contracts—** An endorsement of an endorsed program and a contract under [subparagraph (B)](#h-2-B) shall be for the duration of the program under this section ([including](/usc/42/1301.md?p=b) any transition applicable under [subsection (a)(2)(C)(ii)](#a-2-C-ii)), except that the [Secretary](/usc/42/1301.md?p=a-6) may, with notice and for cause (as defined by the [Secretary](/usc/42/1301.md?p=a-6)), terminate such endorsement and contract.
    - (D) **Ensuring choice of programs—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall ensure that there is available to each discount card eligible individual a choice of at least 2 endorsed programs (each offered by a different sponsor).
      - (ii) **Limitation on number—** The [Secretary](/usc/42/1301.md?p=a-6) may limit (but not below 2) the number of sponsors in a [State](/usc/42/619.md?p=5) that are awarded contracts under this paragraph.
  - (3) **Service area encompassing entire States—** Except as provided in [paragraph (9)](#h-9), if a prescription [drug](/usc/42/11851.md?p=4) card sponsor that offers an endorsed program enrolls in the program individuals residing in any part of a [State](/usc/42/619.md?p=5), the sponsor must permit any discount card eligible individual residing in any portion of the [State](/usc/42/619.md?p=5) to enroll in the program.
  - (4) **Savings to medicare beneficiaries—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor that offers an endorsed discount card program shall pass on to discount card eligible individuals enrolled in the program negotiated prices on covered discount card [drugs](/usc/42/11851.md?p=4), [including](/usc/42/1301.md?p=b) discounts negotiated with pharmacies and manufacturers, to the extent disclosed under [subsection (i)(1)](#i-1).
  - (5) **Grievance mechanism—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor shall provide meaningful procedures for hearing and resolving grievances between the sponsor ([including](/usc/42/1301.md?p=b) any entity or individual through which the sponsor carries out the endorsed discount card program) and enrollees in endorsed discount card programs of the sponsor under this section in a manner similar to that required under [section 1395w–22(f) of this title](/usc/42/1395w–22.md?p=f).
  - (6) **Confidentiality of enrollee records—**
    - (A) **In general—** For purposes of the program under this section, the operations of an endorsed program are covered functions and a prescription [drug](/usc/42/11851.md?p=4) card sponsor is a covered entity for purposes of applying part C of subchapter XI and all regulatory provisions promulgated thereunder, [including](/usc/42/1301.md?p=b) regulations (relating to privacy) adopted pursuant to the authority of the [Secretary](/usc/42/1301.md?p=a-6) under [section 264(c)](/usc/42/264.md?p=c) of the Health Insurance Portability and Accountability Act of 1996 ([42 U.S.C. 1320d–2](/usc/42/1320d–2.md) note).[^1]
    - (B) **Waiver authority—** In order to promote participation of sponsors in the program under this section, the [Secretary](/usc/42/1301.md?p=a-6) may waive such relevant portions of regulations relating to privacy referred to in [subparagraph (A)](#h-6-A), for such appropriate, limited period of time, as the [Secretary](/usc/42/1301.md?p=a-6) specifies.
  - (7) **Limitation on provision and marketing of products and services—** The sponsor of an endorsed discount card program—
    - (A) may provide under the program—
      - (i) a product or service only if the product or service is directly related to a covered discount card [drug](/usc/42/11851.md?p=4); or
      - (ii) a discount price for nonprescription [drugs](/usc/42/11851.md?p=4); and
    - (B) may, to the extent otherwise permitted under [paragraph (6)](#h-6) (relating to application of HIPAA requirements), market a product or service under the program only if the product or service is directly related to—
      - (i) a covered discount card [drug](/usc/42/11851.md?p=4); or
      - (ii) a [drug](/usc/42/11851.md?p=4) described in [subparagraph (A)(ii)](#h-7-A-ii) and the marketing consists of information on the discounted price made available for the [drug](/usc/42/11851.md?p=4) involved.
  - (8) **Additional protections—** Each endorsed discount card program shall meet such additional requirements as the [Secretary](/usc/42/1301.md?p=a-6) identifies to protect and promote the interest of discount card eligible individuals, [including](/usc/42/1301.md?p=b) requirements that ensure that discount card eligible individuals enrolled in endorsed discount card programs are not charged more than the lower of the price based on negotiated prices or the usual and customary price.
  - (9) **Special rules for certain organizations—**
    - (A) **In general—** In the case of an organization that is offering a plan under part C or enrollment under a reasonable cost reimbursement contract under [section 1395mm(h) of this title](/usc/42/1395mm.md?p=h) that is seeking to be a prescription [drug](/usc/42/11851.md?p=4) card sponsor under this section, the organization may elect to apply the special rules under [subparagraph (B)](#h-9-B) with respect to enrollees in any plan described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A) that it offers or under such contract and an endorsed discount card program it offers, but only if it limits enrollment under such program to individuals enrolled in such plan or under such contract.
    - (B) **Special rules—** The special rules under this subparagraph are as follows:
      - (i) **Limitation on enrollment—** The sponsor limits enrollment under this section under the endorsed discount card program to discount card eligible individuals who are enrolled in the part C plan involved or under the reasonable cost reimbursement contract involved and is not required nor permitted to enroll other individuals under such program.
      - (ii) **Pharmacy access—** Pharmacy access requirements under [subsection (e)(1)(B)](#e-1-B) are deemed to be met if the access is made available through a pharmacy network (and not only through mail order) and the network used by the sponsor is approved by the [Secretary](/usc/42/1301.md?p=a-6).
      - (iii) **Sponsor requirements—** The [Secretary](/usc/42/1301.md?p=a-6) may waive the application of such requirements for a sponsor as the [Secretary](/usc/42/1301.md?p=a-6) determines to be duplicative or to conflict with a requirement of the organization under part C or [section 1395mm of this title](/usc/42/1395mm.md) (as the case may be) or to be necessary in order to improve coordination of this section with the benefits under such part or section.
- (i) **Disclosure and oversight—**
  - (1) **Disclosure—** Each prescription [drug](/usc/42/11851.md?p=4) card sponsor offering an endorsed discount card program shall disclose to the [Secretary](/usc/42/1301.md?p=a-6) (in a manner specified by the [Secretary](/usc/42/1301.md?p=a-6)) information relating to program performance, use of prescription [drugs](/usc/42/11851.md?p=4) by discount card eligible individuals enrolled in the program, the extent to which negotiated price concessions described in [subsection (e)(1)(A)(ii)](#e-1-A-ii) made available to the entity by a manufacturer are passed through to enrollees through pharmacies or otherwise, and such other information as the [Secretary](/usc/42/1301.md?p=a-6) may specify. The provisions of [section 1396r–8(b)(3)(D) of this title](/usc/42/1396r–8.md?p=b-3-D) shall apply to [drug](/usc/42/11851.md?p=4) pricing data reported under the previous sentence (other than data in aggregate form).
  - (2) **Oversight; audit and inspection authority—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide appropriate oversight to ensure compliance of endorsed discount card programs and their sponsors with the requirements of this section. The [Secretary](/usc/42/1301.md?p=a-6) shall have the right to audit and inspect any books and records of a prescription discount card sponsor (and of any affiliated organization referred to in [subsection (h)(1)(B)](#h-1-B)) that pertain to the endorsed discount card program under this section, [including](/usc/42/1301.md?p=b) amounts payable to the sponsor under this section.
  - (3) **Sanctions for abusive practices—** The [Secretary](/usc/42/1301.md?p=a-6) may implement intermediate sanctions or may revoke the endorsement of a program offered by a sponsor under this section if the [Secretary](/usc/42/1301.md?p=a-6) determines that the sponsor or the program no longer meets the applicable requirements of this section or that the sponsor has engaged in false or misleading marketing [practices](/usc/42/17061.md?p=19). The [Secretary](/usc/42/1301.md?p=a-6) may impose a civil money penalty in an amount not to exceed $10,000 for conduct that a party knows or should know is a [violation](/usc/42/2000e–16a.md?p=c) of this section. The provisions of [section 1320a–7a of this title](/usc/42/1320a–7a.md) (other than subsections [(a)](#a) and [(b)](#b) and the second sentence of [subsection (f)](#f)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under [section 1320a–7a(a) of this title](/usc/42/1320a–7a.md?p=a).
- (j) **Treatment of territories—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) may waive any provision of this section ([including](/usc/42/1301.md?p=b) [subsection (h)(2)(D)](#h-2-D)) in the case of a resident of a [State](/usc/42/619.md?p=5) (other than the 50 [States](/usc/42/619.md?p=5) and the District of Columbia) insofar as the [Secretary](/usc/42/1301.md?p=a-6) determines it is necessary to secure access to negotiated prices for discount card eligible individuals (or, at the option of the [Secretary](/usc/42/1301.md?p=a-6), individuals described in [subsection (b)(1)(A)(i)](#b-1-A-i)).
  - (2) **Transitional assistance—**
    - (A) **In general—** In the case of a [State](/usc/42/619.md?p=5), other than the 50 [States](/usc/42/619.md?p=5) and the District of Columbia, if the [State](/usc/42/619.md?p=5) establishes a plan described in [subparagraph (B)](#j-2-B) (for providing transitional assistance with respect to the provision of prescription [drugs](/usc/42/11851.md?p=4) to some or all individuals residing in the [State](/usc/42/619.md?p=5) who are described in [subparagraph (B)(i)](#j-2-B-i)), the [Secretary](/usc/42/1301.md?p=a-6) shall pay to the [State](/usc/42/619.md?p=5) for the entire period of the operation of this section an amount equal to the amount allotted to the [State](/usc/42/619.md?p=5) under [subparagraph (C)](#j-2-C).
    - (B) **Plan—** The plan described in this subparagraph is a plan that—
      - (i) provides transitional assistance with respect to the provision of covered discount card [drugs](/usc/42/11851.md?p=4) to some or all individuals who are entitled to benefits under part A or enrolled under part B, who reside in the [State](/usc/42/619.md?p=5), and who have income below 135 percent of the [poverty line](/usc/42/1397jj.md?p=c-5); and
      - (ii) assures that amounts received by the [State](/usc/42/619.md?p=5) under this paragraph are used only for such assistance.
    - (C) **Allotment limit—** The amount described in this subparagraph for a [State](/usc/42/619.md?p=5) is equal to $35,000,000 multiplied by the ratio (as estimated by the [Secretary](/usc/42/1301.md?p=a-6)) of—
      - (i) the number of individuals who are entitled to benefits under part A or enrolled under part B and who reside in the [State](/usc/42/619.md?p=5) (as determined by the [Secretary](/usc/42/1301.md?p=a-6) as of July 1, 2003), to
      - (ii) the sum of such numbers for all [States](/usc/42/619.md?p=5) to which this paragraph applies.
    - (D) **Continued availability of funds—** Amounts made available to a [State](/usc/42/619.md?p=5) under this paragraph which are not used under this paragraph shall be added to the amount available to that [State](/usc/42/619.md?p=5) for purposes of carrying out [section 1396u–5(e) of this title](/usc/42/1396u–5.md?p=e).
- (k) **Funding—**
  - (1) **Establishment of Transitional Assistance Account—**
    - (A) **In general—** There is created within the Federal Supplementary Medical Insurance Trust Fund established by [section 1395t of this title](/usc/42/1395t.md) an account to be known as the “Transitional Assistance Account” (in this subsection referred to as the “Account”).
    - (B) **Funds—** The Account shall consist of such gifts and bequests as may be made as provided in [section 401(i)(1) of this title](/usc/42/401.md?p=i-1), accrued interest on balances in the Account, and such amounts as may be deposited in, or appropriated to, the Account as provided in this subsection.
    - (C) **Separate from rest of Trust Fund—** Funds provided under this subsection to the Account shall be kept separate from all other funds within the Federal Supplementary Medical Insurance Trust Fund, but shall be invested, and such investments redeemed, in the same manner as all other funds and investments within such Trust Fund.
  - (2) **Payments from account—**
    - (A) **In general—** The Managing Trustee shall pay from time to time from the Account such amounts as the [Secretary](/usc/42/1301.md?p=a-6) certifies are necessary to make payments for transitional assistance provided under subsections [(g)](#g) and [(j)(2)](#j-2).
    - (B) **Treatment in relation to part B premium—** Amounts payable from the Account shall not be taken into account in computing actuarial rates or premium amounts under [section 1395r of this title](/usc/42/1395r.md).
  - (3) **Appropriations to cover benefits—** There are appropriated to the Account in a [fiscal year](/usc/42/619.md?p=3), out of any moneys in the Treasury not otherwise appropriated, an amount equal to the payments made from the Account in the year.
  - (4) **For administrative expenses—** There are authorized to be appropriated to the [Secretary](/usc/42/1301.md?p=a-6) such sums as may be necessary to carry out the [Secretary](/usc/42/1301.md?p=a-6)’s responsibilities under this section.
  - (5) **Transfer of any remaining balance to Medicare Prescription Drug Account—** Any balance remaining in the Account after the [Secretary](/usc/42/1301.md?p=a-6) determines that funds in the Account are no longer necessary to carry out the program under this section shall be transferred and deposited into the [Medicare Prescription Drug Account](/usc/42/1395w–151.md?p=a-10) under [section 1395w–116 of this title](/usc/42/1395w–116.md).
  - (6) **Construction—** Nothing in this section shall be construed as authorizing the [Secretary](/usc/42/1301.md?p=a-6) to provide for payment (other than payment of an enrollment fee on behalf of a transitional assistance eligible individual under [subsection (g)(1)(A)](#g-1-A)) to a sponsor for administrative expenses incurred by the sponsor in carrying out this section ([including](/usc/42/1301.md?p=b) in administering the transitional assistance provisions of subsections [(f)](#f) and [(g)](#g)).

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Aug. 14, 1935, ch. 531, title XVIII, § 1860D–31, as added Pub. L. 108–173, title I, § 101(a)(2), Dec. 8, 2003, 117 Stat. 2131.)

## Notes

### Editorial Notes

### References in Text

The Internal Revenue Code of 1986, referred to in subsec. (f)(3)(B)(iii), is classified generally to Title 26, Internal Revenue Code.

Section 264(c) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (h)(6)(A), is section 264(c) of Pub. L. 104–191, which is set out as a note under section 1320d–2 of this title.

### Statutory Notes and Related Subsidiaries

### Rules for Implementation

Pub. L. 108–173, title I, § 105(c), Dec. 8, 2003, 117 Stat. 2166, provided that: “The following rules shall apply to the medicare prescription drug discount card and transitional assistance program under section 1860D–31 of the Social Security Act [42 U.S.C. 1395w–141], as added by section 101(a): In promulgating regulations pursuant to subsection (a)(2)(B) of such section 1860D–31 [42 U.S.C. 1395w–141(a)(2)(B)]— section 1871(a)(3) of the Social Security Act (42 U.S.C. 1395hh(a)(3)), as added by section 902(a)(1), shall not apply; chapter 35 of title 44, United States Code, shall not apply; and sections 553(d) and 801(a)(3)(A) of title 5, United States Code, shall not apply. Section 1857(c)(5) of the Social Security Act (42 U.S.C. 1395w–27(c)(5)) shall apply with respect to section 1860D–31 of such Act, as added by section 101(a), in the same manner as it applies to part C of title XVIII of such Act [42 U.S.C. 1395w–21 et seq.]. The administration of such program shall be made without regard to chapter 35 of title 44, United States Code. There shall be no judicial review of a determination not to endorse, or enter into a contract, with a prescription drug card sponsor under section 1860D–31 of the Social Security Act. In the case of any order issued to enjoin any provision of section 1860D–31 of the Social Security Act (or of [sic] any provision of this section [amending sections 1395r, 1395t, and 1396r–8 of this title and sections 6103 and 7213 of Title 26, Internal Revenue Code]), such order shall not affect any other provision of such section (or of this section) and all such provisions shall be treated as severable.”