PUBLIC LAW 100-360—JULY 1, 1988
102 STAT. 709
modify such a standard by regulation on the basis of scientific and medical information that such standard is not consistent with the safe and effective use of the drug. "(C) PROHIBITION OF FORMULARY.—Nothing in this title (including paragraph (8)), other than sections 1861(t)(4)(A) and 1862(c), shall be construed as authorizing the Secretary to exclude from coverage or to deny payment— "(i) for any specific covered outpatient drug, or specific class of covered outpatient drug, or "(ii) for any specific use of such a drug for a specific Safety. indication unless such exclusion is pursuant to section 1862(a)(l) based on a finding by the Secretary that such use is not safe or is not effective. "(6) TREATMENT OF CERTAIN PREPAID ORGANIZATIONS.— "(A) GENERAL RULE COUNTING PREPAID PLAN EXPENSES TOWARDS THE CATASTROPHIC DRUG DEDUCTIBLE.—Except aS
provided in subparagraph (B), expenses incurred by (or on behalf of) a medicare beneficiary for covered outpatient drugs shall be counted (consistent with subparagraph (C)) toward the catastrophic drug deductible established under paragraph (1) whether or not, at the time the expenses were incurred, the beneficiary was enrolled in a plan under section 1833(a)(l)(A) or under section 1876. "(B) TREATMENT OF DRUG BUY-OUT PLAN EXPENSES.—In the
case of a medicare beneficiary enrolled in a month in a drug buy-out plan (as defined in subparagraph (D))— "(i) expenses incurred by the beneficiary for covered outpatient drugs reimbursed under the plan shall not be counted towards the catastrophic drug deductible, but "(ii) if the individual disenroUs from the plan during the year, the beneficiary is deemed to have incurred, for each month of such enrollment, expenses for covered outpatient drugs in an amount equal to the actuarial value (with respect to such month) of the deductible for covered outpatient drugs (as computed by the Secretary for purposes of section 1876(e)(l)) applicable on the average to individuals in the United States. "(C) TREATMENT OF EXPENSES FOR COVERED OUTPATIENT DRUGS INCURRED WHILE ENROLLED IN A PREPAID PLAN OTHER
THAN A DRUG BUY-OUT PLAN.—The Secretary may not enter into a contract with an organization under section 1876, or provide for payment under section 1833(a)(l)(A) with respect to an organization which provides reimbursement for covered outpatient drugs, with respect to a plan that is not a drug buy-out plein, unless the organization provides assurances, satisfactory to the Secretary, that— "(i) the organization will maintain and make available, for its enrollees and in coordination with the appropriate carriers under this part, an accounting of expenses incurred by (or on behalf of) enrollees under the plan for covered outpatient drugs; and "(ii) the organization will take into account, in any deductibles established under the plan in a year with respect to covered outpatient drugs under this part, the amounts of expenses for covered outpatient drugs in-
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