Section 3209

SEC. 3209. AUTHORITY TO DENY PLAN BIDS.

[a] In General- Section 1854[a][5] of the Social Security Act [42 U.S.C. 1395w-24[a][5]] is amended by adding at the end the following new subparagraph:

'[C] REJECTION OF BIDS-

'[i] IN GENERAL- Nothing in this section shall be construed as requiring the Secretary to accept any or every bid submitted by an MA organization under this subsection.

'[ii] AUTHORITY TO DENY BIDS THAT PROPOSE SIGNIFICANT INCREASES IN COST SHARING OR DECREASES IN BENEFITS- The Secretary may deny a bid submitted by an MA organization for an MA plan if it proposes significant increases in cost sharing or decreases in benefits offered under the plan.'.

[b] Application Under Part D- Section 1860D-11[d] of such Act [42 U.S.C. 1395w-111[d]] is amended by adding at the end the following new paragraph:

'[3] REJECTION OF BIDS- Paragraph [5][C] of section 1854[a] shall apply with respect to bids submitted by a PDP sponsor under subsection [b] in the same manner as such paragraph applies to bids submitted by an MA organization under such section 1854[a].'.

[c] Effective Date- The amendments made by this section shall apply to bids submitted for contract years beginning on or after January 1, 2011.