option may not vary except as provided under section 2701 of the Public Health Service Act. (c) Payment rates for items and services (1) Rates established by Secretary (A) In general The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this subsection and may change such payment rates in accordance with subsection (d). (B) Initial payment rules (i) In general During 2018, 2019, and 2020, the Secretary shall set the payment rates under this subsection for services and providers described in subparagraph (A) equal to the payment rates for equivalent services and providers under parts A and B of Medicare, subject to clause (ii), paragraph (4), and subsection (d). (ii) Exceptions The Secretary may determine the extent to which Medicare adjustments applicable to base payment rates under parts A and B of Medicare for graduate medical education and disproportionate share hospitals shall apply under this section. (C) For new services The Secretary shall modify payment rates described in subparagraph (B) in order to accommodate payments for services, such as well-child visits, that are not otherwise covered under Medicare. (D) Prescription drugs Payment rates under this subsection for prescription drugs that are not paid for under part A or part B of Medicare shall be at rates negotiated by the Secretary. (2) Subsequent periods