(a) General. This section applies to Part D rebatable drugs for all applicable periods except as otherwise set forth in § 428.402 for the applicable periods beginning October 1, 2022, and October 1, 2023.

(b) Preliminary Rebate Report. A Preliminary Rebate Report will be provided to each manufacturer of a Part D rebatable drug at least 1 month prior to the issuance of the Rebate Report as set forth in paragraph (c) of this section for an applicable period.

(1) The Preliminary Rebate Report for each Part D rebatable drug will include the following information:

(i) The NDC(s) identified for the Part D rebatable drug as set forth in § 428.20;

(ii) The total number of units dispensed under Part D for the Part D rebatable drug for the applicable period as determined under § 428.203;

(iii) The payment amount benchmark period and benchmark period manufacturer price as set forth in §§ 428.202(c) and (d);

(iv) The AnMP for the Part D rebatable drug for the applicable period as determined under § 428.202(b);

(v) The amount, if any, of the excess AnMP for the Part D rebatable drug for the applicable period as set forth in § 428.202(a);

(vi) The benchmark period and applicable period CPI-Us as set forth in §§ 428.202(e) and 428.20, respectively;

(vii) The inflation-adjusted payment amount as set forth in § 428.202(f);

(viii) Any applied reductions determined under §§ 428.301, 428.302, and 428.303; and

(ix) The rebate amount due as set forth in § 428.201(a).

(2) If the Part D rebatable drug is a line extension, the Preliminary Rebate Report will also include the following information as set forth in § 428.204:

(i) The NDC for the initial drug;

(ii) The inflation rebate amount ratio for the initial drug; and

(iii) The alternative total rebate amount.

(c) Rebate Report. A Rebate Report will be provided to each manufacturer of a Part D rebatable drug no later than 9 months after the end of each applicable period.

(1) The Rebate Report will include the information described in paragraphs (b)(1) and (2) of this section, if applicable, with the inclusion of any revisions to such information resulting from CMS' review of a Suggestion of Error as set forth in § 428.403, if applicable, and any CMS-determined recalculations from paragraph (d)(2) of this section.

(2) The Rebate Report is the invoice of a manufacturer's rebate amount due as determined in § 428.201(a), if any, for a Part D rebatable drug for an applicable period.

(d) Reconciliation of the rebate amount. CMS will perform reconciliation of the rebate amount provided in a Rebate Report as determined in paragraph (c) of this section for an applicable period in the following circumstances:

(1) Regular reconciliation. Except as otherwise described in § 428.402, CMS will perform a reconciliation of the rebate amount within 12 months of the date of receipt of the Rebate Report for an applicable period and a second reconciliation approximately 24 months thereafter to include revisions to the information used to calculate the rebate amount as set forth in paragraph (c)(1) of this section.

(i) Preliminary reconciliation. At least 1 month prior to the issuance of a report with the reconciled rebate amount for an applicable period as set forth in paragraph (d)(1)(ii) of this section, CMS will conduct a preliminary reconciliation of the rebate amount for an applicable period based on the information specified in paragraphs (d)(1)(i)(A) through (G) of this section, and CMS will provide the information specified in paragraphs (d)(1)(i)(A) through (G) to the manufacturer of a Part D rebatable drug for the applicable period, if applicable:

(A) Updated total number of rebatable units, including updates submitted by a prescription drug plan (PDP) or Medicare Advantage Prescription Drug (MA-PD) plan sponsor and updates to 340B units (as applicable to the dates of service and applicable periods set forth in § 428.203(b)(2)(i)(A) and (B)), or units otherwise excluded as determined under § 428.203(b);

(B) The inflation-adjusted payment amount as determined under § 428.202(f) if any inputs are restated or newly reported within the reconciliation run-out period;

(C) Updated payment amount benchmark period and benchmark period manufacturer price as set forth in § 428.202(c) and (d) if any inputs are restated or newly reported;

(D) The excess amount by which the AnMP exceeds the inflation-adjusted payment amount for the applicable period as determined under § 428.202(a), using the most recent AMP (if any inputs are restated or newly reported within the reconciliation run-out period);

(E) Updated data on line extension calculations, including the initial drug identified as set forth in § 447.509(a)(4)(iii)(B) of this chapter, the inflation rebate amount ratio, and the alternative total rebate amount as determined under § 428.204 if any inputs are restated or newly reported within the reconciliation run-out period;

(F) The reconciled rebate amount as determined under § 428.201(a); and

(G) The difference between the total rebate amount due as specified on the Rebate Report set forth in paragraph (c) of this section and the reconciled rebate amount as set forth in this paragraph (d)(1)(i).

(ii) Report with a reconciled rebate amount. With the inclusion of any additional revisions to such information resulting from CMS' review of a Suggestion of Error as set forth in § 428.403, if applicable, a report with the reconciled rebate amount will be provided to each manufacturer of a Part D rebatable drug within 12 months and 36 months after the issuance of the Rebate Report set forth in paragraph (c) of this section.

(2) CMS identification of an error or manufacturer misreporting. CMS may recalculate a rebate amount and provide the manufacturer of a Part D rebatable drug a report with a reconciled rebate amount when:

(i) CMS identifies an error in the information specified in paragraphs (c) and (d)(1) of this section, including reporting system or coding errors, not later than 5 years from the date of receipt by a manufacturer of a reconciled rebate amount for the applicable period; or

(ii) CMS determines at any time that the information used by CMS to calculate the rebate amount was inaccurate due to manufacturer misreporting.

(3) Impact of reconciliation on rebate amount. A reconciliation as determined under this paragraph (d) could result in an increase, decrease, or no change to the rebate amount as determined under § 428.201(a) owed by a manufacturer for the applicable period for the Part D rebatable drug compared to the amount described in the Rebate Report set forth in paragraph (c) of this section or an amount described in a previous reconciliation.

(i) A report with a reconciled rebate amount that is an increase to the rebate amount is the invoice for such additional amount due on the manufacturer's rebate amount as set forth in § 428.201 for a Part D rebatable drug for an applicable period.

(ii) [Reserved]

(4) Drugs included in a reconciliation. A drug covered under Part D that does not meet the requirements of a rebatable drug set forth in § 428.101 for an applicable period will not be included in a reconciliation as determined under this paragraph (d).