As used in this subpart, date of receipt is the calendar day following the day on which a report of a rebate amount (as set forth in §§ 427.501(b) through (d) and 427.502(b) and (c) is made available to the manufacturer of a Part B rebatable drug by CMS.
(a) General. This section applies to Part B rebatable drugs for all applicable calendar quarters except as otherwise set forth in § 427.502 regarding the applicable calendar quarters in calendar years 2023 and 2024.
(b) Preliminary Rebate Report. A Preliminary Rebate Report will be provided to each manufacturer of a Part B 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 calendar quarter.
(1) The Preliminary Rebate Report for each Part B rebatable drug will include the following information:
(i) The NDC(s) and billing and payment codes identified for the Part B rebatable drug set forth in § 427.20.
(ii) Total number of billing units as determined under § 427.303.
(iii) Payment amount benchmark quarter and payment amount in the payment amount benchmark quarter as determined under § 427.302(c) and (d).
(iv) Applicable calendar quarter specified amount as determined under § 427.302(b).
(v) Applicable benchmark period and rebate period CPI-Us as set forth in § 427.302(e) and (f).
(vi) Inflation-adjusted payment amount as determined under § 427.302(g).
(vii) The amount, if any, by which the specified amount as determined under § 427.302(b) exceeds the inflation-adjusted payment amount as determined under § 427.302(g) for the Part B rebatable drug for the applicable calendar quarter as set forth in § 427.302.
(viii) Any applied reductions as determined under §§ 427.401 and 427.402.
(ix) Rebate amount due as determined under § 427.301(a).
(2) [Reserved]
(c) Rebate Report. A Rebate Report will be provided to each manufacturer of a Part B rebatable drug no later than 6 months after the end of each applicable calendar quarter.
(1) The Rebate Report will include the information specified in paragraph (b)(1) of this section, with the inclusion of any revisions to such information resulting from CMS' review of a Suggestion of Error as set forth in § 427.503, 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 under § 427.301, if any, for a Part B rebatable drug for an applicable calendar quarter.
(d) Reconciliation of the rebate amount. CMS will perform reconciliation of a rebate amount provided in a Rebate Report specified in paragraph (c) of this section for an applicable calendar quarter in the following circumstances:
(1) Regular reconciliation. Except as otherwise set forth in § 427.502, CMS will perform one regular reconciliation of the rebate amount within 12 months of the date of receipt of the Rebate Report for each applicable calendar quarter to include revisions to the information used to calculate the rebate amount 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 determined under paragraph (d)(1)(ii) of this section, CMS will conduct a preliminary reconciliation of a rebate amount for an applicable calendar quarter determined under paragraph (d)(3) of this section based on the information set forth in this paragraph (b)(1)(i) and paragraphs (d)(1)(ii) through (ix) of this section and provide the information specified in this paragraph (b)(1)(i) and paragraphs (d)(1)(ii) through (ix) to the manufacturer of a Part B rebatable drug for the applicable calendar quarter, if applicable:
(A) Updated total number of rebatable units, as determined under § 427.303.
(B) Updated payment amount benchmark quarter and payment amount in the payment amount benchmark quarter, as determined under § 427.302(c) and (d) if any inputs are restated within the reconciliation run-out period.
(C) Applicable calendar quarter specified amount as determined under § 427.302(b), if any inputs are restated within the reconciliation run-out period.
(D) The excess amount by which the specified amount exceeds the inflation-adjusted payment amount as determined under § 427.302, if any inputs are restated within the reconciliation run-out period.
(E) Reconciled total rebate amount as determined under § 427.301(a).
(F) 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 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 § 427.503, if applicable, a report with the reconciled rebate amount will be provided to each manufacturer of a Part B rebatable drug within 12 months after the issuance of the Rebate Report described in paragraph (c) of this section.
(2) CMS identification of error and manufacturer misreporting. CMS may recalculate a rebate amount and provide the manufacturer of a Part B rebatable drug a report with a reconciled rebate amount when:
(i) CMS identifies an agency error in the information specified in paragraphs (c) and (d)(1) of this section, including reporting system or coding errors, not later than 3 years from the date of receipt by a manufacturer of a reconciled rebate amount for the applicable calendar quarter; 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 set forth in this paragraph (d) could result in an increase, decrease, or no change to the rebate amount, as determined under § 427.301, owed by a manufacturer for the applicable calendar quarter for the Part B rebatable drug compared to the amount described in the Rebate Report described 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 determined under § 427.301 for a Part B rebatable drug for an applicable calendar quarter.
(ii) [Reserved]
(4) Drugs included in a reconciliation. A drug covered under Part B that does not meet the requirements of a rebatable drug specified in subpart B for an applicable calendar quarter will not be included in a reconciliation under this paragraph (d).
(a) Transition rule for reporting. Section 1847A(i)(1)(C) of the Act allows CMS to delay the timeframe for reporting the information and rebate amount described in § 427.501(c) for applicable calendar quarters in calendar years 2023 and 2024 until not later than September 30, 2025.
(b) Rebate Report information for applicable calendar quarters in calendar years 2023 and 2024. The Rebate Reports for applicable calendar quarters in calendar years 2023 and 2024 will include the information set forth in § 427.501(b)(1).
(c) Rebate Report procedures for applicable calendar quarters in calendar years 2023 and 2024. Rebate amounts for the applicable calendar quarters in calendar year 2023 and 2024 will be reported as follows:
(1) The 4 applicable calendar quarters in calendar year 2023 will be consolidated into a single report and manufacturers will receive a single Preliminary Rebate Report followed by a single Rebate Report.
(i) Discarded drug units for which a refund is owed will be removed from the total number of billing units in the single Preliminary Rebate Report for the applicable calendar quarters in calendar year 2023.
(ii) For this single Preliminary Rebate Report for the applicable calendar quarters in calendar year 2023, the Suggestion of Error period as set forth in § 427.503 will be 30 calendar days.
(iii) No regular reconciliation of the rebate amount as set forth in § 427.501(d)(1) will be conducted for the rebate amount in the single Rebate Report for the applicable calendar quarters in calendar year 2023.
(2) The four applicable calendar quarters in calendar year 2024 will be consolidated into a single report and manufacturers will receive a single Preliminary Rebate Report followed by a single Rebate Report.
(i) For this single Preliminary Rebate Report for the applicable calendar quarters in calendar year 2024, the Suggestion of Error period as set forth in § 427.503 will be 30 calendar days.
(ii) Nine months after issuance of the single Rebate Report, CMS will perform one regular reconciliation for the applicable calendar quarters in calendar year 2024 in order to include revisions to the information used, determined under § 427.501(b)(1), to calculate the rebate amount. Such reconciliation will be as determined under § 427.501(d) inclusive of a preliminary reconciliation and a report with the reconciled rebate amount.
(iii) The Suggestion of Error period for the preliminary reconciliation for the applicable calendar quarters in calendar year 2024 will be 10 calendar days.
(a) General. The manufacturer of a Part B rebatable drug may submit a Suggestion of Error about the information in their Preliminary Rebate Report and the report detailing the preliminary reconciliation of the rebate amount to CMS, for its discretionary consideration, if the manufacturer believes that there is a mathematical error or errors to be corrected before the Rebate Report or a subsequent reconciliation of the rebate amount, as applicable, is finalized.
(1) Section 1847A(i)(8) of the Act precludes administrative or judicial review on the determination of units as set forth in § 427.303, the determination of whether a drug is a Part B rebatable drug as set forth in § 427.101, and the calculation of the rebate amount as set forth in § 427.301, inclusive of any reconciled rebate amount.
(2) [Reserved]
(b) Process of submission. Subject to the scope and timing requirements specified in paragraphs (a) and (c) of this section, manufacturers may submit the Suggestion of Error and provide supporting documentation (if applicable).
(c) Timing. Except as set forth in § 427.502 for applicable calendar quarters in calendar year 2023 and 2024, a manufacturer must submit its Suggestion of Error for the applicable calendar quarter within 10 calendar days from the date of receipt of a Preliminary Rebate Report or a preliminary reconciliation of a rebate amount using the method and process established by CMS in paragraph (b) of this section.
(d) Notice. (1) CMS will include any revisions to the calculation of the rebate amount, if determined necessary by CMS based on the Suggestion of Error submitted under this section prior to issuance of the Rebate Report as set forth in § 427.501(c) or § 427.502(c) as well as any report of reconciled rebate amount as set forth in § 427.501(d) or § 427.502(c)(2)(ii).
(2) CMS will notify the manufacturer whether CMS revised its calculation of the rebate amount based on the Suggestion of Error.
(a) General. CMS will establish a method and process for a manufacturer of the Part B rebatable drug to:
(1) Access the manufacturer's Rebate Report as set forth in §§ 427.501 and 427.502, including any report of reconciled rebate amount as set forth in §§ 427.501(d) and 427.502(c)(2)(ii);
(2) Submit a Suggestion of Error as set forth in §§ 427.502(c)(1)(ii) and (c)(2)(i) and 427.503; and
(3) Pay a rebate amount as set forth in § 427.505.
(b) [Reserved]
(a) Rebate amounts owed by a manufacturer. For a rebate amount owed by a manufacturer, payment is due no later than 11:59 p.m. Pacific Time (PT) on the 30th calendar day after the date of receipt of information regarding the rebate amount on—
(1) A Rebate Report as set forth in § 427.501(c) or § 427.502(c)(1) or (2); or
(2) A report of a reconciled rebate amount as set forth in § 427.501(d) or § 427.502(c)(2)(ii).
(b) Failure to pay a rebate amount. Failure to pay a rebate amount due timely and in full may result in an enforcement action as described in subpart G of this part.
(c) Refund to the manufacturer. If a reconciled rebate amount for an applicable calendar quarter as set forth in § 427.501(d) or § 427.502(c)(2)(ii) is less than what the manufacturer paid for that applicable calendar quarter, CMS will initiate the process to provide a refund equal to the excess amount paid within 60 days of the date of receipt of the report with such reconciled rebate amount.