§423.2410. General requirements.
42 C.F.R. § 423.2410
For contracts beginning in 2014 or subsequent contract years, a Part D sponsor (defined at § 423.4) is required to report the information required under § 423.2460 for each contract under this part for each contract year.
If CMS determines for a contract year that a Part D sponsor has an MLR for a contract that is less than 0.85, the Part D sponsor must remit to CMS an amount equal to the product of the following:
The total revenue of the prescription drug plan for the contract year.
The difference between 0.85 and the MLR for the contract year.
If CMS determines that a Part D sponsor has an MLR for a contract that is less than 0.85 for 3 or more consecutive contract years, CMS does not permit the enrollment of new enrollees under the contract for coverage during the second succeeding contract year.
If CMS determines that a Part D sponsor has an MLR for a contract that is less than 0.85 for 5 consecutive contract years, CMS terminates the contract under the authority at 423.509(b)(1) and (d) effective as of the second succeeding contract year.
Notes, amendments, and revision history
Amendments
[78 FR 31310, May 23, 2013; 78 FR 43821, July 22, 2013; 83 FR 16756, Apr. 16, 2018]
Source
Source: 78 FR 31310, May 23, 2013, unless otherwise noted.
Authority
Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh.
Source
Source: 70 FR 4525, Jan. 28, 2005, unless otherwise noted.
Amendments
[78 FR 31310, May 23, 2013; 78 FR 43821, July 22, 2013; 83 FR 16756, Apr. 16, 2018]