---
kind: "section"
citation: "42 C.F.R. § 428.401"
title: "42"
number: "428.401"
heading: "Rebate Reports and reconciliation."
url: "https://uscodex.org/cfr/42/428.401"
---

# §428.401. Rebate Reports and reconciliation.

- (a) **General.** This section applies to Part D rebatable drugs for all applicable periods except as otherwise set forth in [§ 428.402](/cfr/42/428.402.md) 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)](#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](/cfr/42/428.20.md);
    - (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](/cfr/42/428.203.md);
    - (iii) The payment amount benchmark period and benchmark period manufacturer price as set forth in §§ [428.202(c)](/cfr/42/428.202.md?p=c) and [(d)](/cfr/42/428.202.md?p=d);
    - (iv) The AnMP for the Part D rebatable drug for the applicable period as determined under [§ 428.202(b)](/cfr/42/428.202.md?p=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)](/cfr/42/428.202.md?p=a);
    - (vi) The benchmark period and applicable period CPI-Us as set forth in §§ [428.202(e)](/cfr/42/428.202.md?p=e) and [428.20](/cfr/42/428.20.md), respectively;
    - (vii) The inflation-adjusted payment amount as set forth in [§ 428.202(f)](/cfr/42/428.202.md?p=f);
    - (viii) Any applied reductions determined under §§ [428.301](/cfr/42/428.301.md), [428.302](/cfr/42/428.302.md), and [428.303](/cfr/42/428.303.md); and
    - (ix) The rebate amount due as set forth in [§ 428.201(a)](/cfr/42/428.201.md?p=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](/cfr/42/428.204.md):
    - (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)](#b-1) and [(2)](#b-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](/cfr/42/428.403.md), if applicable, and any CMS-determined recalculations from [paragraph (d)(2)](#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)](/cfr/42/428.201.md?p=a), if any, for a Part D rebatable drug for an applicable period.
  - (3) **The manufacturer's rebate amount due is reported as a dollar amount rounded to the nearest cent.**
- (d) **Reconciliation of the rebate amount.** CMS will perform reconciliation of the rebate amount provided in a Rebate Report as determined in [paragraph (c)](#c) of this section for an applicable period in the following circumstances:
  - (1) **Regular reconciliation.** Except as otherwise described in [§ 428.402](/cfr/42/428.402.md), 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)](#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)](#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)](#d-1-i-A..d-1-i-G) of this section, and CMS will provide the information specified in [paragraphs (d)(1)(i)(A) through (G)](#d-1-i-A..d-1-i-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)](/cfr/42/428.203.md?p=b-2-i-A) and [(B)](/cfr/42/428.203.md?p=b-2-i-B)), or units otherwise excluded as determined under [§ 428.203(b)](/cfr/42/428.203.md?p=b);
      - (B) The inflation-adjusted payment amount as determined under [§ 428.202(f)](/cfr/42/428.202.md?p=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)](/cfr/42/428.202.md?p=c) and [(d)](/cfr/42/428.202.md?p=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)](/cfr/42/428.202.md?p=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)](/cfr/42/447.509.md?p=a-4-iii-B) of this chapter, the inflation rebate amount ratio, and the alternative total rebate amount as determined under [§ 428.204](/cfr/42/428.204.md) 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)](/cfr/42/428.201.md?p=a); and
      - (G) The difference between the total rebate amount due as specified on the Rebate Report set forth in [paragraph (c)](#c) of this section and the reconciled rebate amount as set forth in this [paragraph (d)(1)(i)](#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](/cfr/42/428.403.md), 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)](#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)](#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)](#d) could result in an increase, decrease, or no change to the rebate amount as determined under [§ 428.201(a)](/cfr/42/428.201.md?p=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)](#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](/cfr/42/428.201.md) 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](/cfr/42/428.101.md) for an applicable period will not be included in a reconciliation as determined under this [paragraph (d)](#d).

## Notes

### Amendments

[89 FR 98588, Dec. 9, 2024, as amended at 90 FR 50021, Nov. 5, 2025]

### Authority

Authority: 42 U.S.C. 1395w-114b, 1302, and 1395hh.

### Source

Source: 89 FR 98588, Dec. 9, 2024, unless otherwise noted.

### Amendments

[89 FR 98588, Dec. 9, 2024, as amended at 90 FR 50021, Nov. 5, 2025]