42 C.F.R. § 423.2410

Current through September 30, 2024
Section 423.2410 - General requirements
(a) 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.
(b) 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:
(1) The total revenue of the prescription drug plan for the contract year.
(2) The difference between 0.85 and the MLR for the contract year.
(c) 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.
(d) 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.

42 C.F.R. §423.2410

78 FR 31310, May 23, 2013; 78 FR 43821, July 22, 2013; 83 FR 16756, Apr. 16, 2018
83 FR 16756, 6/15/2018