§ 423.294 Failure to collect and incorrect collections of premiums and cost sharing. ( a ) *Requirement to collect premiums and cost sharing.* A Part D sponsor violates the uniform benefit provisions at § 423.104(b) if it fails to collect or incorrectly collects applicable cost sharing, or fails to collect or incorrectly collects premiums as required by § 422.262(e) of this chapter— ( 1 ) In accordance with the timing of premium payments;
( 2 ) At the time a drug is dispensed; or
( 3 ) By billing the enrollee or another appropriate party after the fact.
( b ) Refunds of incorrect collections— ( 1 ) *Definitions.* As used in this section the following definitions are applicable: *Amounts incorrectly collected.* ( A ) Means amounts that exceed the monthly Part D enrollee premium limits under § 423.286 or exceed permissible cost-sharing or copayment amounts as specified in § 423.104(d) through (f), whether paid by or on behalf of the enrollee;
( B ) Includes amounts collected with respect to an enrollee who was believed to be entitled to Medicare benefits but was later found not to be entitled; and
( C ) Excludes de minimis amounts, as calculated per PDE transaction or per monthly premium billing.
*De minimis amounts* means an amount per PDE transaction for claims adjustments and per month for premium adjustments that does not exceed the de minimis amount determined for purposes of § 423.34(c)(2).
*Other amounts due* means amounts due to affected enrollees or others on their behalf (other than de minimis amounts) for covered Part D drugs that were— ( A ) Accessed at an out-of-network pharmacy in accordance with the requirements at § 423.124; or
( B ) Initially denied but, upon appeal, found to be covered Part D drugs the enrollee was entitled to have provided by the Part D plan.
( 2 ) *General rule.* A Part D sponsor must make a reasonable effort to identify all amounts incorrectly collected and to pay any other amounts due during the timeframe for coordination of benefits as established at § 423.466(b). A Part D sponsor must issue a refund for an identified enrollee overpayment within the timeframe specified at § 423.466(a).
( 3 ) *Refund methods* — ( i ) *Lump-sum payment.* The Part D sponsor must use lump-sum payments for the following: ( A ) Amounts incorrectly collected as cost-sharing.
( B ) Other amounts due.
( C ) All amounts due if the Part D plan is going out of business or terminating its Part D contract for a prescription drug plan(s).
( ii ) *Premium adjustment, lump-sum payment, or both.* If the amounts incorrectly collected were in the form of premiums, or included premiums as well as other charges, the Part D sponsor may refund by adjustment of future premiums or by a combination of premium adjustment and lump-sum payments.
( iii ) *Refund when enrollee has died or cannot be located.* If an enrollee has died or cannot be located after reasonable effort, the Part D sponsor must make the refund in accordance with State law.
( 4 ) *Premium reduction and compliance.* ( i ) If the Part D sponsor does not issue the refund as required under this section within the timeframe specified at § 423.466(a), CMS reduces the premium the Part D sponsor is allowed to charge a Part D enrollee by the amounts incorrectly collected or otherwise due.
( ii ) The Part D plan may receive compliance notices from CMS or, depending on the extent of the non-compliance, be the subject of an intermediate sanction (for example, suspension of marketing and enrollment activities) in accordance with subpart O of this part.
( c ) *Collections of cost-sharing and premium amounts* — ( 1 ) *General rule.* A Part D sponsor must make a reasonable effort to attempt to collect cost sharing from a beneficiary or to bill cost sharing or premiums to another appropriate party for all amounts other than de minimis amounts.
( 2 ) *Timeframe.* Recovery notices must be processed and issued in accordance with the timeframe specified at § 423.466(a). A Part D sponsor must make a reasonable effort to attempt to collect these amounts during the timeframe for coordination of benefits as established at § 423.466(b).
( 3 ) *Retroactive collection of premiums.* Nothing in this section alters the requirements of § 423.293(a)(4) of this part with respect to retroactive collection of premiums.
[89 FR 30836, Apr. 23, 2024]