Dispute resolution

(a) Initial disputes. Agreement holders may dispute applicable discounts invoiced to such agreement holder under § 423.2756(a).

(1) Timeframe and method of filing. Initial disputes must be filed, in the manner specified by CMS, no later than the dispute submission deadline, as defined at § 423.2704. The agreement holder must explain why it believes the invoiced discount amount is in error and must provide supporting evidence that is material, specific, and related to the dispute.

(2) Timeframe for making a determination. CMS will issue a written determination on an initial dispute no later than 60 calendar days from the dispute submission deadline.

(b) Independent review. An agreement holder that receives an unfavorable determination from CMS on its initial dispute or has not received a determination within 60 calendar days from the dispute submission deadline, may request review by the independent review entity (IRE) contracted by CMS.

(1) Timeframe and method of filing. A request for review by the IRE must be filed, in the manner specified by CMS, no later than the earlier of the following:

(i) Thirty calendar days from the unfavorable determination on the initial dispute.

(ii) Ninety calendar days from the dispute submission deadline, if no determination was made within 60 calendar days of the dispute submission deadline.

(2) Information considered. In addition to the information provided by the agreement holder, the IRE considers information received from CMS, the TPA, the Part D sponsor, or other sources. The IRE may request additional information from the agreement holder for the purpose of considering the appeal. Failure to comply with this request for additional information within the timeframe specified may result in the IRE issuing a denial.

(3) Timeframe for making a decision. The IRE issues a written decision to the agreement holder and to CMS no later than 90 calendar days from receipt of the request.

(4) Notice requirements. The IRE decision must include all of the following:

(i) A clear statement indicating whether the decision is favorable or unfavorable to the agreement holder.

(ii) An explanation of the rationale for the IRE's decision.

(iii) Instructions on how to request a review by the CMS Administrator.

(5) Effect of IRE decision. A decision by the IRE is binding on all parties unless the agreement holder or CMS files a valid request for review by the CMS Administrator under the process described in paragraph (c) of this section.

(c) Review by the CMS Administrator. (1) CMS or an agreement holder that receives an unfavorable decision by the IRE may request a review of a determination from the IRE by the CMS Administrator.

(2) A request for review by the CMS Administrator must be filed, in the manner specified by CMS, no later than 30 calendar days from the date of the IRE decision.

(3) The CMS Administrator issues a written decision to both parties.

(4) A decision by the CMS Administrator is final and binding.

(d) Adjustment to invoiced amounts. CMS adjusts future invoices (or implements an alternative reimbursement process if determined necessary) if the dispute is resolved in favor of the agreement holder.

(e) Limitation. The dispute resolution process described in this section must not be used to dispute a decision by CMS to terminate an agreement holder's participation in the Manufacturer Discount Program under § 423.2752(c)(1) or a decision by CMS about a manufacturer's eligibility for discount phase-ins described at § 423.2720.