(a) Definitions. For the purposes of this section the following definitions are applicable:

Applicable reconciliation means the later of either the annual deadline for submitting—

(i) PDE data for the annual Part D payment reconciliations referred to in §423.343(c) and (d); or

(ii) Direct and indirect remuneration data.

Funds for purposes of this section, means any payment that a Part D sponsor has received that is based on data submitted by the Part D sponsor to CMS for payment purposes, including data submitted under §423.329(b)(3), §423.336(c)(1), §423.343, and data provided for purposes of supporting allowable costs as defined in §423.308 which includes data submitted to CMS regarding direct or indirect remuneration.

Overpayment means funds that a Part D sponsor has received or retained under title XVIII of the Act to which the Part D sponsor, after applicable reconciliation, is not entitled under such title.

(b) General rule. If a Part D sponsor has identified that it has received an overpayment, the Part D sponsor must report and return that overpayment in the form and manner set forth in this section.

(c) Identified overpayment. The Part D sponsor has identified an overpayment when the Part D sponsor has determined, or should have determined through the exercise of reasonable diligence, that the Part D sponsor has received an overpayment.

(d) Reporting and returning of an overpayment. A Part D sponsor must report and return any overpayment it received no later than 60 days after the date on which it identified it received an overpayment.

(1) Reporting. A Part D sponsor must notify CMS of the amount and reason for the overpayment, using the notification process determined by CMS.

(2) Returning. A Part D sponsor must return identified overpayments in a manner specified by CMS.

(e) Enforcement. Any overpayment retained by a Part D sponsor is an obligation under 31 U.S.C. 3729(b)(3) if not reported and returned in accordance with paragraph (d) of this section.

(f) Look-back period. A Part D sponsor must report and return any overpayment identified within the 6 most recent completed payment years.

[79 FR 29963, May 23, 2014]