Adverse information released by an agency means any statement or release by the Department or any principal operating component made to the news media inviting public attention to an action or a finding by the Department or principal operating component of the Department which may adversely affect persons or organizations identified therein. This part does not apply to nor is it affected by any disclosure of records to the public in response to requests made under the Freedom of Information Act (Pub. L. 90-23). The criteria for such disclosures are set forth in the Department's Public Information Regulation (45 CFR Part 5).

§ 17.2 Basic policy.

All adverse information release to news media shall be factual in content and accurate in description. Disparaging terminology not essential to the content and purpose of the publicity shall be avoided.

§ 17.3 Precautions to be taken.

The issuing organization shall take reasonable precautions to assure that information released is accurate and that its release fulfills an authorized purpose.

§ 17.4 Regulatory investigations and trialtype proceedings.

Adverse information relating to regulatory investigations of specifically identified persons or organizations or to pending agency trial-type proceedings shall be released only in limited circumstances in accordance with the criteria outlined below:

(a) Where the Department or a principal operating component determines that there is a significant risk that the public health or safety may be impaired or substantial economic harm may occur unless the public is notified immediately, it may release information to news media as one of the means of notifying the affected public speedily and accurately. However, where the Department or principal operating component determines that public harm can be avoided by immediate discontinuance of an offending practice, a respondent shall be allowed an opportunity, where feasible, to cease the practice (pending a legal test) in lieu of release of adverse information by the agency.

(b) Where it is required in order to bring notice of pending agency adjudication to persons likely to desire to participate therein or likely to be affected by that or a related adjudication, the Department or principal operating component shall rely on the news media to the extent necessary to provide such notice even though it may be adverse to a respondent.

§ 17.5 Context to be reflected.

The authority for and the character of the information shall be made clear, where appropriate, the release shall explain the nature of any studies performed, the sources of relevant data, the areas in which administrative findings of fact were made, and whether the information is based on allegations subject to subsequent adjudication.

§ 17.6 Advance notice.

Any respondent or prospective respondent in an agency proceeding shall, if practicable and consistent with the nature of the proceeding, be given advance notice of information to be released about the proceeding and a

reasonable opportunity to prepare in advance a response to the information released.

§ 17.7 Retractions or corrections.

Where the Assistant Secretary for Public Affairs finds that information released by the Department was misleading or a misstatement of fact and any person named therein requests a retraction or correction, the Department shall issue a retraction or correction in the same manner to all of the media outlets that received the original information (or as many of them as is feasible). Where information shown to be misleading or misstatement of fact has been released by a principal operating component of the Department and any person named therein requests a retraction or correction, the agency head shall issue a retraction or correction in the same manner to all of the media outlets that received the original information (or as many of them as is feasible).

PART 19-LIMITATIONS ON PAYMENT OR REIMBURSEMENT FOR DRUGS

Sec.

19.1 Purpose. 19.2

Definitions.

19.3 Cost limitation.

19.4 Establishment of pharmaceutical reimbursement board.

19.5 Determination of maximum allowable

cost.

19.6 Review and revision of maximum allowable cost determinations.

AUTHORITY: Sec. 205(c), Pub. L. 81-152, 63 Stat. 390 (40 U.S.C. 486(c)); sec. 224(c), Pub. L. 92-603, 86 Stat. 1395 (42 U.S.C. 1396 (b)(i)(1)); sec. 223 (a), (b), (c), (d), Pub. L. 92-603, 86 Stat. 1393, 1394 (42 U.S.C. 1395x (v)(1)(A)); sec. 237(b), Pub. L. 90-248, 81 Stat. 911, as amended (42 U.S.C. 1396a(a) (30), as amended); sec. 223(a), Pub. L. 92603, 86 Stat. 1411 (42 U.S.C. 1395f(b)); sec. 215, Pub. L. 78-410, 58 Stat. 690, as amended (42 U.S.C. 216, as amended), unless otherwise noted.

SOURCE: 40 FR 32302, July 31, 1975, unless otherwise noted.

§ 19.1 Purpose.

(a) This part establishes Department of Health and Human Services procedures for determining drug costs and,

where applicable, dispensing fees which the Department will use for the purpose of determining:

(1) Reimbursement to providers and health maintenance organizations under the Medicare program.

(2) Reimbursement to States under State administered health, welfare, and social service programs.

(3) Allowable costs under projects for health services.

(b) Policies and procedures, which will be consistent with the policies and procedures set forth in this part, will be published in the HHS Procurement Regulations, Title 41, Chapter 3, Code of Federal Regulations, governing the direct purchase of drugs by the Department and the purchase or supply of drugs by contractors of the Department.

(c) This part does not establish procedures for fixing the actual amount of reimbursement to which providers will be entitled for dispensing drugs. Rather, it establishes procedures for setting a limit on what the individual program regulations and policies might otherwise provide. If the authorizing legislation for a particular program, or the program regulation or policies adopted or issued under that legislation, provides for a lower rate of reimbursement than this regulation permits, then the program reimbursement rate, being lower, will necessarily control the actual payment.

For the purposes of this part:

(a) "Board" means the Pharmaceutical Reimbursement Board established by § 19.4 of this part.

(b) "Drug" means a drug product, including one that may be dispensed without a prescription, containing one or more active ingredients in a specified dosage form and strength. Each dosage form and strength of a drug is a separate drug.

(c) "Program Agency" means the Federal agency, state agency, local governmental unit, contractor or other institution or organization which reimburses or pays providers under any of the programs or activities described in § 19.1.

(d) "Multiple-source drug" means a drug marketed or sold by two or more formulators or labelers or a drug marketed or sold by the same formulator or labeler under two or more different proprietary names or both under a proprietary name and without such a

name.

(e) "Provider" means one who furnishes medical or pharmaceutical services or supplies for which he is entitled to reimbursement or payment under any of the programs or activities described in § 19.1.

(f) "Acquisition cost" means the price generally and currently paid by providers for a drug marketed or sold by a particular formulator or labeler in the package size of drug most frequently purchased by providers.

§ 19.3 Cost limitation.

(a) The amount which the Department will recognize for reimbursement or payment purposes for any drug used in the programs or activities described in § 19.1 shall not exceed the lowest of:

(1) The maximum allowable cost (MAC) of the drug, if any, established in accordance with § 19.5 plus a reasonable dispensing fee;

(2) The acquisition cost of the drug plus a reasonable dispensing fee; or

(3) The provider's usual and customary charge to the public for the drug; Provided, That: The MAC established for any drug shall not apply to a brand of that drug prescribed for a patient which the prescriber has certified in his own handwriting is medically necessary for that patient; and provided further, That: Where compensation for drug dispensing is included in some other amount payable to the provider by the reimbursing or paying program agency, a separate dispensing fee will not be recognized.

(b) Each program agency shall estimate the acquisition cost of each drug for which it reimburses or pays a provider. Such estimate should be consistent with any drug price information furnished the program agency by the Department.

[40 FR 32302, July 31, 1975; 40 FR 36342, Aug. 20, 1975]

§ 19.4 Establishment of pharmaceutical reimbursement board.

(a) There is established in the Health Care Financing Administration a Pharmaceutical Reimbursement Board consisting of six full time employees of the Department, representing the principal offices and agencies concerned with developing and implementing cost determinations under this part. The Director of the Bureau of Program Policy, HCFA, or his designee shall serve as the Chairman.

(b) The Board may make use of outside consultants to advise it on any technical or complex issues during its consideration of a proposed MAC.

(Sec. 1102, 49 Stat. 647 (42 U.S.C. 1302)) [43 FR 35311, Aug. 9, 1978, as amended at 44 FR 55877, Sept. 28, 1979]

§ 19.5 Determination of maximum allowable cost.

(a) Identification of drugs to which a MAC may be applied. The Board shall identify those multiple source drugs for which significant amounts of Federal funds are or may be expended under the programs and for the activities described in § 19.1 and for which there are or may be significantly different prices.

(b) Review by the Food and Drug Administration. The Board shall notify the Food and Drug Adminstration in writing of each drug identified in accordance with paragraph (a) of this section. The Food and Drug Administration, in response to each such notification, shall advise the Board in writing whether there is any regulatory action, either pending or under consideration, bearing upon the marketability of, or to establish a bioequivalence requirement for, the drug and shall further advise the Board whether, in the judgment of the Food and Drug Administration, any such action is a reason for delaying or withholding the establishment of a MAC for the drug.

(c) Initial determination of lowest unit price. For each drug identified in accordance with paragraph (a) of this section and for which the Food and Drug Administration has not advised delaying or witholding the establishment of a MAC, the Board shall make an initial determination of the lowest

unit price at which the drug is widely and consistently available from any formulator or labeler. This determination will be based on the package size of drug most frequently purchased by providers. If it appears to the Board that a drug is or will be unavailable to providers in one or more localities at the same lowest unit price at which it is available elsewhere, the Board shall make a separate determination for each such locality.

(d) Proposed MAC. The Board shall determine whether the lowest unit price should be proposed as the maximum allowable cost (MAC) for the drug.

(e) Notice and comment. The Board shall publish as a notice in the FEDERAL REGISTER each proposed MAC and a summary of the Board's reasons for its proposal. The notice shall invite interested persons and organizations to submit in writing comments on the proposed MAC. All comments received will be maintained for public inspection at the office of the Board.

(f) Public hearing. A public hearing will be held with respect to each proposed MAC. The hearing will be held no sooner than 45 days from the date of the notice in the FEDERAL REGISTER. The dates, time, and location of the hearing shall appear in the notice.

(g) Conduct of hearing. The hearing shall be open to the public and a transcript shall be made of the proceedings. Persons or organizations wishing to make presentations shall submit to the Board's Executive Secretary, no later than 15 days prior to the hearing, a minimum of 20 copies of the proposed oral presentation in its entirety, together with all supporting studies or materials and the names and addresses of proposed participants. The Board will allot time for each oral presentation which, in the judgment of the Board, is relevant to the proposed MAC. Those requesting to appear at the hearing in accordance with this paragraph will be notified in writing.

(h) Proposed final determination. After considering the written comments, the presentations made at the public hearing and any other evidence included as a part of the record, the Board shall decide whether a MAC

should be established for each drug for which a notice of proposed MAC was published and, if so, shall make a proposed final determination of a MAC for each drug.

(i) Administrator's concurrence. The Board shall submit each proposed final determination to the Adminstrator of HCFA. The Administrator shall concur or nonconcur, but may not modify the Board's proposed final determination. If the Administrator concurs, the proposed determination becomes final. If the Adminstrator nonconcurs, the Board may reinstitute proceedings under this section to adopt a MAC for that drug at a different level.

(j) Publication. Notice of the final determination shall be published in the FEDERAL REGISTER together with a statement of the Board's reasons for its determination.

(Sec. 1102, 49 Stat. 647 (42 U.S.C. 1302)) [43 FR 35311, Aug. 9, 1978]

§ 19.6 Review and revision of maximum allowable cost determinations.

The Board will maintain and make publicly available a list of MAC determinations and will regularly review the list to assure that continued application of each MAC is justified. Any individual or organization may at any time request in writing that a MAC determination be revised or withdrawn. The request shall set forth the specific change requested, the justification for the change, and available data in support of the request. Whenever it appears to the Board that there are substantial grounds for reviewing a MAC determination, it shall institute such review in accordance with the procedures set forth in § 19.5. Should there be no substantial grounds for reviewing a MAC determination, the Board shall notify any person or organization requesting review in accordance with this section of its denial in writing. Such notice shall also include a statement of the Board's reasons for denying the request.

Sec.

PART 30-CLAIMS COLLECTION

30.1 Incorporation by reference.
30.2 Scope of regulations.
30.3 Delegation of authority.

AUTHORITY: Sec. 3, 80 Stat. 309, 31 U.S.C. 951-953; Joint Regulations of GAO and Department of Justice, 4 CFR Ch. II Parts 101-105; Statement of Organization and Delegation of Authority of the Department as amended, 31 FR 16375.

§ 30.1 Incorporation by reference.

The regulations of this part incorporate herein and supplement as necessary for Department operation all provisions of the Joint Regulations issued by the Comptroller General of the United States and the Attorney General of the United States under section 3 of the Federal Claims Collection Act of 1966, which prescribes standards for administrative collection of civil claims by the Government as well as compromise, suspension, or termination of agency collection action, with respect to claims not exceeding $20,000 exclusive of interest, and the referral to the General Accounting Office, and to the Department of Justice for litigation, of civil claims by the Government. [32 FR 17891, Dec. 14, 1967]

§ 30.2 Scope of regulations.

The standards set forth in this chapter are not applicable where standards are prescribed under statutes other than the Federal Claims Collection Act of 1966, for compromise or termination of collection action, or waiver in whole or in part of claims thereunder.

[32 FR 17891, Dec. 14, 1967]

§ 30.3 Delegation of authority.

(a) The Secretary delegated to the Department Claims Officer the authority to perform the duties vested in him by the Federal Claims Collection Act of 1966 (31 U.S.C. 951-953) as amended, except with respect to erroneous payments under Titles II and XVIII of the Social Security Act.

(b) The Department Claims Officer shall compromise, suspend or terminate claims referred to him after administrative collection efforts have

been exhausted in accordance with the provisions of this part.

(c) The appropriate office, local, regional or headquarters, shall take all necessary administrative action required under the Act and Joint Regulations, except that, with respect to claims of $800 or more, no compromise of a claim shall be effected, nor collection action suspended or terminated without the prior approval of the Department Claims Officer, or the following specific delegates:

(1) The Deputy Assistant General Counsel, Business and Administrative Law Division, Office of General Counsel;

(2) The Chief, Litigation and Claims Branch, Business and Administrative Law Division, Office of General Counsel;

(3) The Regional Attorneys except with respect to claims arising out of activities of the Public Health Service. [40 FR 40162, Sept. 2, 1975]