(c) Unless the Board otherwise specifies, parties shall submit to the Board an original and two copies of all materials. Each submission other than the notice of appeal, must include a statement that one copy of the materials has been sent to the other party, identifying when and to whom the copy was sent.

(d) Unless hand delivered, all materials should be sent to the Board and the other party by certified or registered mail, return receipt requested.

(e) The Board considers material to be submitted on the date when it is postmarked or hand delivered to the Board.

(a) Each decision is issued by three Board members (see § 16.5(b)), who base their decision on a record consisting of the appeal file; other submissions of the parties; transcripts or other records of any meetings, conferences or hearings conducted by the Board; written statements resulting from conferences; evidence submitted at hearings; and orders and other documents issued by the Board. In addition, the Board may include other materials (such as evidence submitted in another appeal) after the parties are given notice and an opportunity to comment.

(b) The Board will promptly notify the parties in writing of any disposition of a case and the basis for the disposition.

§ 16.22 The effect of an appeal.

(a) General. Until the Board disposes of an appeal, the respondent shall take no action to implement the final decision appealed.

(b) Exceptions. The respondent may

(1) Suspend funding (see § 74.114 of this title);

(2) Defer or disallow other claims questioned for reasons also disputed in the pending appeal;

(3) In programs listed in Appendix A, B.(a)(1), implement a decision to disallow Federal financial participation claimed in expenditures reported on a statement of expenditures, by recovering, withholding or offsetting payments, if the decision is issued

before the reported expenditures are included in the calculation of a subsequent grant; or

(4) Take other action to recover, withhold, or offset funds if specifically authorized by statute or regulation.

§ 16.23 How long an appeal takes.

The Board has established general goals for its consideration of cases, as follows (measured from the point when the Board receives the first submission after the notice of appeal): -For regular review based on a written record under § 16.8, 6 months. When a conference under § 16.10 is held, the goal remains at 6 months, unless a requirement for post-conference briefing in a particular case renders the goal unrealistic.

-For cases involving a hearing under § 16.11, 9 months.

-For the expedited process under § 16.12, 3 months.

These are goals, not rigid requirements. The paramount concern of the Board is to take the time needed to review a record fairly and adequately in order to produce a sound decision. Furthermore, many factors are beyond the Board's direct control, such as unforeseen delays due to the parties' negotiations or requests for extensions, how many cases are filed, and Board resources. On the other hand, the parties may agree to steps which may shorten review by the Board; for example, by waiving the right to submit a brief, by agreeing to shorten submission schedules, or by electing the expedited process.

APPENDIX A-WHAT DISPUTES THE BOARD REVIEWS

A. What this Appendix covers.

This appendix describes programs which use the Board for dispute resolution, the types of disputes covered, and any conditions for Board review of final written decisions resulting from those disputes. Disputes under programs not specified in this appendix may be covered in a program regulation or in a memorandum of understanding between the Board and the head of the appropriate HHS operating component or other agency responsible for administering the program. If in doubt, call the Board. Even though a dispute may be covered here,

the Board still may not be able to review it if the limits in paragraph F apply.

B. Mandatory grant programs.

(a) The Board reviews the following types of final written decisions in disputes arising in HHS programs authorizing the award of mandatory grants:

(1) Disallowances under Titles I, IV, VI, X, XIV, XVI(AABD), XIX, and XX of the Social Security Act, including penalty disallowances such as those under sections 403(g) and 1903(g) of the Act and fiscal disallowances based on quality control samples.

(2) Disallowances in mandatory grant programs administered by the Public Health Service, including Title V of the Social Security Act.

(3) Disallowances in the programs under sections 113 and 132 of the Developmental Disabilities Act.

(4) Disallowances under Title III of the Older American Act.

(5) Decisions relating to repayment and withholding under block grant programs as provided in 45 CFR 96.52

(b) In some of these disputes, there is an option for review by the head of the granting agency prior to appeal to the Board. Where an appellant has requested review by the agency head first, the "final written decision" required by § 16.3 for purposes of Board review will generally be the agency head's decision affirming the disallowance. If the agency head declines to review the disallowance or if the appellant withdraws its request for review by the agency head, the original disallowance decision is the "final written decision." In the latter cases, the 30-day period for submitting a notice of appeal begins with the date of receipt of the notice declining review or with the date of the withdrawal letter.

C. Direct, discretionary project programs.

(a) The Board reviews the following types of final written decisions in disputes arising in any HHS program authorizing the award of direct, discretionary project grants or cooperative agreements:

(1) A disallowance or other determination denying payment of an amount claimed under an award, or requiring return or setoff of funds already received. This does not apply to determinations of award amount or disposition of unobligated balances, or selection in the award document of an option for disposition of program-related income.

(2) A termination for failure to comply with the terms of an award.

(3) A denial of a noncompeting continuation award under the project period system of funding where the denial is for failure to comply with the terms of a previous award.

(4) A voiding (a decision that an award is invalid because it was not authorized by

statute or regulation or because it was fraudulently obtained).

(b) Where an HHS component uses a preliminary appeal process (for example, the Public Health Service), the "final written decision" for purposes of Board review is the decision issued as a result of that proc

ess.

D. Cost allocation and rate disputes.

The Board reviews final written decisions in disputes which may affect a number of HHS programs because they involve cost allocation plans or rate determinations. These include decisions related to cost allocation plans negotiated with State or local governments and negotiated rates such as indirect cost rates, fringe benefit rates, computer rates, research patient care rates, and other special rates. The "final written decision" for purposes of Board review of these disputes is the decision issued as a result of the preliminary appeal process at Part 75 of this title.

E. SSI agreement disputes.

The Board reviews disputes in the Supplemental Security Income (SSI) program arising under agreements for Federal administration of State supplementary payments under section 1616 of the Social Security Act or mandatory minimum supplements under section 212 of Pub. L. 93-66. In these cases, the Board provides an opportunity to be heard and offer evidence at the Secretarial level of review as set out in the applicable agreements. Thus, the "final written decision" for purposes of Board review is that determination appealable to the Secretary under the agreement.

F. Where Board review is not available.

The Board will not review a decision if a hearing under 5 U.S.C. 554 is required by statute, if the basis of the decision is a violation of applicable civil rights or nondiscrimination laws or regulations (for example, Title VI of the Civil Rights Act), or if some other hearing process is established pursuant to statute.

G. How the Board determines whether it will review a case.

Under § 16.7, the Board Chair determines whether an appeal meets the requirements of this Appendix. If the Chair finds that there is some question about this, the Board will request the written opinion of the HHS component which issued the decision. Unless the Chair determines that the opinion is clearly erroneous, the Board will be bound by the opinion. If the HHS component does not respond within a time set by the Chair, or cannot determine whether the Board clearly does or does not have jurisdiction, the Board will take the appeal.

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).

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

maintenance

(1) Reimbursement to providers and health 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