§ 403.820 Sanctions, penalties, and termination.
(a) Intermediate sanctions. (1) For the violations listed in paragraph (a)(3) of this section, the following intermediate sanctions may be imposed on any endorsed sponsor:
(i) Suspension of enrollment of Medicare beneficiaries.
(ii) Suspension of information and outreach activities to Medicare beneficiaries.
(2) Duration of sanctions. The intermediate sanctions continue in effect until CMS is satisfied that the deficiency on which the determination was based has been corrected and is not likely to recur.
(3) Sanctionable violations. The violations for which intermediate sanctions may be imposed are as follows:
(i) Substantial failure to maintain a contracted retail pharmacy network meeting the requirements of § 403.806(f);
(ii) Substantial failure to comply with CMS Information and Outreach Guidelines;
(iii) Substantial failure to provide discount card enrollees with negotiated prices consistent with information reported to CMS for the price comparison Web site and/or reported by the endorsed sponsor;
(iv) Except during the week of November 15, 2004 (which coincides with the beginning of the annual coordinated election period), substantial failure to ensure that the negotiated price for a covered discount card drug does not exceed an amount proportionate to the change in the drug's average wholesale price (AWP), and/or an amount proportionate to changes in the card sponsor's cost structure (including material changes to any discounts, rebates, or other price concessions the sponsor receives from a pharmaceutical manufacturer or pharmacy);
(v) Charging drug card enrollees additional fees beyond a $30 enrollment fee;
(vi) Charging transitional assistance enrollees any enrollment fee;
(vii) Charging a coinsurance more than 5 percent for those at or below 100 percent of the poverty line, or 10 percent for those above 100 percent but at or below 135 percent of the poverty line;
(viii) Substantial failure to administer properly the transitional assistance funding for transitional assistance enrollees;
(ix) Substantial failure to provide CMS or its designees with requested information related to the endorsed sponsor's endorsed discount card operations; or