[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR423.410]

[Page 421-422]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 423_VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT--Table of Contents
 
   Subpart I_Organization Compliance with State Law and Preemption by 
                               Federal Law
 
Sec.  423.410  Waiver of certain requirements to expand choice.

    (a) Authorizing waiver. In the case of an entity that seeks to offer 
a prescription drug plan in a State, CMS waives the licensure 
requirement at Sec.  423.401(a)(1), which requires that the entity be 
licensed in that State if CMS determines, based on the application and 
other evidence presented, that any of the grounds for approval of the 
application described in paragraphs (b), (c), or (d) of this section are 
met.
    (b) Grounds for approval of waivers. Subject to the waiver 
requirements specified in Sec.  423.410(e), waivers may be granted under 
any of the following conditions:
    (1) Failure to act on licensure application on a timely basis. The 
State failed to complete action on the licensing application within 90 
days of the date that the State received a substantially complete 
application.
    (2) Denial of application based on discriminatory treatment. The 
State denied the license application on either of the following bases---
    (i) The State imposed material requirements,
    procedures, or standards (other than solvency requirements) not 
generally applied by the State to other entities engaged in a 
substantially similar business; or
    (ii) The State required, as a condition of licensure, that the 
organization offer any product or plan other than a prescription drug 
plan.
    (3) Denial of application based on application of solvency 
requirements. The State denied the licensure application, in whole or in 
part, on the basis of the PDP sponsor's failure to meet solvency 
requirements and
    (i) The solvency requirements are different from the solvency 
standards CMS establishes in accordance with Sec.  423.420; or
    (ii) CMS determines that the State imposed, as a condition of 
licensing, any documentation or information requirements relating to 
solvency that are different from the standards CMS establishes in 
accordance with Sec.  423.420.
    (4) Grounds other than those required by Federal Law. The 
application by a State of any grounds other than those required under 
Federal law.
    (c) Waiver when licensing process not in effect. The grounds for 
approval specified in paragraph (b)(1) of this section are deemed met if 
CMS determines that the State does not have a licensing process in 
effect for PDP sponsors.
    (d) Special waiver for plan years beginning before January 1, 2008. 
For plan years beginning before January 1, 2008, if the State has a 
prescription drug plan or PDP sponsor licensing process in effect, CMS 
grants a waiver upon a demonstration that an applicant to become a PDP 
sponsor has submitted a fully completed application for licensure to the 
State.
    (e) Waiver requirements. The following rules apply to waiver 
applications or waivers granted under this section.
    (1) Treatment of waiver. The waiver applies only to that State, is 
effective for 36 months, and cannot be renewed.
    (2) Prompt action on application. CMS grants or denies a waiver 
application under this section within 60 days after CMS determines that 
a substantially complete waiver application is received by CMS.
    (3) A State that does not have a PDP sponsor. In the case of a State 
that does

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not have a PDP sponsor licensing process, the 36 month limitation on the 
waiver discussed in paragraph (e)(1) of this section does not apply, and 
the waiver may continue in effect for a given State as long as CMS 
determines that the State does not have a PDP sponsor licensing process 
in effect, and the PDP sponsor meets the solvency standards of Sec.  
423.420(a).