42 CFR § 423.2516 - Selection of LI NET sponsor and contracting provisions.

---
identifier: "/us/cfr/t42/s423.2516"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 423.2516 - Selection of LI NET sponsor and contracting provisions."
title_number: 42
title_name: "Public Health"
section_number: "423.2516"
section_name: "Selection of LI NET sponsor and contracting provisions."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "B"
subchapter_name: "MEDICARE PROGRAM"
part_number: "423"
part_name: "VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh."
regulatory_source: "70 FR 4525, Jan. 28, 2005, unless otherwise noted."
cfr_part: "423"
---


# 423.2516 Selection of LI NET sponsor and contracting provisions.

(a) *Appointment by CMS.* CMS appoints a Part D sponsor that meets the requirements at § 423.2512 to serve as the LI NET sponsor.

(b) *Selection criteria.* In appointing a LI NET sponsor, CMS evaluates the following:

(1) Experience covering low-income beneficiaries, including but not limited to enrolling and providing coverage to low-income subsidy individuals as defined in § 423.34;

(2) Pharmacy access as outlined in § 423.120;

(3) Past performance, including Star Ratings (as detailed in § 423.186), previous intermediate sanctions (as detailed in § 423.750), and consistent with past performance in § 423.503(b); and

(4) Ability to meet the requirements listed in § 423.505 that are not waived under § 423.2536.

(c) *Term of appointment.* The term of the appointment will be ongoing provided mutual agreement between CMS and the selected party, subject to an annual contracting and bid process (per § 423.2524(b)) to determine payment rates for the upcoming year.