(a) General. CMS determines if an IOTA participant qualifies for an upside risk payment, downside risk payment, or the neutral zone for each PY based on the IOTA participant's final performance score, in accordance with paragraphs (b)(1) through (3) of this section.

(b) Upside risk payment, neutral zone, and downside risk payment calculation methodology—(1) Upside risk payment calculation methodology. If in PYs 1-6 the IOTA participant's final performance score is 60 points or above, CMS calculates the IOTA participant's upside risk payment as follows:

(i) Subtracts 60 from the IOTA participant's final performance score.

(ii) Divides the amount resulting from the calculation in paragraph (b)(1)(i) of this section by 40.

(iii) Multiplies the amount resulting from the calculation in paragraph (b)(1)(ii) of this section by $15,000.

(iv) Multiplies the amount resulting from the calculation in paragraph (b)(1)(iii) of this section by the total number of Medicare kidney transplants performed by the IOTA participant during the PY.

(2) Neutral zone. (i) For PY 1, an IOTA participant with a final performance score below 60 points qualifies for the neutral zone and neither owes a downside risk payment to CMS nor receives an upside risk payment from CMS.

(ii) For PYs 2 through 6, if an IOTA participant's final performance is between 41 to 59 points (inclusive), the IOTA participant qualifies for the neutral zone.

(3) Downside risk payment calculation methodology. If an IOTA participant is at or below 40 points in PYs 1 through 6, the IOTA participant qualifies for a downside risk payment. The downside risk payment is calculated as follows:

(i) For PY 1, this paragraph does not apply, and the IOTA participant does not owe a downside risk payment to CMS.

(ii) For PYs 2 through 6, CMS calculates the IOTA participant's downside risk payment as follows:

(A) Subtracts the IOTA participant's final performance score from 40.

(B) Divides the amount resulting from the calculation in paragraph (b)(3)(ii)(A) of this section by 40.

(C) Multiplies the amount resulting from the calculation in paragraph (b)(3)(ii)(B) of this section by $2,000.

(D) Multiplies the amount resulting from the calculation in paragraph (b)(3)(ii)(C) of this section by the total number of Medicare kidney transplants performed by the IOTA participant during the PY to calculate the amount of the IOTA participant's downside risk payment.

(c) [Reserved]

(d) Upside risk payment and downside risk payment timeline. (1) CMS conducts and calculates preliminary performance assessment and payment calculations at least 3 to 6 months after the end of each PY.

(2) CMS notifies the IOTA participant of their preliminary performance assessment and payment calculations in a form and manner determined by CMS at least 5 to 9 months after the end of each PY.

(3) CMS gives IOTA participants 30 days to review preliminary performance assessment and payment calculations and request targeted reviews under § 512.434.

(4) CMS notifies the IOTA participant of their final performance score and any associated upside risk payment or downside risk payment at least 30 days after notifying the IOTA participant of their preliminary performance assessment and payment calculations.

(5) Upside risk payment. After CMS notifies the IOTA participant of their final performance score and any associated upside risk payment, and by a date determined by CMS, CMS issues the upside risk payment to the tax identification number (TIN) on file for the IOTA participant in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS).

(6) Downside risk payment. After CMS notifies the IOTA participant of their final performance score and any associated downside risk payment and by a date determined by CMS, CMS issues a demand letter to the TIN on file for the IOTA participant in PECOS for any downside risk payment owed to CMS.

(i) CMS includes all of the following details in the demand letter:

(A) IOTA participant performance in the model.

(B) Amount of downside risk payment owed to CMS by the IOTA participant.

(C) How the IOTA participant may make payments to CMS.

(ii) The IOTA participant must pay the downside risk payment to CMS in a single payment at least 60 days after the date which the demand letter is issued.