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Medicare Advantage FDR Compliance Program Requirements


Introduction - FDR Compliance

Quartz has contracts with the Centers for Medicare and Medicaid Services (CMS) to provide services under Medicare Advantage and Part D programs to Medicare beneficiaries. Quartz Medicare Advantage delegates some of the administrative and health care services it is required to perform under these contracts to external delegated entities. CMS refers to these delegated entities as First Tier, Downstream and Related Entities (FDRs). FDRs are an important part of the Quartz Medicare Advantage and Part D programs and are required to comply with certain Medicare compliance program requirements — some of which are highlighted below.


Requirements for FDRs

Quartz is committed to operating a health plan that meets the requirements of all the applicable regulations of the Medicare Advantage and Part D programs. CMS requires Medicare Advantage plans to ensure any FDRs to which the provision of administrative or health care services are delegated are also in compliance with applicable laws and regulations.

First-Tier Entities must also ensure the Downstream Entities they use for our product comply with Medicare compliance program requirements, applicable laws and regulations.  Oversight of FDRs is a CMS requirement for all Medicare Advantage and Part D sponsors. If you or your organization is contracted with Quartz Medicare Advantage for participation in our network, you are considered an FDR under CMS guidelines.

What is an FDR?

Quartz defines FDRs according to CMS current definitions:

First-Tier Entity is any party that enters into a written arrangement, acceptable to CMS, with a Medicare Advantage Organization or Part D plan sponsor or applicant to provide administrative services or healthcare services to a Medicare-eligible individual under the Medicare Advantage program or Part D program. 

Downstream Entity is any party that enters into a written arrangement, acceptable to CMS, with persons or entities involved with the Medicare Advantage benefit or Part D benefit, below the level of the arrangement between a Medicare Advantage Organization or applicant or a Part D plan sponsor or applicant and a first-tier entity. These written arrangements continue down to the level of the ultimate provider of both health and administrative services.

Related Entity is any party that is related to a Medicare Advantage Organization or Part D sponsor by common ownership or control and: a) performs some of the Medicare Advantage Organization or Part D Plan Sponsor’s management functions under contract or delegation; b) furnishes services to Medicare enrollees under an oral or written agreement; or c) leases real property or sells materials to the Medicare Advantage Organization or Part D plan Sponsor at a cost of more than $2,500 during a contract period.

FDR Compliance Program and Annual Attestation Requirements

Quartz obtains an annual attestation from its First-Tier Entities to ensure they are in compliance with applicable compliance program requirements. An authorized individual from each First-Tier Entity must attest that its organization and any of its Downstream and/or Related Entities are in compliance with requirements relating to the following: 

  • Completion of general compliance and fraud, waste and abuse (FWA) training 
  • Distribution of the Code of Conduct and compliance policies 
  • Completion of OIG and GSA SAM exclusion list screenings 
  • Make employees aware of reporting mechanisms 
  • Maintain record retention for 10 years 
  • Report FWA and compliance concerns to Quartz
  • Report and request use of offshore operations 
  • Monitoring and auditing of First Tier, Downstream and Related Entities 

Each year, Quartz notifies FDRs via email of the deadline to submit the annual attestation. 

Quartz also conducts routine auditing and monitoring of its First-Tier Entities to further ensure their compliance. FDRs are required to cooperate and participate in these activities, which may, for example, require the First-Tier Entity to produce evidence that supports the attestation.

If FDRs fail to submit a satisfactory attestation by the deadline or fail to satisfy any Medicare compliance program requirements, such failures may lead to a corrective action plan or other contractual remedies (e.g., contract termination).

General Compliance and FWA Training

As a First Tier Entity, your organization must provide general compliance and FWA training to all applicable employees and downstream entities assigned to provide administrative and/or health care services for Quartz’s Medicare Advantage business.

CMS no longer requires FDRs to complete its Medicare Parts C and D General Compliance and Combating Medicare Parts C and D Fraud, Waste, and Abuse Training. Instead, FDRs may complete their own version of general compliance and FWA training specific to their organization’s needs.

Training timing 

Training must be completed within 90 days of initial hire/contracting, and annually thereafter.

Record Retention

FDRs must maintain evidence of training completion for 10 years. Evidence of completion may be in the form of certificates, attestations, employee training logs or other means determined by you to best represent the fulfillment of your obligations. If training logs or standardized reports are utilized as documentation of completion, they should include: 

  • Employee names
  • Date of hire
  • Name of the training topic
  • Date of completion
  • Test score (if captured)

A sample training log found under "Resources" offers a way for FDRs to document their employees’ and Downstream Entities and/or Related Entities training completion. 

Training applicability 

The entire staff is not necessarily subject to the requirement. CMS has provided "examples of the critical roles within an FDR that should clearly be required to fulfill the training requirements": 

  • Senior administrators or managers directly responsible for the FDR’s contract with the Sponsor (e.g. Senior Vice President, Departmental Managers, Chief Medical or Pharmacy Officer); 
  • Individuals directly involved with establishing and administering the Sponsor’s formulary and/or medical benefits coverage policies and procedures; 
  • Individuals involved with decision-making authority on behalf of the Sponsor (e.g. clinical decisions, coverage determinations, appeals and grievances, enrollment/disenrollment functions, processing of pharmacy or medical claims); 
  • Reviewers of beneficiary claims and services submitted for payment; or, 
  • Individuals with job functions that place the FDR in a position to commit significant noncompliance with CMS program requirements or health care FWA. 

If you have questions about which employee positions within your organization should be required to take the training, please contact Quartz’s Compliance Team at QuartzFDR@quartzbenefits.com.

The only exception to the training requirement is that FDRs are deemed to have met the FWA training requirements through enrollment into the Medicare program or accreditation as a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Those parties deemed to have met the FWA training, are still obligated to complete the general compliance training requirement. FDRs who are deemed to have met the FWA training requirements will need to provide Quartz proof of deemed status.

Code of Conduct and Compliance Program Policy Distribution

These documents must be distributed:

  • within 90 days of hire or the effective date of contracting,
  • when updates are made, and
  • annually thereafter. 

OIG and GSA SAM Exclusion List Screening

Federal law prohibits Medicare and other federal health care programs from paying for items or services provided by an individual or entity excluded from participation in these federal programs. Therefore, before hiring or contracting, and monthly thereafter, each FDR must check exclusion lists from the Office of Inspector General ("OIG") and General Services Administration ("GSA").

The exclusion lists are located at the following websites:

If an FDR discovers an employee or Downstream Entity on one of these exclusion lists, it must immediately remove the employee or Downstream Entity from work directly or indirectly related to Quartz's Medicare Advantage Plans and send an email notification to QuartzFDR@quartzbenefits.com.

Reporting FWA and Compliance Issues to Quartz

Reporting is vital in the prevention, detection, and correction of non-compliance and FWA. Quartz has safeguards in place that protect any individual who reports a concern in good faith from retaliation. FDRs are expected to have safeguards in place as well. 

If any FDR or FDR employee knows of, or suspects, an issue of noncompliance or FWA, they are required to report the incident to Quartz. Compliance resources are available through the Compliance Reporting Poster found under "Resources". Quartz encourages its FDRs to publicize this reporting requirement throughout their facilities and has created a poster for their convenience. 

Monitoring and Auditing

A First-Tier Entity is expected to have monitoring and auditing procedures in place to ensure it is in compliance with all applicable laws and regulations. Also, if a First-Tier Entity subcontracts with other individuals or entities to provide administrative and/or health services, it is responsible for monitoring and auditing these Downstream Entities to ensure they comply with all laws and regulations that apply to the First-Tier Entity. 

If you have questions or concerns about any of these requirements, contact our Compliance Team at QuartzFDR@quartzbenefits.com.


Resources

This web page was updated September 1, 2020.