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Medicare Advantage FDR Compliance

Quartz has contracts with the Centers for Medicare and Medicaid Services (CMS) to provide Medicare Advantage (MA) and Part D programs and services to Medicare beneficiaries. Quartz Medicare Advantage delegates some of the administrative and health care services required 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 fulfill certain Medicare compliance program requirements — some of which are highlighted below.

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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?

An FDR is a CMS acronym for First-tier, Downstream or Related entity. Quartz defines FDRs according to CMS’s current definitions:

A First-tier entity is any party that enters into a written arrangement, acceptable to CMS, with a Medicare Advantage Organization (MAO) or Part D plan sponsor or applicant.

These arrangements provide administrative or health care services to a Medicare-eligible individual under the Medicare Advantage program or Part D program (see 42 C.F.R. §423.501).

A Downstream entity is any party that enters into a written arrangement acceptable to CMS, with persons or entities involved with the MA benefit or Part D benefit. They are below the level of the arrangement and between the following:

An MA organization or applicant
A Part D plan sponsor or applicant
A First-tier entity

These written arrangements continue down to the level of the ultimate provider of both health and administrative services. (See 42 C.F.R. §423.501).

A Related entity is any party that is related to an MAO or Part D sponsor by common ownership or control and:

Performs some of the MAO or Part D plan Sponsor’s management functions under contract or delegation;
Furnishes services to Medicare enrollees under an oral or written agreement; or
Leases real property or sells materials to the MAO or Part D plan Sponsor at the cost of more than $2,500 during a contract period (see 42 C.F.R. §423.501).

FDR Compliance Program and Annual Attestation Requirements

Quartz obtains an annual attestation from its First-Tier Entities to ensure they comply with applicable compliance program requirements. An authorized individual from each First-Tier Entity must attest that their 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/or 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 FDRs to further ensure compliance. FDRs are required to cooperate and participate in these activities, which may, for example, require the FDR 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, it may lead to the development of a corrective action plan; retraining, or other contractual remedies (e.g., contract termination).

General Compliance and FWA Training

As a Quartz FDR, you must provide general compliance and FWA training to all applicable employees including temporary employees, volunteers, governing board members, 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 and D General Compliance and Combating Medicare Parts C and D Fraud, Waste, and Abuse Training. Instead, to comply with this requirement, FDRs may complete their version of general compliance and FWA training specific to their organization’s needs, or complete the CMS standardized general compliance module from 2019 and the CMS standardized FWA Training Module bulleted below:

Medicare Part C and D General Compliance Training (PDF)
Combating Medicare Parts C and D Fraud, Waste, and Abuse. (The link to this training will take you off Quartz’s FDR webpage. Once your training is completed, print off or save an electronic copy of the Certificate of Completion as proof of training completion.)

Training timing
Required education and training must be completed within 90 days of initial hire or the effective date of contracting when materials are updated, and annually after that.

Record Retention Requirements

FDRs are required to maintain records of general compliance and FWA training and education taken by employees for a minimum of 10 years. Evidence of completion may be in the form of certificates, attestations, employee training logs or other means determined by the FDR to best represent fulfillment. If training logs or standardized reports are utilized, they must include:

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

A sample training log found under FDR Resources offers a way for FDRs to document 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@quartzdev.wpengine.com.

FDRs are not exempt from general compliance training requirements. The only exception to the training requirement is if you are “deemed” to have met the FWA training requirements through one or both of the following:

Enrollment in Parts A or B of the Medicare program
Accreditation as Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) supplier

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

As a Quartz FDR, you must provide our Code of Conduct and our compliance policies (or a document of your own that is comparable to both of these documents) to your employees and Downstream entities. FDRs must be able to show proof that they provided the code of conduct. FDRs must provide these documents:

Within 90 days of hire or the effective date of contracting
When there are updates to the code of conduct
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) List of Excluded Individuals and Entities (LEIE) and General Services Administration (GSA) System for Award Management (SAM). The following individuals and entities must be screened: employees, temporary employees, volunteers, consultants, and members of your governing board. Completing these screenings will confirm your employees and Downstream entities aren’t excluded from participation in federally funded health care programs.

FDRs may use these websites to perform their exclusion list screenings:

OIG List of Excluded Individuals and Entities (LEIE)

GSA System for Award Management (SAM)

FDRs must maintain evidence that they’ve screened against both exclusion lists and keep proof of screenings for a minimum of 10 years. 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@quartzdev.wpengine.com

Reporting FWA and Compliance Concerns to Quartz

Reporting is vital in preventing, detecting, and correcting of noncompliance and FWA. Quartz has safeguards in place that protects 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 potential FWA, they are required to report the incident to Quartz. There are a number of ways to report suspected or detected noncompliance or potential FWA. Resources are available through Quartz’s Compliance Reporting Poster found under FDR Resources. All reports are confidential. Quartz encourages its FDRs to publicize this reporting poster throughout their organization.

Monitoring and Auditing

FDRs are expected to have monitoring and auditing procedures in place to ensure compliance with all applicable laws and regulations. Also, if an FDR subcontracts with other individuals or entities to provide administrative and/or health care 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@quartzdev.wpengine.com

Record Retention

FDRs are required to retain all Medicare documentation and maintain evidence for at least 10 years. This includes any documentation related to services the FDR performs for Quartz Medicare Advantage, including documentation related to:

Training certificates, attestations, or employee logs
Code of Conduct and/or compliance policies distribution and updates
OIG and GSA exclusion screenings
Reports of and responses to suspected noncompliance and/or fraud, waste, or abuse
Auditing and monitoring activities