Perspectives

Managing risk beyond a plan's direct control

Improving oversight for FDRs

​The Centers for Medicare and Medicaid Services (CMS) has been increasing the level of focus on First Tier, Downstream, and Related (FDR) entities for Medicare Advantage (MA) and Part D plans through their program audits. Plans must implement the FDR oversight requirements in order to meet CMS regulations. It is also good business practice to understand how well the plan’s FDRs are performing against regulatory and contractual obligations. Health Plans issuers will want to prepare their compliance programs for FDR oversight to reduce the potential findings from initial CMS oversight audits.

Managing risks

The report covers how to improve oversight of a health plan’s FDR entities. Topics include:

  • Current environment: MA and Part D plans are under increasing pressure from CMS to determine that they have a documented and structured process to oversee the activities of their FDRs.
  • CMS Medicare program audits and Best Practice Memos: Plans are required to have FDR management and oversight protocols.
  • CM​S requirements for FDR oversight: When a Medicare Advantage or Plan D plan is considering how to perform oversight of its FDRs, the plan should first consider the oversight requirements outlined by the CMS in Chapter 21 of the Medicare Managed Care Manual and Chapter 9 of the Medicare Prescription Drug Benefit Manual.
  • Identific​ation of FDRs: Plans must have a documented procedure in place to properly identify which downstream vendors are considered FDRs and therefore must comply with CMS requirements.
  • Monitoring and​​ Auditing: In the Medicare Managed Manual and the Prescription Drug Benefit Manual, CMS requires that all plans have a documented plan to monitor and audit FDRs to ensure compliance with applicable Medicare requirements.

Download the PDF to learn more about these topics and additional topics.
 

Managing Risk Beyond a Plan's Direct Control: Improving Oversight of a Health Plan's First Tier, Downstream, and Related (FDR) Entities
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