Introduction - FDR Compliance

Senior Preferred has contracts with the Centers for Medicare and Medicaid Services (CMS) to provide services under Medicare Advantage and Part D programs to Medicare beneficiaries. Senior Preferred 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 Senior Preferred 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

Senior Preferred 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 their 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 Senior Preferred for participation in our network, you are considered an FDR under CMS guideline.

What is an FDR?

Senior Preferred 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

Senior Preferred 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 and maintaining record of distribution
  • Federal exclusion list screenings (OIG/GSA) and maintaining record of timely checks against those lists
  • The availability of a system to receive reports of suspected non-compliance and/or FWA that is confidential, allows anonymity, and includes policies of non-retaliation
  • Record retention for 10 years
  • Oversight of Downstream and/or Related Entities
  • Identification of offshore operations (See Offshore Subcontractor Attestation under Resources)

Each year, Senior Preferred notifies FDRs via email of the deadline to submit the annual attestation and the availability of the attestation on this site.

Senior Preferred 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 Senior Preferred’s 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, must provide general compliance and FWA training to all employees and downstream entities assigned to provide administrative and/or health care services for Senior Preferred’s Medicare Advantage business. To comply with this requirement, you may:

  • Complete the general compliance and FWA training modules located on the CMS Medicare Learning Network (MLN) website. The general compliance course is called Medicare Parts C and D General Compliance Training, and the FWA training is called Combating Medicare Parts C and D Fraud, Waste, and Abuse Training.
  • Download and incorporate the content of the CMS standardized training from the CMS Medicare Learning Network (MLN) website into your organizations’ existing compliance training materials.
  • Complete your organizations developed general compliance and FWA training.
  • Complete CMS’ general compliance and FWA training bulleted below:

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 fulfillment of your obligations. If training logs are utilized as documentation, they should include:

  • Name of Organization/Entity
  • Contract year
  • Training topic
  • Employee name and title
  • Date of hire
  • Date of training 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 Senior Preferred at

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 Senior Preferred 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 Senior Preferred’s Medicare Plans and send an email notification to

Reporting FWA and Compliance Issues to Senior Preferred

Reporting is vital in the prevention, detection, and correction of non-compliance and FWA. Senior Preferred 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 FWA, they are required to report the incident to Senior Preferred. Compliance resources are available through the Non-Compliance Reporting Poster found under "Resources".

Senior Preferred 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 Senior Preferred’s Compliance Team at