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Medicare Advantage downstream compliance: What physician practices should know

Raj Shah ( is Senior Regulatory Attorney and Susannah J. Gleason ( is Risk Intern (JD expected 2021) at MagMutual Insurance Company in Atlanta, GA.

Medicare Advantage (MA) and Part D (PD) plan sponsors are responsible for meeting the Centers for Medicare & Medicaid Services (CMS) requirements in place for all Medicare programs.[1] MA and PD sponsors contract administrative and healthcare services out to different first-tier, downstream, and related entities (FDRs). All first-tier entities that contract with a Medicare Advantage organization (MAO) or PD sponsor are then also obligated to meet the CMS requirements; additionally, any downstream entities that first-tier entities contract with for their administrative or healthcare services must meet the CMS requirements. Because MAOs and PD sponsors are ultimately responsible for the compliance of their FDRs, they retain the right to audit any organizations that fall into these categories to ensure compliance with the CMS requirements.[2] CMS also has the right to audit, or may request the records of, FDRs if they are auditing the MAO or PD sponsor.[3] Therefore, FDRs need to be aware of the compliance requirements that they must satisfy.

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