Executive Summary

The Centers for Medicare & Medicaid Services (“CMS”) recently released a memo to Medicare Advantage and Part D plan sponsors (collectively, “Sponsors”) providing additional guidance regarding Compliance Program Effectiveness (“CPE”) training requirements applicable to a Sponsor’s first tier, downstream and related entities (“FDRs”), including a Sponsor’s contracted health care providers and subcontractors. In the memo, CMS announced it will be suspending review of the compliance program training certification element in the CMS Sponsor audit protocol until further notice to give Sponsors and their FDRs time to adjust to the new compliance training requirements. CMS also provided additional guidance to allow flexibility in implementing the compliance training requirements and clarified that not every member of an FDR’s staff must complete compliance training, depending on the employee’s duties.


Under Medicare Part C and D regulations, Sponsors must require their FDRs, including FDR employees, to complete fraud, waste and abuse (“FWA”) and general compliance training within 90 days of hire and annually thereafter. To reduce the burden of compliance training requirements on FDRs, CMS previously clarified that Sponsors must require their FDRs to complete CMS’s standardized compliance training module beginning January 1, 2016. Because many Sponsors also require their FDRs to take Sponsor-specific compliance training as a condition of their provider contracts, FDRs have been subjected to multiple compliance training programs from Sponsors in addition to the CMS standardized training. As a result, CMS has received complaints from Sponsors and FDRs on the administrative burden of the training requirements.

In response to these concerns and to ease the burden on FDRs, CMS announced that it will not review the CPE program training certification element in the CMS audit protocol for Sponsors during the 2015/2016 year. Additionally, CMS has provided the following guidance to Sponsors and FDRs to allow for greater flexibility in implementing the compliance training requirements.

FDR Compliance Program Training

Requirements for Training. CMS requires Sponsors to ensure that their FDRs receive both general compliance training and FWA training. FDRs that are enrolled in the Medicare program as providers or suppliers are deemed to have met the CMS compliance training requirements for FWA. However, those FDRs are still required to complete general CMS compliance training. CMS has a web-based compliance training module, available on the Medicare Learning Network (“MLN”), which offers an approved FWA and general compliance training course.

CMS clarified that FDRs have three options to satisfy compliance training requirements:

  1. FDRs can complete the general compliance and/or FWA training modules on the MLN. This will generate a certificate of completion, which Sponsors must accept;
  2. Sponsors and FDRs can download and incorporate the CMS training modules into their existing compliance training materials and systems; or
  3. Sponsors and FDRs can incorporate the content of the CMS training modules into written documents for providers, such as Provider Guides, Participation Manuals or Business Associate Agreements.

With the latter two options, CMS’s training content cannot be altered except to enhance or add topics specific to the organization. Additionally, Sponsors may request an attestation from FDRs confirming completion of the compliance and FWA training. These attestations must include language that the FDR has complied with CMS compliance and FWA training requirements and that the training includes CMS content.

Who Must Complete the Training. FDRs, including their employees, are required to complete both the general compliance training and FWA training. FDRs include “first tier entities” (i.e., entities that enter into written agreements directly with Sponsors to provide administrative or health care services under the Medicare Advantage (Part C) or Part D programs) and “downstream entities” (i.e., entities that enter into written agreements with an entity involved with Medicare Advantage or Part D that is below the level of the arrangement between a Sponsor and a first tier entity). Health care providers that contract with Sponsors to provide services to Medicare beneficiaries qualify as first tier entities. Subcontractors that provide health care or administrative services to the aforementioned health care providers qualify as downstream entities.

In the memo, CMS clarified that an FDR’s entire staff will not likely be subject to the compliance training requirements. CMS encourages Sponsors to work with their FDRs to identify which positions within an FDR must complete the training. For clarification, CMS provided examples of certain roles within an FDR that should clearly be required to complete compliance training. Such roles include:

  • Senior administrators/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/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 and processing of pharmacy or medical claims);
  • Reviewers of beneficiary claims and services submitted for payment; or
  • Individuals with jobs that place the FDR in a position to commit significant noncompliance with CMS program requirements or health care FWA.

Practical Takeaways

Although CMS is temporarily suspending review of the compliance training requirements, FDRs and Sponsors should work to become fully compliant with CMS compliance training requirements as soon as possible. Because CMS gives each Sponsor discretion in how to enforce FDR compliance training requirements, health care providers that contract with Sponsors should review the terms of their provider agreements and other Sponsor communications for specific details related to FDR compliance training. Additionally, FDRs should consider taking the following steps related to FDR compliance training requirements:

  • Work with Sponsors to determine: (i) what method of compliance training each will require under the new guidance; and (ii) which individuals in the FDR’s organization will be subject to compliance training requirements;
  • Identify any downstream entities that will require compliance training and ensure that such downstream entities receive training in accordance with CMS requirements; and
  • Implement a plan to train new employees within 90 days of hire and annually thereafter.