CMS Pub. 100-16, ch. 21, § 10

These compliance program guidelines reflect the Centers for Medicare and Medicaid

Services (CMS) interpretation of the Compliance Program requirements and related

provisions for Medicare Advantage Organizations (MAO) and Medicare Prescription

Drug Plans (PDP) (Chapter 42 of the Code of Federal Regulations, Parts 422 and 423,

hereinafter collectively referred to as “Parts C & D”). This chapter is designed to assist

sponsors to establish and maintain an effective compliance program.

These compliance program guidelines apply fully to the prescription drug benefit

programs of sections 1833 and 1876 Cost Plans. In addition, these compliance program

guidelines apply to the prescription drug benefit programs of Program of All-Inclusive

Care for the Elderly (PACE) plans only with respect to those portions of this chapter that

pertain to Elements 6 and 7, which are embodied in 42 C.F.R. 423 §§504(b)(4)(vi)(F) and

(G) respectively. These compliance program guidelines do not apply to the PACE plans

or to sections 1833 and 1876 Cost Plans that do not have a prescription drug benefit

program. However, given the Office of Inspector General (OIG) guidance promoting

compliance programs for all sponsors, the CMS strongly encourages sponsors to

voluntarily develop and implement effective compliance programs.

This guidance is subject to change as policy, technology and Medicare business practices

continue to evolve.

Each sponsor must implement an effective compliance program that meets the regulatory

requirements set forth at 42 C.F.R. §§422.503(b)(4)(vi) and 423.504(b)(4)(vi). Sponsors

should apply the principles outlined in these guidelines to all relevant decisions,

situations, communications and developments. Any new rule-making or interpretive

guidance (e.g., annual call letter or Health Plan Management System (HPMS) guidance

memoranda) may update the guidance provided in this document. Sponsors may also

wish to consult the resources listed in the Appendices, which provide additional

information on some topics addressed in this chapter.

In this chapter, the word “must” is used to reflect requirements created by statute or

regulation. The word “should” is used to indicate expectations created by this guidance.

Recommendations are noted as “best practices.”

Chapter 9 previously addressed the prevention of fraud, waste and abuse (FWA) by only

Part D sponsors. In contrast, this chapter provides interpretive rules and guidance to help

all sponsors to establish and maintain an effective compliance program to prevent, detect,

and correct FWA and Medicare program noncompliance

These guidelines, published in both Pub. 100-18, Medicare Prescription Drug Benefit

Manual, chapter 9 and in Pub. 100-16, Medicare Managed Care Manual, chapter 21, are

identical and allow organizations offering both Medicare Advantage (MA) and

Prescription Drug Plans (PDP) to reference one document for guidance.