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Fraud, Waste, and Abuse Policies
and Procedures and Control Programs

Adoption and implementation of policies and procedures to provide for internal auditing and control to reduce fraud, abuse, and waste, is required by CMS. §423.504(b)(4)(vi)(H) provides in part as follows: [a compliance plan must have] a comprehensive fraud and abuse plan to detect, correct, and prevent fraud, waste, and abuse. This fraud and abuse plan should include procedures to voluntarily self-report potential fraud or misconduct related to the Part D program to the appropriate government authority.

See also, Social Security Act §1860D-4( c ) (1)(D).

The necessity of having a well-prepared, comprehensive, and properly administered Fraud, Waste, and Abuse Control Program, beginning with properly written and implemented policies and procedures, and followed through in day -to-day operations, cannot be over-emphasized. It is integral to controlling the costs of providing services, profitability, and, ultimately, to retention of authority to continue as an approved provider under the Medicare Advantage Program. It is a function specifically included in the responsibilities of the Medicare Compliance Officer and the Medicare Oversight Compliance Committee. It avoids potential criminal liability for submission of false and fraudulent claims (see, 18 U.S.C. §1347). Finally, control of fraud, waste, and abuse is fundamental to good business practice and profitability for the insurer.

The CMS Compliance Counsel Department of the firm assumes that an insurance company entering into the Medicare Advantage Program, has general experience in establishing and operation of Fraud, Waste, and Abuse Control programs similar to that required by CMS, and that establishing a program for CMS compliance would normally be initiated anyway as a normal, prudent, business practice. However, the firm is available to review the program established to advise whether the program appears to cover the required areas for CMS compliance, or, if necessary, to write and implement the Program.

The Medicare Compliance Officer, and the Medicare Compliance Committee, are charged with the responsibility for developing, operating, and monitoring the Fraud, Waste, and Abuse Program. Therefore, coordination with the MCO and the MCC is integral to this process.