New 2026 FDR Compliance Rules: What Medicare Providers Need to Know

The Clock Is Ticking on 2026 FDR Compliance

Healthcare providers working with Medicare Advantage (MA) or Medicare Part D plans face an important deadline. Beginning in 2026, new compliance requirements for FDRs (First Tier, Downstream, and Related Entities) will take effect.

These rules come from the Centers for Medicare & Medicaid Services (CMS) and are designed to strengthen oversight, prevent fraud, and ensure providers deliver care with integrity. For medical practices, billing companies, credentialing vendors, and even subcontractors, FDR compliance is not optional — it’s a condition of doing business with Medicare.

At Access1 Business Services, we’ve been tracking these changes closely. This guide breaks down what FDR compliance means, why it matters, and how your practice can prepare without being overwhelmed.

Context: These FDR rules are part of a larger set of 2026 Medicare Advantage (MA) and Part D program updates announced by CMS. Beyond compliance, CMS is introducing sweeping reforms designed to improve oversight, operational efficiency, and beneficiary protections across the entire Medicare landscape .

What Exactly Is an FDR?

The acronym FDR stands for First Tier, Downstream, and Related Entity.

• First Tier Entities – Any organization that has a direct contract with a Medicare Advantage plan or Part D sponsor. Example: a hospital or provider group directly contracted with an MA plan.
  

• Downstream Entities – Subcontractors who work under a first-tier entity. Example: billing companies, credentialing vendors, or individual providers working under a hospital contract.
  

• Related Entities – Organizations under common ownership or control that perform management functions, provide services to Medicare members, or lease/sell services to MA organizations.
  

The key takeaway? If you provide administrative or healthcare services to Medicare members, you are an FDR. This includes physicians, hospitals, dentists, pharmacies, agents, and vendor partners.

Broader 2026 Impact: While FDR compliance is critical, it’s just one part of CMS’s Contract Year 2026 Final Rule. Other provisions include:

• Automatic renewals of plan participation unless beneficiaries opt out.
  

• 3-day processing of opt-out requests.
  

• Standardized communication rules for model notices and plan websites.
  

• Stricter Prescription Drug Event (PDE) submission timelines — some within 7 days.
  

• Network pharmacies required to use the Medicare Transaction Facilitator Data Module (MTF DM) to improve accuracy in data and payments.
  

• Expanded definition of organization determinations, ensuring all concurrent care decisions are appealable and preventing retroactive denial of inpatient admissions except in cases of fraud or good cause.

These updates reinforce CMS’s push for transparency, accountability, and patient protection in 2026.

Compliance Requirements Every FDR Must Meet

CMS requires all FDRs to comply with Medicare’s compliance program standards. Here’s what that looks like in practice:

1. Distribute Code of Conduct & Conflict of Interest Policies

Every FDR must provide employees with written standards of conduct and policies addressing conflicts of interest. These must be shared:

• At hiring or contracting
  

• Annually
  

• Whenever policies are updated
  

2. Provide Fraud, Waste, & Abuse (FWA) Training

Annual compliance and Fraud, Waste, and Abuse (FWA) training is required for all employees. This ensures staff can identify and prevent billing errors, false claims, or abusive practices.

3. Conduct Monthly Exclusion List Screenings

All employees, subcontractors, and governing body members must be checked monthly against the OIG’s List of Excluded Individuals/Entities (LEIE) and the GSA’s System for Award Management (SAM) database.

4. Report Compliance Concerns & Protect Whistleblowers

Practices must have clear reporting mechanisms for suspected compliance violations — with zero tolerance for retaliation.

5. Gain Approval for Offshore Services

If protected health information (PHI) is handled outside the U.S., providers must submit an Offshore Services Attestation to CMS.

6. Maintain a Business Continuity Plan (BCP)

Every FDR must demonstrate how they will continue operations during disruptions such as natural disasters, cyberattacks, or staffing shortages.

7. Monitor & Audit Downstream Entities

If your practice uses subcontractors, you’re responsible for ensuring they comply with all CMS rules. Documentation of monitoring and audits is required.

8. Keep Records for 10 Years

Proof of compliance — training logs, exclusion screenings, policies, and monitoring reports — must be retained for at least a decade.

What Happens If You Don’t Comply?

CMS is serious about accountability. Failure to comply with FDR requirements can result in:

• Corrective action plans
  

• Mandatory retraining
  

• Financial penalties
  

• Termination of your Medicare contracts
  

Given the heightened oversight scheduled for 2026, practices that delay preparation may find themselves scrambling — or worse, losing reimbursement eligibility.

How Access1 Helps Providers Manage FDR Compliance

At Access1, we understand that most practices don’t have time to keep up with evolving CMS regulations. That’s why we offer end-to-end compliance support designed to simplify FDR requirements and protect your revenue.

Here’s how we help:

• Credentialing & Enrollment Management – Ensuring your provider files are always compliant.
  

• Monthly Exclusion Screenings – Automating OIG and GSA checks so nothing slips through.
  

• Compliance Training – Delivering required FWA and compliance education tailored to your staff.
  

• Audit Support – Preparing documentation and assisting with CMS or payer audits.
  

• Downstream Oversight – Monitoring subcontractors and vendors so you remain compliant.
  

• Business Continuity Planning – Helping you design, test, and document continuity strategies.
  

Don’t wait until 2026 to prepare. Contact Access1 today and let us simplify your FDR compliance.

Why Preparing Now Matters

The 2026 deadline may seem far away, but compliance takes planning. Training employees, updating policies, creating monitoring systems, and building documentation processes don’t happen overnight.

By acting now, your practice can:

• Avoid last-minute stress
  

• Reduce risk of penalties
  

• Build confidence with payers that you’re a trusted, compliant partner
  

Preparing early also positions your practice to adapt to other 2026 Medicare Advantage and Part D changes. These include:

• Expanded utilization management requirements.
  

• Enhanced network adequacy standards.
  

• Tighter coordination requirements under the new Medicare Prescription Payment Plan (M3P), which links IT, finance, and member services for smoother billing and renewals.
  

In short, preparing for FDR compliance means you’re preparing for the entire future framework of Medicare participation.

In Summary

FDR compliance isn’t just another box to check — it’s a federal requirement for any provider connected to Medicare Advantage or Part D. CMS has made it clear: every provider, vendor, and subcontractor in the chain must comply.

The good news is you don’t have to navigate this alone. At Access1 Business Services, we make compliance manageable, practical, and reliable so you can focus on patient care.

Ready to get ahead of 2026 FDR requirements? Contact Access1 today and let us take compliance off your plate — before deadlines put your reimbursements at risk.

Access1, based in Colorado, proudly supports healthcare providers nationwide. From Denver to Dallas, Phoenix to Philadelphia, our compliance experts help practices meet federal standards while maximizing revenue.