CMS Compliance Requirements: Rules, Checklists, Resources

CMS compliance means meeting the rules and program expectations set by the Centers for Medicare & Medicaid Services so you can bill correctly, protect patients, and stay eligible to participate in Medicare, Medicaid, and CHIP. In practice, that includes having an effective compliance program, following Conditions of Participation, reporting quality data, training staff on fraud, waste, and abuse, safeguarding data, and being able to prove it through audits and documentation.

This guide translates the regulations into plain language. You’ll see what CMS compliance covers and who’s in scope, the core rules behind it, the seven elements of an effective program, Part C/D sponsor and FDR duties, training and deeming, provider requirements, HIPAA administrative simplification, audits, documentation, practical checklists, vendor oversight, technology that helps, official resources, and what’s new for 2024–2025.

What CMS compliance covers and who it applies to

CMS compliance spans how you deliver, document, bill for, and report care across Medicare, Medicaid, and CHIP. It includes having an effective compliance program, meeting Conditions of Participation/Conditions for Coverage, accurate billing and coding, fraud, waste, and abuse (FWA) controls, quality reporting, data privacy/security under Administrative Simplification, and readiness for audits and corrective actions.

• Who’s in scope: Medicare-certified providers and suppliers (e.g., hospitals, HHAs, DMEPOS suppliers).
• MA and Part D sponsors: Required compliance programs under 42 C.F.R. 422.503/423.504.
• FDRs and contractors: First tier, downstream, and related entities handling plan functions.
• Vendors handling CMS data or claims: Subject to sponsor/provider oversight and attestations.

Core rules: the regulatory framework behind CMS compliance

Think of CMS compliance as a stack: laws set the floor, regulations add specifics, and CMS guidance operationalizes what you must do. Your obligations flow from the Social Security Act, are implemented in the Code of Federal Regulations (C.F.R.), and are clarified through CMS manuals, program guidance, certifications, and contracts.

• Statute (Social Security Act): Establishes certification, participation, and minimum health and safety standards.
• Regulations: 42 C.F.R. 422.503 and 423.504 require Medicare Advantage and Part D sponsors to maintain effective compliance programs; provider CoPs/CoCs set participation standards.
• HIPAA Administrative Simplification (enforced by CMS): Transactions, code sets, and identifiers compliance.
• CMS subregulatory guidance: Medicare Managed Care Manual Chapter 21 and compliance program policy/guidance.
• Contracts and certifications: Program agreements that incorporate audits, reporting, and enforcement.

The seven elements of an effective compliance program

CMS embeds the “seven elements” model in 42 C.F.R. 422.503/423.504 and the Medicare Managed Care Manual, Chapter 21. When these are operationalized—not just written—you reduce FWA risk, improve billing accuracy, and are ready for audits, investigations, and corrective actions.

• Written policies, procedures, and standards of conduct: Clear, accessible, risk-based documents covering FWA prevention, reporting, non-retaliation, and role expectations.
• Compliance officer and committee: An empowered leader and multidisciplinary committee with direct access to senior leadership/board and adequate independence and resources.
• Effective training and education: Role-based onboarding and periodic refreshers covering general compliance and FWA requirements consistent with CMS guidance.
• Effective lines of communication: Confidential, anonymous options (e.g., hotline), non-retaliation protections, and tracked two-way communication to and from compliance.
• Well-publicized disciplinary standards: Consistent enforcement for workforce and contractors, proportionate to violations, tied to policies and job descriptions.
• Routine monitoring and auditing: Risk-based audits, data analytics, issue tracking, and documented vendor/FDR oversight with corrective action follow-through.
• Prompt response and corrective action: Timely investigations, root-cause analysis, corrective action plans, repayments when applicable, and documentation of outcomes.

Plan sponsor and FDR obligations under Parts C and D

Under Medicare Parts C and D, plan sponsors must run effective compliance programs and actively oversee first tier, downstream, and related entities (FDRs). CMS regulations at 42 C.F.R. 422.503/423.504 and the Medicare Managed Care Manual Chapter 21 define these CMS compliance requirements across governance, delegation, monitoring, and audit readiness.

• Implement seven‑element programs with board support and adequate resources.
• Define FDRs, perform due diligence, and conduct risk‑based monitoring/auditing.
• Flow down CMS requirements in contracts, including access to records and corrective action plans (CAPs).
• Ensure FDRs complete general compliance and FWA training and provide attestations.
• Maintain hotlines, non‑retaliation, timely investigations, and cooperate with CMS program audits.

Training and FWA requirements (and deeming exceptions)

As part of CMS compliance requirements, Medicare Advantage/Part D sponsors must ensure workforce and FDRs complete general compliance and fraud, waste, and abuse (FWA) training within 90 days of hire and annually. FDRs may submit attestations confirming CMS-aligned content was completed. Entities enrolled in Medicare Parts A or B—or accredited as DMEPOS—are deemed to have met the FWA training requirement; however, C/D general compliance training still applies.

• Who must train: Senior administrators, formulary/benefit policy staff, decision-makers (coverage, appeals), claims reviewers, and roles positioned to cause significant noncompliance.
• What to retain: Certificates/scores, completion dates, rosters, FDR attestations, and remediation for missed deadlines.
• Oversight tips: Track 90‑day/annual cycles, tailor by role, reinforce reporting and non‑retaliation, and align with Chapter 21 guidance.

Provider requirements: certification, CoPs/CoCs, and quality reporting

Under CMS compliance requirements, Medicare-participating providers and suppliers must obtain certification and continuously meet CMS Conditions of Participation (CoPs) or Conditions for Coverage (CoCs) set as minimum health and safety standards under the Social Security Act. Practically, that means survey readiness, timely corrective actions, and required quality reporting that demonstrates care performance—backed by policies, trained staff, and reliable documentation.

• Maintain current licensure/accreditation: Keep credentials up to date and preserve complete CMS enrollment and certification files.
• Operationalize CoPs/CoCs: Embed requirements in policies, training, monitoring, and corrective action plans following surveys.
• Manage quality reporting and records: Submit required measures, validate data, and retain support for audits and recertification.

Administrative simplification: HIPAA transactions, code sets, and identifiers

Administrative Simplification under HIPAA—enforced by CMS—requires covered entities to use adopted standards for electronic health care transactions, code sets, and unique identifiers. Doing so reduces rework and audit exposure. Build these rules into contracts, system configuration, and monitoring so every claim, eligibility check, remittance, and authorization follows the required formats and uses the correct codes and identifiers.

• Adopt standards: Use CMS‑adopted HIPAA electronic transaction and code set standards.
• Use unique identifiers: Include required identifiers for providers, plans, and employers.
• Prove compliance: Maintain policies, test evidence, issue logs, and remediation records.

Audit and enforcement: program audits, investigations, and appeals

CMS verifies CMS compliance requirements through routine and targeted program audits, investigations, and Administrative Simplification enforcement. Expect formal notice with audit objectives and document requests, review of records and data “universes,” staff interviews and, when needed, on‑site visits. CMS issues findings and recommendations; you must implement corrective action plans (CAPs) and can appeal conclusions you believe are inaccurate. For Medicare Advantage, 2024–2025 audit focus areas include utilization management and new clinical coverage requirements.

• How you’re selected: Risk assessments, random selection, and complaints/whistleblower reports.
• Be audit‑ready: Current policies, training/attestations, FDR contracts and oversight evidence, monitoring logs, and closed CAPs.
• Admin Simplification: CMS enforces adopted transaction/code set/identifier standards; keep test evidence and remediation records.
• After findings: Execute CAPs with owners and timelines, track effectiveness, and retain all correspondence.

Documentation, record retention, and reporting CMS expects

Documentation is your proof of compliance. CMS expects you to maintain complete, current, and retrievable records that substantiate operations, billing accuracy, quality reporting, FWA controls, and vendor oversight—and to produce them quickly during audits, surveys, or Administrative Simplification enforcement. Build a formal retention schedule, version control, and audit trails into your program so you can meet CMS compliance requirements without scrambling.

• Program governance: Policies/standards of conduct, committee minutes, risk assessments, monitoring/audit plans, CAPs, and closure evidence.
• Workforce & FDRs: Training rosters/certificates, FDR attestations, delegation agreements with flow‑downs, oversight findings, and remediation.
• Clinical & billing: Medical necessity/UM decisions, claims/denials/appeals files, repayments, and data “universes” for audits.
• Certification & quality: Enrollment/certification files, survey reports, corrective actions, and quality measure submissions with source validation.
• Admin Simplification: HIPAA transaction/code set policies, testing results, issue logs, and fixes.

Practical checklists for plans, providers, and vendors

Use these concise checklists to operationalize CMS compliance requirements. Assign owners and due dates, and retain evidence for audits, surveys, and Administrative Simplification enforcement.

• Plans (MA/Part D sponsors)

  • Seven elements, board oversight: officer/committee, hotline, training (general + FWA) within 90 days/annually; collect attestations.
  • FDR governance: inventory and risk‑tiering; flow‑down contracts with audit access; monitoring/audits with CAPs; audit‑ready universes.
  • Admin Simplification: maintain HIPAA transactions/code set compliance evidence and an issue log.

• Providers and suppliers

  • Certification & CoPs/CoCs: operationalized policies, survey readiness, tracked corrective actions, quality reporting calendar with source validation.
  • Billing & training: billing/coding controls and overpayment repayment; workforce training roster (deeming documented); HIPAA standards and a retention schedule.

• Vendors/FDRs

  • Contract & credentials: CMS flow‑downs, audit access, CAPs, retention; current licensure/accreditation.
  • Training & reporting: CMS‑aligned training or deeming proof with attestations; compliance contact; secure data handling and timely incident reporting.

Working with vendors: onboarding, credentialing, and attestations

Because sponsors remain accountable for their delegated work, vendor management must mirror CMS’s expectations for FDR oversight: define who is in scope, vet them up front, bind them contractually to CMS compliance requirements, and verify performance with evidence. At onboarding, capture credentials and policies; in contracts, include flow‑downs, access to records, HIPAA Administrative Simplification obligations, monitoring/audit rights, and corrective action terms. For training, collect and retain FDR attestations that required general compliance and FWA content (or deeming status) was completed.

• Scope FDRs: Inventory vendors performing plan functions and risk‑tier them.
• Credential and verify: Collect licensure/accreditation and relevant policy/procedure evidence.
• Contract flow‑downs: CMS requirements, audit access, CAPs, retention, and data standards.
• Training attestations: Document completion within required cycles or deeming applicability.
• Ongoing oversight: Monitor, audit, track issues, and document CAP closure and re‑testing.

Technology and automation to operationalize compliance

Manual binders and spreadsheets buckle under audits. You need systems that weave policy, training, vendor oversight, documentation, and data into daily operations—then produce evidence on demand. The right tooling turns CMS compliance requirements into repeatable workflows, complete with audit trails, alerts, and integrations with EHR, CAD, and billing.

• Policy & training tracking: Assign by role, enforce 90‑day/annual cycles, capture certificates and FDR attestations, escalate misses.
• Vendor/FDR oversight: Credentialing with expirables alerts, contract flow‑downs, monitoring, and CAP workflows.
• Audit‑pack automation: One‑click universes, policies, rosters, UM decisions, claims/appeals, and CAP status.
• FWA/quality analytics: Dashboards that flag anomalies and trigger focused audits.
• Admin Simplification checks: Validate X12 transactions, code sets, identifiers; retain test and remediation evidence.
• Secure communication & e‑signatures: Time‑stamped messaging and forms to create immutable records.
• Workflow automation/AI: Reconcile dispatch‑to‑claim, prefill documentation, schedule audits, and nudge CAP deadlines.

Official CMS resources and where to find updates

Stay current by relying on CMS primary sources and monitoring official changes. These are the rules, manuals, and enforcement pages auditors reference when evaluating your CMS compliance requirements and the evidence you present in audits and surveys.

• Compliance Program Policy and Guidance (Parts C/D): core sponsor/FDR requirements.
• Medicare Managed Care Manual, Chapter 21: seven‑element program details.
• Quality, Safety & Oversight – Certification & Compliance: CoPs/CoCs and surveys.
• Administrative Simplification – Enforcement and Compliance: HIPAA transactions/code sets/identifiers.
• Small Entity Compliance Guides and CMS Newsroom fact sheets: plain‑language rule summaries and updates.

What’s new for 2024–2025 that may affect your program

CMS’s 2024–2025 updates are shaping audit scopes. The 2024 Medicare Advantage and Part D final rule (CMS‑4201‑F) tightened utilization management and introduced new clinical coverage requirements; CMS plans routine and focused audits to confirm implementation. Administrative Simplification enforcement continues, so keep transaction/code‑set evidence current and refresh FDR oversight, training, and attestations to reflect these changes.

• Update UM policies/criteria: Log decisions, rationales, and timeliness.
• Align clinical coverage protocols: Retrain affected roles and update workflows.
• Re-test HIPAA transactions/code sets: Retain test and remediation logs.
• Stage audit universes/CAPs: Pre‑build data pulls and corrective action templates for these focus areas.

Final thoughts

CMS compliance is about proving, not just promising—embedding the rules into everyday operations and being audit-ready at any moment. If you’re ready to turn policies into real workflows, strengthen vendor oversight, and produce evidence on demand, explore how VectorCare unifies patient logistics, credentialing, and automation to make compliance faster, cheaper, and repeatable.