FDR in healthcare most commonly stands for First Tier, Downstream, and Related entities. It refers to the network of outside organizations that contract with Medicare Advantage and Part D plan sponsors to deliver healthcare services or handle administrative tasks on their behalf. If you encountered this term in a compliance training, a contract, or a job in health insurance, this is almost certainly what it means. In medical and clinical contexts, FDR can also stand for First Degree Relative, a term used in family history and cancer screening guidelines.
First Tier, Downstream, and Related Entities Explained
Medicare Advantage and Part D plans don’t do everything in-house. They contract with pharmacies, provider groups, billing companies, call centers, and many other organizations to run their programs. The Centers for Medicare and Medicaid Services (CMS) groups all of these contractors under the umbrella term “FDR,” but each word describes a different layer in the contracting chain.
A first tier entity is any organization that has a direct written contract with a Medicare Advantage or Part D plan sponsor to provide healthcare or administrative services to Medicare beneficiaries. Think of a large pharmacy benefit manager or a physician group that signs a contract directly with the plan.
A downstream entity is any organization that contracts with a first tier entity (or with another downstream entity) rather than directly with the plan sponsor. These arrangements cascade downward, all the way to the provider or company that ultimately delivers the service. A local pharmacy that fills prescriptions through a pharmacy benefit manager is a common example.
A related entity is an organization connected to the plan sponsor through common ownership or control. It qualifies as a related entity if it performs management functions for the sponsor, furnishes services to Medicare enrollees, or sells materials or leases property to the sponsor at a cost exceeding $2,500 during a contract period.
Why CMS Holds Plan Sponsors Responsible for FDRs
The plan sponsor, not the FDR, holds the contract with CMS. That means the sponsor carries ultimate responsibility for meeting all Medicare program requirements, even when it has delegated work to outside organizations. If an FDR fails to comply with Medicare rules, CMS can hold the sponsor accountable for that failure.
This creates a chain of oversight. The sponsor’s compliance officer and compliance committee must build procedures that ensure every FDR follows applicable federal laws and regulations related to its delegated Medicare responsibilities. Sponsors must also develop a strategy to audit their first tier entities and confirm those entities are, in turn, monitoring the downstream organizations they contract with. Even if a first tier entity conducts its own internal audits, the sponsor is still obligated to perform independent auditing on top of that.
Each year, sponsors must include in their compliance work plan the number of first tier entities they will audit and how those entities are selected. When an FDR is found to have deficiencies, the sponsor must ensure the problems get corrected. Corrective actions should be detailed in writing and include consequences for failure to comply, up to and including contract termination.
Compliance Requirements for FDRs
If your organization is an FDR, you have specific obligations under Medicare compliance rules. These aren’t optional, and you’re expected to maintain documentation proving you’ve met them.
Exclusion Screening
Federal law prohibits Medicare and other federal healthcare programs from paying for items or services provided by excluded individuals or entities. Before hiring or contracting with anyone, and monthly thereafter, each FDR must check both the Office of Inspector General (OIG) exclusion list and the General Services Administration (GSA) exclusion list. This applies to employees, temporary workers, volunteers, consultants, governing body members, and any sub-contracted FDRs. You must keep source documentation such as screenshots or date-stamped records proving you completed the screenings.
Fraud, Waste, and Abuse Training
Every FDR must distribute general compliance and fraud, waste, and abuse (FWA) training to its workforce. New employees or contractors must complete the training within 90 days of hire or the effective date of their contract. After that, training is required annually and whenever materials are updated. Records must include employee names, completion dates, and passing scores if applicable. One notable exemption: organizations already enrolled in Medicare Parts A or B, or accredited as durable medical equipment suppliers, may be deemed to have met the FWA training requirement through those credentials.
Record Retention
All evidence of compliance, including training records and exclusion screening documentation, must be retained for a minimum of 10 years.
FDR as First Degree Relative
In clinical and genetic medicine, FDR stands for first degree relative. The National Cancer Institute defines this as a family member with no other relatives in the bloodline between them and you: a parent, sibling, or child. You share roughly 50% of your genes with each first degree relative, which is why their medical history carries significant weight in your own risk assessments.
This distinction matters most in cancer screening. Having a first degree relative with colorectal cancer, for instance, can shift when and how often you should be screened. Major gastroenterology guidelines generally recommend starting colonoscopy at age 40, or 10 years before the age your relative was diagnosed (whichever comes first), if you have one FDR diagnosed before age 60 or two or more FDRs diagnosed at any age. Screening then repeats every five years rather than the standard ten. If your FDR was diagnosed at 60 or older, guidelines typically recommend beginning screening at age 40 or 50, depending on which guideline your doctor follows, with repeat intervals closer to those for average-risk individuals.
Second degree relatives (grandparents, aunts, uncles, nieces, nephews) also factor into some screening recommendations, but having an affected first degree relative generally triggers the most aggressive changes to screening timelines.