Answer: The Centers for Medicare & Medicaid Services (CMS) defines an FDR as follows:
First Tier Entity – any party that enters into a written arrangement, acceptable to CMS, with a Medicare Advantage (MA) Organization (MAO) or Part D plan sponsor or applicant to provide administrative services or health care services to a Medicare eligible individual under the MA program or Part D program (refer to 42 CFR 423.501).
Downstream Entity – any party that enters into a written arrangement, acceptable to CMS, with persons or entities involved with the MA benefit or Part D benefit, below the level of the arrangement between an MAO or applicant or a Part D plan sponsor or applicant and a first tier entity. These written arrangements continue down to the level of the ultimate provider of both health and administrative services (refer to 42 CFR 422.501).
Related Entity – any entity that is related to an MAO or Part D plan sponsor by common ownership or control and: 1) performs some of the MAO or Part D plan sponsor’s management functions under contract or delegation; 2) furnishes services to Medicare enrollees under an oral or written agreement; or 3) leases real property or sells materials to the MAO or Part D plan sponsor at a cost of more than $2,500 during a contact period (refer to 42 CFR 423.501).