Fraud, Waste & Abuse (FWA) Compliance

A robust compliance program to prevent fraud, waste, and abuse (FWA) is a fundamental requirement for healthcare groups seeking credentialing with insurance payers, Medicare, Medicaid, and other healthcare programs. Demonstrating that your organization has such a program in place is essential for legal compliance, risk management, and successful network participation.

What Is Fraud, Waste, and Abuse (FWA)?

• Fraud: Intentional deception or misrepresentation to gain an unauthorized benefit (e.g., billing for services not provided).

• Waste: Overuse or misuse of resources that results in unnecessary costs (e.g., ordering unnecessary tests).

• Abuse: Practices inconsistent with accepted medical or business standards, leading to unnecessary costs (e.g., upcoding services).

What Is a Compliance Program?

A compliance program is a structured set of policies, procedures, and practices designed to:

• Prevent, detect, and correct FWA

• Meet federal and state legal requirements

• Promote ethical conduct and a culture of compliance within your organization

Core Elements of an Effective Compliance Program

Most effective healthcare compliance programs are built around seven core elements, as recommended by the Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG):

1. Written Policies and Procedures

   • Develop clear standards of conduct and operational guidelines for preventing FWA.

2. Compliance Leadership and Oversight

   • Designate a compliance officer or committee responsible for program oversight and enforcement.

3. Training and Education

   • Provide regular FWA training for all staff, including new hires and contractors.

4. Effective Communication

   • Establish open channels for reporting concerns or suspected violations without fear of retaliation.

5. Auditing and Monitoring

   • Conduct ongoing reviews of billing, claims, and operations to detect irregularities or noncompliance.

6. Enforcement and Discipline

   • Apply consistent disciplinary measures for violations of compliance policies.

7. Prompt Response and Corrective Action

   • Investigate detected issues and implement corrective actions to prevent recurrence.

Why Is a Compliance Program Required?

• Legal Requirement: Federal and state laws mandate compliance programs for organizations participating in Medicare, Medicaid, and many commercial insurance networks.

• Credentialing Expectation: Insurance payers require evidence of an active compliance program as part of the credentialing process.

• Risk Reduction: A compliance program helps protect your organization from legal penalties, financial losses, and reputational harm.

What Credentialing Teams May Request

During credentialing, you may be asked to provide:

• A copy of your written compliance policy or code of conduct

• Evidence of staff FWA training (e.g., training logs, certificates)

• Documentation of audits, monitoring activities, and corrective actions

• Contact information for your compliance officer or program lead