Fraud, Waste, and Abuse Requirements: Reporting, Training, and Risk Management Checklist

Use this practical checklist to operationalize fraud, waste, and abuse (FWA) requirements across reporting, training, and risk management. You’ll align daily practices with the False Claims Act, Civil Monetary Penalty Law, and the Federal Anti-Kickback Statute while strengthening Compliance Program Documentation and your control environment.

Fraud Waste and Abuse Training

Build a structured program that defines FWA, explains why it matters, and shows employees how to act. Cover legal obligations under the False Claims Act, Civil Monetary Penalty Law, and Federal Anti-Kickback Statute, using real scenarios that mirror your operations and third-party risks.

Deliver role-based content during onboarding and at least annually. Include enhanced modules for billing, procurement, sales, clinical operations, and vendor management. Require attestation, knowledge checks, and documented completion to demonstrate effectiveness.

• Publish learning objectives that map to laws, policies, and Fraud Risk Indicators.
• Provide varied formats (e-learning, live workshops, microlearning) and scenario-based exercises.
• Require annual acknowledgments and minimum passing scores; retest when needed.
• Track completion by role and contractor status; reconcile with HR and access lists.
• Store rosters, scores, and materials as part of Compliance Program Documentation.
• Refresh content after incidents, audits, or law/policy changes.

Reporting Mechanisms for FWA

Offer multiple Non-Retaliatory Reporting Channels so people can speak up safely: hotline, web portal, email, in-person to managers or Compliance, and optional anonymity. Publicize your zero-retaliation stance and detail confidentiality protections in policies and training.

Standardize intake, triage, and escalation. Assign case owners, define response timeframes, and log every step—from allegation to closure—so you can demonstrate consistency and fairness. Share de-identified trends with leadership to drive systemic fixes.

• Maintain 24/7 hotline and web portal; support language access and vendor reporting.
• Post clear instructions in onboarding, facilities, intranet, and vendor contracts.
• Use a case management tool to track allegations, evidence, actions, and outcomes.
• Define triage criteria (severity, legal exposure, patient/customer impact).
• Notify Legal/HR/Internal Audit when triggers are met; preserve documents immediately.
• Measure and report metrics (volume, time-to-first-action, substantiation, closure rate).

Fraud Risk Assessment

Integrate your assessment with the COSO Enterprise Risk Management Framework. Map processes, identify schemes, rate inherent and residual risk, and align controls to your risk appetite. Use results to prioritize monitoring, auditing, and control redesign.

Leverage data to spot anomalies and outliers across billing, payables, payroll, and procurement. Blend quantitative analytics with front-line insights from walk-throughs, interviews, and control testing to validate where exposure truly lies.

• Define scope, risk taxonomy, and evaluation criteria (likelihood, impact, velocity).
• Identify controls per risk; test design and operating effectiveness.
• Create action plans with owners, milestones, and target dates.
• Integrate outputs into audit plans, training refreshers, and policy updates.
• Document methodology, results, and follow-up for Compliance Program Documentation.

Compliance Program Elements

Establish clear standards of conduct and detailed policies for billing, coding, procurement, vendor onboarding, gifts and entertainment, conflicts of interest, and interactions with referral sources. Keep policies accessible, current, and acknowledged.

Ensure independent oversight through a chief compliance officer with direct line to the board or a committee. Monitor and audit high-risk areas, investigate issues, implement corrective actions, and enforce disciplinary guidelines consistently.

• Code of conduct and policy suite aligned to applicable laws and contracts.
• Governance: chartered compliance committee, board reporting, and periodic program reviews.
• Risk-based monitoring and auditing with documented workpapers and remediation tracking.
• Targeted communications, town halls, and policy attestations to reinforce expectations.
• Comprehensive Compliance Program Documentation covering decisions, metrics, and outcomes.

Indicators of Fraud Waste and Abuse

Define and circulate Fraud Risk Indicators so employees know what to watch for. Encourage pattern recognition—single anomalies rarely tell the full story, but clusters and trends can reveal underlying schemes.

• Billing anomalies: duplicate claims, upcoding, unbundling, or services not rendered.
• Vendor red flags: shell entities, shared addresses with employees, rapid payment changes.
• Improper inducements: gifts, referral fees, or arrangements that raise Anti-Kickback concerns.
• Financial manipulation: round-dollar or after-hours entries, excessive manual overrides.
• Operational gaps: missing logs, altered documents, or repeated “exceptions” without cause.
• Unusual metrics: high refund rates, chargebacks, write-offs, or outlier utilization patterns.

Corrective Actions for FWA

When concerns arise, investigate promptly and impartially. Define scope, secure data, interview witnesses, analyze records, and document facts. Involve Legal and Internal Audit where appropriate, and preserve privilege when available.

Address root causes with proportionate remediation: control redesign, targeted retraining, process automation, contract changes, and—when required—repayment, recoupment, or disclosures. Monitor effectiveness until risks return to acceptable levels.

• Open a case, preserve evidence, and create an investigation plan and timeline.
• Assess legal exposure under the False Claims Act and Civil Monetary Penalty Law.
• Evaluate Anti-Kickback risks in relationships with referral sources and vendors.
• Implement corrective and preventive actions; verify through follow-up testing.
• Update training, policies, and analytics to prevent recurrence.
• Record decisions and outcomes within Compliance Program Documentation.

Disciplinary Guidelines and Enforcement

Apply progressive discipline that is fair, consistent, and proportional to the violation and role. Set expectations in policy, communicate them widely, and coordinate actions with HR, Legal, and leadership to ensure due process and documentation.

Consequences may include coaching, written warnings, suspension, termination, vendor remediation or termination, and referrals to authorities when appropriate. Reinforce that retaliation for good-faith reporting is itself a violation subject to discipline.

• Publish disciplinary ranges tied to policy categories and aggravating/mitigating factors.
• Ensure uniform enforcement across roles and locations; document rationale for decisions.
• Track enforcement metrics for trend analysis and program improvement.
• Reference obligations and potential consequences under applicable laws and contracts.

In practice, you reduce risk by training people well, offering Non-Retaliatory Reporting Channels, assessing fraud risks with COSO principles, monitoring high-risk activity, responding decisively, and documenting everything. This checklist helps you translate FWA requirements into daily, defensible controls.

FAQs.

What are the differences among fraud waste and abuse?

Fraud is intentional deception for gain (for example, billing for services not rendered). Waste is careless or inefficient use of resources, such as unnecessary tests or duplicative purchases. Abuse is behavior that conflicts with accepted practices, causing avoidable costs or unjustified benefits, even without intent to defraud.

What are the mandatory training requirements for FWA?

At a minimum, you should deliver onboarding and annual training that defines FWA, explains reporting options, and covers key laws like the False Claims Act, Civil Monetary Penalty Law, and Federal Anti-Kickback Statute. Require attestations, test comprehension, track completion, and retain materials as Compliance Program Documentation.

How should employees report suspected fraud waste or abuse?

Provide multiple Non-Retaliatory Reporting Channels—hotline, web, email, and open-door options—with anonymity where permitted. Publish clear instructions, protect confidentiality, prohibit retaliation, and use a case system to log, triage, investigate, and close every report.

What corrective actions are required when FWA is detected?

Act quickly to investigate, stop the conduct, and remediate root causes. Measures include control fixes, targeted retraining, recovery or repayment, vendor or staff discipline, and disclosures when required by law or contract. Verify effectiveness through follow-up monitoring and document all decisions and outcomes.