What Is Healthcare Compliance, and Why Is It Important?

To put it simply, healthcare compliance is following the rules, regulations, and laws regarding your practice.

Compliance can cover both internal and external issues, but the most essential aspects of compliance are generally considered to be patient safety, patient privacy, and billing practices.

Compliance in healthcare is important because it benefits everyone involved in the practice, from the doctors to the patients. Following the set rules and regulations keeps your office running efficiently and helps everybody follow standard protocol.

Compliance is necessary for every business, but it’s especially crucial for those in the healthcare industry. Without compliance, your staff can’t properly help your patients. In a worst-case scenario, someone could get injured. Compliance enables you to keep your office safe, so you can focus on providing high-quality care.

Governing Bodies and Federal Regulations for Healthcare Compliance

• Social Security Act – funds and sets requirements for Medicare, Medicaid, CHIP, and more
• HIPAA and HITECH Act – protects patient privacy by implementing measures for safeguarding patient records
• False Claims Act – makes it illegal to file a false claim to a federal program for funding
• Patient Protection and Affordable Care Act – states the requirements for insurance, Medicaid, and more
• Drug Enforcement Administration (DEA) and Food and Drug Administration (FDA) – governs the creation and distribution of pharmaceutical goods
• Department of Health and Human Services and Office of the Inspector General – protects against fraudulent activity

What Is Non-Compliance?

As you’ve probably guessed, non-compliance is when you violate compliance regulations. There will be times when the patients are causing a compliance issue, but we’ll focus on the compliance issues you can control in your office for this article.

There are two types of non-compliance: ordinary and gross negligence.

The difference between the two lies in whether the organization voluntarily or willfully broke healthcare rules and regulations. Most healthcare practitioners don’t purposefully put their patients in danger, so most non-compliance issues are ordinary.

The best way to avoid non-compliance is to have a secure system to prevent any accidental issues and stay on top of regulatory updates. While having up-to-date protocols in place may not keep everything from falling through the cracks, demonstrating that you had safeguards in place can help you in case of legal battles or penalties.

Remember that Non-Compliance Goes Beyond HIPAA

If you already have HIPAA protocols in place, that’s fantastic, but it doesn’t mean that your work is done.

As we stated in the last section, there are many things to consider regarding compliance, so you have to make sure that you comply with everything from federal and state regulations to accreditation standards to OSHA standards.

What Are the Costs of Non-Compliance?

The Ponemon Institute reports an average $5,838,781 difference between the costs of compliance and non-compliance for 46 organizations. Among the 46 organizations surveyed, compliance costs ranged between $446,000 and over $16 million; non-compliance costs ranged between $1.4 million and nearly $28 million.

In short, non-compliance ends up costing about 2.65 times more than compliance.

It’s crucial to remember that this goes beyond the dollar sign. Non-compliance has other costs, including license cancellation, business disturbances, loss of trust, and a poor reputation.

Fines and Penalties

The out-of-pocket costs from non-compliance will hurt your practice’s bank account. HIPAA violations alone can cost up to $1.5 million per incident. In 2020, the Department of Health and Human Services’ Office for Civil Rights settled 19 HIPAA violations and collected about $13.6 million in fines.

It’s also important to note that you’ll be featured in the HIPAA Journal if you do get a HIPAA violation, where they’ll list your practice by name. And that’s not the kind of shout-out you want for your facility.

Security Breaches

If you’re in the process of digitizing your system, then you have to put security measures in place. Having your patients or your employees’ sensitive information leaked causes more issues than your practice being non-compliant with privacy laws. Security breaches can have severe repercussions for those whose information is accessed.

Lawsuits and Settlements

If you’re found in violation of the regulations governing the healthcare industry, your facility may be sued. Directly neglecting to have compliance measures in place will increase your legal fees and settlement amounts.

Impact on Patient Care

Aside from the financial costs of non-compliance, not adhering to the industry standards compromises the quality of care you give your patients.

When you aren’t compliant, you’re directly violating your patient’s privacy or trust. If you’re fined for your non-compliance, then you’ll have a more challenging time purchasing the materials you need to provide the best possible care for your patients.

You may lose patients in the process, and it will be hard to attract new patients if everyone finds out that you weren’t compliant with the laws.

In healthcare, our patients have to be able to trust us to help them through their illnesses and issues. It’s our duty not to break that trust, and one of the best ways we can keep that trust is to put a compliance system in place.

How to Ensure Compliance in Your Office

Compliance is an all-hands-on-deck activity, and it will make your team and your practice that much stronger. Let’s look at some of the ways you can build your own compliance program.

Create A Written Policy

As you familiarize yourself with the rules and regulations that apply to your industry, you should create a written guide that lists your practice’s policies, protocols, and standards of conduct.

Having your compliance program written out will help you in case of any legal issues and will help you keep a consistent workplace. It can also serve as a guide that your employees can reference if a problem arises.

It’s important to review your compliance manual at least once a year to see if there are any updates or amendments you need to make.

Appoint a Compliance Officer (or Two)

Have someone who’s in charge of maintaining and coordinating your compliance program. This gives your employees and patients a direct point of contact for any issues.

Of course, there are multiple aspects of compliance, so it may be best to appoint more than one officer or even a committee, depending on the size of your practice. You can have a head compliance officer and compliance deputies who specialize in various aspects of compliance.

The compliance deputies would report to the head officer, and the head officer would report to your institution’s CEO or governing body.

Train Your Employees

Once you have your handbook written out and your officer(s) appointed, it’s time to get the rest of the team on board. We know your staff is busy, but if you send them a long document and expect them to read the whole thing before they sign, they might miss vital information.

It’s best to take time to have a training meeting or use training modules to give your employees the highlight reel of your compliance policies. You’ll train them on things to look for, how they should stay compliant, what to do if something goes wrong, and what will happen to those who violate the handbook.

If you do an in-person meeting, you’ll want to have everybody sign an official document saying they understand everything. If you use online training models, you should require that they pass a quiz to demonstrate that they learned the necessary information.

Create Communication Channels

Now that your employees know what to look for, it’s essential to give them an easy way to communicate with your compliance officers.

Your compliance officers can’t spend their whole day on the hunt for non-compliance, and it’s more likely that an employee will spot something that seems off. Providing your employees with a trustworthy way to talk to compliance officers will increase the likelihood that they’ll speak up.

The best thing you can do is help your employees understand that they’ll never be punished for reporting compliance issues. You may also want to consider creating an anonymous channel for reporting compliance violations if you think your staff will prefer speaking up that way.

Actively Monitor Compliance

Your compliance officers should perform regular audits to ensure that your compliance measures are working and identify any potential issues before they grow. And as we said before, it’s good to update your internal compliance handbook consistently.

Enforce Standards Quickly

If one of your employees violates the compliance protocols, you must take the actions listed in the guide right away. If you let things slide, it sends the message to other employees that compliance isn’t really that big of a deal.

No matter what your policy is for non-compliance, whether it’s a three-strike policy or an immediate suspension, you’ll be able to prevent future violations if you act on it immediately. We know it’s not fun to punish your employees, but remember that compliance is all about trust and keeping your organization running smoothly.

Let us handle your compliance for you.