Definition of compliance in healthcare

What is healthcare compliance and why is it important? Here are some practical tips for building an effective healthcare compliance program.

December 22, 2020

Article highlights

In a highly regulated, high-risk industry like healthcare, compliance is especially important.

Healthcare compliance is the process of following rules, regulations, and laws that relate to healthcare practices.

Compliance in healthcare can cover a wide variety of practices and observe internal and external rules. But most healthcare compliance issues relate to patient safety, the privacy of patient information, and billing practices.

Why healthcare compliance is important

Every healthcare organization must have some level of corporate compliance in order to operate effectively.

Compliance keeps operations running smoothly and makes sure everyone follows proper procedures and understands expectations.

But compliance in healthcare comes with even higher stakes than in other industries. If a doctor or nurse doesn’t follow proper procedure, they can end up injuring a patient or another staff member.

Ultimately, healthcare compliance is about providing safe, high-quality patient care. Complying with industry standards and regulations helps healthcare organizations continue to improve the quality of care.

Healthcare organizations are also held to strict standards, regulations, and laws from the federal and state levels. Violations of these laws can result in lawsuits, hefty fines, or the loss of licenses.

What is required for healthcare compliance?

There are many different aspects of healthcare compliance, governed by a variety of federal and state agencies.

Changing laws and regulations can make it difficult for organizations to keep up with healthcare compliance. And laws differ between states and local governments. Every healthcare organization should take time to examine the different laws that apply to their organization.

However, here are some of the governing bodies and federal regulations that govern healthcare compliance:

  • The Social Security Act governs funding and requirements for Medicare, Medicaid, CHIP, and more.
  • HIPAA and the HITECH Act protect patient privacy, requiring healthcare organizations to implement measures to keep patient records secure.
  • The False Claims Act makes it illegal to file a false claim for funds from a federal program.
  • The Patient Protection and Affordable Care Act implemented new requirements for insurance, Medicaid, and more.
  • The Drug Enforcement Administration and the Food and Drug Administration regulate the creation and distribution of medication.
  • The Department of Health and Human Services and the Office of the Inspector General help protect against fraud.

Healthcare organizations are also subject to the same workplace regulations that apply to organizations in every industry. The laws established by the Occupational Safety and Health Administration and the Equal Employment Opportunity Commission, for example.

Who is responsible for healthcare compliance?

As previously mentioned, healthcare laws and requirements often differ between states. And compliance needs and issues differ between organizations.

Most healthcare organizations have a compliance officer or department dedicated to maintaining compliance. But in order to be effective, the compliance department must have the authority to create programs to enforce compliance.

This authority usually comes from working closely with the organization’s executive leadership and governing body. Ultimately, the executive leadership must put the framework in place to implement an effective compliance program.

However, healthcare compliance doesn’t stop there. Everyone has a role in maintaining compliance. Healthcare organizations can only maintain compliance when every staff member takes responsibility for following procedures and regulations.

Organization leaders can set the tone and encourage transparency and ethical behavior. But ideally, healthcare organizations develop a culture of accountability that spreads through the organization, helping every staff member see why compliance is important.


Patient privacy and information security

Patient privacy is one of the biggest issues in healthcare compliance. Many different laws protect doctor-patient confidentiality. Others, such as HIPAA, establish standards for privacy and establishes when a patient’s information can be used or disclosed.

Privacy and information security are important because it can affect the quality of care. If patient information calls into the wrong hands, it can result in insurance issues, scams or fraud, or even identity theft.

As digital record keeping has expanded, laws have been updated to establish standards for information security. Security breaches can result in serious penalties for healthcare organizations.

This aspect of healthcare compliance is only getting more challenging as technology expands. As one University of Illinois Chicago researcher wrote,

Managing electronic health information presents unique challenges for regulatory compliance, for ethical considerations and ultimately for the quality of care. As electronic health record system ‘meaningful use’ expands, and more data are collected, such as from mobile health devices, that challenge for healthcare organizations expands.

Creating an effective healthcare compliance program

The Office of the Inspector General has many different resources for healthcare compliance. Along with education materials, the OIG’s Compliance 101 page outlines elements of effective healthcare compliance programs.

Based on those elements, here are some ideas for creating an effective compliance program for your organization:

Develop, distribute, and implement written policies, procedures, and standards of conduct

Policies, procedures, and standards formalize practices within your organization.

Policies and procedures promote consistency and improve the quality of care. They also help protect your organization in the event of an incident of noncompliance.

The OIG suggests that policies and procedures include policies about coding, overpayment, conflict of interest, privacy, non-retaliation, and policies that address regulatory requirements.

Of course, in order for policies to help with compliance, they need to be accessible so employees can read them and understand how to comply with the requirements.

A policy management software can help you create and distribute policies and procedures. You can track signatures to make sure that every employee receives and acknowledges each policy.

Policy management software also makes it easy to collaborate on policy updates so you can ensure that your policies keep up with industry standards and regulations.

Designate a chief compliance officer or compliance committee

With all the different aspects of healthcare compliance, it’s best to have a compliance officer or committee that is responsible for coordinating compliance.

This person or committee should be responsible for operating and monitoring the compliance program. They should ensure that the proper controls are in place, evaluate how effective the program is, and keep up-to-date on changing regulations.

The chief compliance officer or committee needs the resources, and tools to properly fulfill the role. They should report directly to the CEO or governing body and have the authority to make suggestions and enforce compliance.

Develop and deliver effective training on written policies, procedures, and standards of conduct

Even when employees have access to policies and guidelines, they sometimes may have a hard time seeing how regulations apply to their work.

Healthcare compliance training helps employees understand the importance of compliance, promote a culture of compliance, and communicate complex regulations in a way employees can comprehend.

A training management software can help your organization streamline healthcare compliance training by conducting some of the training online. You can track training all in one place and attach quizzes to test employee comprehension.

Create effective lines of communication, including the ability to anonymously report concerns or complaints

The compliance officer or committee can’t be the only one monitoring compliance. Employees are often better situated to spot compliance violations.

Training will help employees know how to identify a violation. But they also need to know how to report violations. This requires a degree of trust – employees must know their complaint will be taken seriously, and that they won’t be punished for voicing concerns about compliance.

As we wrote in our article about avoiding Qui Tam lawsuits, encouraging transparency and open communication can help your organization address issues internally and avoid litigation.


Actively monitor and measure compliance through internal audits

Healthcare compliance programs require regular upkeep. Regular internal audits can help you identify any potential issues before they become a problem.

Along with audits, you can also regularly send out anonymous surveys to employees asking if they have any compliance concerns.

Enforce standards with well-publicized disciplinary guidelines

Along with clear policies and procedures, your organization’s compliance program should establish the disciplinary actions for noncompliance.

Communicating disciplinary guidelines shows employees how serious compliance really is.

Having employees sign off on these guidelines can also provide an extra measure of protection and enforcement. Use a policy management software to track signatures.

Respond promptly to offenses and develop corrective action plans

If a compliance issue comes up, the chief compliance officer should respond immediately. Whether it’s a potential concern or a compliance violation, following through on discipline and corrective action is probably the most important aspect of the compliance officer’s job.

Proactively responding is always better for your organization. It can prevent future incidents and improve your overall compliance. Learn more about healthcare compliance and compliance across industries by checking out our article here. 

Healthcare compliance is an essential part of protecting your organization, providing good patient care, and ensuring operations run smoothly.

As you seek to create a compliance program for your organization, you can use PowerDMS to promote healthy communication, and update, distribute, and track your policies and training.

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