- Healthcare regulatory compliance
- Corporate regulatory compliance
- Achieving accreditation with a compliance team
It's been said that the three pillars of a happy life are love, health, and money. As a society, we put so much stock into those ideals that industries built around health and money are highly regulated and require a lot of trust to operate.
There are countless laws, regulations, and policies surrounding how people provide healthcare services and financial services. So many, in fact, that it's often difficult to keep track of them all. Even as organizations try to abide by every one of them, a failure to do so can greatly damage their reputation and their bottom line.
Complying with those regulations can help organizations better serve their customers or patients, protect them from malpractice and mistreatment, and reduce the possibility of costly or dangerous errors.
Whether it's corporate compliance, healthcare compliance, financial compliance, or banking compliance, it's important that employees in all of these organizations know and understand the rules they're required to follow. A thorough policy and procedure manual can help them achieve this, as can simplifying and streamlining the process to create new policies, revise old ones, and incorporate any changes to the regulations and best practices in that industry.
In this article, we'll look at the importance of healthcare regulatory compliance and corporate regulatory compliance, including human resources, financial services, and banking, as well as how to achieve accreditation with a compliance team.
Healthcare regulatory compliance
Because healthcare is a high-risk, high-trust industry that deals with a patient's health and well-being, there are many different rules, regulations, and laws that affect how a healthcare facility performs its regular functions.
The different policies and procedures help healthcare organizations to reduce the possibility of serious errors and improve internal communication. Doing so can mean the difference between life and death for a patient. Policies based on today's technology and information can help a patient overcome illness and injury in ways they couldn’t have five years ago.
Healthcare regulations and policies have often been created by various healthcare accreditation associations and professional associations, using the latest scientific knowledge, technology, and best practices. By creating a policy and procedure manual that uses the latest developments, healthcare organizations can create the best possible outcomes for their patients.
A manual, plus earning accreditation, can also help reduce the risk of liability, prevent medical errors, reduce patient deaths and illnesses, and even lower the cost of liability insurance and help cut down on the number of lawsuits.
Here are some other non-medical laws that govern how a healthcare organization operates.
- The Social Security Act regulates Medicare, Medicaid, CHIP, and more.
- HIPAA and the HITECH Act protect patient privacy, which requires healthcare organizations to protect patient data.
- The Patient Protection and Affordable Care Act created new requirements for insurance, Medicaid, and more.
- The Drug Enforcement Administration and the Food and Drug Administration regulate medication creation and distribution.
- The Department of Health and Human Services and the Office of the Inspector General help protect against fraud.
Even though most of their rules are geared toward patient care and privacy, healthcare organizations also need some form of corporate compliance as well.
These are the rules and laws every organization must follow, including things like the Family Medical Leave Act, Fair Labor Standards, wage and labor laws, Americans with Disabilities Act, as well as OSHA and Equal Employment Opportunity Commission laws. Violations of these laws can lead to lawsuits and hefty fines.
Many healthcare organizations have a healthcare compliance officer or an entire department, but they need the authority and buy-in from executive leadership in order to enforce compliance. That comes from working with leadership and the governing body.
Consequences of non-compliance in healthcare
The risk involved in non-compliance could be far-reaching. According to a study by the Ponemon Institute, the cost of non-compliance is about 3.5 times higher than the cost of compliance ($820/employee for non-compliant organizations vs. $222/employee for compliant organizations), with an average of $9.6 million in costs for non-compliant organizations.
But there are more consequences than just high fines. There are also:
- Legal penalties. HIPAA fines can be as much as $1.5 million per incident per year. In September 2020, an orthopedic clinic was fined $1.5 million for not complying with HIPAA rules.
- Security breaches. These are more common as more healthcare providers switch to digital systems and fail to follow proper cybersecurity measures. In 2020, another health insurer paid $6.85 million in 2020 to settle a data breach that affected more than 10 million people.
- Lawsuits and settlements. Lawsuits are expensive, embarrassing, and public. They also have an impact on your liability insurance costs. They can happen for malpractice and errors, but if your employees were non-compliant, that will only increase the costs of settlements or the punitive damages in the lawsuit.
- Impacts on patient care. The ripples of non-compliance can affect the quality of care your patients receive. When following poor practices and procedures, or failing to follow effective practices, there's often an increase in patient care issues. This can also erode the trust of future patients and damage your reputation in the community.
You can visit our website to learn more about how to develop an effective healthcare compliance program and the consequences of non-compliance in healthcare.
Corporate regulatory compliance
Compliance in the workplace covers two areas:
- Regulatory compliance: The steps a corporation takes to comply with external laws and regulations. An organization that ignores regulatory compliance may face fines, legal action, prison time for executives, and even be shut down entirely.
- Corporate compliance: The steps a corporation takes to comply with its own policies, procedures, and behavioral norms. A company without this program will often have chaotic and wasteful practices, and may engage in unethical behavior.
Larger companies ensure compliance with both areas by writing policies and procedures and then appointing a compliance officer or an entire department (sometimes human resources) to oversee all compliance efforts. Learn more about corporate compliance by checking out our article here.
Human resources compliance best practices
Human resources managers are often thrust into the role of serving as the compliance overseers for a corporation. That makes sense when you consider that human resources managers keep a corporation's business activities in motion, from recruiting and onboarding new employees, to training and retaining top talent, to ensuring that internal corporate compliance policies are followed and kept up-to-date.
HR managers need to not only keep up with the corporate compliance policies, but they must also understand and keep up with changes to various federal, state, and local laws, as well as any industry rules and regulations that affect their employees. They often deal with:
- Employment laws like the Family and Medical Leave Act, Fair Labor Standards Act (wages and hour laws), anti-discrimination laws, Age Discrimination in Employment Act, anti-harassment laws, and the Americas with Disabilities act.
- Employee health and safety (OSHA) as it relates to workplace hazards and safety, and health and wellness.
- Hiring, firing, and onboarding now include a greater focus on labor relations, unions, and immigration laws. Plus, they must find a way to release costly or troublesome employees that doesn't lead to lawsuits.
HR managers are not responsible for all corporate compliance laws, however. They don't necessarily have to track the various banking and financial regulations like we discuss below. But when it comes to people who ensure that corporations are complying with the various rules and regulations, HR managers should definitely be at the top of the list. After all, every employee is affected by the general policies and procedures, but not every employee works in the finance department or other federally regulated departments.
You can visit our website to learn more about human resources compliance management.
Bank compliance policy and procedures
Banking regulations have changed significantly over the last ten years. More compliance regulations (and more stringent ones) mean banks and financial institutions need to constantly update their own policies and procedures.
According to Thomson Reuters, the number of regulatory updates totals around 200 per day, compared to only 10 per day in 2004.
But banks aren't keeping up with the changes. Retail and corporate banks saw their compliance operating costs increase by 60 percent over an eight-year period.
A large issue is that many banks' compliance structures were designed for a pre-digital era, serving as an enforcement mechanism for the legal department rather than actually protecting consumers.
Banking regulations can be overwhelming in number, complexity, and focus. By creating different written policies, it's easier to distill the laws and regulations into simpler language so every bank employee can understand them.
Even if your employees don't understand what the regulatory requirements mean, your policies should at least foster compliance with those requirements by giving them a framework and process for doing the right thing and making smart decisions. The policies can help avoid inadvertent mistakes that can jeopardize an entire operation.
Plus, by providing regular training and updates, if there ever is an error, you can show that you've taken steps to protect your institution from potential risk. Then if a rogue employee intentionally does any harm, you can show that it's not due to the bank's negligence or failure to act.
You can visit our website to learn more about banking regulation compliance.
Financial services compliance
As complex as banking regulations are, the financial services regulations may be even broader. They have rules and regulations designed to protect consumers, businesses, and the U.S. financial system. And since financial services compliance serves everyone's interest, it's important that organizations understand the challenges and issues surrounding the continually changing regulations.
Some of these regulations can include, but are not limited to, the following:
- General Data Protection Regulation (GDPR): The toughest privacy and security law anywhere. Although it only applies to the European Union, any organization that collects data from people in the EU must abide by it, including U.S.-based companies.
- Common Reporting Standard (CRS): A new reporting requirement for financial institutions in participating countries as a way to fight against tax evasion. Includes most European and Latin American countries, but not the U.S.
- Data privacy: Data privacy laws keep customer data safe and private. Some of these laws are governed by GDPR, as well as the Sarbanes-Oxley Act and Payment Card Industry Data Security Standard (PCI-DSS).
- Cybersecurity: Deals with preventing and reducing cyberattacks that could cripple your business, expose customer data, and intellectual property. There are even laws that govern what your company should do in case of a data breach.
- Consumer laws and regulations: Businesses must keep track of other consumer laws, such as the Home Mortgage Disclosure Act, Truth In Lending Act, Fair Credit Billing Act, and the Fair Credit Reporting Act, to name a very few.
- Financial crimes: These can include "money laundering, insider dealing, market abuse, corruption, terrorist financing, and fraud or dishonesty crimes'." While no policy can stop a determined criminal, once again, having these policies on the books can demonstrate that you have taken steps to deter these criminal acts.
You can visit our website to learn more about financial services compliance.
Achieving accreditation with a compliance team
Every organization that deals with accreditation and legal or regulatory compliance needs at least one person – an accreditation manager – to take ownership of your organization's entire accreditation effort. They're the person responsible for coordinating the efforts, compiling the proof of compliance documents, collating the data, and managing all the deadlines.
For larger organizations, you may need an entire accreditation and compliance department. For smaller organizations, there needs to be one person who's tasked with overseeing the entire process. This is true for both healthcare organizations and corporations of any type.
You will also need leaders from different departments, divisions, or units within the organization. It's especially important to secure management buy-in from departments most affected by, and most responsible for, the bulk of your accreditation activity. For example, the finance department and the production department in a manufacturer should both participate. In a hospital, the nurses will play a major role in that hospital's accreditation, and IT will likely need to buy in as well.
The team also needs subject matter experts to make sure the policies are feasible, workable, and practical. They're the ones who will be up-to-date on the latest technology and best practices for many of your organization's policies.
They are also the stakeholders who will provide valuable feedback on the new policies, as well as helping you integrate policies and procedures from your accrediting agency or professional association.
Finally, you will need executive leadership buy-in, since they're the ones who will set the tone for the importance of the manual and accreditation. If you have their buy-in from the beginning, they can direct departments and individuals who might balk at helping or try to slow your efforts.
You can visit our website to learn more about the importance of having a compliance team help with your accreditation.
Organizations that deal with health and money are some of the most highly regulated ones in the United States. Whether it's financial institutions and financial services, hospitals and healthcare facilities, there are regulations and laws for a reason. They're designed to protect the consumers and patients who need those services.
Companies in these highly regulated industries would do well to earn the trust of their communities and people by earning accreditation from their related associations. They help reduce the risk of malpractice and costly errors, lower liability insurance costs, and reduce the risk of expensive lawsuits and settlements. They also create trust and enhance the reputation of accredited organizations.
And regardless of the industry, the right kind of policy management solution can help these organizations build a thorough policy manual, train employees, and earn that all-important accreditation. To learn more, you can request a free demo of our policy management platform.