What is compliance management, and how to implement it

An automated compliance management program can save your organization time, money, and resources.

December 28, 2020

Article highlights

Compliance is the structure that's built to ensure your corporation, healthcare organization, or law enforcement agency is complying with the different rules, regulations, and laws that govern your industry and the way your organization operates.

A compliance management system is a process that's created to keep the compliance structure functioning. It's the process by which you build your policy manual, manage training and professional development, and compile your proof of compliance for accrediting agencies and government regulators.

The compliance management system uses methods and tools like internal audits, third-party audits, technology applications, reports and documentation, and security controls. Plus it relies on a team of people who understand the hows and whys of compliance and work to keep their organization running smoothly.

In this article, we'll discuss compliance management, why it's important, how to start a compliance management program, and to do it without getting overwhelmed.

What is compliance management?

Compliance management is the processing of monitoring an organization's systems, policies, and procedures to ensure all employees comply with federal, state, and local laws, governmental regulations, accreditation rules, and codes of conduct. Workplace compliance generally involves two areas:

  • Corporate compliance is the way an organization ensures employees comply with internal policies, procedures, rules, as well as performance and behavioral standards.
  • Regulatory compliance refers to the way an organization complies with external laws, regulations, and rules.

In other words, corporate compliance involves rules created within the organization, regulatory compliance follows rules created outside the organization.

You can learn more about compliance and compliance management on our website.

Why is compliance management important?

Simply put, compliance management keeps you out of trouble.

There are regulations, laws, and rules to keep people from violating privacy, sharing another person's information, stealing, or committing fraud, because sometimes people do.

There are regulations, laws, and rules to compel people to act in the best interest of their patients, clients, and customers, because sometimes people don't.

Compliance management mitigates risk and builds a culture of compliance. It ensures that people know, understand, and follow those regulations, laws, and rules.

If they don't, your organization can be subjected to government penalties and fines, lawsuits and settlements, legal costs, security costs, damage to your reputation, and even criminal prosecution. One penalty or lawsuit can wipe out your company finances. The damage to your reputation can hurt your corporate image and cause people to find alternatives or refuse to cooperate with your organization.

When you consider what non-compliance can do to your organization, you'll realize you can't afford to go without a compliance management plan. Learn how corporate compliance training software can help here. 

Three approaches to compliance management

There are three basic approaches to compliance management: 1) Strict, top-down, 2) Hands-off, or 3) Shared or distributed.

Here's what that all means.

Strict, top-down approach 

A strong authority figure enforces the rules throughout the organization. There's no room for compromise or flexibility. For example, a manufacturer will have a strict safety policy when it comes to using heavy equipment while intoxicated. You can't negotiate for a relaxation of the safety rules: you can't drive the forklift when you're only "a little drunk." Similarly, a hospital will also have strict safety policies when it comes to patient care. You have to give your patient the right medicine at the right time. You can't ask for some flexibility in giving it only "most of the time."

Hands-off approach

This is the flexible approach to compliance management. The authority figure has set some high-level guidelines, but the procedures are left up to the employees to figure out. Of course, you can't break the law to accomplish your goals, but when it comes to other benchmarks, there's still some flexibility. For example, a corporation might have a flex work schedule. Everyone must work 40 hours per week, but they can work from home during whatever part of the day is best for them. This works well in a ROWE – a results-oriented work environment – where you can set your own high standards, but you aren't subject to sanctions and fines if you don't meet them.

Shared or distributed model

This means everyone works together and shares the responsibility to make compliance their priority. Rather than receiving high-level guidance from an authority figure, the group shares the responsibility for achieving and proving compliance. It's the "we're in this together" approach. For example, a financial technology startup has certain regulations they have to follow, but rather than having the rules dictated to them by the authority figure, they all know what it is they're supposed to do and what they're allowed to do. They understand the laws and regulations, and they hold each other accountable while tracking their own processes to prove they're in compliance.

How to create or improve a compliance program

To begin with, every compliance program should have a chief compliance officer or a compliance manager. This person should have the authority to create new policies, revise existing ones, and enforce training and compliance requirements in the organization's policy and procedure manual.

Your compliance team needs leaders and from different departments within your organization. They'll not only have a vested interest in ensuring their department meets its accreditation requirements, they may also have their own requirements they have to meet.

You also need subject matter experts who will ensure the feasibility and functionality of the various policies. They'll explain the hows and whys of certain policies, making sure that the procedures can be accomplished and what standards of performance you should expect.

As far as creating the rest of the compliance program, the Affordable Care Act outlined seven key elements of an effective compliance program. And even though it's geared primarily toward healthcare, the seven elements still make sense for any other industry or organization.

  • Establish and adopt written policies, procedures, and standards of conduct. It fosters uniformity and compliance within your company.
  • Create program oversight. Who will oversee, monitor, and enforce the compliance program? This person is your go-to company watchdog and should be able to answer questions and concerns.
  • Provide training and education. Employees at every level need to understand the compliance program standards in order to comply with them. A training program can clearly communicate your company’s requirements.
  • Establish two-way communication at all levels. Employees should proactively communicate in a timely manner, whether asking questions, reporting issues, or addressing ethical concerns. Include a way for employees to anonymously report compliance issues or fraudulent or illegal behavior without fear of retaliation.
  • Implement a monitoring and auditing system. You’ll want to measure the program's effectiveness and identify risks. Develop a system of both internal and external monitoring, including formal audits.
  • Enforce consistent discipline. Enforce conduct standards and give out appropriate discipline for anyone who fails to comply with program requirements.
  • Take corrective action. When you find vulnerabilities or violations through monitoring and auditing, correct the issue in a timely manner.

The list may be designed for healthcare facilities, but any industry can create its own compliance management program using these seven elements.

Determine your compliance management system

A compliance management system is the system or processes used for reviewing and updating policies, communicating with employees, maintaining audit trails, and proving compliance to industry standards and regulations.

Choosing the right kind of system, whether upgrading an old system or launching a brand new one, can be difficult. People are used to the old way of doing things, even if the new way promises to save them a lot of time and energy. It can be stressful, to say the least.

If you're switching from a manual, folder-and-binder system of compliance management to an automated one with computer software, you'll still run into some difficulties.

But by switching to an automated compliance management system, you can move your organization forward in new ways, improving your compliance efforts, testing results, and even reducing the risk of liability and lawsuits.

A manual system is time-consuming, expensive, and wastes a lot of time. For one thing, imagine giving everyone in your organization a 100-page policy manual printed up and bound in a three-ring binder. A single ream of paper will be needed just to create five policy manuals. Not to mention finding a three-ring binder for every person in the organization.

And what do you do when there are updates to existing policies? Print out the policy and give it to everyone? Email it to everyone and ask them to print it and put it in the binder, tearing out the old one when they do?

What do you do if you're supposed to keep track of whether everyone read the new policy? Do you ask each of them to email you once they have printed out the new policy? How many times will you have to email them reminders to send you their notification?

With an automated compliance management system, you load up your policy manual to a cloud-based server where all your organization's policies, procedures, and regulations are kept. The manual is accessible on any mobile phone, tablet, or computer.

You can upload new policies or make updates to existing ones. And you can push out these new policies to all affected employees, and then ask them to sign the policy and acknowledge receipt. 

For those who don't do this as quickly as you need, the system can send out individual automatic notices to people, reminding them to read and sign the new policy.

You can get a complete view of your organization's compliance with training, assessments, reading the policies, and signing off on the necessary documents. You no longer have to track signatures and sign-in sheets for training sessions, that's all done automatically.

And by eliminating the paper policy manuals, you're saving time and money by not printing out any more policy manuals. You can easily scale your policy manual without increasing your costs. Plus, you've eliminated all storage costs because everyone's version is always in the cloud and not on their shelves or in a filing cabinet.

These features are also important in industries where some people don't even have desks, like nurses and orderlies in a hospital. Plus, you can provide all kinds of training content to be watched, read, and heard on their favorite devices, rather than trying to find a way to schedule everyone in a limited space and limited amount of time.

Healthcare professionals can participate in the necessary training, and you can compile all of those proof of compliance documents with your compliance management software and provide it to the necessary accrediting and regulatory bodies.

How to implement a compliance program without getting overwhelmed

Compliance management is a daunting task, especially for high-risk, high-trust organizations like the healthcare industry

Compliance software can help organizations of any kind achieve, track, and maintain their organizational compliance. This software can track changing regulations, and let administrators see how existing policies and procedures line up. 

The software also makes it easier to update policies, push out the changes to employees, and promote training and professional development to employees. You can also run risk assessments and set automatic alerts to remind people to maintain their licensing requirements.

Compliance software also makes it easier to maintain proof of compliance documents to show what the organization is doing to stay in compliance.

But should you buy your compliance management software, or do you want to try to build your own to meet your company's specific requirements?

While most companies will buy their compliance management software, some organizations are brave enough to build their own. Of course, as a policy management software developer, we're going to recommend that you buy your software rather than build your own from scratch. Here are a few reasons why.

You can start working right away. If you're worried about compliance management and developing a policy manual, you want to get started developing the content you need, not the software you want to use. Buying software means you can be up and running in a short time.

Many of the features and functionalities are already baked into the software. Out-of-the-box software like PowerDMS is already easy to use and the documentation has already been written. Everything is already there to start your compliance management.

It costs less to buy software. We have an entire company dedicated to building PowerDMS, incorporating upgrades, solving errors, and keeping everything functioning properly. Do you have the staff and resources to build even a small version of that? The bigger question is, do you want to get into the software development business or stick with what you do best?

Accreditation is simpler. We partner with accrediting agencies from many different industries, including healthcare, law enforcement, and fire/EMS responders. There are already electronic copies of those standards and they can easily be incorporated into your own policy manuals and then mapped to your accreditation requirements. You can also easily upload training content and assessments to the software so people can begin training on the different policies.

PowerDMS has been in the policy management software business since 2001. This is what we do, and we're very good at it. So rather than losing sight of your own purpose, let us focus on the thing that we do best so you can do the things you do best.

Final thoughts

Compliance management is an important part of every organization's success. It's one thing to develop a policy and procedure manual, but if you don't have a way to make people comply with those rules and regulations, you're in danger of government fines, lawsuits, and other governmental sanctions.

Whether you take a top-down approach, hands-off approach, or shared or distributed model of compliance management, developing your own compliance program will involve appointing a compliance manager, and regularly reviewing your policies and procedures, as well as passing audits by your accrediting agency. 

Of course, some organizations don't have a policy manual yet, or they haven't worked toward accreditation yet, and so are working to understand why and whether it's important to do so.

If you want to learn more about the meaning of compliance management or developing your own compliance management system, please visit the PowerDMS website and speak with one of our sales representatives.

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