Compliance Insights

Your Trusted Resource for Compliance Insights

Establish a proactive compliance program, management, and automation system through our intuitive Compliance Insights. Connect with us below so we can help you enhance your compliance process into one centralized platform.
Blog Hero
Blog > Understanding What Healthcare Compliance Really Means

Understanding What Healthcare Compliance Really Means

VComply Editorial Team
May 20, 2024
6 minutes

It should come as no surprise that healthcare – a multi-trillion dollar industry operates under a complex web of regulations designed for solid protection of patient safety, ethical practices, and financial accountability.

Everything is regulated in healthcare – from safeguarding patient privacy to following safety measures for medication distribution and procedures, maintaining thorough and accurate medical records, and ensuring correct coding and billing.

What is Healthcare Compliance?

Healthcare compliance can be defined as an active, ongoing process healthcare organizations undertake to abide by all legal, ethical, and professional compliance standards. It consists of a wide range of areas, including patient care, billing practices, and reimbursement processes. 

Basically, it is about following the rules and regulations. These rules are sophisticated and complex, often needing operational and workflow changes, internal audits, ongoing education, health IT compliance updates, and more. The goal of healthcare compliance is to promote a culture where participants within the entity strive to prevent waste, fraud, or abuse within a healthcare entity.

Building a strong compliance culture starts with a structured plan, which often includes specific steps called compliance elements. When discussing compliance, documents frequently weave together the ethics, culture, and codes of conduct of the organization.

However, maintaining compliance with healthcare regulations is a challenging task. A 2022 Healthcare Compliance Benchmark Survey revealed that respondents ranked regulatory compliance as the second-highest risk factor, following insurance claims processing and reimbursement errors.

Regulations and GRC

It is impossible to define the complexity of healthcare compliance as it is constantly evolving. New regulations are introduced and existing ones are revised on a daily basis from all levels of government – with some of these having larger implications such as Stark Law, HIPAA, Anti-Kickback Statute, Criminal Healthcare Fraud Statute, False Claims Act and HITECH laws being designed to secure and protect the privacy of patients. 

The sheer volume of regulations can be overwhelming for healthcare organizations. This calls for a proactive approach, with a focus on building a strong culture of compliance within the organization. 

Also, healthcare compliance pertains to all healthcare organizations – be it large or small. This is part of a holistic approach known as healthcare governance, risk management, and compliance – or GRC – which is integral to creating a secure, safe, high-performing and highly reliable healthcare environment.

If you want to manage compliance, risk audit, and policies in one place, VComply’s GRCOps Suite is the best platform for that. It helps to scale your compliance programs with a pre-built framework library along with features such as common control mapping, real-time alerts, automated workflows, and smooth evidence management.

Compliance CTA


A Quick Peep into the History

In the contemporary healthcare industry, healthcare compliance stands as a glimmer of trust, promising and prioritizing patient care to be of the highest quality and that entities adhere to the strictest standards. For better future advancements, it is important to learn about the historical evolution of healthcare compliance.

With significant changes over the course of its development, healthcare compliance has one key driving force that helped transform it – it is the increasingly complex and dynamic healthcare landscape. 

With medical technology changes, new treatment methods, and evolving healthcare services, the regulatory framework adapted to ensure patient safety, quality service, and ethical practices and standards. Additionally, as healthcare goes global and doctors work together across countries, new international rules are needed to make sure everyone follows the same guidelines.

One of the revolutionary factors that developed healthcare compliance is digitization. With the embracing of electronic health records (EHRs), telemedicine, and data analytics, new challenges and opportunities started to flourish. 

Some of the important concerns were the protection of patient data, adherence to privacy regulations like the Health Insurance Portability and Accountability Act (HIPAA) in the United States, and the prevention of cyber threats. Healthcare organizations all over the world are required to invest and stick to the robust cybersecurity measures and stay updated on rapidly evolving technology laws and regulations.

The idea of healthcare compliance started to take off in the late 1900s. Back in 1991, a set of guidelines (Sentencing Commission Guidelines Manual) were created to hold hospitals and other healthcare providers accountable for misconduct. 

A few years later, in 1998, the Office of Inspector General (OIG) came along and put even more emphasis on making sure healthcare was done ethically and with patient safety as the top priority. Laws like the Social Security Act also helped shape how healthcare compliance works today.

Regulatory Bodies and Importance of Following Regulations

It’s not just a free-for-all in healthcare! Many government agencies, both federal and state, keep an eye on things to make sure everyone plays by the rules. 

Some of the big names you’ll hear about are the DEA (for handling controlled substances), the FDA (for medications and medical devices safety), HHS (the Department of Health and Human Services, which oversees a lot of healthcare activities), and the OIG (the Office of Inspector General, more like healthcare’s internal affairs).

Healthcare providers need to be familiar with key laws like HIPAA (protecting patient privacy), HITECH (keeping patient information secure electronically), the False Claims Act (to prevent fraudulent billing), and the Anti-Kickback Statute (stopping bribes and unfair advantages). 

Plus, they have to stay on top of updates from agencies like CMS (Centers for Medicare & Medicaid Services) that set specific rules for how things are done.

Who is Responsible for Healthcare Compliance?

Within a healthcare organization, the responsibility for compliance typically falls to a designated compliance department or officer. This individual or department gets the authority to implement a comprehensive compliance program from the organization’s executive leadership team (ELT) or Board of Directors. 

However, akin to security protocols, healthcare compliance extends beyond a single department. It is an institutional commitment that requires the participation of every employee and contractor within the organization.

Benefits of Compliance Programs

  • Saving Money: Compliance programs help avoid hefty fines and penalties for things like privacy breaches or incorrect billing. Think of it as a financial shield!
  • Reduced Risk: By prioritizing ethical practices and patient safety, compliance programs lessen the chances of lawsuits and legal headaches.
  • Detecting Problems: Regular reviews and audits are like check-ups for your healthcare system. They identify potential issues early on, allowing you to fix them before they escalate into bigger problems.
  • Building Trust: A strong commitment to compliance shows patients and others that you take ethical behavior seriously. This builds trust and leads to a better reputation for your organization.
  • Smoother Operations: Clear-cut training and streamlined procedures, often part of compliance programs, can lead to a more efficient and smoother workflow for everyone.
  • The Right Culture: Compliance programs promote an environment where everyone understands their role in following regulations and doing the right thing for patients.

Core Elements of a Robust Healthcare Compliance Program

The Office of the Inspector General (OIG) started the first healthcare compliance program in the late 1990s, calling for all types of healthcare professionals and entities to establish compliance programs to avoid and alleviate violations of federal healthcare program rules.

The voluntary, non-binding guidance documents of the OIG help healthcare systems and their compliance teams to self-monitor and prevent fraud, abuse and waste. In 2023, the OIG provided updated guidance with a guarantee of updates to industry-specific guidance in 2024.

These are the 7 elements of a successful compliance program:

  1. Written policies and procedures
  2. Compliance leadership and oversight
  3. Effective lines of communication with the compliance officer and disclosure programs
  4. Training and education
  5. Enforcing standards, including consequences and incentives
  6. Risk assessment, monitoring, and auditing
  7. Response to offenses and corrective action initiatives

Did you know that according to the U.S. Department of Justice and the False Claims Act, “the FCA provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government’s damages plus a penalty that is linked to inflation. FCA liability can arise in other situations, such as when someone knowingly uses a false record material to a false claim or improperly avoids an obligation to pay the government. Conspiring to commit any of these acts also is a violation of the FCA.”

Compliance CTA


How to Build and Implement a Robust Compliance Program in Your Organization

healthcare appliance program

Building a strong and effective healthcare compliance program is a tall order. This is due to the complex issues of overlapping and conflicting regulations, a large chunk of sensitive  and confidential information, limited proof of trained personnel, and the massive impact of non-compliance. 

Although resources from the OIG and CMS can serve valuable information and guidance, the one-size-fits-all approach won’t work. Programs need to be customized to meet the needs and risk profile of each healthcare organization. Leadership commitment is fundamental in inciting a compliance culture where ethical behavior and obeying regulations are prioritized.

To make the program work, it should be built on a strong base of well-defined written policies, procedures, and standards of conduct. In order to keep things running smoothly and ethically, healthcare organizations need a “compliance team” with a leader (compliance officer) and a committee. Their job is to make sure everyone follows the rules. 

But it’s not just about the team – everyone from doctors and nurses to receptionists needs to understand what’s expected of them. That’s why regular training sessions are a must.

To ensure a culture of compliance in healthcare, make sure to follow these things:

  • Shared Responsibility: Drive a culture where all parties involved understand their role in following healthcare regulations.
  • Learning from Mistakes: Monitor and analyze errors to prevent future occurrences.
  • Continuous Effort: Compliance requires ongoing commitment from leadership, a dedicated department, and regular training.
  • Top-Down Approach: Executive leadership sets the ethical example for the entire organization.

The key for the program is to promote a space of open communication. Meaning, it should allow staff members to report any potential issues or problems when they see something suspicious. Nobody wants to get in trouble, so disciplinary actions help discourage rule-breaking. This will help eradicate malpractice and promote a culture of ethical behavior, and compliance at all levels.

Finally, to ensure things are at a good stead – the program should conduct regular reviews and audits to identify potential problems lurking around the corner. This helps the organization to fix them by bringing corrective measures before they escalate into major issues. 

The program should mention how often the entity will review it each year to propagate goals and include any new OIG Work Plan items into the compliance program. Most of the time, you’ll just need to update the existing plan instead of starting from scratch. 

Once the review is done, don’t forget to date the document and stamp the signatures of those who assisted in reviewing the program. This way, everyone’s on the same page and you can keep your compliance program in tip-top shape! This proactive approach defends patient safety, nurtures compliance, and ultimately reinforces the organization’s overall healthcare delivery.

Cost of Non-Compliance in Healthcare

While healthcare organizations may perceive compliance programs as an added expense, the reality is that non-compliance possesses far greater financial consequences. These go beyond the potential harm to patient care and the organization’s reputation, encompassing major monetary penalties.

The Department of Health and Human Services (HHS) maintains a public record of enforcement actions for HIPAA violations, highlighting the visible consequences of non-compliance with this single regulation. However, penalties associated with other healthcare laws can be equally severe.

For example, the False Claims Act imposes a hefty penalty structure. Filing false claims can result in liability up to three times the amount lost by Medicare or Medicaid programs, in addition to a per-claim penalty.

Similarly, violating the Federal Anti-Kickback Statute is considered a felony, punishable by a maximum fine of $100,000, imprisonment for up to 10 years, or both. Furthermore, conviction automatically excludes the organization from federal healthcare programs like Medicare and Medicaid.

Beyond regulatory sanctions, non-compliance exposes organizations to costly lawsuits. While a robust compliance program cannot guarantee immunity from legal action, it can greatly reduce potential settlement amounts by showing a commitment to due diligence and patient safety.

In short, although healthcare compliance requires investment, it ultimately serves as a financial safeguard. It minimizes the risk of substantial penalties, protects the organization’s reputation, and fosters a culture of ethical practices that prioritizes patient well-being.

How VComply Helps with Healthcare Compliance Solutions

Healthcare compliance plays a big role in protecting patient safety, securing public health, and preserving the integrity of the healthcare system. 

Managing healthcare compliance is a relentless pursuit, and organizations need a scalable and flexible solution that can adapt with their changing regulations. This way, they can keep improving healthcare quality and safety, reduce risk, and ensure patient’s safety. 

VComply’s web-based solutions help you establish a streamlined, multi-framework compliance program, a real-time glimpse into compliance so healthcare leaders can make timely decisions. 

Whether you are starting out, looking for scaling, or improving your compliance operations, VComply adapts to your requirements. Everything is made easy with automation, centralizing all your frameworks.

For example, VComply’s healthcare compliance software makes it easy to get a holistic overview of compliance activities through the dashboard, stay informed about compliance updates, simplify evidence management with a centralized repository, improve efficiency with automated workflows, and much more – all during a time when organizations are doing more with the less. Schedule a personalized demo to see how VComply makes it possible.