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Blog > Healthcare Compliance Program: Understanding the Purpose and Creation

Healthcare Compliance Program: Understanding the Purpose and Creation

VComply Editorial Team
June 3, 2024
6 minutes

Healthcare organizations are required to comply with various regulations and standards like HIPAA and OSHA. These cover key issues like patient privacy, security, and workplace safety. That is where a strong compliance program helps the healthcare organizations in meeting these obligations and aligning their operations with industry guidelines.

Have you ever wondered how healthcare institutions like hospitals and clinics keep your medical records secure? A strong healthcare compliance program is the lifeline for protecting patient’s personal information. These programs are the unsung heroes working actively to guarantee your health information is securely stored, accessed by authorized personnel and passed on with high-level encryption. With healthcare compliance programs under your belt, your data records are treated with respect, care, and privacy.

With tech influence happening at a rapid pace, these programs are designed to avoid, detect, and address breaches of laws, regulations, and company policies. Understanding the purpose and creating an affecting health compliance program becomes indispensable – as institutions cannot compromise on confidential data and policies. They not only prevent risks but also uplift the quality of care due to a healthy culture of compliance and accountability.

Healthcare organizations are required to comply with various regulations and standards like HIPAA and OSHA. These cover key issues like patient privacy, security, and workplace safety. That is where a strong compliance program helps the healthcare organizations in meeting these obligations and aligning their operations with industry guidelines.

What is a Healthcare Compliance Program?

A healthcare compliance program is a structured framework or system of policies, procedures, and processes designed to help healthcare organizations to follow all relevant and important laws(federal and state), regulations, and ethical standards. 

There is no “one-size fits all” approach when it comes to compliance programs. Each organization should customize its compliance program to fit its own unique needs. Plus, compliance programs should be a mix of paper, training, and auditing. 

The program is important to maintain the integrity and legality of healthcare practices, safekeeping patient privacy, conducting accurate billing, and promoting organization accountability. It should be a living thing – as it should adapt to rising issues and changing laws.

Who is Eligible for a Compliance Program?

  1. Healthcare Providers: This consists of:
  • Hospitals
  • Clinics
  • Nursing homes
  • Physician practices, and any other facilities providing medical care. 
  1. Healthcare Professionals: 
  • Doctors
  • Nurses
  • Pharmacists
  • Therapists, and other licensed medical practitioners are all subject to compliance requirements.
  1. Administrative and Support Staff: Employees in administrative, billing, coding, and support functions within a healthcare organization also play a huge role in compliance.
  1. Vendors and Contractors: External vendors and contractors providing services or products to healthcare organizations, such as:
  • Medical equipment suppliers
  •  IT service providers
  • Outsourced billing companies
  1. Managed Care Organizations: Entities that provide or manage health insurance plans, such as HMOs and PPOs, need compliance programs to smoothly operate within legal and regulatory frameworks, protecting the interests of their members and maintaining proper management of healthcare services and costs.
  1. Academic and Research Institutions: Universities, research labs, and other academic entities involved in healthcare research must have compliance programs to stick to ethical standards, protect patient data, and ensure the integrity of their research practices.
  1. Public Health Organizations: Government agencies and public health organizations responsible for overseeing and regulating healthcare practices also use compliance programs to maintain public trust and for the effective enforcement of health regulations.

Purpose and Formation of Healthcare Compliance Program

The primary purpose of a healthcare compliance program is to make sure that healthcare organizations stick to all applicable laws, regulations, and standards governing their operations. This includes requirements like those related to patient privacy, billing practices, clinical procedures, and employment practices. 

A rigid compliance program = protection of the organization from legal penalties + financial losses + reputational damage.

A compliance program serves multiple functions:

  • Risk Management: The program helps to ward off violations by identifying and preventing potential compliance risks and checks whether the organization is operating within the legal framework.
  • Quality Improvement: Compliance programs contribute to the betterment of healthcare quality by carrying out standards that refine patient safety and care outcomes.
  • Financial Integrity: Checking compliance with billing and coding regulations helps prevent fraud, waste, and abuse. This keeps the organization’s financial health safe and secure.
  • Regulatory Adherence: Making the organization stay up-to-date with the latest regulatory changes and adapt its practices accordingly.
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Formation of a Healthcare Compliance Program

Did you know…

In 1976, the Department of Health and Human Services (HHS) set up the Office of Inspector General (OIG) to find and fight fraud, waste, and abuse in HHS programs and operations. The OIG can audit any organization that receives federal healthcare funding. While some of these audits are routine and many don’t result in fines, it’s still important to have a strong compliance program in place. The reason? – Because compliance is a complex area that’s exposed to constant changes.

Healthcare industry comes with a house full of regulations and high-risks. To combat these, the entities need a rock solid healthcare compliance program shouldn’t be a second-thought. It is a mandatory and priority part of operations that facilities should follow on a regular basis without fail.

The hard part? Doing it efficiently and effectively, without breaking your bank and without taking valuable resources away from the main mission of quality patient care.

Creating an effective compliance program is a challenging task, especially when establishing the foundational elements of compliance. 

To do this effectively, you need to develop numerous policies, procedures, processes, and systems to address compliance requirements. These should encompass the prevention, detection, and correction of fraudulent or illegal behavior and other compliance issues. 

Plus, ensuring that employees at all levels understand the benefits of a healthcare compliance program is essential. This involves clearly communicating expectations, providing comprehensive staff training, and regularly assessing the program’s strengths and weaknesses.

7 Core Elements of Compliance

An effective compliance program infrastructure must have the All Seven Elements Found in the Compliance Program Guidance published by HHS-OID.:

  • Written policies and standards of conduct.
  • Compliance officer and compliance committee.
  • Effective training and education.
  • Effective lines of communication and hotlines.
  • Enforcement through disciplinary actions.
  • Monitoring and auditing.
  • Prompt response and corrective action.

Let’s have an overview of each of these seven key steps:

  1. Documentation and Reporting:

Maintaining a detailed documentation of all compliance activities is integral. This includes records of training sessions, audits, investigations, and any corrective actions taken. Regular reporting to senior management and the board of directors ensures transparency and accountability within the organization.

2. Commitment from Leadership:

The success of a compliance program starts with a strong commitment from the organization’s leadership. The board of directors and senior management must endorse the program and assign resources to support its implementation and maintenance. This sets the tone for the entire organization and underscores the importance of compliance.

3. Training and Education:

Ongoing training and education are important in making the employees understand their compliance responsibilities. Training programs should be customized to different roles within the organization and should address specific compliance risks associated with each role. Regular training sessions help reinforce the need for compliance and keep employees informed about any changes in regulations.

4. Effective Communication Channels:

Setting the ground warm for open lines of communication is crucial for the success of the compliance program. Employees should feel comfortable reporting compliance concerns or violations without fear of retaliation. This can be facilitated through anonymous reporting mechanisms, hotlines, or designated compliance officers.

5. Enforce Consistent Discipline

Create a plan to enforce conduct standards in a timely manner, with clear disciplinary measures for non-compliance. Communicate importance on a regular basis and apply actions consistently to reinforce compliance seriousness.

6. Monitoring and Auditing:

Regular monitoring and auditing activities are necessary to assess the effectiveness of the compliance program. These activities help identify any gaps or weaknesses in compliance practices and ensure that policies and procedures are being followed correctly. Continuous monitoring allows for early detection of potential issues and prompt corrective action.

7. Take Corrective Action

Address vulnerabilities or violations promptly, applying preventive measures. Document actions taken, review effectiveness, and communicate measures to prevent recurrence. This will help to reinforce the program’s credibility. compliance practices.

Good read: Why is Employee Engagement Critical in Fostering Compliance?

How to Design a Healthcare Compliance Program?

Designing a healthcare compliance program doesn’t require a large budget. The OIG and CMS offer free resources, including checklists, fact sheets, and educational videos, to help you create a compliance plan.

Starting Your Compliance Plan:

  • Research: Look for free compliance plans from similar healthcare organizations and review samples from reputable sources.
  • Customization: Tailor the plan to fit your organization’s unique circumstances.
  • Core Elements: Include all seven core compliance elements and consider adding an eighth element addressing non-retaliation, even if your state doesn’t require it.

Plan Content:

  • Length: An effective compliance plan should cover all essential elements, typically spanning three to four pages.
  • Feasibility: Make sure the plan is practical and can be applied and overseen by your organization.
  • Accountability: Include only the items that you plan to follow through on.

Review and Updates:

  • Frequency: Review the plan annually to ensure goals are met and to apply new OIG Work Plan items.
  • Reviewers: The compliance point of contact, senior management, and the board (if applicable) should review the plan.
  • Documentation: After each review, update the document with the date and signatures of those involved in the review.


  • Culture: Embed compliance into the organization’s culture, with senior management leading the effort.
  • Communication: Make the plan easy to read and understand for all employees.
  • Engagement: Use engaging methods, like compliance games, to involve employees.

Effective Healthcare Compliance Programs

  • Authorities like the DOJ evaluate compliance programs based on their effectiveness. An effective compliance program achieves the outcomes outlined in the plan.

Resources and Implementation:

Key points to reflect on:

  • Design: Is the compliance program well-designed?
  • Risk Assessment: Has the organization conducted a risk assessment?
  • Resource Allocation: Are resources allocated appropriately between low- and high-risk areas?
  • Training: What type of training do key gatekeepers receive?

These guidelines help you create an effective healthcare compliance program that not only meets regulatory requirements but also encourages a culture of compliance within your organization.

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Benefits of a Healthcare Compliance Program

The implementation of a compliance program offers many benefits:

  1. Less Legal Liability: Protects the organization from potential fines and penalties through regulatory compliance.
  2. Ethical Workplace Environment: Promotes staff to report discrepancies and compliance issues for a proactive compliance culture.
  3. Business Continuity: Ensures uninterrupted operations by addressing regulatory requirements and mitigating risks.
  4. Increased Efficiency: Streamlines processes and reduces redundancies, enhancing operational efficiency.
  5. Better Reputation: Promotes a culture of honesty and ethical behavior, improving the organization’s reputation in the community and industry.
  6. Ethical Workplace: Facilitates early identification and rectification of misconduct, reducing harm and reinforcing a commitment to ethical standards.
  7. Better Accountability: Ensures all staff members understand their responsibilities and are held accountable.
  8. Competitive Advantage: Attracts more patients and partners by demonstrating regulatory adherence and ethical practices.
  9. Better Patient Care: Enhances patient safety and clinical outcomes by adhering to best practices and regulatory standards.


If you have questions about healthcare compliance, contact the team at VComply. VComply offers a user-friendly compliance management platform that simplifies operations by centralizing all your activities, evidence, reports, and insights in one space!

With an easy-to-use intuitive interface, the platform makes compliance a competitive bonus for your business by helping you to track and audit critical responsibilities and demonstrate compliance across your organization.

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