Compliance in Healthcare

Healthcare is one of the most highly regulated industries in the business world. Meeting those regulatory compliance obligations is challenging and complex, because of both the evolving regulations and the need to balance high-quality patient care with stringent privacy and security. 

In this article we’ll discuss the importance of a compliance program in healthcare, key compliance subjects, federal regulations that govern healthcare compliance, and how healthcare organizations can assure compliance.

What Is Healthcare Compliance?

Healthcare organizations must adhere to healthcare laws, regulatory requirements, and standards at both the state and federal levels. Failure to comply with those mandates can result in severe consequences, including litigation, exclusion from government healthcare programs, or even the revocation of operating licenses.

To assist medical providers and health services facilities with maintaining a robust compliance program, the U.S. Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) provides valuable resources on its website. OIG even published new guidelines on healthcare compliance programs as recently as November 2023. 

One principal challenge is that healthcare laws and regulations are updated and revised frequently. A reliable compliance solution is necessary to assure ongoing compliance with these standards, as well as to stay informed about changes and provide guidance on the necessary actions to uphold regulatory compliance.

Why Is a Compliance Plan Important in Healthcare?

A compliance plan helps you understand what your compliance obligations are, and how well your organization is or isn’t moving to fulfill those obligations. Given the potentially severe consequences for poor compliance (both in financial costs and the overall integrity of patient care), the need for a compliance plan cannot be overstated. 

For example, a well-structured compliance plan helps identify, prevent, and rectify fraudulent activities, such as improper billing, kickbacks, and false claims. Compliance violations can also have severe implications for patient safety and the quality of care. A robust compliance plan promotes adherence to clinical standards, ethical practices, and patient privacy, assuring that the patient’s best interests are at the forefront of healthcare delivery.

The integrity and reputation of a healthcare organization are invaluable assets. Non-compliance can damage the institution’s public image, causing patients and business partners to lose trust and go elsewhere.

As you can imagine, the non-compliance costs extend beyond immediate penalties and fines, affecting the long-term sustainability and trustworthiness of healthcare organizations.

For example, health insurer Anthem Inc. suffered a huge cyberattack in 2015, resulting in the exposure of personal and medical information of nearly 78.8 million individuals. The Anthem breach eroded trust among millions of its members: patients entrusted Anthem with their sensitive health and personal data, and the breach shattered that trust. Anthem also had to pay a $16 million penalty to pay to the U.S. Department of Health and Human Services.

Key Areas of Healthcare Compliance

Key areas of healthcare compliance include:

• Patient privacy and data security: safeguarding patient health information (PHI) in compliance with U.S. law and implementing cybersecurity measures to protect against data breaches.
• Quality of care: improving the quality of services provided, often by adhering to clinical guidelines and best practices.

• Patient rights: respecting and upholding the rights of patients, including informed consent, access to medical records, and the right to refuse treatment.

• Ethical conduct: assuring healthcare professionals and staff maintain high ethical standards in patient care and interactions.

• Employee training: providing ongoing training to staff on compliance matters and regulations.

• Risk management: identifying potential healthcare industry risks, from patient safety concerns to legal and financial risks.

• Billing and coding compliance: accurate and ethical medical billing, coding, and documentation to prevent fraudulent claims, in accordance with the False Claims Act and other anti-fraud laws.

• Fraud and abuse prevention: detecting and preventing healthcare fraud, waste, and abuse through audits and investigations.

Federal Regulations Governing Healthcare Compliance

Here are some of the federal regulations that govern healthcare compliance.

Social Security Act

The Social Security Act establishes the framework for various federal health programs, including Medicare and Medicaid. It is pivotal in providing financial support for healthcare services to specific populations, such as the elderly, low-income individuals, and people with disabilities.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA safeguards patient privacy and security by regulating the handling of protected health information and assures the portability of health insurance coverage when individuals change jobs.

Health Information Technology for Economic and Clinical Health Act (HITECH)

HITECH complements HIPAA by promoting the adoption and meaningful use of electronic health records (EHRs) and strengthening the security of electronic health information.

False Claims Act

The False Claims Act imposes penalties on individuals or organizations submitting false claims for payment to the federal government. It is an important tool to combat fraud against government healthcare programs, allowing the government to recover funds and deter fraudulent activities.

Stark Law

The Stark Law prevents physicians from referring Medicare and Medicaid patients to entities they have a financial relationship with, aiming to prevent conflicts of interest and to assure medical decisions are based on patient needs.

Patient Protection and Affordable Care Act

The Affordable Care Act (ACA) focuses on expanding access to healthcare, improving quality of care, and controlling healthcare costs. It introduces various provisions such as Medicaid expansion, health insurance marketplaces, and essential health benefits to enhance overall healthcare accessibility.

Drug Enforcement Administration (DEA) and the Food and Drug Administration (FDA)

The DEA regulates controlled substances, overseeing their manufacturing, distribution, and prescription to prevent drug abuse and ensure patient safety. The FDA regulates the safety and efficacy of drugs, medical devices, and other healthcare products, assuring they meet standards before entering the market.

Anti-Kickback Statute

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration in exchange for referrals or business involving federal healthcare programs. It aims to prevent fraudulent activities and conflicts of interest that could compromise patient care integrity and the healthcare system.

Who Is Responsible for Healthcare Compliance?

At most healthcare businesses, compliance is typically overseen by a designated compliance officer or department. For maximum effectiveness, senior leadership must empower this compliance function to develop and execute an effective healthcare compliance program.

Every employee should play a role in maintaining healthcare compliance. This requires all staff members to adhere to established procedures and professional standards. Accessible compliance guidance should be readily available to address employee inquiries.

Every healthcare organization needs to develop a culture of compliance and accountability that spreads through the company. Regular compliance training assures that each employee comprehends compliance’s significance and their role in upholding it.

How Do Healthcare Organizations Assure Compliance?

The initial step involves fostering a “culture of compliance” within the organization. This entails implementing programs to assure that every organization member understands how his or her actions affect healthcare compliance and that employees are committed to adhering to all relevant laws.

In the event of errors, organizations with a healthcare compliance culture are dedicated to investigating the root causes and implementing corrective actions to prevent their recurrence.

Building a robust compliance framework and culture requires deliberate action. Senior leaders in particular must lead by example and set clear standards. A compliance officer with a specialized team enforces rules, conducts audits, and offers training programs to ensure the organization respects necessary laws.

Ensure Healthcare Compliance With ZenGRC

Reciprocity’s ZenGRC is a powerful solution for compliance and risk management. It offers a streamlined approach to evidence and audit management across various compliance frameworks, including HIPAA, CCPA, PCI, SOX, GDPR, and ISO.

The best part is that ZenGRC eliminates challenges posed by working in silos and across disconnected teams. It achieves this by providing a unified source of information. ZenGRC brings all aspects of compliance, risk management, and third-party vendor activities into a single platform. This integration lets you streamline operations and reuse controls and evidence across various frameworks.

Get a demo today to see how it helps you strengthen your compliance while minimizing IT risk.