Healthcare Compliance Program: The Complete Guide

In healthcare compliance, to be prepared is to be forearmed.. Anticipating problems allows organizations to respond effectively, avoid surprises, and stay ahead of potential risks.

Recent research reveals that the average cost of a healthcare data breach is nearly $11M, the highest of any industry. The repercussions of non-compliance can be devastating and have far-reaching consequences, like financial loss and business closure. 

A healthcare compliance program can help your organization identify and manage regulatory risks, prevent fraud and abuse, and ensure adherence to laws. It helps protect patient data, promotes ethical behavior, and minimizes the likelihood of legal action or costly fines. It also shows regulators that your organization is committed to preventing, detecting, and correcting violations.

This blog post takes a deeper look at a healthcare compliance program.

What is Healthcare Compliance?

Healthcare compliance means adhering to a range of laws, ethical frameworks, and technical standards to prevent fraud, abuse, and waste in the healthcare industry. It ensures the safety of both patients and healthcare professionals. But it’s worth noting that the practice extends far beyond adhering to rules; it's also a framework that ensures the security and integrity of healthcare systems.

Healthcare compliance is rooted in effective risk management, and organizations must understand the regulations relevant to their operations as well as the critical risks associated with those regulations. This enables them to implement targeted measures that minimize the risks and safeguard patient welfare. 

History of Healthcare Compliance Regulations

Healthcare compliance has undergone significant changes over the last 100 years. It began in the early 20th century as a response to concerns about the quality of healthcare. The government introduced licensing and credentialing to regulate physicians and ensure minimum standards of care. Here’s a brief history.

Medicare and Medicaid (1960s)

In the 1960s, two government-funded healthcare programs, Medicare and Medicaid, were introduced, leading to increased scrutiny and regulation of healthcare practices. Compliance began to encompass the prevention of fraud, billing, and abuse. 

HIPAA (1996)

In 1996, the Health Insurance Portability and Accountability Act (HIPAA) was enacted. It established stringent standards for patient data privacy and security. Compliance efforts began focusing on protecting patient information.

HITECH Act (2009)

The Health Information Technology for Economic and Clinical Health (HITECH) Act prompted the adoption of electronic health records (EHRs) and higher penalties for data breaches. Healthcare compliance efforts began to encompass the security of electronic health records (EHRs).

Affordable Care Act (2010)

A year later, the ACA was established, introducing the concept of value-based care. Care quality and patient outcomes took precedence over the quantity of services. Compliance shifted to include performance reporting and quality metrics.

MACRA (2015)

The Medicare Access and CHIP Reauthorization Act introduced Alternative Payment Models (APMs) and the Merit-Based Incentive Payment System (MIPS). Healthcare providers were mandated to use payment models that incentivize better care and begin reporting quality data.

Moving forward, we anticipate an increase in compliance regulations in areas such as user privacy, security, and others at the local, state, federal, and international levels. To mitigate compliance risks, use an effective tool like Atlas PRIME®. You’ll keep abreast of laws and regulations that impact your organization, sufficiently mitigate risks, and stay compliant.

7 Core Elements of Compliance

Having an effective compliance program could mean that regulators are more lenient during a corporate misconduct investigation. Here are the seven essential elements of compliance.

1. Governance

Governance provides the framework for establishing policies, procedures, and internal controls that ensure your organization adheres to legal and regulatory requirements. When creating a compliance program, focus on governance. Determine who will be accountable for the compliance program, how information about compliance will be escalated, the resources dedicated to compliance, and the responsibilities of senior management. The compliance officer must have adequate resources to do their job properly. 

2. Regular risk assessments

Your compliance program must be designed to detect the specific types of misconduct most likely to occur in your line of business and regulatory environment. It’s also worth mentioning that events such as entering new markets, corporate reorganization, and engaging with new regulators can bring about new compliance risks. 

Risk assessment shouldn’t be a one-off event. According to the U.S. Department of Justice’s guidance document for prosecutors, they should verify whether a company’s compliance program has been reviewed periodically when assessing its quality. 

3. A code of conduct policy

This shows an organization’s commitment to comply with all relevant laws and regulations. It establishes clear expectations for behavior and promotes consistency across the organization. It can be used for training, helping employees understand their roles, and reducing the risk of legal violations. Organizations can use the policy to mitigate risks and demonstrate due diligence to regulators and stakeholders. The document should be readily available to employees for easy reference.

4. Regular employee training

A well-structured compliance program provides comprehensive employee training. Employees should be aware of the rules they’re expected to follow, know who to contact for guidance on compliance-related matters, and understand how to report violations and concerns. The program should also include risk-based training for staff working in high-risk functions. Training should be offered either online or in person to ensure that all employees fully absorb the content.

5. Misconduct reporting process

Like it or not, misconduct may happen at some point, and a regular employee may be the first to notice. Ensure your employees know when they need to report an issue and how to do so. Employees should be able to report issues through their manager, a toll-free hotline, a monitored email alias, or another channel. 

When employees feel empowered, they raise issues early, helping the company prevent small problems from escalating into larger issues. Enforce a no-retaliation policy to let staff know they won’t be punished for bringing forth issues in good faith. 

6. An incident response plan

Having an incident response plan is just as important as having controls to mitigate compliance risks. Incidents are inevitable, and how you respond will make the difference between a great reputation and a ruined one. Poor incident response is often what gets brands into public headlines. 

Once an incident occurs, scope it out, contain it, assess the impact, and implement the recovery plan. And after the dust settles, craft a plan to improve your systems and avoid a similar occurrence in the future. The compliance officer can handle small incidents, while bigger ones are best handled by senior management. 

7. Ongoing monitoring and auditing 

You may have all the necessary compliance controls in place, train employees, and communicate effectively with stakeholders, but your workforce may still fail to comply. Regularly monitoring and auditing the compliance program can help instill a culture of compliance. Auditing reveals if controls are functioning as intended and potentially protects your company from costly fines or legal action. You can easily identify compliance blind spots and patch them. External audits become less stressful as you have all the necessary evidence. 

Major Laws Related to Healthcare Compliance

Healthcare laws and regulations protect patient privacy, safety, and confidential information. They also prevent abuse or misuse of payment and referrals. Here are the major laws in healthcare compliance.

The Health Insurance Portability and Accountability Act (HIPAA) 

HIPAA was originally created to bring reforms to the health insurance industry, but has become a cornerstone in patient data protection. It controls health plan fraud and abuse, patient privacy rights, data security, and the use and confidentiality of Protected Health Information (PHI). 

HIPAA applies to healthcare providers, health plans, business associates that have access to or use protected health information (PHI), and institutions that provide medical services or perform healthcare billing. Civil monetary penalties for HIPAA violations range from $$141 to $2,134,831 per violation.

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

This law complements HIPAA by promoting the adoption of electronic health records (EHRs) and increasing penalties for data breaches. It emphasizes the secure electronic exchange of health information, enhancing patient data protection. HITECH requires healthcare providers to use certified EHR systems in a meaningful way. They must utilize the technology, but in ways that enhance patient care by ensuring that patient information is kept safe within the healthcare system.

The HITECH Act introduces tiered penalty levels for violations of PHI, which can reach up to $1.5 million. Criminal penalties such as fines and imprisonment may also be imposed.

The Stark Law

Also known as the Physician Self-Referral Law, it prohibits physicians from referring patients to healthcare providers with whom they have a financial relationship, such as a compensation arrangement, ownership, or investment. This could be inpatient and outpatient hospital services, laboratory services, radiology, or other health services. 

Physicians who violate the Stark Law can face fines and be excluded from participating in federal healthcare programs. Penalties for violations include denial of payment for the service provided, payment of civil penalties of up to $15,000 for each service, and refund of monies received.

False Claims Act (FCA)

This makes it illegal to submit false claims for payment to Medicare or Medicaid. Violating the act can result in civil or criminal penalties. Violators can be fined up to $28,619 per claim and even face imprisonment.

The FCA holds companies and individuals liable for fraud against the government. It allows whistleblowers to sue entities on behalf of the government for fraud related to federal programs. If the government wins, the whistleblowers can receive a share of the recovered amount.

Anti-Kickback Statute

This law prohibits healthcare providers from accepting or paying for referrals for services covered by the federal healthcare programs. This includes programs like Medicaid, Medicare, and other government healthcare initiatives. It prevents the provision of financial incentives that may result in unnecessary or inappropriate services being provided to patients.

Violations can result in civil monetary penalties of up to $50,000, fines of up to $100,000 per violation, or imprisonment for up to 10 years.

Patient Safety and Quality Improvement Act (PSQIA)

This law enhances patient safety and healthcare quality by allowing healthcare providers to openly discuss medical errors without fear of legal repercussions. They can report medical errors and other issues for external experts or patient safety organizations to collect, review, and assess information about patient safety issues. Violations can result in civil penalties of up to $14,960.

Healthcare Quality Improvement Act (HCQIA)

Established in 1986, HCQIA regulates the healthcare industry by requiring hospitals and healthcare providers to conduct employee background checks to determine if physicians have the right education, training, and license to provide healthcare services. The act has a confidential database, the National Practitioner Data Bank (NPDB), which holds information about healthcare professionals who have been involved in malpractice, negligence, and other professional misconduct.

Benefits of a Healthcare Compliance Program for Different Organization Types and Sizes

An effective compliance program helps healthcare organizations protect their patients, employees, and reputation. It positions them to deliver safe, high-quality care without putting themselves at risk for potential legal or financial repercussions caused by non-compliance. Here are the top benefits of a healthcare compliance program.

1. Boosts employee retention

Employee safety has a huge impact on retention. Employees who feel safe and cared for at work are more likely to be loyal. A safe workplace also minimizes work-related injuries, resulting in lower costs and reduced lost time for your organization. A well-designed healthcare compliance program fosters a culture of safety that enables employees to thrive. Organizations that follow legal requirements and ethical standards create a workplace where employees feel secure and respected, which in turn reduces turnover.

2. Mitigates security risks

A healthcare compliance program helps companies to proactively address risks and adhere to regulations. They establish clear policies, procedures, and training programs and perform monitoring and auditing to identify and address issues before they escalate. This data can be captured by a compliance tracking tool and used to make necessary enhancements to a code of conduct policy, an employee training program, and safety plans.

3. Improves operations

A compliance program doesn’t just protect your healthcare organization from legal action and costly penalties; it’s a tool you can use to improve business operations. All processes that adhere to regulatory requirements can be leveraged to refine and enhance operations. For example, if you have branches in different locations, you can utilize the compliance program to train all employees, reducing variations in practices and preventing fraud, waste, and abuse. You can also prevent medical errors that could jeopardize patient safety.

Manage Your Healthcare Compliance Program With PRIME® by Atlas Systems

Managing a healthcare compliance program can be overwhelming when done manually. You’ll spend your days tracking spreadsheets and emails. Compliance automation software streamlines tasks, from tracking compliance regulations to identifying exclusions. Turn compliance from a chore into a culture.

The compliance landscape is rapidly evolving, and your organization needs a powerful tool to stay up-to-date with regulatory requirements and protect itself from potential risks. Atlas PRIME® helps organizations automate compliance management, auditing, and risk assessment. It streamlines your healthcare compliance program and sets your company up for success.

Frequently Asked Questions

Are compliance programs for healthcare providers mandatory?

Yes, healthcare providers who treat Medicare and Medicaid beneficiaries are required to have a compliance program, as mandated by the Patient Protection and Affordable Care Act of 2010 (ACA). A compliance program helps providers ensure accurate claim submissions and avoid fraudulent activities.

How often should healthcare organizations assess their compliance programs?

Compliance programs should be assessed at least annually; however, high-risk areas, such as data security and financial compliance, require more frequent assessments, ideally on a quarterly or biannual basis. Assessments are also required after periods of significant regulatory change.

What is a corporate compliance program in healthcare?

A healthcare compliance program is a system of internal controls that promote adherence to healthcare laws and regulations. It helps organizations avoid misconduct, identify it when it occurs, and implement corrective action. It fosters a culture of compliance in an organization and promotes ethical behavior.

How to develop a healthcare compliance program

First, identify the laws and regulations that apply to your industry. Develop written policies and procedures, train and educate staff, monitor compliance, respond to incidents, and periodically review the program to ensure ongoing effectiveness.