What is Compliance in Healthcare: Definition, Regulations, and Solutions

Compliance in healthcare is a critical component to preserving the sanctity of modern society. Compliance in any industry ensures adherence to a minimum set of requirements to ensure quality of service; while undoubtedly important everywhere, it’s more so in healthcare due to its direct impact on human lives. For example, while financial compliance secures the safety of our funds, healthcare compliance ensures the safety of our personal selves. 

What is Compliance in the Healthcare Sector?

Healthcare compliance by definition is adherence to specific practices, codes of conduct, and management models that guide hospitals, clinics, and other businesses that deal with the care of patients. Its aim is to optimize patient care while protecting patient data, and allows organizations to meet the legal, professional, and ethical obligations imposed by various healthcare-related regulations. However, achieving healthcare compliance is no easy task. In fact, as per the 2022 Healthcare Compliance Benchmark Survey, regulatory compliance was identified by the respondents as the second-highest risk after insurance claims processing and reimbursement errors.

What Laws Regulate the Healthcare Sector?

The healthcare sector is one of, if not the most, regulated sectors in the United States. And this holds true for other geographies as well, and understandably so. Mistakes in any other industry can cause significant difficulties in the end-consumers’ everyday lives, whereas an error in healthcare can potentially end their lives. This strict regulatory environment means that American healthcare organizations are subject to a plethora of laws, both at the federal and state levels. While such laws across the 50 states are beyond the scope of this article, here are the federal regulatory compliance laws for healthcare, typically administered by the Department of Health and Human Services (HHS) and the Office of Inspector General (OIG), that apply to most companies operating in this space:

• HIPAA: This includes the Healthcare Insurance Portability and Accountability Act (HIPAA) Privacy, Security, and Breach Notification Rules. The Privacy Rule applies to the use and disclosure of Protected Health Information (PHI). The Security Rule specifies administrative, physical, and technical controls to ensure the confidentiality, integrity, and security of electronic PHI. The Breach Notification Rule requires the notification of an impermissible use or disclosure under the Privacy Rule that compromises the security or privacy of unsecured (not rendered unusable, unreadable, or indecipherable to unauthorized persons) PHI.
• HITECH Act: The Health Information Technology for Economic and Clinical Health (HITECH) Act deals with the use of information technology in healthcare, specifically in the adoption and meaningful use of Electronic Health Records (EHR). The Act is composed of the following subtitles that support the civil and criminal enforcement of the HIPAA rules mentioned earlier:
  • Promotion of Health Information Technology
  • Testing of Health Information Technology
  • Grants and Loans Funding
  • Privacy‍
• Anti-Kickback Statute: This criminal legislation makes it an offense to knowingly and willfully offer, pay, solicit, or receive any remuneration for the referral of an individual for the furnishing of any item or service reimbursable under a Federal health care program.‍
• Physician Self-Referral Law: Also known as the “Stark law,” this prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception applies.‍
• False Claims Act: This civil legislation prohibits:
  • Knowingly presenting or causing to be presented to the federal government a false or fraudulent claim for payment or approval.
  • Knowingly making or using or causing to be made or used a false record or statement to have a false or fraudulent claim paid or approved by the government.
  • Knowingly making or using or causing to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government.‍
• Criminal Health Care Fraud Statute: This makes it a criminal offense to defraud a health care benefits program. The criminal health care fraud statute prohibits knowingly and willfully executing, or attempting to execute, a scheme to either: (1) defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property from any health care benefit program.

Who is Responsible for Healthcare Compliance?

Healthcare compliance within an organization is usually the responsibility of the compliance department or the compliance officer. This individual or department is granted the authority to implement a compliance program by the organization’s executive leadership team (ELT) or Board of Directors. However, very much like security, healthcare compliance is the responsibility of every employee and contractor working in a healthcare organization. Executive leadership can help set the right “tone at the top” by demonstrating their commitment to healthcare compliance through their behaviors, such as participation in awareness programs and following directions of the compliance officer. This will consequently result in a “compliance-first” culture where adherence to healthcare compliance and regulations would be of paramount importance.

Cost of Non-compliance in Healthcare

If healthcare organizations think compliance is costly, they should know that non-compliance in healthcare is much, much costlier. Beyond the obvious negative impact to patient care, the affected organization’s reputation and future revenue, there are stiff monetary penalties in scope. The HHS maintains a comprehensive list of all such enforcement actions due to HIPAA violations. While HIPAA non-compliance grabs headlines, the penalties associated with other healthcare laws are also severe. For example, under the False Claims Act, filing false claims may result in liability of up to three times the (Medicare or Medicaid) programs’ loss plus an additional penalty per claim filed. Violation of the Federal anti-kickback statute constitutes a felony punishable by a maximum fine of $100,000, imprisonment up to 10 years, or both. Conviction also will lead to mandatory exclusion from Federal healthcare programs, including Medicare and Medicaid. Beyond the actions by regulatory agencies, non-compliance can open up organizations to expensive lawsuits. While compliance does not necessarily prevent lawsuits, it can certainly reduce the size of settlements if due diligence and due care can be demonstrated to have been implemented.

Challenges for Organizations

There are several compliance challenges that healthcare organizations get confronted with when attempting to meet compliance regulations. Some of the key healthcare compliance issues  include:

• Complex Regulatory Landscape: The healthcare industry is subject to a multitude of regulations and standards, industry-specific like HIPAA and HITECH, and general like GDPR and CCPA.
  
• Evolution of Regulations: Healthcare regulations are constantly evolving, with updates, new requirements, and changes in enforcement practices. Organizations must know about and comply with changes to avoid penalties and maintain patient trust.
• Interoperability Challenges: Healthcare organizations often struggle with interoperability issues when it comes to sharing patient data across different systems and platforms while maintaining compliance with privacy and security regulations. Ensuring secure and seamless data exchange between disparate systems can be challenging.
• Data Security and Privacy Risks: Data security and healthcare privacy compliance risks are heightened due to the increasing adoption of digital health technologies, mobile devices, and cloud-based systems, as well as the prevalence of insider threats.
• Vendor Management: Healthcare organizations often rely on third-party vendors, such as electronic health record vendors, cloud service providers, and medical device manufacturers, to support their operations. Managing vendor compliance and ensuring their adherence to regulatory requirements pose challenges in maintaining overall compliance posture.
• Audit and Monitoring Burden: Healthcare organizations are subject to regular audits, assessments, and compliance reviews by regulatory agencies, auditors, and business partners. The burden of preparing for and responding to audits while maintaining day-to-day operations can be daunting and time-consuming.
• Cross-Border Data Flows: With the globalization of healthcare services and the increasing use of telemedicine and remote patient monitoring technologies, organizations face challenges in complying with regulations across different jurisdictions and managing cross-border data flows while ensuring data privacy and security.

Addressing these challenges requires a comprehensive compliance program that involves holistic governance structures, risk management practices, investments in technology and security measures.

Building an Effective Healthcare Compliance Program

Building an effective healthcare compliance program is no easy task, given the complexities of overlapping (and sometimes, conflicting) regulations, huge quantities of sensitive information, limited pool of trained personnel, and of course, the monumental impact of non-compliance. The HHS and OIG have formulated the following seven elements of a successful healthcare compliance program:

1. Written Policies and Procedures: Policies and procedures guide the duties (and their performance) of the organization’s employees and contractors. They also demonstrate to stakeholders, including government regulators, how the organization tries to comply with applicable laws, regulations, and requirements.
2. Compliance Leadership and Oversight: The program should be led by an empowered and independent Compliance Officer. The Compliance Officer's primary responsibilities should include advising the CEO, Board of Directors, and other senior leaders on compliance risks facing the organization and the operation of the healthcare compliance program. The Compliance Officer should be supported by a Compliance Committee that should meet at least once every quarter.
3. Training and Education: The Compliance Officer, with the support of the Compliance Committee, should develop and coordinate a multifaceted education and training program that covers the healthcare compliance program and applicable laws and regulations. All Board members, officers, employees, contractors, and medical staff (if applicable) should receive training at least once every year.
4. Effective Lines of Communication with the Compliance Officer and Disclosure Program: While training can help recipients identify instances of non-compliance, they should also be enabled to report such incidents. Moreover, such reporting should be encouraged via the publication of confidentiality and non-retaliation policies. Such open communications will encourage transparency in the organization and make the compliance program more effective.
5. Enforcing Healthcare Compliance Standards: Consequences and Incentives: The program should encourage compliance through incentives and discourage non-compliance through consequences. Incentives for excellence in compliance can include bonuses, recognition, etc. Consequences for ignorance, negligence, or reckless conduct can include non-punitive re-training or punitive penalties.
6. Risk Assessment, Auditing, and Monitoring: A risk assessment helps in identifying, analyzing, and responding to risks. A compliance risk assessment focuses on risks originating from violations of law, regulations, or other legal requirements. Organizations should leverage data analytics to identify compliance risks. Regular audits, internal and external, should be conducted to ensure continued compliance.
7. Responding to Detected Offenses and Developing Corrective Action Initiatives: Despite comprehensive healthcare compliance policies and procedures, effective training, and robust risk assessment, the Compliance Officer can expect to receive notifications of possible non-compliance. Once notified, such incidents should be immediately investigated, and if confirmed, corrective actions taken, including notifying the appropriate government authority.

Healthcare Compliance Solutions: How Riscosity can Help

A key ethos of healthcare compliance is securing patient data. In today’s connected world, healthcare organizations often lose track of where data is transmitted. This is especially true when hundreds of vendor organizations are part of the healthcare ecosystem. Riscosity empowers healthcare organizations to have full visibility of all sensitive data in transit, thereby ensuring that patient data will never be disclosed to unauthorized entities. Schedule a personalized demo to learn how Riscosity makes it possible.