What is Financial Compliance in Healthcare?

Financial compliance in healthcare refers to the set of regulations, laws, and guidelines that healthcare organizations and providers must adhere to in order to ensure the proper handling of financial transactions, billing, and financial reporting within the healthcare industry. Answering the question “what is financial compliance in healthcare” means looking more closely at the regulations put in place to promote transparency, prevent fraud and abuse, protect patient financial information, and maintain the integrity of healthcare financial operations.

Continuous compliance training is one of the best ways to ensure all staff — not just the billing and coding employees — are aware of the regulations and know your organization’s specific policies and procedures.

Wondering how your training program stacks up? Download a worksheet to evaluate your process.

What is Healthcare Compliance?

Healthcare compliance is the process of following the laws, regulations, and ethical standards that govern the healthcare industry. It ensures that healthcare organizations and professionals adhere to guidelines that protect patient safety, maintain data privacy, and uphold the integrity of medical practices. Compliance is essential for operating within the legal framework, providing high-quality care, and maintaining the trust of patients and the community​.

Key Aspects of Financial Compliance in Healthcare

• Healthcare Billing and Coding: Ensuring that medical billing and coding practices are accurate and in accordance with established coding standards, such as the International Classification of Diseases (ICD) and Current Procedural Terminology (CPT) codes. Accurate coding is essential for proper reimbursement and prevents overbilling or underbilling.
• Anti-Fraud Measures: Implementing safeguards to prevent fraudulent activities, such as upcoding (billing for more expensive services than actually provided) or unbundling (billing separately for services that should be billed together). Compliance programs should include mechanisms for detecting and reporting fraud.
• Policies and Procedures: Every healthcare organization should regularly update fraud, waste, and abuse policies and ensure employees acknowledge receipt. See how you can streamline the process with a document and policy management solution.
• Stark Law and Anti-Kickback Statute: Complying with federal laws that prohibit physician self-referral (Stark Law) and illegal inducements for referrals (Anti-Kickback Statute) to ensure that financial arrangements between healthcare providers do not lead to unethical or illegal practices.
• Medicare and Medicaid: Ensuring that billing practices related to government-funded healthcare programs like Medicare and Medicaid are in line with program-specific rules and regulations, including proper documentation of services provided.
• Internal Controls and Auditing: Implementing internal controls, such as regular financial audits and reviews, to monitor financial transactions, billing processes, and reimbursement procedures, with the goal of identifying and rectifying compliance issues.
• Transparency and Reporting: Providing accurate and timely financial reports and disclosures to regulatory authorities, stakeholders, and the public, as required by healthcare regulations and generally accepted accounting principles.
• Compliance Training and Education: Offering ongoing training and education to staff members to ensure that they are aware of and can comply with relevant financial regulations and best practices.

Failure to comply with financial regulations in healthcare can result in severe penalties, including fines, legal action, and damage to an organization’s reputation. Therefore, healthcare organizations and providers must prioritize financial compliance as an integral part of their operations to maintain trust, protect patients, and avoid legal and financial consequences.

Why Continuous Education Is Critical To Financial Compliance

Continuous education on fraud, waste, and abuse is highly recommended by government agencies and it is also one of the most effective ways to maintain compliance and reduce liability. Here are several reasons you want to continuously provide financial compliance training for staff.

• Regulations Change: If you only require financial compliance training upon hire, there’s a good chance regulations will have changed if the employee spends a few years with your organization. Use a learning management system that updates training content when regulations change and that automatically assigns training on a schedule so you don’t have to remember. 
• Understand Complex Rules: Healthcare financial compliance often involves complex rules related to billing, coding, reimbursement, and financial relationships. Sometimes hearing the information more than once — or in a different way — will better resonate. 
• Reduce Liability: Education programs teach healthcare professionals how to recognize and prevent fraudulent activities, ensuring that the organization’s financial practices remain above board. Consistent training may not prevent issues, but it shows a good faith effort to maintain financial compliance.
• Create a Culture of Compliance: Healthcare professionals are often faced with ethical dilemmas related to financial matters. Continuous education keeps discussions of ethics top-of-mind and encourages dialogue.
• Prepare for Audits: Education programs prepare healthcare professionals for audits and investigations. When audits occur, staff members who are well-educated on compliance matters are better equipped to provide the necessary documentation and cooperate with auditors.

Simplify compliance training with MedTrainer Learning

Learn More

Improve Financial Compliance in Your Healthcare Organization

Providing healthcare-focused training and accessibility to policies and procedures can help your organization improve financial compliance. This is available in MedTrainer’s all-in-one compliance platform. Healthcare entities can streamline and fortify financial compliance initiatives and ensure staff members are well-equipped to meet the exacting demands of financial regulations.

Find out how MedTrainer can improve your financial compliance.