Who Started the First Healthcare Compliance Program?

Amanda Martin, MSN, FNP-C
Binder on a desk

Healthcare compliance isn’t a new concept. Who started the first healthcare compliance program? The U.S. federal government enacted the Federal False Claims Act (FCA) in 1863 during the American Civil War. It was passed to combat fraud by government contractors during the conflict and set the stage for future compliance regulations. However, it wasn’t until the mid-20th century that healthcare compliance regulations and programs began.

The FCA, along with several subsequent legislation and regulations, such as the Anti-Kickback Statute and the Stark Law, brought about the need for healthcare compliance programs. These laws require healthcare providers to establish internal controls and compliance programs to prevent fraud and abuse in the healthcare system.

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​.

FCA Set the Stage for Comprehensive Healthcare Compliance

According to the U.S. Department of Justice and the False Claims Act, “the FCA provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government’s damages plus a penalty that is linked to inflation. FCA liability can arise in other situations, such as when someone knowingly uses a false record material to a false claim or improperly avoids an obligation to pay the government. Conspiring to commit any of these acts also is a violation of the FCA.”

The need to combat fraud, waste, and abuse is what brought about the modern compliance program. 

OIG Guidance Started the First Healthcare Compliance Program

In the late 1990s, the Office of the Inspector General (OIG) recommended that healthcare providers and organizations of all types establish compliance programs to prevent and mitigate violations of federal healthcare program rules. 

The OIG’s voluntary, non-binding guidance documents help healthcare organizations and their compliance teams to self-monitor and prevent fraud, waste, and abuse. In 2023, the OIG provided updated guidance with a promise of updates to industry-specific guidance in 2024. 

These are the seven recommended elements of a compliance program:

  1. Written policies and procedures
  2. Compliance leadership and oversight
  3. Effective lines of communication with the compliance officer and disclosure programs
  4. Training and education
  5. Enforcing standards, including consequences and incentives
  6. Risk assessment, monitoring, and auditing
  7. Response to offenses and corrective action initiatives

Healthcare Compliance Program Advancements

Since its inception, compliance programs in healthcare have advanced significantly. Here are some key ways in which these programs have evolved:

  • Increased Regulatory Complexity: As healthcare regulations have become more complex and numerous, compliance programs have had to keep pace. The introduction of laws like the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), and the Medicare Modernization Act have added layers of complexity to healthcare compliance.
  • Focus on Preventing Fraud and Abuse: While early compliance programs primarily aimed to prevent fraud and abuse, modern compliance programs have expanded their focus to include a wider range of compliance issues. They address not only financial fraud but also issues like patient privacy, data security, billing accuracy, and quality of care.
  • Mandatory Compliance Programs: Federal and state governments have mandated that certain healthcare providers and organizations have formal compliance programs in place. Failure to implement and maintain these programs can result in legal penalties and sanctions.
  • Technology Integration: Modern compliance programs often leverage technology to streamline compliance efforts. Compliance software helps with policy management, incident reporting, and training online.
  • Training and Education: Prioritizing the ongoing training and education of staff helps employees become aware of the latest regulations and understand their role in maintaining compliance.
  • Whistleblower Protections: Newer and strengthened whistleblower protection laws encourage individuals to report compliance violations without fear of retaliation. The False Claims Act, for example, includes provisions that potentially reward whistleblowers with a certain percentage of funds recovered as a result of their disclosures.
  • Third-Party Audits and Assessments: Many healthcare organizations engage third-party auditors and assessors to conduct independent evaluations of their compliance programs. This helps identify weaknesses and areas for improvement.
  • Cultural Emphasis: Modern compliance programs often emphasize creating a culture of compliance within organizations. This involves promoting ethical behavior and transparency throughout the organization.
  • Global Considerations: In an increasingly interconnected world, healthcare compliance programs may need to address international regulations and data protection laws, especially when dealing with patient data that crosses beyond the United States’ borders.
  • Continuous Improvement: Healthcare compliance programs are evolving and adaptable. Organizations should regularly assess and update their programs to address changing regulations and emerging risks.

The evolution of healthcare compliance programs helps guide ethical and legal practices in the healthcare industry, which is essential for patient safety and the integrity of healthcare systems. Using technology can help improve your compliance program as well as potentially reduce the amount of manual processes, so you and your team can likely be more efficient. See how all-in-one compliance software, like MedTrainer, can help.

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