Key Healthcare Compliance Examples To Understand Its Importance

Amber Ratcliffe
A hand pointing to a symbol that represents healthcare compliance examples

Maintaining compliance with healthcare regulations and standards isn’t just a legal requirement; it’s a crucial element in upholding patient safety, data security, and the overall integrity of healthcare practices. From ensuring proper infection control to safeguarding patient privacy and data, the healthcare compliance examples provided in this article demonstrate how compliance plays a pivotal role in maintaining high-quality industry standards.

Compliance is an extremely diverse concept, and there are various aspects of compliance that healthcare organizations need to consider on a day-to-day basis. It starts with strong compliance processes, extends to proper training and oversight, and culminates with a culture rooted in an understanding of the importance of compliance. 


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Why Is Healthcare Compliance Important?

Healthcare compliance is more than just a set of rules and regulations to abide by. It’s a commitment to providing the best possible care to patients, while upholding ethical and legal standards. A compliant healthcare facility achieves higher rates of patient and employee retention, lower rates of provider burnout, increased quality of direct patient care, a positive community reputation, and overall improved company growth outcomes. A robust compliance program is part of developing a successful business strategy for any healthcare organization. Let’s take a look at some key healthcare compliance examples for reference, starting with major press releases on the consequences of non-compliance.  

What Are the Penalties for Non-Compliance?

These two healthcare compliance news stories — and many others — highlight the significant damage that can come from non-compliance or a willful violation of compliance standards.

Advocate Health Care HIPAA Breach (2016)

In August 2016, Advocate Health Care Network — one of the largest healthcare systems in Illinois — agreed to settle potential violations of Privacy and Security Rules for $5.55 million. This settlement was the largest HIPAA settlement at that time.

The breach occurred in 2013 when four unencrypted laptops containing the electronic protected health information (ePHI) of over 4 million patients were stolen from an Advocate Health administrative building. The information on the laptops included names, addresses, dates of birth, Social Security numbers, clinical information, and health insurance information.

Covenant Healthcare Stark Law Settlement (2023)

In 2023, Covenant Healthcare System reached a settlement agreement with the Department of Justice (DOJ) to pay more than $69 million to resolve allegations that it violated Stark Law. Details of the settlement indicate the submission of false claims to Medicare, Medicaid, TRICARE, and FECA programs.

According to the DOJ, Covenant engaged in “improper financial relationships” with eight referring physicians and a physician-owned investment group from 2006 to 2013. The case was brought to light by an internal whistleblower who received $12 million in compensation for their involvement. 

Scope of Penalties

The penalties for non-compliance can be severe, impacting not only the financial health of healthcare organizations but also their reputation, patient trust, and legal standing. Penalties correlate to the severity of non-compliance, and can include:

  • Monetary fines and penalties. Regulatory bodies have the authority to impose substantial fines and penalties on healthcare organizations found to be non-compliant. The amount of these fines can vary widely depending on the severity of the violation and the specific regulations involved. For instance, violations of HIPAA can lead to fines ranging from hundreds of dollars to millions, depending on the scale of the breach.
  • Loss of reimbursements. Many healthcare facilities rely on reimbursements from government programs such as Medicare and Medicaid. Non-compliance with regulations that govern these programs can result in the suspension or termination of reimbursements. This can cause significant financial strain on the organization.
  • Legal action and lawsuits. Non-compliance can open the door to legal action from various parties, including patients, employees, and regulatory bodies. Patients whose privacy is compromised due to non-compliance with HIPAA, for example, might file lawsuits seeking damages for the breach of their sensitive health information.
  • License revocation or suspension. Regulatory agencies can suspend or revoke the licenses of healthcare professionals and facilities that consistently fail to meet compliance standards. This effectively prevents them from practicing or operating legally, jeopardizing the continuity of care for their patients.
  • Damage to reputation. Public perception is crucial in healthcare. Non-compliance incidents — especially those involving patient data breaches or compromised safety standards — can severely damage the reputation of organizations. Negative publicity can erode patient trust, lead to a loss of referrals, and deter patients from seeking care.
  • Criminal charges. In cases of intentional or gross negligence, non-compliance can escalate to criminal charges against individuals or organizations. For instance, knowingly engaging in fraudulent billing practices can lead to criminal charges with potentially severe penalties, including imprisonment.
  • Corrective action plans and monitoring. Regulatory bodies might require non-compliant organizations to implement corrective action plans to address deficiencies and prevent future violations. These plans can be resource-intensive and require continuous monitoring to ensure compliance. This, in turn, diverts resources from patient care and other essential activities.
  • Business disruption. Non-compliance incidents can lead to disruptions in healthcare operations. Regulatory investigations, legal proceedings, and corrective actions can consume time and resources, diverting attention from patient care and potentially causing delays or interruptions in services.
  • Loss of patient trust. Ultimately, patients expect their healthcare providers to prioritize their safety, privacy, and well-being. Non-compliance undermines this trust and can result in patient attrition, leading to a loss of revenue and damaging the overall viability of the organization.

Healthcare Compliance Examples

To better-understand the role of healthcare compliance in a practical sense, let’s take a look at some real-world healthcare compliance examples:

  • Patient safety. Adhering to regulations such as the Occupational Safety and Health Administration (OSHA) infection control regulations and the Centers for Medicare & Medicaid Services (CMS) emergency preparedness rules ensure that healthcare facilities are equipped to handle emergencies and prevent the spread of infections, thereby safeguarding patient health.
  • Patient privacy. The Health Insurance Portability and Accountability Act (HIPAA) mandates the protection of patient privacy and sensitive health information. Compliance with HIPAA ensures that patient data is handled securely, to maintain trust between patients and healthcare providers.
  • Data security. Alongside HIPAA, the Health Information Technology for Economic and Clinical Health Act (HITECH) focuses on the security of electronic health information. Compliance with these regulations prevents data breaches and unauthorized access to patient records.
  • Credentialing. Proper credentialing of healthcare professionals ensures that only qualified individuals are providing care. This prevents unqualified practitioners from compromising patient safety and mitigates liability and risk for healthcare organizations. 
  • Physician compliance. Regulations like the Stark Law and Anti-Kickback Statute prevent conflicts of interest and ensure that medical decisions are made solely based on patient need, rather than financial gain.

Maintain Compliance in Healthcare With an Online Platform

When streamlining healthcare compliance efforts, modern online platforms are a great solution. These platforms allow organizations to create, update, and distribute compliance documents from a centralized location. Features include document approvals, staff acknowledgments, automated reminders, and detailed reporting for inspections. Additionally, healthcare-focused learning management systems (LMS) ensure staff receive up-to-date training that is accessible from anywhere.

Healthcare compliance isn’t merely a legal obligation; it’s a commitment to patient safety, data security, and ethical practice. Utilizing MedTrainer’s online platform and learning management system further facilitates compliance efforts, to ensure that staff are well-trained and documents are easily managed. To learn more about how these solutions can benefit your organization, contact us for a demo.