Healthcare Supplier Compliance Checklist

Julie Horibe, BSN, RN, CPN
Supplier compliance checklist

Healthcare organizations rely on third-party vendors for myriad products and services – from biohazard disposal and cleaning to credentialing and durable medical equipment. Creating and using a supplier compliance checklist ensures vendors meet regulatory requirements and are trusted partners in managing sensitive information.

In this article, I’ll discuss why supplier compliance is as critical as legal and regulatory adherence for healthcare organization employees. Our supplier compliance checklist will help guide you through vendor audits and how to ensure you’ve chosen the right partners for your organization.

Healthcare Supplier Compliance Checklists Are A Must

All healthcare organizations are obliged to adhere to federal compliance guidelines. Other entities, like third-party vendors, may also choose to comply with them voluntarily, perhaps due to ethical considerations, industry standards, or potential benefits. Compliance with federal compliance guidelines is often seen as ensuring ethical behavior, protecting sensitive information, and maintaining accountability.

In its updated compliance program guidance documents, the Office of Inspector General(OIG) included updated voluntary guidance for “third-party billers and durable medical equipment suppliers, among others, to encourage the development and use of internal controls to monitor adherence to applicable statutes, regulations, and program requirements.” The OIG released 11 pages of optional guidelines for ambulance suppliers and 20-plus pages for vendors who sell durable medical equipment(DME).

By offering these comprehensive guidelines, the OIG aims to assist third-party vendors and other entities in the healthcare industry in establishing robust compliance programs tailored to their specific operations. While adherence to these guidelines is voluntary, organizations implementing effective compliance programs are better equipped to identify and address potential compliance risks, mitigate fraud and abuse, and uphold the integrity of healthcare programs and services.


WEBINAR: Presenting Compliance Information To Your Board or Executive Team

What Should Be on Your Supplier Compliance Checklist?

No two vendors are alike, so there’s no one-size-fits-all supplier compliance checklist. Checklists should be tailored to each vendor’s needs, requirements, and operational processes to ensure effective compliance management, efficiency, and risk mitigation. For example, a healthcare IT vendor should include items related to HIPAA, while a checklist for a food vendor should focus on FDA or USDA regulations.

Here are a few checklists to help guide your decisions:

Accessibility to Personal Health Information (PHI) or Other Data

The healthcare industry is heavily regulated, with strict guidelines and regulations like HIPAA (Health Insurance Portability and Accountability Act). Covered entities and business associates invest significant time and resources to ensure compliance and establish robust controls and processes for managing data accessibility, security, privacy, risk mitigation, operational efficiency, and accountability.

HIPAA Compliance

  • Implement appropriate administrative, physical, and technical safeguards to protect PHI.
  • Conduct regular risk assessments to identify and mitigate security vulnerabilities.
  • Establishing procedures for responding to breaches of unsecured PHI.
  • Develop and maintain HIPAA-compliant policies and procedures for handling PHI.
  • Ensure suppliers are adequately trained on HIPAA privacy and security rules.

Data Security

  • Ensure the supplier/vendor has robust data security measures to protect sensitive patient information and comply with data protection laws.
  • Check if they have encryption protocols, access controls, data breach response plans, and regular security audits.
  • Implement controls to prevent fraudulent billing practices and improper financial relationships.
  • Monitor compliance with regulatory requirements related to referrals and financial incentives.

Interoperability Standards

  • Do products and services comply with interoperability standards such as HL7 and FHIR?
  • Enable seamless exchange of health information across different systems and platforms.
  • Ensure compatibility with existing healthcare infrastructure and electronic health record (EHR) systems.
  • Financial and Contractual Oversight

Financial and contract oversight is a crucial tool for organizations to ensure compliance, mitigate risks, and enhance transparency in their financial and contractual activities. By systematically reviewing financial transactions and contracts, it facilitates adherence to regulations and internal policies, minimizes errors, and enhances accountability. It also aids in cost control, vendor management, and informed decision-making, contributing to organizational efficiency and goal achievement.

Vendor Credentialing and Contractual Obligations

  • Conduct initial vendor and entity exclusion checks, provide continuous monitoring, and retain required documentation.
  • Review and negotiate contracts with healthcare organizations, ensuring compliance with regulatory requirements and contractual obligations.
  • Adhere to terms and conditions related to data security, indemnification, and liability limitations.

Financial Stability

  • Evaluate the financial stability of the supplier/vendor to ensure they can fulfill their contractual obligations over the long term.
  • Request financial statements, credit reports, or other relevant financial documents.

Intellectual Property and Licensing

  • Protect intellectual property rights through patents, trademarks, and copyrights.
  • Ensure compliance with licensing agreements and software usage terms.
  • Monitor for potential infringement and take appropriate legal action when necessary.

Documentation and Reporting

  • Ensure the supplier/vendor maintains comprehensive documentation of their processes, procedures, and compliance efforts.
  • Require regular reporting on compliance status, audits, and incidents or breaches.

Simplify Healthcare Supplier Compliance

Consistent internal audits and a supplier compliance plan – including supplier compliance checklists – will ensure a vendor’s business practices meet or exceed those required by the healthcare organization.

A comprehensive compliance management platform offers healthcare organizations a centralized system to manage supplier compliance effectively. Document management allows organizations to store and organize documents, including Business Associate Agreements(BAAs), essential for ensuring compliance with HIPAA regulations. Electronic signature capabilities streamline the BAA process, making it easier for parties to sign agreements digitally and securely store them within the platform, readily accessible for compliance inquiries, audits, or surveys.  With tracking and reporting tools, document-related data can be easily consolidated into customizable reports for efficient information sharing.

Using a learning management system (LMS), you can easily give suppliers the required compliance training and track their course completion.  Plus, it helps keep your staff updated on HIPAA training so they know how to work with vendors compliantly.

Additionally, online incident management aids in preemptively identifying potential issues, allowing proactive risk reduction within the organization.

If you’re ready to improve your supplier compliance, contact MedTrainer today.