Why Is Healthcare Compliance Important?

Amber Ratcliffe
Medical staff with tablet to complete compliance tasks

When it comes to healthcare delivery, compliance is not just a matter of ticking boxes; it’s the backbone of patient trust and safety. A healthcare organization’s commitment to compliance is crucial — it’s about maintaining the integrity of medical practice, navigating the complexities of legal frameworks, and embracing ethical decision-making. In this blog post, we’ll explore the many reasons why healthcare compliance isn’t just important — it’s vital.

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​.


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Consequences of Non-Compliance 

Without question, the importance of compliance extends beyond just meeting the requirements. Another important angle to consider is the opposite of healthcare compliance — non-compliance. Consequences for non-compliance can damage an organization in a variety of ways:

Legal Penalties: Non-compliance can result in legal actions against a healthcare entity, including injunctions and corrective action mandates.

Fines and Financial Losses: Healthcare organizations can incur heavy fines from regulatory bodies, which can significantly impact their financial resources.

Exclusion from Government Programs: Entities found non-compliant may be barred from participating in government healthcare programs like Medicare and Medicaid.

Loss of Licenses: Healthcare providers may lose their professional licenses, hindering their ability to practice.

Criminal Charges: Knowingly committing compliance violations can lead to criminal charges against individuals responsible.

Reputational Damage: Non-compliance can damage the reputation of healthcare providers, leading to a loss of trust from patients and the community.

Operational Disruptions: Compliance issues may force healthcare organizations to restructure operations, often at a significant cost and operational inconvenience.

Increased Insurance Premiums: Non-compliance can lead to higher organizational insurance premiums due to the increased risk profile.

Resource Drain: Addressing compliance issues post-violation can consume considerable time and resources, diverting attention from patient care.

Monitoring and Oversight: An organization found non-compliant may be subject to increased scrutiny and monitoring by regulatory bodies.

Important Healthcare Regulations To Know for Compliance

With so many consequences for non-compliance to consider, it may seem like there are countless healthcare regulations. However, there are a few key legal regulations you want to be especially acquainted with in order to steer a little smoother through the complexities of compliance.

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act, or HIPAA, is dedicated to preserving the confidentiality and security of patient health data, setting forth guidelines for handling, sharing, and protecting this sensitive information. Adhering to HIPAA is crucial for protecting patient privacy, building trust within the healthcare system, and reducing the likelihood of data breaches and the unauthorized use of personal health data. The Office of Civil Rights (OCR) oversees its enforcement.

Health Information Technology for Economic and Clinical Health Act (HITECH)

The Health Information Technology for Economic and Clinical Health Act, or HITECH, is a key part of the American Recovery and Reinvestment Act of 2009. It builds upon HIPAA, extending its privacy and security rules to electronic health records and health information technology.

HITECH underscores the safeguarding of patient information in the digital realm and advocates for the secure use of technology to elevate healthcare quality and efficiency. HITECH incentivizes healthcare providers to adopt certified electronic health record systems. It also amplifies the enforcement of HIPAA by introducing steeper penalties for violations and mandating breach notifications.

Emergency Medical Treatment and Labor Act (EMTALA)

The Emergency Medical Treatment and Labor Act, or EMTALA, ensures that every individual is entitled to urgent medical attention when required, irrespective of their financial capacity or insurance coverage.

Hospitals that accept Medicare and have emergency departments are mandated by EMTALA to conduct a medical evaluation for anyone who comes in seeking care for what could be an emergency. Should an emergency be confirmed, the hospital is obligated to stabilize the patient or facilitate a transfer to a facility that can. The Office of Inspector General leads EMTALA enforcement.

False Claims Act

The False Claims Act, or FCA, mandates that any person who knowingly submits false claims to the government is liable for three times the government’s damages plus a penalty. It targets instances where providers might overcharge or charge for services they didn’t provide. Conspiring with others to commit these acts is also a violation. The False Claims Act is enforced by the U.S. Department of Justice. 

Anti-Kickback Statute

The Anti-Kickback Statute safeguards patients along with federal health programs against fraudulent practices. It bans any exchange meant to sway the referral of business under these federal programs, effectively preventing healthcare providers from engaging in bribery or business generation within federal healthcare services. The Office of Inspector General is in charge of the Anti-Kickback Statute.

Stark Law

The Stark Law, also known as the Physician Self-Referral Law, forbids doctors from sending patients to receive certain healthcare services from entities where there is a financial relationship unless specific exceptions are met. 

The Stark Law’s intent is to eliminate any potential for a conflict of interest that may affect medical judgment. Its goal is to ensure that patient care decisions are made in the patient’s best interest without any monetary motivations for the doctor, thereby upholding ethical standards and transparency in healthcare services. The Stark Law is primarily enforced by the Centers for Medicare and Medicaid Services.

Simplify Healthcare Compliance

The importance of compliance in healthcare can not be overstated. While it can get complicated, it must remain a top priority for all healthcare organizations. Luckily, today’s technology offers lots of tools that simplify processes and save time. While developing and maintaining your healthcare organization’s compliance can feel daunting, you don’t have to do it alone. Explore more about MedTrainer’s all-in-one compliance platform specifically designed for healthcare professionals.