Why Consider Outsourced Compliance Services in Healthcare?

Hospital executive moving a digital representation of an employee to an outsourced position.

There are times when outsourcing healthcare compliance services can become a practical and pragmatic option. Consider the following …

In this Article …


Boardroom Realizations: Navigating Healthcare Compliance Concerns

Imagine you are the CEO of a small or medium-sized hospital, and one of your Board members has just brought up the subject of a record settlement she read about recently. The settlement involved a large hospital system that was fined a record amount under the False Claims Act, based on violations of the Stark Law. A second Board member mentioned seeing an article about fines imposed on healthcare organizations for employing excluded individuals. And a third member pipes up about a conversation with a local critical access hospital regarding their compliance program. Suddenly, the Board is very interested in the type of compliance programs healthcare organizations need: What are the issues related to regulatory compliance? What does a compliance officer do, anyway, and how much do they cost? What are the Board’s roles, responsibilities, and exposure for non-compliance?

Now what?


Compliance Program Regulatory Requirements

Your first step might be to educate the Board on the healthcare regulations that require compliance programs for healthcare providers. And the first thing they will learn is that there are no government regulations on healthcare provider compliance programs. There is the next best thing though, and that is Guidance from the Health and Human Services Department (HHS) Office of Inspector General (OIG) on the Seven Elements of an Effective Compliance Program.

On learning that there are no industry regulations – for which a compliance program is required – Board members may think about limited internal resources and the cost savings that medical facilities may enjoy by not having internal compliance processes. But here is where you remind the Board about the U.S. Sentencing Guidelines that provide for a significant reduction in fines for healthcare organizations that invest in healthcare compliance management. A robust healthcare compliance program is in some ways, an investment in risk reduction. Implementing all the aspects of a comprehensive compliance program – risk assessments, policies and procedures, staff member training, auditing, and monitoring, etc. – all contribute to mitigating risk to healthcare organizations.


Staffing Compliance Functions in Healthcare Organizations

Many healthcare organizations have issues staffing the compliance functions recommended for healthcare providers. Compensation for compliance program professionals has continued to increase over the past few years. And qualified compliance officers, that is people certified by the Health Care Compliance Association, or another certifying organization, are increasingly in demand. At the same time, limited resources are always a fact of life.

What about assigning accountability for the extensive responsibilities of a compliance program to multiple staff members in your healthcare organization? This may result in asking people who are busy with already extensive responsibilities to be responsible for ensuring compliance with complex regulations for which they have no deep understanding. Even though there are no healthcare compliance regulations requiring a compliance program, the compliance officer is often expected to research or opine on compliance issues such as billing or physician compensation. This wide range of compliance issues indicates a need for specialized knowledge. And there are actual regulations covering those activities.

And then there is the question about assigning the duties of the Compliance Officer to the provider’s Legal Counsel. While there is certainly overlap between legal issues and compliance issues, the orientation of legal counsel vs. compliance officers is a little different. Attorneys are rightly focused on issues like contracts and directing investigations when outside agencies are involved. Compliance Officers must ensure there is an effective compliance program in place covering all of the seven elements in the OIG Guidance. That is a somewhat broader range of interests for which you don’t need someone with a law degree to successfully manage.


What About Outsourcing Healthcare Compliance?

Many healthcare organizations consider outsourcing their healthcare compliance program. Outsourcing compliance to a consulting company can have several benefits:

  • You get the benefit of specialized knowledge of several individuals, not just the one person you can afford to hire.
  • Outsourcing healthcare compliance programs can be less expensive than hiring a dedicated in-house compliance officer. This is especially true for smaller healthcare providers who need a structured compliance program but have limited internal resources.
  • Outsourcing compliance can also speed the implementation of compliance services in healthcare organizations. A compliance officer from a consulting company will be ready to begin leading the organization in all elements of an effective compliance program. He or she can also help streamline compliance processes in healthcare providers, introducing compliance discipline to the policies and practices of the healthcare organization.

Are there compliance activities that outsourcing compliance services cannot do? Sure, for instance:

  • Compliance with all of the laws and regulations applicable to healthcare providers is not the province of one individual. An outsourced Compliance Officer can take the lead in managing the organization’s compliance program, just as a Chief Quality Officer leads the performance improvement activities of a provider, but is not the sole person responsible for identifying and implementing corrective actions. Similarly, an outsourced Compliance Officer cannot be the only person available to ensure compliance with all government regulations or accreditation standards.
  • An outsourced Compliance Officer cannot create a culture of compliance by himself or herself. Creating a culture where staff members come to work each day always ready to do the right thing, is an all-hands-on-deck endeavor. Compliance consultants are not “vendors”, dispensing compliance to executives, managers, or staff members only when called. They must be integral to the institution itself, even if they are not on-site each day.


Successful Healthcare Compliance Outsourcing

Outsourcing healthcare compliance support services is not a new trend in the healthcare industry. But one of the key factors is to find a consulting company with the right mix of experience and expertise to implement a successful, meaningful program. These days, your healthcare provider’s reputation may depend on it!

When you need proven expertise and performance

Jim Hook, MPH

Mr. James D. Hook has over 30 years of healthcare executive management and consulting experience in medical groups, hospitals, IPA’s, MSO’s, and other healthcare organizations.