What are the risks of non-compliance when it comes to local health regulations?

Non-compliance is when individuals fail to follow regulations, rules, policies, and laws pertaining to healthcare and healthcare practices. Non-compliance covers a broad range of areas and can include patients that do not comply with medical guidelines or orders, as well as internal and external roles within organizations. Patient safety, privacy, practitioner presentation, and communication, as well as medical billing and coding practices, can be evaluated against HIPAA standards and can carry non-compliant practices if not careful. You must also consider federal and state regulations, in addition to accreditation standards, internal policies, and procedures, as well as financial statements, to achieve overall compliance in your practice. ‍

Compliance in healthcare is a responsibility that falls on every staff member in healthcare practices, not just the common delegation to the one full-time employee that 20% of companies conduct. Considering the significant business implications, senior practitioners should set the tone for compliance, but it is a collective effort on behalf of the entire healthcare organization. Non-compliance can have severe repercussions if not handled correctly, and so it is of utmost importance that you understand the risks.

To comprehend the full picture of why compliance is so important, it is necessary to consider the consequences commonly associated with non-compliance within the context of healthcare. 

Fines, penalties, & other fees

Failing to comply with regulatory standards can result in imposed fines and penalties and other fees for the organizations involved. While these fines can vary depending on the offense, they can get lofty pretty quickly. For instance, the General Data Protection Regulation (GDBR) offers low-tier fines of up to $11.03 million, or two percent of the company’s annual revenue, which can cause immense financial losses. Not to mention the loss of assets, as you could have commodities confiscated if no compliant action is taken. Non-compliance for healthcare businesses could result in stupendous monetary consequences, and you will find that the cost of maintaining compliance is far easier to manage. 

Business disruption

As part of a chain of events, once you have evidence of non-compliance, customers are less likely to trust your organization. Patients need to have the confidence that their data is in safe hands, and if you cannot maintain and support this, then your clients are more likely to resort to using other competitors. Privacy is of utmost importance, especially when it comes to sensitive healthcare information, and so any fines or penalties will negatively impact your business. You will have to work twice as hard to retain customers, and you may need to invest in more opportunities to attract patients to your clinic. 

Loss in revenue

In some cases, failing to comply with security and privacy standards could result in a cease of operations. This can be incredibly costly, with temporary disabling resulting in high overhead costs, with no steady income available to supplement the resource. This is often the situation for organizations after facing data and security breaches, as the large incurred costs make it vastly difficult to recover. A loss in revenue due to non-compliance also means that there are less financial means to invest in necessary medical equipment and services, meaning that the quality of service could also potentially go down.

Loss in productivity  

Non-compliance can also result in severe losses in productivity for your business, as security breach regulations may demand that you limit or disable areas of operations. This can restrict your working capacity, as reduced labor will lead to assessing fewer patients, meaning that you cannot effectively treat the same number of people that previous resources allowed. 

Reputation Damage

Perhaps the most significant consequence of failing to comply with privacy regulations and laws, is the potential blow to your reputation. If you’re lucky, this may not be a permanent hit, however, it is very difficult to establish trust in customers when there are various alternatives available. The restoration process could be a long road for your company, and you will likely suffer across most business processes.

Although the consequences of non-compliance are considerably negative, there are various tips you can incorporate into your healthcare practice to minimize these risks. Especially considering the consequences for patients in terms of non-compliance, healthcare businesses need to take extra care when it comes to knowing and abiding by privacy laws to avoid major repercussions. Firstly, you need to implement effective training resources so your employees that handle patient information know how to do this appropriately. Your staff should be able to understand and incorporate HIPAA standards when answering phone calls, filing medical records, as well as when interacting with patients. Establishing a culture of compliance will ensure that you are maintaining high standards, and following up with employees to communicate goals. You should also have open communication with patients and staff in regards to compliance policies, so that any raised concerns can be dealt with efficiently and quickly. Any problems can be reported, and providing the avenues to hold meetings can clarify any ambiguity concerning healthcare compliance. It is important to implement cybersecurity protocols to protect patient data from being compromised or hacked, with resources including anti-virus programs, firewalls and monitoring software. Information should be located within encrypted servers, and there need to be efficient password protection programs in place to provide an additional layer of security. Ideally, your healthcare business should also conduct regular audits to ensure all information is accurate and stored appropriately. Auditing can evaluate who has accessed or modified certain information, and can identify weaknesses that may need improvement, and can be used to assess whether practitioners and patients have access to the relevant information. A final tip that you should consider when looking to elevate your compliance, is to hold clear accountability standards for your staff. For instance, doctors should be held just as responsible for a mistake as nurses. Having documented consequences ensures consistency as everyone is held to the same standard, with no prejudices or discrimination.

Compliance is an essential component of every healthcare business, and failure to comply with relevant regulations, policies, and laws can result in severe consequences for your practice. The costs of maintaining compliant systems are far less than those for non-compliant businesses, meaning that it is in your best interest to immediately prioritize compliance standards within your clinic. This way, you can continue to build and strengthen relationships with your patients, as well as increase revenue costs and productivity to provide the best care that resources allow. 

Further reading:

• Can America’s Healthcare Crisis Be Solved?‍
• To Future-Proof Healthcare, Collaboration Between The Public And Private Sectors Is Key