Outsourcing Corporate Compliance in Rural Hospitals is increasingly seen as the most cost-effective means of having and measuring an effective corporate compliance program. And, lest we forget – it should include compliance with numerous HIPAA requirements.
As corporate compliance laws and regulations in the U.S. are on the rise, so equally are the risks associated with failure to comply. This remains a significant challenge to many rural hospitals operating in communities that are struggling with the provision of medical services and the financial consequences. More than 88,000 federal rules and regulations and over 4,300 laws were created between 1995 and 2016. ADP Research Institute revealed that in 2017, about 40% of midsized businesses surveyed incurred unbudgeted expenses due to non-compliance with regulatory rules and laws.
The Need for Outsourcing Corporate Compliance in Rural Hospitals
Rural hospitals represent an integral part of healthcare service delivery, accounting for more than 50% of the total hospitals in the U.S. According to Healthcare Business & Technology, “rural hospitals face unique challenges compared to larger facilities.” These challenges resulted in the closure of 95 rural hospitals between 2010 through 2018; 32 of those were critical access hospitals. Furthermore, about 430 hospitals – more than one-fifth of the total number of rural hospitals – are on the brink of closing if their financial situations do not improve.
The Benefits of Outsourcing Corporate Compliance
- Minimizes your risk: Healthcare remains one of the most regulated industries in the United States. The complexities and number of regulatory laws and rules have increased in recent years, as have the risks and penalties for non-compliance. When you outsource your corporate compliance, you minimize your exposure by allowing these risks to be managed on your behalf. The organization you outsource to is generally more specialized, having the expertise, and staying up-to-date with new or changing HIPAA or corporate compliance regulations.
- Increases your effectiveness: Corporate compliance risks cut across all the various functions in a hospital – hazard management, technology, finances, clinical/patient safety, legal/regulatory, human capital, and more. Maintaining and monitoring compliance in-house is not only tedious and time-consuming but also reduces your effectiveness. You also risk overlooking some regulations or rules, which might result in a penalty or fine. Outsourcing your corporate compliance to an expert can reduce your stress and improve your effectiveness by providing you with ample time to focus on your core functions. This invariably strengthens your patient’s satisfaction and ultimately enhances your business profitability.
- Reduces your operational cost: Cost containment is a major challenge in many rural hospitals. Having an in-house compliance department adds more to your business operations cost, and this affects your bottom line. In addition to paying staff salaries and other benefits, you need to spend money on training and research for your staff to stay on top of the changing compliance laws and regulations. Outsourcing corporate compliance in rural hospitals reduces your operational cost. You can save on recruitment, training, health insurance, research, salaries, technologies, and more. Reducing your operational cost by outsourcing your corporate compliance gives you a competitive advantage compared to other rural hospitals that choose to have an in-house compliance department.
Rural Hospital Case Study – Circumstances and Challenges
This hospital undertook a review of their Corporate Compliance Program addressing specifically fair market value and commercial reasonableness of the Hospital’s agreements with physicians. In addition, urgent attention was needed to deal with the Compliance Manual, the Compliance Committee, audit and monitoring activities, Compliance Policies related to specific risk areas, Code of Ethical Conduct, and HIPAA. Several weaknesses and lack of compliance with regulatory standards were discovered. Some required legal counsel involvement. Here is what happened next . . .
Measuring Corporate Compliance Program’s Effectiveness
Requirements include the measuring of your corporate compliance program’s effectiveness. After having implemented a sustainable compliance infrastructure the organization you engaged to outsource the corporate compliance program to will be responsible for . . .
- skillfully conducting internal monitoring and auditing across the entire healthcare organization, including conducting periodic HIPAA Risk Analyses.
- developing compliance policies and procedures that adhere to company guidelines and to federal and state laws and regulations.
- implementing and enforcing policies and procedures across the entire organization, including periodic compliance evaluations.
- conducting appropriate training, educating staff on the very latest federal and state laws, which change and evolve over time.
- responding to offenses and developing corrective actions that repair situations, including the implementation of immediate strategies to prevent similar circumstances in the future.
Because of ever-changing compliance processes, the shortage of talent in rural areas, and the high cost of technology infrastructures make outsourcing corporate compliance in rural hospitals a viable option. This can help you to stay focused on your core function, patient care.