Collaboration Between Compliance and Risk: What is Permissible?

Compliance departments, generally speaking, guide staff and boards of directors to comply with the requirements, laws and regulations that govern the organization’s business. They also monitor for compliance via internal audits.  Risk departments, on the other hand, address ways to mitigate risk to an organization through such activities as the evaluation and purchase of insurance policies.  Given the broad nature of the scope of these two departments within the organization, when is compliance and risk collaboration permissible?

Possible collaborations

  1. Strategic planning: Collaboration here should include not only compliance and risk but the entire organization and the board of directors, if applicable.
  2. Disaster response and business continuity: As with strategic planning, disaster response and business continuity planning should also involve input and collaboration from all departments in the organization.
  3. General security and privacy : Here the compliance/privacy officer, information technology/security officer, and risk management director should all be included in the planning.
  4. Known security threat and/or breach incident: Compliance, information technology (IT), and risk management would all participate in mitigating a security threat or breach incident on the organization. Each would provide input and guidance on their respective areas of knowledge.
  5. Risk assessments, gap analysis and mitigation plans: Again, the development of these plans should include leaders from the entire organization; moreover, compliance and risk would specifically collaborate on the assessment, analysis and mitigation activities.
  6. General policy development: Compliance and risk staff can collaborate and provide feedback and input for all organization policies.
  7. Record and document retention schedule: Here compliance and risk can collaborate with legal counsel to ensure record and document retention policies comply with state and federal laws.
  8. Staff education: This is an area where compliance and risk can collaborate to provide training, whether it is done in person, virtually, by email or via online course.

Collaborations to vet and evaluate permissibility

  1. Security breach: As noted above, compliance, IT, and risk will work together once a security breach has been identified. It is important to ensure compliance addresses HIPAA related information and potential reporting requirements; IT evaluates the technical aspects of the breach; and risk focuses on reporting to the insurance carrier and mitigation strategies in conjunction with compliance and IT. These collaborative activities will usually take place under a breach coach or law firm to protect the confidential nature of the breach.
  2. Shared work areas: Depending on the confidential nature of discussions, say a lawsuit against the organization, it may or may not be appropriate for compliance staff to be privy to such information. So shared work areas should be closely evaluated.
  3. Shared staff: As with shared work areas, if a staff member such as a registered nurse (RN) is shared between the compliance and risk department, both leaders and the RN must remain in the scope of the job role in which they are working at the time.
  4. Reporting to the board: Typically, compliance reports to the organization’s leader (such as a CEO) but also has direct or dotted line reporting to the board of directors. Make sure any collaborations with other departments do not create potential conflicts of interest with reporting up this chain of command.
  5. Committee membership: As with the analysis discussed above, make sure to vet compliance staff member membership on the risk committee and vice versa to avoid any actual or potential conflicts of interest.

Goal

All organizations should work to develop a culture where permissible collaborations between compliance and risk occur. They should also make certain that staff feel comfortable calling the compliance or risk department with potential concerns while ensuring the staff not crossing any lines when it comes to compliance or risk department confidential matters or conflicts of interest.

PRACTICE TIP:

  1. Evaluate opportunities for the compliance department to collaborate with the risk management team, as noted above.
  2. Access youCompli to find resources which address required document and record retention requirements.

Denise Atwood, RN, JD, CPHRM

District Medical Group (DMG), Inc., Chief Risk Officer and Denise Atwood, PLLC

Disclaimer: The opinions expressed in this article or blog are the author’s and do not represent the opinions of DMG.

Denise Atwood, RN, JD, CPHRM has over 30 years of healthcare experience in compliance, risk management, quality, and clinical areas. She is also a published author and educator on risk, compliance, medical-legal and ethics issues. She is currently the Chief Risk Officer and Associate General Counsel at a nonprofit, multispecialty provider group in Phoenix, Arizona and Vice President of the company’s self-insurance captive.  

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Legal Challenges and the Benefit of a Comprehensive Compliance Program

The list of compliance and legal challenges facing providers, hospitals and healthcare systems over the next year is long:

  • Physician arrangements and fair market value;
  • Mergers and acquisitions;
  • Quality metrics and risk sharing;
  • Fraud, waste, and abuse;
  • Coding and billing transactions;
  • Reimbursement;
  • Medical staff issues and burnout;
  • Labor and employment issues;
  • HIPAA and HITECH; and
  • Technology and integrated medical devices.

A list like this can seem daunting. However, a comprehensive compliance program with appropriate resources can help avoid disastrous results related to healthcare compliance and legal challenges.

Labor and Employment Law

The Atlantic reported in January 2018, “Health Care Just Became the U.S.’s Largest Employer In the American labor market.”  The growth of the healthcare sector brings increased labor and employment challenges.  Although the terms are often used synonymously, labor law focuses on groups of workers (think unions and collective bargaining) while employment law focuses on individual workers, (think discrimination of an individual in a protected class).

A comprehensive compliance program will decrease labor and employment law challenges, by ensuring human resource policies and procedures comply with federal and state laws.  Moreover, personnel file audits will demonstrate compliance with those laws.

Transactional Law

Mergers, acquisitions, partnerships, joint ventures and U.S. antitrust law

The Agency for Healthcare Research and Quality (AHRQ) reported in its 2018 National Healthcare Quality & Disparities Report that almost 70% of U.S. hospitals and 43% of primary care physicians are part of consolidated health care systems. Consolidations require an astute compliance and legal team to ensure compliance with antitrust law. These transactions continue to draw scrutiny from the Federal Trade Commission due to monopoly concerns.

The challenge for healthcare organizations is even greater when business crosses state lines. The organization must then comply with multiple state laws simultaneously.  As part of a comprehensive compliance program, a compliance professional should work closely with in-house or outside counsel to ensure the business transactions and consolidations include a compliance due diligence perspective, for example reports to the board of directors.

Security Law

HIPAA

Compliance is mandatory; failure to comply is an opportunity to ruin an organization both financially and reputationally.  Ransomware attacks on healthcare providers through their computers and medical devices are on the rise. While most IT departments focus on HIPAA security for computers, few address security issues with interconnected medical devices.

A comprehensive compliance program will include recommendations to address the management of cybersecurity for medical devices like those outlined by the U.S. Food and Drug Administration (FDA).

Practice Tips

  1. Use of reports to support legal defense of employment or labor law violations, if needed.
  2. Use of notification and management system to prevent legal challenges by providing up-to-date guidance to support compliance activities.
  3. Conduct an evaluation of medical devices in accordance with the FDA FAQ. Disable the voice recognition feature of smart devices while conducting confidential discussions in a room with a smart TV or speaker.

A system such as youCompli is a strong addition to a comprehensive compliance program, providing up to date notifications of regulatory change, as well as full insight and audit of the compliance process.

Denise Atwood, RN, JD, CPHRM
District Medical Group (DMG), Inc., Chief Risk Officer and owner of Denise Atwood, PLLC
Disclaimer: The opinions expressed in this article or blog are the author’s and do not represent the opinions of DMG.

Denise Atwood, RN, JD, CPHRM has over 30 years of healthcare experience in compliance, risk management, quality, and clinical areas. She is also a published author and educator on risk, compliance, medical-legal and ethics issues. She is currently the Chief Risk Officer and Associate General Counsel at a nonprofit, multispecialty provider group in Phoenix, Arizona and Vice President of the company’s self-insurance captive.  

Audit Expectations and Challenges

When it comes to hospitals providing best-in-class health care, stress comes with the territory. From stabilizing trauma victims, to accurately distributing medications, to physicians and nurses working long shifts, increased demands are everywhere — including operations not directly involved with patient care. One demand that can turn daily routines completely upside-down and compound stress is an audit. A GRC compliance audit can be conducted internally by various hospital committees or externally, often by government-approved contractors.

Internal Audits

An internal audit seeks to determine if a hospital’s financial and operational controls, and their related policies and procedures, meet compliance and risk management demands.

Based on a hospital’s risk assessment, management develops and reviews the scope and goals of an audit. Running the audit is then delegated to a committee, with the most common committees focusing on:

  • Patient safety
  • Nursing staffing
  • Clinical quality
  • Medical staff

An internal audit involves interviews and evaluating personnel or procedures. Upon the audit’s completion, a report of its findings is prepared by the appropriate committee and shared with management. Corrective recommendations of action to any areas of noncompliance are collaboratively developed, and a finalized report is presented to the hospital’s board of directors, chief compliance officer, and audit and compliance committee.

The ultimate goal of an internal audit is to improve patient care. Who in a hospital wouldn’t want to improve it, right? But the truth is that an audit can diminish quality of care while it’s in progress. That’s because committees are often comprised of physicians, nurses, and technologists who are pulled away from patient-care responsibilities to work on compliance administrative tasks.

External Audits

According to a 2017 AHA report, four federal agencies — the Centers for Medicare & Medicaid Services, the Office of Inspector General, the Office of Civil Rights, and the Office of the National Coordinator for Health Information Technology — are the primary drivers of regulations and compliance costs across eight domains for hospitals:

  • Hospital conditions of participation
  • Billing and coverage verification requirements
  • Meaningful use of electronic health records
  • Quality reporting
  • Privacy and security
  • Fraud and abuse
  • Program integrity
  • New models of care

The frequency and pace of regulatory changes implemented by multiple federal agencies are dizzying. Hospitals are often required to comply with regulations in very short timeframes, requiring a significant investment of staff time and finances. What’s more, responding to multiple external audits increases administrative costs, and funds could be tied up in lengthy appeals processes contesting an auditor’s inappropriate determination.

External audits are conservatively estimated at $100 per hour. For example, consider the total costs of a HIPAA audit:

  • HIPAA Gap Assessment — Identifies gaps and provides remediation plans for those gaps
    (40 hours average, $24,000–34,000)
  • Full HIPAA Audit — Assesses hospitals against all the requirements in the HIPAA Security Rule
    (100 hours average, $30,000–60,000)
  • Validated HITRUST Assessment — Provides the most complete, certifiable framework for HIPAA to mirror PCI compliance (400 hours average, $100,000–160,000 — with costs much higher for larger organizations)

Protect Your Hospital

If your hospital is like most others, it’s spending too much staff time and money dealing with a blizzard of regulations and an avalanche of red tape. Fortunately, there are solutions. youCompli GRC risk management software monitors, reads, and translates complicated regulations into plain English. Our solution enables you to fully understand which rules are pertinent to maintaining compliance, further simplifying the auditing process. And it tracks everything, from end to end, making audits much less painful.

Learn how youCompli regulatory compliance management software protects your hospital.