Compliance Violations increase healthcare costs

March 16, 2017

Repeal? Replace? Repair? Or some combination? For those of us who live and breathe the healthcare system, we know it is complex. And while we’d like it to be simplified, most of us recognize that improving the overall system will take time. But as various approaches to improvement are considered, it’s clear that one area needs no debate: compliance violations increase healthcare costs.

compliance-newspaper-clipping-400pxA complex system offers a lot of places to hide bad behavior. Medicare and Medicaid—programs at the heart of the current healthcare debate—are particularly vulnerable to violations of Stark Law, the Anti-Kickback Statute, and the False Claims Act. Nearly every day, the Office of Inspector General (OIG) issues details of individuals and hospitals being charged or convicted of healthcare fraud and abuse. This month alone, the OIG won judgments on $50 million in fraudulent billing by a cardiologist and neurologist, a multi-million dollar false claims scheme by a medical equipment provider, and a $200 million bribery and illegal referrals case in which 43 individuals have been convicted so far. Financial penalties and the possibility of imprisonment aside, damning headlines can destroy the bottom line and reputation of even the most respected healthcare providers.

These cases and thousands like them erode the very foundation of trusted healthcare delivery by driving up costs and compromising patients who are overcharged or subjected to unnecessary tests and treatments. By extension, compliance violations increase insurance rates, adding to the burden of taxpayers, employers, and consumers. Conservative estimates say that $68 billion in annual healthcare spending is attributable to fraud. In 2015, the Medicare Fraud Strike Force and the Health Care Fraud Prevention and Enforcement Action Team recovered $1.9 billion from healthcare fraud cases. But there is still much work to be done, and that work must begin with those of us who provide healthcare.

We have discussed compliance and fraud on this blog before. The topic deserves regular attention, so now—alongside the national healthcare debate—we encourage everyone to examine how compliance is implemented and monitored within your organization. Review all compliance-related policies and practices. Make sure that your contractual agreements are current and meet standards. Hold your allied healthcare providers accountable. Engage your legal and compliance teams. Post this Cost of Healthcare Compliance Violations infographic in breakrooms and use it during training sessions to raise awareness. Conduct compliance reviews and training at least annually as a vital element of your plan to keep costs in check while providing competent, reliable care.

The continuing national debate reminds us that healthcare is a top concern for all Americans. It’s a very personal issue that elicits strong opinions about availability, quality, and price. It’s also a reminder of the daily challenge and the fundamental obligation facing all healthcare providers—to be good stewards of the enormous responsibility to provide excellent care and ensure reasonable costs that create value throughout the U.S. healthcare system.


Download our new Cost of Compliance Violations infographic and read about the SpecialtyCare Compliance Program to learn how we minimize risk for our customers in perfusion, IONM, sterile processing, autotransfusion, surgical assist, and minimally invasive surgical support.