Compliance Outsourcing: A Comprehensive Guide for Healthcare Leaders
One of the most significant business trends over the last decade has been to outsource functions that are not core business activities
– with compliance among the most common functions to be outsourced. But how should your organization approach outsourcing – and when is it most effective?
This article answers those questions, providing a comprehensive overview of healthcare compliance outsourcing.
What Does it Mean to Outsource Compliance Functions?
Outsourcing involves working with an external partner to undertake work that would otherwise be completed in-house. For example, most healthcare organizations have internal functions to evaluate their compliance with relevant regulations. But they might opt to contract a third-party organization to run independent assessments that help them gain new insights or save time.
Five Benefits of Outsourced Compliance Support
This raises a simple question: why would an organization engage an outside expert to assist in running the compliance program?
While the answer varies, there are five common reasons healthcare organizations opt for outsourcing:
- Reduce Costs: While outsourcing has a reputation for being expensive, it is almost always more cost-effective than hiring in-house compliance staff. Rather than committing to a full-time contract, outsourcing allows leaders to identify and source specific skills or tasks they require – and only pay for what they need.
- Access Expertise: The cost savings are ever more apparent when you factor in the level of expertise routinely required for healthcare compliance. Few organizations can afford to develop an in-house team that covers the full range of healthcare compliance tasks – from HIPAA audits to policy development. But outsourcing allows you to work with the experts for each separate task.
- Increased Flexibility: Regulatory requirements are constantly evolving, and outsourcing enables you to react to changes more flexibly. You can increase your team during times of high intensity – such as in the run-up to your annual HIPAA audit, and then relax them during quieter periods.
- Free Time: Many compliance office tasks are repetitive and may not be the best use of your in-house team’s time. Outsourcing them to vendors enables your compliance office to focus on the program’s core elements. Hotlines, sanction screening services, and training programs are commonly outsourced for this reason.
- Combat Staffing Shortages: In some cases, a compliance officer’s departure creates the need for assistance until the organization can hire a replacement. Outsourcing ensures attrition does not negatively impact your Compliance Program.
When Should You Outsource Compliance?
Organizations decide to hire compliance experts after identifying weaknesses or gaps in their operations, such as vacancies in compliance, privacy or security officer roles. Many times, government investigation drives the decision to bring in experts. Corporate Integrity Agreements mandate that an organization attests to having a fully functioning and effective compliance program.
Managed Care statutes require maintaining an effective compliance program and notifying CMS when a compliance officer vacancy occurs. And under the Affordable Care Act, CMS is required to develop mandated compliance program requirements. Once these requirements are in effect, many will seek expert assistance to meet them.
Where Can You Find Compliance Outsourcing Services?
Where can organizations find necessary compliance expertise? The easiest starting point is checking the internet to find professional journal articles on the subject. This can provide additional insight and identify experts on the subject. A search can also identify firms that may provide the needed services.
Who Should You Outsource Compliance To?
Who are some experts who can fill gaps or supplement compliance programs and have also built, assessed, and managed effective compliance programs? They are individuals with hands-on experience in multiple circumstances and settings that make them experts.
The following are examples of experts with extensive compliance program consulting experience, who have served as compliance officers in multiple roles:
- Cornelia Dorfschmid, PhD, has over 20 years of health care consulting experience and has served as designated/interim compliance officer for hospital systems and physician practices on multiple occasions.
- Steve Forman, CPA, with 12 years as a health care consultant, 10 years as VP for Audit/Compliance at a hospital system, and has served as interim/designated compliance officer multiple times.
- Suzanne Castaldo, JD, CHC, is an experienced consultant who has served as an interim/designated compliance officer several times.
Outsourcing Best Practices: Nine Ways to Maximize Your Benefits
How can organizations use compliance experts to their best advantage? Using qualified experts has many benefits, but the key in hiring them is to bring an optimum return of benefit for the cost by ensuring added value. In addition to day-to-day management, consider including some of the following:
- Examine the program to confirm strengths and identify opportunities for improvement;
- Conduct an independent evaluation of the program for senior management and board;
- Review the Code of Conduct and other written guidance;
- Evaluate the quality and effectiveness of compliance training;
- Assess high-risk areas that warrant attention;
- Assess resources needed to effectively operate the compliance program;
- Use experts to identify and build metrics evidencing compliance program effectiveness;
- Use experts to assist in identifying and evaluating candidates for the permanent compliance officer position; and
- Provide a “road map” for incoming compliance officers to follow.
What Level of Effort Should You Put Into Outsourcing Compliance?
What level of effort do organizations need to use compliance experts in compliance programs? Even for fairly large organizations, a true compliance expert can hold the program together for several months without having to be on-site full time. Most organizations can run compliance programs efficiently by using an expert for 50-80 hours per month for up to 6 months until having a permanent compliance officer in place becomes critical.
Smaller organizations and most physician practices will need experts for only half the time. Due to advances in technology, not all hours need to be on-site. However, the key is to have the expert on-call to address any emergent issues. Notably, the OIG has accepted that for smaller organizations, engaging a qualified expert as the Designated Compliance Officer may make more sense. The OIG cites many reasons for an organization to consider using an outside expert instead of a W-2 full-time employee.
Outsourcing Compliance with Strategic Management Services
Healthcare compliance can be overwhelming – especially as regulations change and your organization grows. That is why more compliance leaders outsource key functions to scale their programs without draining their budget.
Strategic Management Services delivers tailored support to help your Compliance Program stay ahead of auditors and protect your patients, reputation, and bottom line. From risk assessments to claims reviews, we can evaluate and remediate key elements of your compliance program.
Struggling to find the resources to scale compliance this year?
