The Importance of Compliance Programs for the Health Care Industry

Abstract

Civil and criminal liability for health care companies and their representatives is a continuing and growing threat. While organized health care fraud (particularly in the Medicare area) is a well-known problem, legitimate health care organizations increasingly face criminal and civil exposure due to various factors, including increased enforcement of complex federal regulations and improper actions by companies whose representatives are tempted to cut corners due to shrinking margins and increased competition in the industry. A company's exposure to criminal, civil, and administrative penalties can be substantially reduced, however, through the development and implementation of a compliance program. The existence of such a program is an essential component of lenity in the sentencing of organizations under the United States Sentencing Guidelines. This article examines three subject areas. First, it presents the basic requirements of an effective health care compliance program. Second, the article reviews the benefits of instituting an effective health care compliance program. Finally, the article examines how corporate compliance programs work in practice.