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A solid compliance program protects your practice. Here’s how to evaluate yours and strengthen it where it counts.
Practicing medicine or offering wellness services can be rewarding, but it also comes with legal and financial risks, especially if your practice bills Medicare or Medicaid. Government payors want to ensure they’re only paying for services that are necessary, accurately billed, and safely delivered. That’s why a well-structured compliance program is critical.
A good compliance program acts as a safeguard for your business. It establishes policies, promotes education, and outlines how to respond when something goes wrong. Whether you’re building one from the ground up or reviewing an existing plan, it’s helpful to understand how regulators evaluate these systems and what they expect to see when issues arise.
What Is Fraud, Waste, and Abuse?
If your practice serves patients with public health insurance, you’re already within the oversight sphere of government regulators. That makes it especially important to prevent fraud, waste, and abuse—three categories of conduct that can trigger audits, investigations, or even penalties.
Fraud involves intentionally submitting false or misleading information to receive payment. Waste refers to the overuse of healthcare services, even when unintentional. Abuse often looks like improper billing or medically unnecessary treatment. It may not be deliberate, but it still increases costs and may violate program requirements. Mistakes happen, but without a compliance program, even simple errors can escalate into larger legal or financial issues.
See our related articles:
Why Healthcare Fraud is Landing More Doctors and Execs in Prison.
False Claims Act Allegations: Is Your Practice At Risk?
Three Questions Every Compliance Program Should Answer
When federal agencies like the Department of Justice evaluate a healthcare compliance program, they focus on three key questions:
- Is the program well designed?
- Is it adequately resourced?
- Does it actually work in day-to-day operations?
Designing a Fraud, Waste, and Abuse Program That Fits Your Practice
A cookie-cutter compliance program is unlikely to satisfy regulators or serve your business well. Instead, your plan should reflect the unique risks tied to your services, billing structure, and patient population. For example, a physical therapy clinic will face different compliance concerns than a behavioral health group or a concierge medical practice.
At a minimum, your program should include written policies that align with industry regulations and address how to identify and handle suspected fraud, waste, or abuse. These policies should be accessible and actively used, not just handed out on an employee’s first day and forgotten.
See our related articles:
Fraud, Waste, and Abuse Policies For Mental Health Practices.
It’s also important to designate a compliance officer with the authority and responsibility to oversee implementation. This person should have access to the information they need and the ability to raise concerns to leadership without fear of retaliation. Ongoing training, open communication, and a way for employees to anonymously report issues all help create a culture where compliance is part of daily operations.
Resourcing Your Program for Real-World Use
A compliance program isn’t something you can set and forget. It requires sustained attention and resources. One of the most common pitfalls is underfunding. Businesses often underestimate the cost of training, investigations, or legal review.
See our related article, “What is ‘Training’ for Compliance Purposes?”
For a program to be considered adequately resourced, the compliance officer must be empowered to act independently when needed. They should have a direct line to senior leadership and the authority to raise red flags. The program must also have access to internal systems and data, which allows for effective monitoring. And when employees violate policies, there should be clearly defined disciplinary measures in place to respond.
If your compliance plan is only dusted off in the wake of a problem, or if no one knows who’s in charge of it, it’s unlikely to hold up under scrutiny.
Evaluating Whether Your Program Works
The final test of a compliance program is whether it functions in practice. Do you make updates after each audit or incident? Are staff learning from past mistakes? A static program suggests that compliance is a low priority. But if your policies evolve based on lessons learned, that shows regulators and your team that you take compliance seriously.
A working compliance program isn’t perfect. But it is responsive, grows alongside your business, reflects new risks as they arise, and helps position you to prevent problems rather than react to them after the fact.
Get Legal Support
Setting up a compliance program—or improving the one you already have—can be one of the smartest steps you take to protect your business. It reduces risk, reinforces ethical care, and provides a roadmap for addressing problems when they occur.
If you operate in one of the states where we’re licensed, you can schedule a consultation with one of our attorneys to discuss your compliance program and how to strengthen it for the long term.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.
