In traditional finance parlance the term "risk management" involves identifying events that can have adverse financial consequences and then taking action to prevent and/or minimize the damage caused by these events. Thus healthcare financial risk management typically involves dealing with matters such as the unique aspects of capitation, implementing physician incentive programs, protecting against employee fraud or embezzlement, and the like. This article takes that concept one step further and posits that smaller health care entities must add the possibility of government fraud investigations and associated penalties to that list. It further suggests that the only way to manage regulatory financial risk effectively is to create and implement a compliance program appropriate for the organization's particular size and business model.
As the health care community knows by now, compliance programs that were formerly discretionary will be mandatory under the Patient Protection and Affordable Care Act ("ACA"). Some implementing regulations have already been promulgated and more are certain to come. But, mandatory or not, it is also clear that compliance plans must be an important part of sound financial management for every health care organization no matter what its size.
Originally Published in the Birmingham Medical News - June 12, 2014.
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