By Margaret Scavotto, JD, CHC
A compliance officer recently asked me: How much do healthcare providers typically budget for compliance?
It’s a common question – and while there are multiple answers and no “right answer” – there are guidelines that apply to most organizations.
The size of your compliance budget is based on a consideration of two variables: 1) your resources (personnel time and expertise); and 2) the level of compliance risk that is acceptable to the leadership of the organization.
Here are some items we like to see in a compliance budget:
- Compliance Officer salary (or, contract amount for an outside consultant if your organization cannot dedicate sufficient staff hours in-house)
- Education and training for the Compliance Officer. This could include HCCA membership, attendance at the annual HCCA meeting, and webinars/CEUs.
Policies, procedures, and audit tools
- Staff time and expertise to draft policies and audit tools, and continually update them. OR a budget for purchasing policies and audit tools.
- Compliance training for employees
- Compliance training for the Board
- Your Corporate Compliance & Ethics Week events. This is optional! And I have seen successful compliance weeks with a small budget ($300 for prizes, treats, and printing flyers)
- Any other compliance-related training that is not otherwise included in the budget. For example, HIPAA training, QAPI training, etc.
- Third party audits if used. For example, a third party vendor comes in to conduct therapy documentation audits.
- Exclusion screening vendor (if not included in HR budget)
- Compliance program annual review (if not done internally)
- HIPAA Security Risk Analysis (if not done internally)
- Any other compliance-related audits that are not otherwise included in the budget
- Compliance survey (if a third party is used or if there is a cost with a survey software program)
- Legal review of compliance issues (if not included in legal expenses line item of budget)
- Anonymous compliance hotline (if outsourced to a vendor)
It’s all relative
It can also be helpful to consider how much is spent on compliance versus other departments. Did the Corporate Compliance & Ethics Week get a “no” in the budgeting process – but a ski retreat for the Board got a “yes”? That raises an eyebrow about the organization’s commitment to compliance. On the other hand, if the compliance department asked for $4,000 for stress balls with the hotline number on them, and there simply isn’t money for that – but $300 for printing flyers and buying candy was approved, that could be seen as reasonable.
Time IS money
One more factor to consider – if these items are done in-house, time needs to be budgeted. If there isn’t time, then money needs to be budgeted to use outside help. Time also includes an opportunity cost. Any time devoted to compliance comes at a reduction in time devoted to other tasks or responsibilities.
If neither time or money is budgeted, it doesn’t get done.