For many healthcare organizations, “compliance” might mean endless paperwork, or stressful audits — and yes, sometimes it is. But it’s also one of the things quietly holding your healthcare organization together. It keeps your patients safe, helps your team stay on the same page, and helps you avoid costly surprises.
Recent data shows just how powerful healthcare compliance can be. Between April 2023 and March 2024, improved safety efforts helped 200,000 more patients survive care they might not have in 2019.
However, as healthcare organizations working with imperfect individuals and juggling ever-changing regulations, understand that errors can occur. And these slip-ups, though unintended, can have dire consequences for healthcare facilities.
This article will show you the compliance issues that healthcare organizations face, the consequences, and best practices to keep you insulated.
What Are Healthcare Compliance Issues?
Compliance in healthcare is the process through which hospitals and facilities ensure adherence to operating principles established by regulatory bodies.
Any error in the healthcare sector is critical and has devastating consequences for the provider, patient health and data, and the healthcare organization.
Because of these nuances, regulatory bodies like HIPAA, OSHA, TJC, and CMS have detailed operating procedures and best practices to avoid common slipups like coding issues, billing errors, and data breaches.
Unfortunately, this is where healthcare compliance issues come in; when hospitals set up a compliance program to ensure that their care standards align with those of regulatory bodies and yet, they fall short.
Common Healthcare Compliance Issues to Watch
Identifying healthcare compliance issues is the first step towards mitigating them and these issues include:
HIPAA Violations and Data Breaches
When it comes to enforcing patients’ rights over their details, trust the Health Insurance Portability and Accountability Act to answer. This regulatory body was enacted in August 1996 to protect Patient Health Information (PHI) from data breaches and unauthorized access while making it available for healthcare decision-making.
Unfortunately, there’s been a steady increase in data breaches in recent times, exposing PHI to unauthorized access. In fact, according to the HIPAA Journal, April 2025 saw a 17.9% increase in data breaches. This is dangerous because fraudsters can use this data for medical identity theft, fraud, and, in severe cases, blackmail patients.
Healthcare facilities suffer reputational damage, lawsuits, and heavy fines with such occurrences. There could also be exclusions and sanctions from Medicare and Medicaid services.
Inaccurate Billing and Coding Practices
Wrong patient information, duplicate billing, and charging the wrong insurance company are common errors with healthcare organizations. Conversely, coding issues such as upcoding, use of wrong codes, and unbundling also occur frequently. Inaccurate billing and coding practices can lead to overpayment, underpayment, or outright rejection of claims after adjudication.
Fraudsters who access PHI through hacking also perpetrate billing errors. They could:
- Submit fake and expensive claims
- Set up ghost clinics in the name of a real clinic using stolen credentials and
- Open fraudulent billing accounts in the name of actual hospitals.
The result? Affected healthcare organizations lose patient trust, face lawsuits, and run the risk of heavy fines. Inaccurate billing and coding directly impact payment integrity, but targeted interventions—such as automated claims reviews and credentialing safeguards—can significantly reduce these issues during claims processing.
Inadequate Staff Training
According to HIPAA, one of the elements of a compliance program is “effective training and education,” and for good reason. Some healthcare organizations treat compliance as a one-off task that’s done only after a successful provider credentialing and during onboarding. Sadly, this attitude opens the door to healthcare compliance issues. Regulatory bodies are constantly reviewing and updating operating standards, so hospitals that do not prioritize compliance education do not stand a chance.
Inadequate staff training can cause data silos, credentialing issues, poor communication among departments, and even misunderstanding of roles. This healthcare compliance issue is dangerous because it’s subtle. Most leaders just assume that once employees are passionate, they probably know their way around, and they often realize this wrong assumption when problems spring up.
Consequences of Noncompliance in Healthcare
Noncompliance in healthcare has consequences for both the patient, the provider, and the healthcare organization. Unfortunately, healthcare organizations are at great risk, especially financially. Some of these consequences include:
Financial Penalties: Healthcare organizations lose millions of dollars yearly in fines and lawsuits as a result of noncompliance. For example, Coastal Orthopedics has been fined $1.4 million because of a data breach affecting over 200,000 individuals. Think about the other high-impact initiatives this amount could have funded within the hospital.
Reputational Harm: Once patients realize that you’ve had healthcare compliance issues in the past, they tend to trust you less. Patients could withhold critical information that’s relevant for administering care to them, and as such, providers will record a steady decline in treatment success. This can also affect your ability to hire quality talent, as providers also want to protect their image and have clean records.
Operational Setbacks: For a healthcare organization facing compliance issues, the priority often shifts from patient care to settling fines, administrative meetings, and reactive compliance measures. Often, this causes operational setbacks and inefficiencies.
Best Practices for Managing Healthcare Compliance
We’ve shown you the common healthcare compliance issues and the devastating consequences that come with noncompliance. So, how do you ensure to stay away from compliance troubles?
Developing a Culture of Compliance
One thing about compliance is, you cannot fumble your way through your procedures and audits and come through unscathed. So, the only option is to develop a culture where compliance measures are strictly adhered to, even when external audits are far off. Also, ensure your leaders are genuinely interested in the organization’s compliance efforts because their attitude will trickle down.
Conducting Regular Risk Assessments and Audits
Risk assessment is the process of understanding the possible risks in administering care, while audits check the efficiency of your compliance efforts in handling them. Risk assessments and audits should be scheduled periodically, say quarterly or biannually. That way, it’ll be easier to trace the root of compliance issues and nip them in the bud before they escalate.
Keeping Up with Changing Regulations
Changing regulations as regards credentialing, privileging, and patient care can take you by surprise in healthcare. So you need to ensure that you set up systems (a compliance committee and a compliance officer) that look out for these changes and help your organization to adjust its policies accordingly.
Healthcare provider credentialing solutions like Verisys help you stay abreast of these regulations with automated monitoring, real-time alerts, and policy alignment.
Proactive Strategies to Address Compliance Issues
Facilities can face delayed reimbursements, data breaches, loss of accreditation, and regulatory violations are common compliance risks that healthcare organizations face.
And the major way to stay safe is to enact a strategic compliance program and to improve your compliance efforts from reactive to proactive. This should consist of written guidelines, effective training, clear communication, and regular monitoring and auditing.
Partnering with a trusted compliance data provider like Verisys can significantly strengthen your efforts, offering real-time, verified data that streamlines credentialing, enhances risk visibility, and supports long-term regulatory readiness.
Sources
HIPAA Journal, Coastal Orthopedics Agrees to Pay $1.4 Million to Settle Data Breach Litigation.
https://www.hipaajournal.com/coastal-orthopedics-data-breach-settlement/
HIPAA Journal, April 2025 Healthcare Data Breach Report
https://www.hipaajournal.com/april-2025-healthcare-data-breach-report/#
AHA. Hospitals Improve Patient Safety as We Advance Health in America. https://www.aha.org/news/perspective/2024-09-13-hospitals-improve-patient-safety-we-advance-health-america
