Healthcare professionals are subject to a complex web of regulations at the local, state, and federal levels. These laws are designed to prevent fraud, safeguard patient privacy, and maintain high standards of care.
According to IBM’s data breach report, the average cost of a healthcare data breach reached a record $10.93 million in 2023. This highlights the importance of adhering to healthcare regulations to protect patient data and mitigate financial risks.
In this guide, we will explore the major healthcare laws and regulations that every healthcare practice should comply with to deliver safe, high-quality care.
- Healthcare providers must comply with both federal and state-level regulations to ensure patient safety and avoid legal risks
- Most healthcare laws and policies are developed by the government to regulate the industry, protect patients, and ensure quality care
- Violations of fraud and abuse laws can lead to severe penalties, including fines, exclusion from federal healthcare programs, and legal action
- Ongoing education and training on compliance best practices are essential for all employees in a healthcare organization
- The rise of healthcare data breaches highlights the growing need for stronger data security measures and compliance with regulatory standards
Healthcare in the U.S. continues to expand, with expenditures in 2023 reaching over $4.8 trillion. More than half of personal healthcare costs are covered by the public sector, which makes the government a significant player in shaping healthcare policies. The Department of Health and Human Services (HHS) is the primary federal agency responsible for overseeing healthcare regulations.
Here we will explore the key federal healthcare laws in the U.S that impact providers, patients, and organizations.
Health Insurance Portability And Accountability Act (HIPAA)
HIPAA is a federal law that establishes rules and standards for safeguarding protected health information (PHI). Healthcare providers must comply with HIPAA to ensure the confidentiality and security of patients' health information.
HIPAA’s Security Rule requires providers to implement technical, administrative, and physical safeguards to secure electronic protected health information (ePHI). The Privacy Rule protects all forms of individually identifiable health information and gives patients control over how their health information is used and disclosed.
Noncompliance with HIPAA can lead to criminal or civil penalties, with fines ranging from $137 to $68,928 per violation.
For more information on how to secure patient information under HIPAA, check out this detailed guide on HIPAA security requirements for EHRs.
Affordable Care Act (ACA)
The Affordable Care Act, also known as Obamacare, is a comprehensive reform law enacted to improve healthcare access and reduce costs. The law establishes guidelines to make health insurance available to more people and support innovative medical delivery methods.
ACA requires providers to implement compliance and ethics programs as a condition for receiving reimbursement under federally funded healthcare programs. It also helps patients who were previously uninsured due to financial limitations or preexisting conditions secure affordable health plans through their state's health insurance marketplace.
Health Information Technology For Economic And Clinical Health (HITECH) Act
HITECH was enacted to promote the adoption and meaningful use of EHRs. The Act strengthened HIPAA’s security provisions and introduced incentives for healthcare organizations to adopt health information technology.
- The primary goals of the HITECH Act are listed below:
- Ensure privacy of patient information
- Improve coordination of care
- Encourage patients to participate in their care process
- Improve the health status of the population
HITECH also introduced a requirement for covered entities and business associates to report data breaches to the Office for Civil Rights (OCR) and affected individuals.
Emergency Medical Treatment And Active Labor Act (EMTALA)
EMTALA is another federal regulatory law in healthcare that ensures individuals receive emergency medical care regardless of their ability to pay or insurance coverage. The Act specifically mandates that Medicare-participating hospitals offer immediate healthcare services to patients with an emergency medical condition.
Healthcare professionals are required to comply with fraud and abuse laws to prevent frauds, maintain transparency within the healthcare industry, and ensure patients receive appropriate care. Here's a list of health laws that can help mitigate fraud and abuse in the healthcare sector:
The Anti-Kickback Statute (AKS)
The Anti-Kickback Statute (AKS) is a federal law implemented to prevent the exploitation of the healthcare system for personal financial gain. It prohibits the exchange of anything of value, such as money or gifts, in exchange for referrals of patients covered by federal healthcare programs like Medicare or Medicaid.
The goal is to ensure that healthcare decisions are made in the best interest of the patient, not influenced by financial incentives.
Stark Law
The Stark Law, also known as the Physician Self-Referral Law, prohibits physicians from referring Medicare or Medicaid patients for certain healthcare services to entities with which they have a financial relationship, unless specific exceptions apply.
Violations of the Stark Law can lead to severe penalties, including fines of up to $15,000 per service and exclusion from federal healthcare programs.
For example, a Houston-based neurologist was recently fined $1.8 million for allegedly billing Medicare and Medicaid for medically unnecessary services and referring patients to his own diagnostic centers.
False Claims Act (FCA)
The False Claims Act imposes civil liabilities on those who knowingly submit false claims to the federal government for reimbursement. Penalties under the FCA range from $5,000 to $10,000 per violation, plus three times the amount of financial losses incurred by the government due to fraudulent claims.
In 2023, the Department of Justice recovered over $2.68 billion in judgments and settlements from civil cases involving fraud and false claims against the government.
State-level healthcare compliance requirements refer to laws, guidelines, and standards that are set by individual states for healthcare facilities operating within their jurisdiction. These requirements cover issues like patient record retention periods, licensing and credentialing of physicians, and reporting obligations for certain diseases.
For example, some states, like Washington, have enacted specific regulations related to data security breaches. The Washington State Security Breach Notification Act establishes requirements for organizations that experience data breaches involving personal information of Washington residents.
Another example is the California Consumer Privacy Act (CCPA), which grants California residents rights over their personal information, including health data. The CCPA also requires businesses to disclose how they use this data and allows individuals to request its deletion.
Healthcare providers operate in a complex and constantly evolving regulatory environment. This requires organizations to adopt proactive measures to ensure compliance and mitigate risks. Here are a few strategies to consider:
- Stay informed about changing regulatory requirements
- Establish a compliance program tailored to your organization’s needs
- Conduct internal audits to identify and mitigate potential vulnerabilities
- Provide ongoing training for staff on compliance best practices
- Engage with legal and compliance experts to navigate complex regulations
You can also use our regulatory compliance checklist to streamline your compliance efforts and ensure your practice stays up to date with the latest healthcare standards.
Healthcare is an industry that requires strict adherence to regulations and guidelines to protect the safety and well-being of patients. The recent cyberattack on Change Healthcare highlighted the serious vulnerabilities within the U.S. healthcare system and the consequences of noncompliance with privacy and security rules.
It's important to understand that compliance is not a one-time effort, but an ongoing commitment that demands continuous education, adaptation, and dedication. By prioritizing compliance, healthcare organizations can better protect sensitive patient information and contribute to a more secure healthcare environment.
To learn more about healthcare acts and regulations, refer to our comprehensive guide to regulatory compliance for new healthcare practices.
What is the difference between a law and a regulation in healthcare?
A law is a formal rule established by a legislative body, while a regulation is a specific guideline created by government agencies to implement and enforce those laws.
Why is regulation important in healthcare?
Regulation is important in healthcare because it ensures patient safety, maintains quality standards, and promotes accountability within healthcare organizations.
What regulatory issues are affecting the healthcare industry?
Some of the regulatory issues affecting the healthcare industry include compliance with data protection laws, reimbursement policies, quality reporting requirements, and the management of healthcare fraud and abuse.
Why is government regulation important in healthcare?
Government regulations in healthcare are important because they establish standards that ensure patient safety, promote quality of care, and protect public health by holding healthcare providers accountable for their practices.
What is the most critical law that regulates the health care industry?
The Health Insurance Portability and Accountability Act (HIPAA) is the key law for regulating the healthcare industry, as it sets standards for the protection of patient health information and helps ensure privacy and security in healthcare practices.
