Article

Building a sustainable compliance framework

For government programs and impact of AI

Pam Thomsen
VP, Govt Programs and Transformation,
Citius Healthcare Consulting

Mar - 11

Government healthcare programs face unprecedented transformation as the Centers for Medicare and Medicaid Services (CMS) drive the shift to value-based care, aiming to transition all Medicare Fee-for-Service beneficiaries by 2030.^[1] Furthermore, studies list regulatory changes as the top trend in the health plan industry.^[2]

Medicare and Medicaid programs present unique compliance challenges for health plans, from interpreting complex Health Plan Management System (HPMS) memos to managing dual-eligible program requirements across CMS and state regulations. Health plans must navigate intricate documentation requirements while ensuring delegated entities maintain compliance with accreditation standards like the National Committee for Quality Assurance (NCQA).

Creating compliant processes requires building an organizational DNA where every team member understands their specific role in maintaining compliance. This includes clear protocols for reporting potential issues, defined channels for regulatory updates, and systematic approaches to implementing changes.

As government healthcare programs undergo continuous transformation, health plans face increasingly complex compliance challenges. The shift to value-based care, new privacy regulations, and the intricacies of Medicare and Medicaid programs demand a comprehensive approach to compliance. To address these challenges effectively, health plans need to focus on several critical success factors that form the foundation of a robust compliance framework.

Critical success factors in government program compliance

Success in government healthcare compliance depends on coordinated efforts across teams, technologies, and processes. The complexity of these programs demands robust oversight mechanisms and agile adaptation to regulatory changes.

Key components include:

Alignment with regulatory changes: Organizations must systematically monitor, interpret, and implement updates. For example, a dedicated regulatory intelligence team can review HPMS memos, analyze impacts, and coordinate necessary changes through cross-functional meetings addressing areas like claims processing, member communications, and provider network management.
Documentation and policy management: Up-to-date documentation of policies, procedures, and process flows ensures consistent compliance with evolving regulations.
Training and development: Regular training equips staff with knowledge of compliance requirements, covering both general principles and role-specific responsibilities.
Vendor and delegation oversight: Active monitoring of delegated entities and vendors ensures adherence to compliance standards through audits, performance reviews, and corrective actions.
Corrective action implementation: Prompt resolution of compliance issues prevents escalation. For instance, addressing coding errors in claims submissions might involve retraining staff, updating guidelines, and automating claims reviews supported by clear timelines and progress checks.

A holistic compliance framework integrating these factors enables organizations to meet current standards while remaining flexible for future challenges, ensuring sustainable success.

Emerging compliance trends in healthcare

Healthcare technology and delivery models - from AI-powered clinical decision support to integrated care platforms for dual-eligible members - are rapidly advancing, introducing new compliance considerations. While these critical success factors form the foundation of a strong compliance program, organizations must also stay ahead of emerging trends that are reshaping the compliance environment.

In a survey, more than 90% of surveyed health IT security practitioners experienced at least one cyberattack in the past 12 months at their organization.^[3]As a result, organizations today must manage traditional regulatory requirements while adapting to emerging challenges around data privacy, artificial intelligence, and integrated care models. Understanding these trends helps health plans develop forward-looking compliance strategies that address both current and future needs. The collection and use of new data types, particularly around social determinants of health, creates additional complexities in compliance management. The following trends are set to transform the healthcare industry:

Data privacy and cybersecurity considerations: Patient data protection requirements are growing more complex, with one-third of healthcare executives prioritizing tech investments in 2025. This calls for robust security measures while ensuring data accessibility.
Impact of AI and machine learning regulations: New rules, such as the FDA's proposed framework for AI/ML-based Software as a Medical Device (SaMD), govern the responsible use of AI in healthcare. Organizations need frameworks like the IEEE's Ethically Aligned Design or the EU's Ethics Guidelines for Trustworthy AI to ensure AI applications maintain patient safety and equity.
Integration of care delivery models: Dual-eligible programs and other integrated models create multi-layered compliance requirements. Plans must meet both state and federal standards. For example, they need to comply with Medicare Advantage regulations at the federal level and state-specific Medicaid rules, which can differ significantly in areas like eligibility criteria, covered services, and reporting requirements.
Social determinants of health data management: Collection and the use of SDOH data introduce new privacy and security requirements. Programs need guidelines for appropriate data gathering and application, such as:

- Obtaining explicit consent for collecting SDOH data
- Ensuring data is used only for intended healthcare purposes
- Implementing robust data anonymization techniques
- Establishing clear data-sharing protocols with community partners
- Regular staff training on SDOH data handling and privacy regulations
Value-based care compliance requirements: Quality metrics and risk arrangements demand specialized oversight. Plans must verify accurate reporting and appropriate incentive structures.

The evolving healthcare sector necessitates a forward-thinking compliance strategy. Health plans that proactively address emerging trends in data privacy, AI regulation, and integrated care models will be better equipped to meet future regulatory demands while fostering innovation and growth.

Building sustainable compliance processes

As health plans navigate emerging trends, building sustainable compliance processes is crucial. A forward-thinking strategy addresses current regulatory demands while laying the groundwork for adapting to future changes.

Sustainable compliance requires a strategic approach that balances flexibility with consistency. Leading health plans are developing adaptive frameworks to support both daily operations and long-term goals, effectively navigating global regulatory and political changes.^[4] This involves creating comprehensive yet flexible processes that evolve, including:

Centralized compliance management: This refers to establishing a central compliance department that coordinates activities across the organization, triages regulatory updates, and assigns responsibilities to appropriate teams.
Clear communication channels: Multiple reporting options—hotlines, email systems, and internal portals—facilitate timely issue identification, promote transparency, and enable swift corrective actions.
Standardized change management: Systematic processes for reviewing and implementing regulatory updates ensure comprehensive adoption and minimize operational disruptions.
Implementing proactive risk assessment: Regular evaluation of potential compliance risks, both internal and external, allows for early issue resolution.
Establishing nimble policy management: Policies must adapt quickly to regulatory changes while maintaining consistency across the organization. This requires streamlined review and approval processes.
Developing clear roles and responsibilities: Each team member must understand their compliance duties, such as flagging coding issues or ensuring provider credentialing. With evolving roles due to new technologies, regular training and upskilling are essential.

Sustainability in compliance hinges on creating adaptable yet consistent frameworks. While robust processes form the foundation of compliance programs, technology enables health plans to streamline operations, automate routine tasks, and gain deeper insights into compliance efforts.

Technology and tools for enhanced compliance

Modern compliance programs leverage technology to enhance efficiency and effectiveness. Health plans recognize that manual processes cannot keep up with the volume and complexity of compliance requirements. Advanced tools and platforms are now essential components of a comprehensive compliance strategy, including:

Compliance management platforms: These solutions provide centralized oversight, real-time monitoring, automated alerts, and standardized reporting. They help organizations identify and address compliance issues quickly, reducing the risk of violations and penalties.
AI-powered risk assessment: Advanced analytics uses healthcare claims data to assess risks and visualize patient health patterns, enabling proactive resource allocation and preventing minor issues from escalating.
Process improvement tools: Tools like root cause analysis help address specific compliance challenges, from prior authorization documentation gaps to provider network adequacy inconsistencies, improving operational efficiency and reducing errors.

The US digital health market is expected to reach USD 0.282 trillion by 2030.^[5] Meanwhile, CMS is investing in technology and modernization to enhance healthcare delivery and program integrity. This trend highlights the growing recognition that technology-enabled compliance processes can help organizations navigate complex regulations while improving operational efficiency.

Way forward

Looking ahead, growth and consumer affordability are at the core of the healthcare industry in general. Health plans must prepare for increased scrutiny of AI applications, stricter data privacy regulations, and expanded requirements for integrated care models – that ensure both growth and the economics of feasibility. Success hinges on building flexible compliance frameworks that can rapidly adapt to health plans transforming with technology and regulations. To achieve this, organizations should prioritize three key areas: strengthening automation capabilities, enhancing cross-functional collaboration, and leveraging advanced analytics for proactive risk identification. Health plans can create resilient compliance frameworks capable of meeting both current and future regulatory demands while supporting operational excellence by focusing on these areas.