Managing the compliance risk created by third parties

8 minute read

Healthcare organizations rely heavily on third parties to fulfill their missions. Third parties may be represented as suppliers, vendors, contractors, or other individuals or organizations who provide a service or product to a healthcare entity. Working with these parties offers numerous strategic and financial advantages for healthcare entities allowing them to enlist external resources and expertise that would otherwise be significantly more costly for a healthcare entity to provide themselves. The use of third parties is increasing considerably in the healthcare industry, and compliance professionals need to apply appropriate risk management principles to this area. Recent world events have demonstrated the fragility of relying on third parties and the impact they can have on a healthcare entity.

Healthcare entities are required to comply with all federal, state, and local laws, even if a third party conducts the underlying processes. Third parties are typically not owned or operated by the healthcare entity. This separation of ownership and control limits the healthcare entity’s ability to ensure compliance with all laws and regulations. If not managed effectively, this could create increased compliance risk to the organization.

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