Understanding the Compliance Risk Assessment Framework (RAF)
Every healthcare organization understands the importance of risk management, but most do not have a solid foundation for their programs. 50% of security leaders say they struggle to keep up with the number of assessments they need – with the net result that most organizations do not have an accurate view of their existing compliance risk exposure.
This article reveals a proven method to solve this problem: the Compliance Risk Assessment Framework. But first, we need to explore why this framework is so important.
What is a Compliance Risk Assessment?
A compliance risk assessment systematically evaluates your systems, policies, and operations to uncover factors that could lead to non-compliance. For example, a HIPAA compliance risk assessment might reveal that your employees lack regular training in updates to the HIPAA Security or Privacy Rules – increasing the likelihood that they will mishandle data and ultimately cause your organization to breach HIPAA’s guidelines.
What Happens When Risk Assessments Aren’t Completed?
Healthcare organizations that fail to run regular assessments are at far higher risk of non-compliance. This can result in fines, penalties, or other costs regulators might impose. However, there are other potential consequences, such as exposure to tort liability from civil lawsuits, loss of reputation and standing in the community, negative impacts on business relationships, weakening of employee confidence, financial impact, etc.
The Benefits of Healthcare Risk Assessments
Healthcare compliance is an ever-evolving landscape, with new legislation passed every year, which organizations must factor into their daily operations. From new cybersecurity requirements to higher financial penalties for HIPAA violations, organizations must stay on top of these changes to understand their changing compliance risk exposure.
Risk assessments, therefore, provide several benefits:
- Risk Identification: Risk assessments ensure you understand the areas where your organization is at risk of non-compliance. Routine assessments ensure you factor in new requirements and do not develop compliance blind spots.
- Risk Prioritization: Assessments also provide essential data to determine which challenges are most urgent and should, therefore, be remediated first. This ensures organizations with limited budgets can still maintain reliable compliance programs.
- Regulatory Reporting: Regular, accurate assessments provide clear documentation, which can simplify and accelerate regulatory reporting. This can save your compliance team a lot of time and resources.
The only problem is how to run regular assessments without creating a huge amount of confusion and extra work for your teams.
Why Are Risk Assessments Difficult?
Despite the evident value of regular risk assessments, most healthcare organizations find assessments difficult. There are several reasons for this, including:
- Resource Constraints: Most healthcare organizations have limited funds available for risk assessments. This means teams often do not have enough time to devote to assessments, especially when the assessments are often messy and unsystematic.
- Time Constraints: Risk assessments can be time-consuming, and many organizations believe they should be focused on remediating problems rather than identifying new ones.
- Complexity and Data: Assessments are often highly complicated; you need to source information from across the entire organization to fully understand the existing risk exposure and identify compliance risks. However, this data is rarely stored in a centralized location, creating headaches for those tasked with parsing it out and drawing conclusions from the assessments.
However, these issues are all substantially lessened when you have a reliable framework to use when conducting assessments.
What is the Risk Assessment Framework?
The Compliance Risk Assessment Framework (RAF) is a methodology designed to enable consistent, ongoing compliance risk assessments. It includes an inventory of compliance risks with respect to applicable laws, regulations, rules, standards, and guidelines by providing a structure for assessing compliance with them. Consequences of risk failure can result in fines, penalties, or other costs regulators might impose. However, there are other potential consequences, such as exposure to tort liability from civil lawsuits, loss of reputation and standing in the community, negative impacts on business relationships, weakening of employee confidence, financial impact, etc. On the other hand, evidence of effective risk management often results in more favorable treatment by government regulators.
The compliance risk assessment process should include analyzing where regulatory compliance obligations are weak or not being adequately addressed. This process is primarily a program manager function who should identify, address, and then manage risks within their program operations. This function involves evaluating and specifically identifying, prioritizing, and controlling risks associated with the threat of non-compliance.
Risk Assessment Framework Elements
- Identify risks affecting the operational areas.
- Analyze risks in terms of vulnerability, likelihood, and consequences.
- Rank risks from high to low as to probability and negative consequences for failure.
- Begin with the highest risk exposure; review existing controls.
- Determine adequacy of policies and procedures to control risks.
- Plan steps to reduce or mitigate risk levels with new or modified policies and procedures.
- Train staff on following the compliance guidance.
- Conduct ongoing monitoring to ensure staff is adhering to the compliance risk guidance.
- Conduct internal audit review to test and validate controls are effective.
- Routinely repeat the process to test controls and adjust as needed.
Noteworthy is that there are other areas of risk assessment in addition to compliance (e.g., strategic planning, mergers/acquisitions, clinical, financial, etc.).
Take Control of Your Compliance Risk with SMS
Healthcare compliance can be stressful and time-consuming – but not when you have the right partner to simplify, accelerate, and improve your approach to risk.
Strategic Management Services has developed a four-step process to make risk management easy for healthcare providers. While this includes the compliance RAF we’ve discussed here, it also features powerful methodologies for risk remediation, monitoring, and reporting.
Want to explore how it could help your organization stay safe?
Frequently Asked Questions
Q. How Often Should I Assess Compliance Risk?
While the answer will vary for every organization, we strongly believe compliance risk assessments should be an always-on process. Along with ongoing monitoring and auditing, it provides a foundation for your compliance program and ensures you can be confident hidden risks are not about to take you by surprise.
Q. What are the Differences Between Risk Assessments and Monitoring?
A risk assessment looks for aspects of your operations that could lead to non-compliance, while risk monitoring looks for changes in how policies and controls are administered to identify emerging risks.
Q. Do I Need Help to Run a Compliance Risk Assessment?
Healthcare organizations can run assessments for themselves, but most lack the internal expertise or resources to produce reliable insights. Risk assessments exist on a spectrum: you could assess your compliance risk within a few days using internal methods, but this is likely to be a relatively shallow and potentially dangerous approach.
