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Business Impact of Non-Compliance for Health Care


Health care compliancy relates to an array of topics. It could mean HIPPA, financial, or even technology. But in this case, we’re going to discuss health care compliancy in relation to fire safety and life safety and the consequences of finding yourself out of compliance. Fire and life safety compliance continues to be one of the overwhelming areas health care organizations struggle with to maintain compliance.

The Joint Commission identifies the top cited standards, or most frequently seen as “not compliant,” every year. These citations touch all levels of the health care environment (ambulatory, behavioral health, hospitals, and more) and are frequently seen as violations. While there is a wide variety of cited standards, fire and life safety standards regularly and often appear on the lists. Thus, proving fire and life safety compliance is challenging to maintain. Below are some of the top cited fire and life safety standards the Joint Commission issues.

  1. Egress integrity - LS.02.01.20
  2. Fire safety equipment and building features - EC.02.03.05
  3. Minimization of fire, smoke and heat damage via building and fire protection features - LS.02.01.10
  4. Building features provided and maintained to protect from fire and smoke hazards - LS.02.01.30
  5. Fire extinguishment features provided and maintained - LS.02.01.35

Though a select group of people or departments may officially be responsible for meeting regulations and standards included above, it takes all employees to maintain compliance. That is why awareness of how to maintain compliance is critical so everyone can do their part to identify issues that need addressed. The combined effort it takes to achieve fire and life safety compliance can be overwhelming, but it is critically important given how highly regulated the health care industry is.

The costs of non-compliance go beyond the dollars. In addition to financial penalties, if you are found non-compliant, it can cause loss of insurance coverage and funding from organizations like Medicaid, lawsuits, business disruption, poor patient care, and damaged public reputation. 

Financial Penalties and Loss of Funding

Monetary fines can be in the hundreds to thousands depending on the type of deficiency the health care organization is pinged for. Additionally, if you are found out of compliance, you may lose your eligibility for funding from certain groups, including Medicaid.

Hospitals receive funding for Medicaid patients through base rates and supplemental rates. These rates are negotiated and under terms can be terminated if a hospital is non-compliant.

Loss of Insurance Coverage

If hospitals don’t meet compliancy standards, they can lose their insurance coverage. Insurance companies are in place to protect hospitals in the event of a lawsuit, natural disaster, or another event that could be of monetary detriment to the organization. If a hospital or different health care organization fails to be compliant with their fire and life safety systems, the insurance company can raise rates, or even cancel coverage.

Once a health care facility loses coverage due to fire and life safety non-compliance, it’s tough to find a new company to provide it at a decent rate.


Besides fines and penalties, non-compliance in health care also attracts lawsuits to the organization. To avoid lawsuits and ensure all fire and life safety systems are ready in the event of a fire emergency, it’s important to have a preferred fire and life safety partner. This partner handles all inspections, maintenance, and management of the systems so the organization or responsible individual doesn’t miss deficiencies.

A preferred fire and life safety partner eliminates the non-compliancy risk; therefore, eliminating the chance of a lawsuit due to the organization’s fire and life safety systems not being compliant.  


While fire safety non-compliance may not be immediately felt by patients until a fire emergency arises, life safety non-compliance affects patients much quicker.  If the health care organization is fined or closed due to non-compliance fire and life safety issues, this will negatively impact the available resources to purchase equipment or hire more necessary employees.

Even worse, patients and potential employees could begin to lose trust in the organization if news of non-compliance reaches the public.

If non-compliance forces to disrupt services offered or scheduled procedures, it could result in that patient seeking treatment elsewhere.


Not all news is good news. Non-compliance citations can cause an array of bad press for the organization. Not to mention word-of-mouth from current patients and employees.

A company’s reputation is essential. Maintaining compliancy is vital.

Being non-compliant in a health care setting can have a variety of negative impacts. Being compliant eliminates the risk and doing so demonstrates due diligence and certainly reduces the penalties and consequences to the business, employees, and patients. By partnering with a preferred fire and life safety company, it will ensure the health care facility is compliant with all fire and life safety standards and regulations. Inspections, maintenance, and management are handled and there is no risk or worry from the health care side.

Health care facilities have many worries and regulations to maintain. They can guarantee eliminated risk and standard and regulation compliance by choosing a preferred fire and life safety company.

Tags: preferred protection, life safety, fire safety, compliance, inspections, #healthcare, deficiency