📘 Question
The CFO needs to understand the cost of non-compliance vs. the cost of the compliance program. MedBridge generates $420M in annual revenue from CMS contracts, which would be at risk if compliance is not achieved. The regulation specifies financial penalties of $10,000 per violation per day for turnaround time breaches, and MedBridge currently processes 1,200 authorization requests per day. Assume 30% of those are currently non-compliant with the new turnaround standards. Separately, the compliance program is estimated to cost $38M over 18 months. Should MedBridge invest in compliance purely on a financial basis?
📊 Case Exhibit
Your answer:
The CFO needs to understand the cost of non-compliance vs. the cost of the compliance program. MedBridge generates $420M in annual revenue from CMS contracts, which would be at risk if compliance is not achieved. The regulation specifies financial penalties of $10,000 per violation per day for turnaround time breaches, and MedBridge currently processes 1,200 authorization requests per day. Assume 30% of those are currently non-compliant with the new turnaround standards. Separately, the compliance program is estimated to cost $38M over 18 months. Should MedBridge invest in compliance purely on a financial basis?
📊 Case Exhibit
