It can be easy to dismiss the thought of medical practice embezzlement. The practice of medicine requires trust and integrity on so many levels that you may not even begin to contemplate issues of dishonesty associated with any member of your staff. It’s a very difficult subject, and obviously you’d rather focus entirely on issues of patient care. However, the reality is that medical office theft does impact patients. If your practice fails due to the consequences of theft, their care may be interrupted.
Who steals from medical practices?
According to the Medical Group Management Association (MGMA), the profile of the average medical practice embezzler lines up disturbingly with our image of the most trusted employees. Thieves have generally been employed for over three years. Smaller, tightly knit practices are more likely to be victimized, with practices of under 10 practitioners accounting for 70% of cases, and more than half of the cases occurring in practices with less than five doctors.
How do they steal?
There are many ways your practice can be defrauded, but the simplest ways are the most common. According to the MGMA, most theft (72%) centers around cash on hand, cash receipts, and disbursements. Lack of careful record keeping and front desk staff who can write off balances and cancel appointments while accepting cash copays are a recipe for temptation. Office managers who lack oversight and who can add vendors to your database while having the authority to write checks can create fake accounts and fake invoices, billing your practice for thousands of dollars of supplies that never arrive.
What can you do?
Taking measures to protect your practice from theft is an unfortunate necessity, but it doesn’t have to be uncomfortable or difficult. You can remove the opportunities for embezzlement and institute built-in accountability without creating a suspicious culture around the office. Just follow a few simple steps:
- Introduce a policy of background checks for all staff and confirm all references directly with previous employers.
- Review high-risk areas on a regular basis as well as in random audits.
- Contract with a third party medical billing company to create another layer of accountability and surveillance.
- Distribute critical financial functions between separate members of staff so that no one employee exerts responsibility for and control over transactions such as billing, payment acceptance, write-offs, refunds, payroll, and deposits.
According to the Association of Certified Fraud Examiners (ACFE), medical practices in America lose up to $25 billion each year. It’s not hard to develop a financial blind spot in the day-to-day rush of running a medical practice. Many doctors place the administrative and financial tasks of the business solely in the hands of employees, leaving their practices open to financial misconduct, which can go undetected until it reaches a desperate state. Don’t let it happen to you.