The U.S. Department of Commerce estimates that $500 billion is lost to internal business theft every year. With health care found to be the third most embezzled industry in the country, your medical office – like all others – is at risk of being affected by employee fraudulence.
The good news is that by taking a few extra precautions, diligently monitoring your business operations and deploying a system of checks and balances, you can lower your embezzlement risk.
Screen Before Employing
When hiring, you’ll want to utilize the searchable database of the Exclusions Program of the U.S. Department of Health & Human Services. Crosscheck potential new employees against the list to find out if they’re barred from participating in federal health care programs.
Anyone convicted of defrauding Medicare or Medicaid is in the database, so it’s the best place to start your practice protection measures.
Experts also recommend conducting background checks on potential new hires, particularly those whose job duties would involve money. You may also consider performing credit checks for extra peace of mind.
Separate the tasks that can place you at risk: whenever possible, make sure two related, financially sensitive duties aren’t performed by the same person.
The staffer who collects all the co-pays shouldn’t be the one who tallies the day’s cash totals. Having coworkers review one another’s work helps keep them honest.
Make sure employees are fully cross-trained and ask them to rotate responsibilities so no one person “owns” a particular task, such as balancing the books.
“If an employee never allows anyone else to be involved in financial transactions or anyone else to help monitor their work, there’s no way to discover there’s a problem,” says practice manager Teri Arseneau.
Every complaint or concern should be heard and considered thoughtfully. If patients report being billed for services they’ve already paid for, get details and investigate. Never assume harmless administrative error occurred before looking into the issue.
If an employee comes to you to report missing items or suspicions about a coworker, take notice and scrutinize her concerns. Have an open-door policy and don’t let trust in your staff blind you to a problem.
Watch for Warning Signs
Changes in employee behavior, such as increased spending or a major lifestyle upgrade, can be red flags.
If someone becomes defensive when asked about a billing error or refuses to take multiple days off in a row, be suspicious. Never ignore your instincts if something or someone just seems “off.”
Enable Transparency with Technology
If you’re using multiple platforms for patient management and bookkeeping, you’re leaving a hole in your process for malfeasance to occur. If your programs don’t work together, they can’t police each other.
An all-in-one system that manages appointments and billing can produce greater transparency and facilitate easier audits. The best new systems identify problems and flag errors to employee-specific accounts, notifying you of accounting issues sooner than legacy reporting methods.
Monitor and Enforce
You may not have much time to oversee employees, but you should always make room in your schedule for the occasional drop-in.
Perform surprise checks of the financials. Call the bank to ensure your checks were deposited. Ask an employee for a tutorial on a certain activity or take a day to observe the overall execution of billing.
“If you have good financial controls, and if people know they are being watched, that is the key,” says Susan Childs, president of Evolution Healthcare Consulting. “Trust but review. Trust but monitor.”
Don’t make your practice easily embezzled by ignoring obvious liabilities.
Have physicians or managers sign their own checks. Giving a staffer signing rights or allowing use of a signature stamp presents easy opportunities for malfeasance.
Be educated on all of the ins and outs of your practice and discern where every dollar should be going. Get to know your vendors and reacquaint yourself with what services they provide. Inspect every checking account your business has and review what it pays for.
These suggestions may sound obvious, but they’re important. In most instances, embezzlers are trusted employees who were given too much control of the finances and abused their power.
Pre-emptive measures are the only protection you really have. Once money is stolen by fraudulent means, it’s usually gone for good.
“Most people who commit embezzlement spend it,” says Averti Fraud Solutions president Denise McClure. “There’s usually nothing left.”
Plus, for fear of embarrassment, most embezzled businesses don’t take legal action on employee theft. The Medical Group Management Association found that less than 30% of medical practice embezzlers face prosecution.
Protect your business through vigilant checks and constant awareness. Keep a watchful eye, maintain financial control and use the best technology to keep your practice from being taken for a ride.
How do you safeguard your practice from embezzlement?
Madelyn Young is a Content Writer for CareCloud and an expert on practice management, medical billing, HIPAA 5010, ICD-10 and revenue cycle management. You can read her work on Power Your Practice and the CareCloud Blog. Contact Madelyn with story suggestions, contributor articles, or any other feedback at firstname.lastname@example.org or follow her on Twitter @madelyn_young.
The material and information contained on this website is for general information purposes only. You should not solely rely upon the material or information on the website as a basis for making any business, legal, medical, or any other decisions. While we endeavor to keep all information up-to-date and correct, all information in this site is provided "as is," and CareCloud Corporation and MTBC Inc. make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information contained on the website for any purpose. Any reliance you place on such material is therefore strictly at your own risk.