Where There’s Money There’s MISCHIEF!

For one doctor it started with medical vendors thanking him for paying them twice in one month.

For another doctor it started with a few missing checks.

For both of them, they were seeing a shrinking profit margin, higher overhead, unnecessary purchases and undocumented bonuses. Busy with patients, staff requirements and insurance outlay, the doctors rarely took time to review their accounts, trusting that their finances were in the hands of a loyal and dedicated employee. Employee embezzlement has reached epic proportions, costing U.S. businesses some $652 billion annually, according to the Association of Certified Fraud Examiners. http://www.acfe.com/ Medical groups are particularly vulnerable, especially those in private practice.

monkey hanging w money (2)

Many physicians grant exclusive bookkeeping authority to one person. Some even give that person power of attorney over the practice. Both of these are fatal mistakes. According to experts there are classic mistakes doctors make.

  • They don’t review their credit card statements
  • They don’t always sign their own checks
  • They do not keep track of insurance billing and reimbursement
  • They don’t review in-house book keeping records or patient payment schedules
  • They don’t monitor bank deposits or know when a reimbursement check was received, or when cash was used as payment
  • They don’t compare regularly (if ever) the in-house bookkeeping record against the bank statements

Becoming familiar with employee theft and embezzlement schemes can help you formulate protective strategies. Many thefts occur at the front desk, where employees simply pocket the cash paid for copays and other fees. The office checkbook is another popular method for misappropriating funds. The person committing fraud simply writes a practice check for personal use and then records it in the check register as a practice expense. Dishonest employees in smaller practices (who handle most if not all of the accounting responsibilities) have been known to open a second account in the practice’s name, deposit money into it using a signature stamp, and treat it as their own. The physician never knows the account exists. Patient refunds are another favorite among petty thieves. Larger practices process hundreds of refunds a month, so it’s easy to process five or six fictitious ones using a patient’s name (or an invented one). The employee then takes the falsified refund checks and deposits them into their own account using an automated teller machine (ATM) and they almost always get away with it.

There are many ways to catch a thief, and many more ways for a thief to ruin you. Be on your guard!