Stop Embezzlement in Your Practice
By Douglas J. Jorgensen, DO, CPC, FAAO, FACOFP, CAQ Pain Medicine
Embezzlement is a real concern when running a medical practice. MGMA data conclude that most embezzlement schemes continue for six months, or more, before they are discovered. In that time, a lot of theft can occur. Consider these tips to protect your practice against embezzlement:
Get Bonded. Bonding your company takes any personal bias out of the investigation process because it financially protects your organization, and the bonding company–not the doctor or practice—seeks prosecution. Bonding is cost effective (typically hundreds of dollars, up to a few thousand dollars), and the insurer will often risk stratify the practice because it has a stake in doing so. Theft insurance also reimburses you for missing cash.
Front desk reconciliation: Have two persons verify the balance sheet at the end of every day for all cash, credit card, and check transactions. Each person must sign off on the total, and nobody leaves until both independent counts are done. Checks and cash are most vulnerable: Using an electronic deposit for checks prevents someone from cashing the checks on his/her own.
Have an accountant, administrator, or the owner verify checks written to payroll, vendors, charity etc, monthly or quarterly. Checks for “petty cash” can result in hundreds of thousands of dollars stolen over several years, even in a small practice. The owners of many small practices review every check that goes out the door. This is not feasible in a larger practice, but the point it clear: Checks and balances are necessary.
Reconcile all billing department checks, daily. Electronic Funds Transfers (EFTs) are becoming common, but checks are not likely to go away, soon. Cell phones or other electronic scanning systems now allow money to be deposited immediately—perhaps into someone else’s account. Daily reconciliation and verification of payment against services rendered will identify the money going into AR, and will allow your billing team to track deposits. Most billing companies and EMR administrative panels can provide a report linking paid and unpaid claims. These are usually based on human postings; therefore, a two-person verification system is best to protect the practice and billing personnel.
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