As an ophthalmologist, you’re most likely far too busy with the medical aspects of your business to deal with the everyday aspects of establishing and enforcing sound internal controls for employee theft within your practice. You’ve done your best to surround yourself with trusted staff, which allows you to focus primarily on your number one asset, your patients. But even the most trusted employee can find themselves in an opportunistic situation too tempting to pass up.
“According to a recent Medical Group Management Association (MGMA) survey, 82% of respondents reported that they had worked for a medical practice that was the victim of employee theft or embezzlement — totaling more than $94.6 million.”
Doing everything possible to prevent theft in ophthalmology involves more than making sure that your cash and patient/insurance payments are deposited into your business account. Employee theft can also include time card fraud or simply stealing goods and services from your organization.
No matter how loyal your employees are, it’s imperative to have safe guards and best practices in place. It will not only save you money and help control insurance rates for the practice, it will remove the temptation for some employees to make an irreversible “bad choice”.
Here are eight ways to guard against employee theft in your office:
Create a policy that all new or potential employees pass a background check. You probably already require resumes, conduct in-person interviews, call references and even check the applicant’s social media sites to help prevent a bad hiring decision, but it is also very important to always conduct a lawful background check on all employees. By conducting background checks, which your applicants will have to authorize in writing if they want to be considered for the job, you can add another level of prevention against employee theft. With today’s technology, this service can be conducted online by your staff or it can be outsourced depending upon your needs. Background checks are very cost effective and can potentially prevent you from hiring applicants with a criminal history.
Separate employee duties. There should always be a separation of duties when dealing with any income that comes into the practice. The person balancing the cash drawer should NOT be the same person filling out deposit slips and making the daily deposit(s). Similarly, responsibilities such as posting checks, opening mail, ordering supplies and writing checks should be distributed among several employees. There is a need for “checks and balances” at all times within the practice. Spot audits of the employee’s duties should be conducted on a regular and consistent basis.
Limit the number of authorized check signers. Requiring two signatures on all checks is a very simple but excellent policy. This creates a system of checks and balances for funds that are leaving the practice. Issuing refunds for overpayment is one area where accidents can happen—such as two employees refunding the same customer. Requiring two signatures also prevents the opportunity for the not so trust-worthy to divert funds into their own account without anyone knowing, especially if the customer isn’t expecting a refund in the first place. Additionally, every check written by the practice should have supporting documents and be filled out completely before anyone signs it.
Review all adjustments. As with the refunds, it’s important to have someone (perhaps yourself) review all insurance adjustments to ensure they are valid. Anytime there are ‘write-offs’ it is always a good practice to review your billing processes.
Secure cash and checks. Cash and checks should be kept secure in a locked safe. Having a safe and authorizing only one or two employees with the combination can deter the opportunist who may see cash sitting on someone’s desk unattended as an invitation to steal. In addition, deposits to the bank should be conducted daily. Checks and cash laying around in the practice is poor cash management that can lead to employee theft that may not get discovered for years! This may seem elementary but it is surprising how many practices do not see the need for such tight controls.
Perform your own unscheduled checks and balances. It’s your practice and being a hands-on owner can help discourage would-be thieves. Checking over payroll records, cash deposit receipts and inventory items will show your employees that you are paying attention. This should be conducted on a regular unscheduled basis. Keep everyone on their toes. Let them know that you take employee theft seriously and that employees that are caught stealing from the practice will be prosecuted by the full extent of the law!
Ensure daily reconciliation. Make sure that there is an auditing process that takes place in your practice each and every day. There can be no exceptions. All diagnostic tests performed should be audited to a log book or the electronic medical record. Lost charges from diagnostic testing is an every-day occurrence in ophthalmology. At the front desk, the patient schedule should be reconciled with an equivalent amount of fee slips. Cash and checks should also be balanced to the daily schedule. It is important to ensure that your practice management system balances to your accounting software each month. Some variances may occur due to the timing of the close of the month but it is important to account for any noted discrepancies.
Seek advice from professionals. Whether it’s having your regular accountant come in for interim audits or hiring an outside firm who can review all of your processes, it’s a wise investment to seek help. It is very easy for employees to steal money from your practice. This can go on for years and it is usually the person or individuals that you trust the most. Even if you can’t imagine any of your employees stealing from you, having a professional assessment of your practice and implementing best practices will optimally produce an astute awareness that employee theft will not be tolerated and guilty parties will be prosecuted to the full extent of the law.
If you would like more information about optimizing your practice’s finances and learning more about theft control policies and procedures, contact us today.