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What steps can you take to protect your practice from dishonest employees
or fraudulent activities?
We are frequently asked about reducing the risks for
theft or fraud. In recent months, several local medical
groups have reported employee theft or discovered employee
dishonesty in their workplace. Others have experienced
unauthorized activities from non-employees resulting in
losses. In some instances, PMC’s services have led to the
discovery of employee or outsider wrong-doing.
We are taking this opportunity to share our recommendations
for all employers regarding reduced potential for losses due
employee or outsider dishonesty. Please contact us if
you have any questions about how these recommendations can
be implemented in your practice.
 Accounts Payable
- Only sign checks with ORIGINAL invoices attached. Never
accept a copy. Confirm that the payment submission
coupon, if any, is intact.
- Initial the original invoice as you sign the check,
particularly for vendors without payment submission
coupons, or those not requiring that the invoice
accompany the payment.
- Request packing slips for the invoices you are paying.
- For
high volume, multiple monthly purchase expenses,
maintain a log of orders, deliveries, and then compare
AP checks written against log.
- Do
all vendor checks have addresses? Do addresses match
the invoice “pay to” address?
- Perform periodic reviews for high volume vendors.
Request a monthly or quarterly statement and compare to
your check register.
- Lock up all blank check stock. If accounts payable
checks are out of sequence, demand an explanation.
- Sign all checks, (contracts, agreements, letters, etc.)
in colored ink. Never use black ink, so that you can
differentiate originals from copies.
- Do
not use credit cards for routine, recurring purchases.
Do not provide employees with your credit card number.
- Designate one owner/officer for accounts payable and
assign responsibility for signing checks. Others may
sign checks only during extended absences of the
designated person.
Protect Your Organization
- Confirm that your company general liability insurance
includes employee dishonesty coverage
- Obtain a Fidelity Bond for the organization.
- Perform a background check, including criminal and
credit review, on all new hires.
- Perform periodic and unannounced audits of petty cash.
- Routinely check your bank account online to confirm
deposits from the office are on-time and the correct
amounts.
- Verify that daily bank deposits match daily posted
payments in your management system. Reconcile monthly
as well.
- Post a sign informing your patients that they will
ALWAYS receive a receipt for a co-payment or cash
purchase.
- Monitor your practice management system's "missing ticket" and canceled appointments reports. Canceled appointments and missing superbills may be an indicator of theft.
- Require multiple-employee participation in banking and
deposits. Include a physician if possible. The same
individual should never open mail, collect funds,
prepare the deposit, and go to the bank unattended.
Monitor the receipt coupon book, daily batch totals, the
bank deposit slips, and the bank deposit receipts.
Never use the night-deposit.
- Have your bank statement sent to your accountant; an
independent bank account reconciliation should be
performed BEFORE staff members have access to the bank
statements.
 Be Observant
- Are
expense checks routinely presented to different
physicians for signature?
- Watch for last minute submissions, hurried reports, and
missed deadlines. One of the best ways to hide
dishonesty or incompetence is untimely activity.
- Do
you know what is happening with your company merchant
services (credit card) activity? Are there refunds?
- Are
you monitoring your bank account activity online,
watching for fraud?
- Is
there adequate documentation accompanying each and every
patient refund check? Particularly checks issued to
individual patients?
- Monitor your financial performance, particularly the
comparative statements. Increases in expenses are often
the first clue that something is wrong.
- Ask
a patient about their experience at check in. Pay
particular attention to their description of the co-pay
procedure. Then check to verify the co-pay is noted on
the account, recorded on the daily batch, and deposited
in the bank.
- Is
the employee you see at the time clock holding his/her
time card? Holding more than one time card?
We hope that you find
these suggestions helpful. We encourage you to take any and
all possible steps to reduce the potential for employee, or
outsider, dishonest activities at your expense. We’d like
to hear from you if you have any questions, or suggested
methods for protecting your organization.
Thank you for your
consideration.
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