Tips to Protect Against Theft, Fraud, and Embezzlement in Your Practice

#fraud #embezzlement #privatepractice

According to a 2011 MGMA survey, 83% of medical practices that reported were affiliated with a practice where employee theft had occurred.

Here are 5 tips, mentioned in the book The New Thriving Medical Practice, which help to decrease the risk of theft within your practice:

1. Hire the right people.

I recently heard the saying, “Hire slow and fire fast”. It’s important to take the time necessary to make sure that you are not only hiring the right person for the job, but the right person for your practice. Recently I learned "The Rule of 3" from Darren Hardy. This Rule of 3 offers three hiring tips that you might want to consider during your next hiring process.

The Rule of 3

• Interview 3 people – regardless of the position and regardless if you already know whom you want to hire. It’s important to get a true comparison of the talent that’s out there.

• Conduct 3 different interviews, in 3 different places, by 3 different people for each candidate – this allows the opportunity for the true character of each candidate to surface.

• Check 3 references – However, not the references that were provided by the candidate! You will have to do a little digging, obviously in a professional manner, to contact people with whom the candidate previously worked to get unbiased information about their work habits.

This process is no doubt time consuming. It is, however, worth the time to avoid hiring the wrong person. Bad employees are like a cancer to your practice. The process to rid them completely from your practice is painful and often leaves behind scars and wounds that never heal. Avoid them at all costs.

2. Develop policies, procedures and protocols to keep honest employees honest.

Your goal is to make it difficult for your employees to act dishonestly. From day one, have all employees sign a written policy stating your zero tolerance of fraud and theft.

• Use a lockbox for petty cash

• Create checks and balances by dividing financial duties. One person should not have complete control over the finances

• Restrict signature authority on checks and online banking access

• Get rid of any signature stamps

• Pay bills online

• Have bank statements be sent to your home

3. Purchase Business Liability Insurance.

• Make sure your liability insurance includes coverage for theft and embezzlement.

• Bond all staff who process payments

4. Know and be aware of warning signs.

Here are a few things to look for as well as behaviors that worrisome employees might exhibit:

• Spending habits exceed salaries

• Refusing to take vacation or time off

• Unusual or long work hours

• Taking accounting books home

• Missing receipts, invoices or purchase orders

• Overdue notices from vendors

• Patients continually complaining about billing errors

• Unexplained shortages of petty cash

• Unusual patterns in bank deposit statements

5. Listen to your gut.

Chances are if your gut is telling you something is wrong, most likely there is.

If you'd like to read more Click Here to download your free digital copy of The New Thriving Medical Practice written by Patrick Phillips & retired surgeon Dr. Vicki Rackner.