You may have seen headlines touting the increase in front office fraud within medical practices, but even so you may not realize the risk that employees bring to your business. While focusing on patient care is an important part of a physician’s daily rituals, there are also a great deal of practice-related responsibilities that can be offloaded to front office team members. However, it’s important to ensure that the appropriate checks and balances are in place to prevent fraud due to lack of oversight. In a time of decreased Medicare payments and overall revenue reductions, keeping fraud in check is more critical than ever. Maintaining stringent procedures and regular audits can help mitigate the risk that can leave your practice vulnerable.
There are a variety of types of fraud that are commonly reported within a medical practice. The majority of these schemes revolve around receiving or incorrectly reporting payments, including:
- Causing the organization to issue payments for goods or services that do not exist
- Skimming cash or checks from the organization before they are recorded on the books
- Trading organizational influence for non-cash value items
- Stealing checks or cash meant for another employee or the organization
All of these methods of misappropriation of goods of services can have a significant impact on your practice, especially if they continue for an extended period of time.
Significant Revenue Loss
While it may seem like the opportunity for loss is relative small in a local medical practice, the reality is that employees can abscond with hundreds of thousands of dollars over a short period of time — and maintain practices that result in a steady loss of income for your business. The loss of a few thousand dollars a month may go unnoticed due to the reduced revenue associated with insurance repayments, but your income erosion can become critical quickly if the theft is relatively aggressive in nature. There are any number of reasons that employees decide to steal from your practice: if they feel as though there’s no other options available to them due to unexpected financial hardships, they feel as though they are “due” some additional compensation or simply decided to try getting away with a small indiscretion and then needed to continue the practice to cover up their initial theft.
Efficient Processes and Procedures
Perhaps one of the best ways to mitigating the risk of fraud in the medical practice front office is by instituting efficient processes and procedures, and implementing a series of ongoing audits. Anytime employees are dealing with cash payments there is an opportunity for misuse of funds. This can be mitigated by double-checks by employees, such as having one individual open payments and have someone else post the payments to the accounting system. Having separation of duties provides better balance overall, and reduces the opportunity for theft that could be attributed to patient or insurance write-offs that resulted in a zero-sum. Concealing theft becomes much more difficult when there is more than one person involved in processing payments. Another opportunity for fraud within the practice is the use of electronic bank drafts, which can cut down on paperwork but may also allow non-authorized individuals to initiate a transfer of funds.
Regular Audits and Cross-training
If you find that there is a specific employee who is particularly resistant to audits or any changes in your accounting or payment systems, this may be a good indicator that there is some fraud being perpetrated within your practice. Regular audits and cross-training for various financial positions within your practice are a great way to catch any type of fraudulent behavior, as they may turn up some of the red flags that can go along with theft in your front office. Specifically, look for employees who are experiencing a divorce, medical emergency or other unexpected financial stress or, unexplained drops in overall practice revenue and any delays or dissembling from employees who produce financial documents.
Aside from regular audits and training, one of the best ways you can help reduce the risk of fraud within your office is through proper medical billing and servicing. Let the professional team at M-Scribe work with you to increase collections, improve medical coding and manage many more aspects of your medical practice. Contact me today at 770-666-0470 or via email to firstname.lastname@example.org.