Medical practices can make it harder for employees to embezzle money with these basic steps
With the median annual loss of nearly $450,000 due to theft many practices have plenty of room for improvement, new research from MGMA found.
When it comes to preserving a practice's or system's bottom line, the usual operating glitches and the occasional happenstance are hard enough to weather. Even worse, sabotage from within can be especially damaging, both financially and in terms of employee morale and trust.
But many organizations take measures to prevent embezzlement within their organization, but almost 10 percent don't, leaving them wide open, according to the latest MGMA Stat poll.
The median annual loss for healthcare organizations due to employee theft was $437,016 in 2016 and that same report nearly 29 schemes lasted more than five years, MGMA said. These can involve anything from funds and merchandise or property theft to check or credit card fraud and false billing.
Debra Phairas, an MGMA member and president of Practice & Liabilities Consultants in San Francisco said there are steps practices, or health systems that own medical groups, can take to prevent embezzlement.
First, implement accounting controls. That could include segregating duties for financial transactions, carefully reviewing electronic transfers, having a separate staff member prepare checks and another sign them. It also means regularly reconciling EHR, rotating opening mail and posting payments.
Practice leaders should also appoint partners who conduct periodic spot checks and an independent accountant to review the practice's financial records.
Verify your vendors. That means making sure they have no conflicts of interest with the practice and checking that that vendors haven't been fabricated by employees.
Make sure you are treating your staff well, with competitive salaries, benefits, consistent coaching and feedback, and perks. Also safeguard the practice by conducting thorough reference and background checks on employment candidates, as embezzlers will often move from one practice to the next due to lack of prosecution.
While it is necessary to give employees written notice of video surveillance, both the reason why it is being used and where, such oversight can also prove helpful in curbing illegal behavior. Employees must sign a consent form.
Finally, any employee that handles money should be compelled to pass a drug screen, MGMA said. That's because an addict might embezzle funds from the practice to feed their drug habit.
MGMA's poll was conducted this week with 1,295 respondents. Of them, 81 percent said their organizations take preventative measures against embezzlement. Internal controls such as audits, checks and balances, separation of duties, frequent reconciliation and balancing in tandem with accounting best practices. For the remaining respondents, 8 percent took no preventative measures and 11 percent weren't sure if they did or not.
Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com
