Seven Ways to Minimize Risk from Dishonest Practice Staff

August 10, 2011

In my experience, it’s often the staff that has been with the practice the longest, and on whom the practice most relies, who pose the greatest threat.

Earlier this week, I received a frantic call from a physician client in distress concerning a long-term practice manager who had been calling in prescriptions for herself under the physician’s name. A call from a local pharmacy questioning a dosage had been the first alert that something was amiss.

Upon further investigation, it was determined that not only had the physician’s prescription pad been used by the practice manager, but there appeared to be serious concerns regarding checks written by the practice manager. I am certain additional scrutiny will reveal a pattern of inappropriate conduct.

Unfortunately, it’s not unusual to find employee dishonesty in the workplace, especially physician practices. Whether its credit card data, social security numbers, drugs, or supplies being stolen, physician practices are an easy target since they rarely have the safeguards in place to provide protection. This is even truer of solo and small practices that depend heavily on their long-time, trusted staff and often do not have the time or resources for day-to-day oversight. In my experience, it’s often the staff that has been with the practice the longest, and on whom the practice most relies, who pose the greatest threat.

What could possibly cause a long-term, loyal employee who plays an important role in your practice to engage in dishonest conduct? There are numerous possibilities: Has the employee had a life-changing event such as a divorce, death in the family, bankruptcy, or other event that has caused financial strain? Has the employee developed an addiction to drugs, perhaps following surgery or illness? Has the employee become disgruntled at work or does he or she feel they are compensated inadequately for contributions made to the success of the practice?

Although it is nearly impossible to predict with certainty which employees may pose a risk to your practice, there are certain signs that can be observed and steps that can be taken to minimize risk to the practice:

1. Watch for suspicious behavior which could include an individual acting controlling, territorial, and/or who is secretive about how the practice’s financial matters are handled.

2. Keep an eye on key employees who work excessively long hours and who are unwilling to take vacations (even when possible).

3. Watch for patient complaints about discrepancies in co-pay payments or bills they claim were paid.

4. Make sure there is never one person who has sole and controlling responsibility for the practice’s finances, such as access to cash/lockbox, access to practice checks/financials, or access to billing systems and passwords, etc. Make sure there is overlap in responsibilities and cross-train to avoid segregation of duties.

5. Meet regularly with primary staff to review checks being written, bookkeeping entries, and other matters to help you have some checks and balances in the practice. It’s also advisable for a physician to be a signatory on all checks and accounts or, if not possible, reviewed and signed by two “trusted” employees.

6. Maintain an office policy of “no privacy.” Access to drawers, systems, and files should be available at all times.

7. Have an outside consultant perform annual audits of the bookkeeping functions of your office to assure oversight, verify vendors and otherwise assure compliance.

When a problem is discovered, it is important for the practice to act quickly. If fraud or theft is involved, consult legal counsel immediately. This will be especially important if the misconduct involved fraudulent billing or other activities that impact Medicare or other payers. You may also need to contact the police or pharmacy when falsified prescriptions or theft is involved.

The time and expense spent recovering from a dishonest employee’s conduct can be significant. Although you cannot always prevent good employees from turning bad, when hiring new staff you should always be sure to include a background check and a discussion with the employee’s prior employer. I am always shocked by employees who are able to repeatedly fleece medical practices in the same community.

It’s always hard for doctors to find out they have been betrayed by a trusted individual in their practice. Regrettably, it’s all too common. Do what it takes to make sure it does not happen to you!

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