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2017 slideshare embezzlement (ct) 050217 v4

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KarenZupko & Associates, Inc.
KarenZupko & Associates, Inc.

Many physician practices are at risk for employee theft due to a lack of cash handling procedures and controls. Here are 9 things you can do to reduce the opportunity of embezzlement in your medical office.

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ESSENTIALS FOR REDUCING EMBEZZLEMENT RISK 9
A consulting and education firm that has helped physicians and healthcare organizations increase revenue, optimize efficiency, reduce risk, and improve the patient experience for more than 30 years.
3 Physicians are easy targets for employee theft. Thats because many practices lack the systems and the checks and balances needed to reduce the opportunity for employees to steal. Savvy employees know this.
4 By putting the following processes in place, youll avoid common audit control pitfalls, and add strength to your financial risk management. As an extra precaution, speak with your insurance broker about employee dishonesty coverage.
5 1. NEVER GIVE EMPLOYEES CHECK-SIGNING PRIVILEGES. No one but a physician owner should ever sign checks. Not the manager. Not the long-time, loyal assistant. Allowing staff to sign checks opens your practice to a huge amount of risk. Don't do it.
6 The check should include an invoice and/or purchase order. It should be stamped PAID, and include the check number and date. Tip: Ask for back-up documentation before you sign.
7 If candidates are up to their ears in debt, or have been convicted of a crime, they probably should not be hired to handle money. Trusted Employees is one company that provides this service at reasonable rates. The time to conduct the background check is before you hire. Asking employees who handle money to submit to a background check is considered discriminatory. 2. CONDUCT BACKGROUND CHECKS FOR ALL NEW HIRES WHO WILL HANDLE MONEY.
Had a background check been conducted during the recruitment process, a Chicago practice would not have hired what turned out to be a thief who stole $250,000 in practice receipts. The employee had previously been convicted of embezzlement, and a background check would have exposed this. 8
One of the most overlooked processes we see in physician offices, a daily close is standard operating procedure in any retail store or restaurant and should be your practices standard operating procedure too. 9 3. IMPLEMENT AN EFFECTIVE DAILY CLOSE.
The basic premise is to make sure that all amounts collected match the amounts posted to the computer system, less any discounts or write-offs. The goal is to balance to the penny every day. 10 3. IMPLEMENT AN EFFECTIVE DAILY CLOSE.
11 Scan all paperwork and save it as one, electronic document with the days date in the filename. Filing the daily close electronically makes looking up transactions by date fast and easy. Tip: Electronically file documentation for each day.
12 The person who opens the mail should not post payments or write checks. The person who collects deposits and balances from patients prior to surgery should not prepare and make the bank deposit. 4. SEPARATE CASH HANDLING DUTIES. For example:
13 4. SEPARATE CASH HANDLING DUTIES. Ask the practice accountant to review current procedures to ensure they are airtight. The person who orders products/supplies should not be the one to receive the shipments and put them on the shelf. For example:
14 All encounter tickets whether electronic or paper must be closed and reconciled for the day's visits. This includes scheduled visits, add-ons, and walk-ins. 5. RECONCILE ALL ENCOUNTERS DAILY.
15 KEY STEPS IN THE RECONCILIATION PROCESS: "Close" each ticket by posting the day's charges and payments for each patient encounter.
16 KEY STEPS IN THE RECONCILIATION PROCESS: Generate an "Open Ticket" report or use your system's encounter form reconciliation feature to verify that all encounters/tickets have been "closed."
17 KEY STEPS IN THE RECONCILIATION PROCESS: Hold staff accountable for tracking down, posting, and closing all open "tickets."
18 Hand-written receipts compromise internal controls. Computerized receipts are a must. The staff person who collects from patients at the front desk/check-out should also post these payments into the computer system and issue the patient a computerized receipt. 6. ELIMINATE HAND-WRITTEN RECEIPTS FOR PATIENT PAYMENTS.
19 Dishonest employees can cover their tracks by collecting (and keeping) money, then writing off the balance to an adjustment or write-off category. This is particularly easy for them if you use vague, general categories such as "Miscellaneous Write Off or Administrative Adjustment. 7. PAY ATTENTION TO ADJUSTMENT AND WRITE-OFF TOTALS.
20 Employees will respect what physicians regularly inspect. Create detailed categories to improve data transparency, and monitor adjustment and write-off amounts monthly. 7. PAY ATTENTION TO ADJUSTMENT AND WRITE-OFF TOTALS.
21 Making refunds to one's own credit card, or that of a friend, is a common fraud scheme. Monitor the credit card machine's daily reports to ensure no refunds have been made. If a refund is required, issue the patient a check - signed by the physician, of course. 8. PROHIBIT STAFF FROM MAKING CREDIT CARD REFUNDS.
22 RDC (Report Deposit Capture) is a bank service that scans and converts paper checks to direct deposits. It reduces embezzlement risk and saves staff time since there is no deposit slip to prepare or bank run to make. 9. ARRANGE FOR RDC OR A LOCK BOX.
23 A lock box is a service that processes mailed in checks through a special post office box instead of your practice address. Bank employees retrieve checks from the box, process them, and deposit the funds directly into your account. 9. ARRANGE FOR RDC OR A LOCK BOX.
24 Following these 9 essentials will protect your practice from financial risk. Make sure all procedures are understood by everyone, implemented, and followed. Monitor monthly reports for inconsistencies or unusual activity. Active involvement is key to reducing financial risk.
KZA helps physicians solve and manage business problems. Practice Evaluation Revenue Cycle Assessment Practice Check Up Coding and Documentation Review Coding and Documentation Education Practice Management Education Hourly Coding and Management Guidance Physician Employment Contract Review Administrator Recruitment and Onboarding Physician Advocates Since 1985 Our Services
KZA is known for its significant knowledge of surgical specialties, including orthopaedics, otolaryngology, neurosurgery, plastic surgery, general surgery, and vascular surgery. We also work with dermatology, interventional pain, and critical care providers. Specialty Focused Our team has deep expertise in the operational and strategic challenges that practicing physicians face every day. Our consultants are physician advocates who are nurses, former practice administrators, and physicians who have led practices and delivered patient care. Real-World Experience
Tell us your needs and well provide a quote. www.karenzupko.com/quote How can we help your practice? Contact us: information@karenzupko.com www.karenzupko.com 312.642.5616

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2017 slideshare embezzlement (ct) 050217 v4

  • 2. A consulting and education firm that has helped physicians and healthcare organizations increase revenue, optimize efficiency, reduce risk, and improve the patient experience for more than 30 years.
  • 3. 3 Physicians are easy targets for employee theft. Thats because many practices lack the systems and the checks and balances needed to reduce the opportunity for employees to steal. Savvy employees know this.
  • 4. 4 By putting the following processes in place, youll avoid common audit control pitfalls, and add strength to your financial risk management. As an extra precaution, speak with your insurance broker about employee dishonesty coverage.
  • 5. 5 1. NEVER GIVE EMPLOYEES CHECK-SIGNING PRIVILEGES. No one but a physician owner should ever sign checks. Not the manager. Not the long-time, loyal assistant. Allowing staff to sign checks opens your practice to a huge amount of risk. Don't do it.
  • 6. 6 The check should include an invoice and/or purchase order. It should be stamped PAID, and include the check number and date. Tip: Ask for back-up documentation before you sign.
  • 7. 7 If candidates are up to their ears in debt, or have been convicted of a crime, they probably should not be hired to handle money. Trusted Employees is one company that provides this service at reasonable rates. The time to conduct the background check is before you hire. Asking employees who handle money to submit to a background check is considered discriminatory. 2. CONDUCT BACKGROUND CHECKS FOR ALL NEW HIRES WHO WILL HANDLE MONEY.
  • 8. Had a background check been conducted during the recruitment process, a Chicago practice would not have hired what turned out to be a thief who stole $250,000 in practice receipts. The employee had previously been convicted of embezzlement, and a background check would have exposed this. 8
  • 9. One of the most overlooked processes we see in physician offices, a daily close is standard operating procedure in any retail store or restaurant and should be your practices standard operating procedure too. 9 3. IMPLEMENT AN EFFECTIVE DAILY CLOSE.
  • 10. The basic premise is to make sure that all amounts collected match the amounts posted to the computer system, less any discounts or write-offs. The goal is to balance to the penny every day. 10 3. IMPLEMENT AN EFFECTIVE DAILY CLOSE.
  • 11. 11 Scan all paperwork and save it as one, electronic document with the days date in the filename. Filing the daily close electronically makes looking up transactions by date fast and easy. Tip: Electronically file documentation for each day.
  • 12. 12 The person who opens the mail should not post payments or write checks. The person who collects deposits and balances from patients prior to surgery should not prepare and make the bank deposit. 4. SEPARATE CASH HANDLING DUTIES. For example:
  • 13. 13 4. SEPARATE CASH HANDLING DUTIES. Ask the practice accountant to review current procedures to ensure they are airtight. The person who orders products/supplies should not be the one to receive the shipments and put them on the shelf. For example:
  • 14. 14 All encounter tickets whether electronic or paper must be closed and reconciled for the day's visits. This includes scheduled visits, add-ons, and walk-ins. 5. RECONCILE ALL ENCOUNTERS DAILY.
  • 15. 15 KEY STEPS IN THE RECONCILIATION PROCESS: "Close" each ticket by posting the day's charges and payments for each patient encounter.
  • 16. 16 KEY STEPS IN THE RECONCILIATION PROCESS: Generate an "Open Ticket" report or use your system's encounter form reconciliation feature to verify that all encounters/tickets have been "closed."
  • 17. 17 KEY STEPS IN THE RECONCILIATION PROCESS: Hold staff accountable for tracking down, posting, and closing all open "tickets."
  • 18. 18 Hand-written receipts compromise internal controls. Computerized receipts are a must. The staff person who collects from patients at the front desk/check-out should also post these payments into the computer system and issue the patient a computerized receipt. 6. ELIMINATE HAND-WRITTEN RECEIPTS FOR PATIENT PAYMENTS.
  • 19. 19 Dishonest employees can cover their tracks by collecting (and keeping) money, then writing off the balance to an adjustment or write-off category. This is particularly easy for them if you use vague, general categories such as "Miscellaneous Write Off or Administrative Adjustment. 7. PAY ATTENTION TO ADJUSTMENT AND WRITE-OFF TOTALS.
  • 20. 20 Employees will respect what physicians regularly inspect. Create detailed categories to improve data transparency, and monitor adjustment and write-off amounts monthly. 7. PAY ATTENTION TO ADJUSTMENT AND WRITE-OFF TOTALS.
  • 21. 21 Making refunds to one's own credit card, or that of a friend, is a common fraud scheme. Monitor the credit card machine's daily reports to ensure no refunds have been made. If a refund is required, issue the patient a check - signed by the physician, of course. 8. PROHIBIT STAFF FROM MAKING CREDIT CARD REFUNDS.
  • 22. 22 RDC (Report Deposit Capture) is a bank service that scans and converts paper checks to direct deposits. It reduces embezzlement risk and saves staff time since there is no deposit slip to prepare or bank run to make. 9. ARRANGE FOR RDC OR A LOCK BOX.
  • 23. 23 A lock box is a service that processes mailed in checks through a special post office box instead of your practice address. Bank employees retrieve checks from the box, process them, and deposit the funds directly into your account. 9. ARRANGE FOR RDC OR A LOCK BOX.
  • 24. 24 Following these 9 essentials will protect your practice from financial risk. Make sure all procedures are understood by everyone, implemented, and followed. Monitor monthly reports for inconsistencies or unusual activity. Active involvement is key to reducing financial risk.
  • 25. KZA helps physicians solve and manage business problems. Practice Evaluation Revenue Cycle Assessment Practice Check Up Coding and Documentation Review Coding and Documentation Education Practice Management Education Hourly Coding and Management Guidance Physician Employment Contract Review Administrator Recruitment and Onboarding Physician Advocates Since 1985 Our Services
  • 26. KZA is known for its significant knowledge of surgical specialties, including orthopaedics, otolaryngology, neurosurgery, plastic surgery, general surgery, and vascular surgery. We also work with dermatology, interventional pain, and critical care providers. Specialty Focused Our team has deep expertise in the operational and strategic challenges that practicing physicians face every day. Our consultants are physician advocates who are nurses, former practice administrators, and physicians who have led practices and delivered patient care. Real-World Experience
  • 27. Tell us your needs and well provide a quote. www.karenzupko.com/quote How can we help your practice? Contact us: information@karenzupko.com www.karenzupko.com 312.642.5616

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