Neither physicians nor practices want to believe that embezzlement can happen to them. Yet, embezzlement has happened, can happen, and will continue to happen. We want and need to believe in our team members, and indeed, we have to believe in one another for any team to be effective. For more on that topic refer the Leading the Team section of this website.
But trusting one another doesn’t mean having blind faith in everyone or believing that “my team could never be affected.” A well-functioning team means that we can drop our guard; it doesn’t mean we can put blinders on. Always remember that effective embezzlement requires trust and access. Betrayal is a central feature of corporate crime. It also requires insufficient monitoring.
You can enjoy trust within your teams provided you are vigilant for the following red flags, pay attention to what makes a practice prone to fraud, and put policies in place to protect everyone both from temptation and its consequences. Make sure the employee handbook explains these issues. Make sure the rules apply to everyone involved. In practices of more than one partner, hold all physicians including the partners to a code of conduct. Do not create an environment of suspicion. Suspicion creates an unhealthy team spirit. Just be vigilant. Vigilance is reasonable and can actually enhance the team ethos.
- Diminishing cash flow when receipts are strong
- Confirmed bank deposits don’t agree with posted payments in the practice management system
- Increasing accounts payable and accounts receivable balances
- Vague, poor, or nonexistent documentation or approval of transactions
- Frequent patient and/or payor complaints about billing or payments
- Numerous or high-value year-end adjustment journal entries
- Shoddy accounting records
At Smart Business Great Medicine, our motto is Trust, and Verify! This means having policies to verify that trust is well placed and reviewing possible signs that trust has been broken regularly.
There are no guarantees, but we hope knowing these red flags will make fraud, theft, and embezzlement less likely for you.
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