Outside Medical Billing services can decrease monetary loss due to embezzlement or fraud

Doctors and practice administrators do not like to admit that embezzlement happens. Fraud can occur to the best of practices. I have seen the after effects of fraud first-hand when I was hired to help clean up after a practice administrator who had sole custody of the books. She was the only person to see the money come in, deposit the checks and perform the day to day insurance billing.

While cleaning up, we found uncontested and unpaid claims stuffed in charts and denied claims in desk drawers. We found claims that were never billed to the insurance company. It was a mess.  No one was looking out for the doctor’s best interests. The doctor had no idea why she was loosing money. This practice administrator was also cashing checks made out to petty cash. Needless to say, the administrator lost not only her job but now has a police record.

To guarantee that fraud would not happen again; a series of checks and balances were set into place. Two people had to check off the daily deposit. The claims were no longer the sole responsibility of one person. Billing was done by a “biller” and that biller had to report to an administrator, who reported to the doctor. The physician was kept informed of problem claims in a monthly basis.

According to the amednews.com : “Nearly 83% of 688 practice managers were affiliated at some point with medical offices where employee theft occurred, according to a survey released Nov. 5, 2010, by the Medical Group Management Assn. Nearly 45% of practice managers reported cash stolen before or after it was recorded on the books. Experts say so much cash and minimal staff to check one another’s work make small practices particularly vulnerable.”

Regrettably, embezzlement is still a problem and if no checks and balances are put into place, the practice leaves itself open to fraud and lost revenue. One way to prevent lost revenue is to hire an outside billing service. A billing service has a vested interest in getting the practice paid. Most services are paid on a percentage of the net revenue the practice receives monthly. Another safeguard is to have all payments go directly to the practice office and not to the billing office. This protects both the practice and the billing company.

The billing company should have a system where the claims and payments coming from the medical office are accounted for daily. Thus a “day sheet” can be generated for each entity to verify that nothing is missing or miscounted.  Electronic Medical Records systems (EMR) have other safeguards in place, as well.

Another way to deter fraud is to screen potential employees with background checks.  All candidates should have some screening done.  Karen Zupko of Karen Zupko & Associates stated in her article to the America Journal of Orthopedics: “According to Donna Ploof of RHR Information Services, a company that provides background checks to a wide range of businesses, including medical practices, “one of every three applicants provides false, inaccurate, misleading, or incomplete information”.

Background checks aren’t fool proof and some of the employees who steal have been employees for years and a background check can not weed out the employee who has no “record”,  However, if all the tools are in place along with utilizing an outside billing agency or auditor, you have a better chance of steering clear of fraud and theft.

Dorothy Trottier, Owner

Medical Specialty Billing

http://www.medspecialtybilling.com

About Dorothy Trottier

For over 13 years I have owned a billing service providing reimbursement and information management designed to maximize the performance of physician based practices. I have over 20 years of insurance billing and medical office administrative experience.
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