Employee fraud is a significant threat to all small businesses and medical practices certainly fall into this category. Medical practices, as with all small businesses, employ few to no anti- fraud controls. As a result the practice and physician is vulnerable to employee theft and fraud.
Most frauds occur when the following three conditions occur:
- The employee has a need for money.
- There is an opportunity.
- The employee is capable of rationalizing his/her actions.
What Can You Do?
Physicians can take positive steps to minimize the risk of fraud:
- Institute a system of internal controls.
- Segregate internal duties in accounting procedures and processing of business transactions.
- Bond all employees who handle company assets, especially cash and receivables.
- Random checks of transactions and/or simple audits of the practice’s systems will discourage fraud.
- Establish a fraud hotline for employees to anonymously report suspected fraud.
In addition to these recommendations, the most significant policy that a physician can implement to fight fraud is to institute awareness, prevention and early detection skills training for managers and staff.
This training will show the members of the staff of the medical practice that fraud prevention is important to the physician who owns the practice. The training will provide the staff with skills to help detect fraud and to be aware of certain types of behavior that may be indicators of potentially fraudulent activity.
Fraud can have a significant negative effect not only on the physician’s income, but if large enough can put the entire medical practice in jeopardy of closure.
For more information about preventing fraud in your medical practice call Greg Lewis at 714.569.1000.
