Do you know how much your patients really pay you for procedures? Are you getting all the money that they bring to your practice?
You would be surprised to know that according to the survey released by the Medical Group Management Association in 2010, nearly 83% of 688 practice managers were at some point affiliated with medical offices where employee theft occurred. Even though only 18% of such incidents involved the theft of $100,000 or more, usually taken in dribs and drabs by the most trusted employees, these high-dollar thefts accounted for 93% of the total losses.
Dentists, plastic surgeons, concierge physicians, and other medical providers who accept cash from clients (vs. billing the insurance) are particularly vulnerable to employee embezzlement.
Most people who commit embezzlement do so because they need money – this is obvious. It is also obvious that they spend whatever they embezzle. You can do very little after the fact to recover your losses.
I just spent 3 days as a juror on a trial that involved embezzlement in the medical office. A typical case of theft by a trusted employee who has been around for years and whom the doctor treated as “family.” The jury did find the defendant guilty, but it’s highly unlikely that the victim will ever recover financial loss.
If your medical practice involves procedures not covered by the insurance, you are at risk of employee embezzlement. Don’t take it lightly. Call LSL CPAs & Business Advisors at 714.569.1000. We can help you establish good financial controls so that malfeasance will be deterred and come to light sooner rather than later if it does occur.
By Yana Weaver, CPA
