Eyeworld

March 2016 • Ophthalmology Business 19 Protecting the practice Just what can physicians and admin- istrators do to curb the risk of theft? There are a few practices you can im- plement. 1. Vet your employees—but keep in mind there's always risk of fraud. One oversight that Jean Eaton, CHIM, Information Managers, Edmonton, Alberta, Canada, sees is practices that don't take the time to prepare to hire. By rushing to hire—instead of thinking who the ideal employee would be in a position and vetting them according- ly—poor hiring decisions are made, she said. When you have new potential hires, plan to check references and do a criminal records check, Ms. Eaton advised. "Checking references is not a 'nice to do'; it's a critical part of due diligence as an employer," she said. If you decide to do criminal checks, decide in advance how the practice will react to different results, and document those expectations in advance, Ms. Eaton recommended. For example, would you accept, reject, or give probation to a candidate who had any of the following on a criminal records check? • History of convictions within 5 years for violence to others • History of convictions within 5 years for violence or harm to self • History of convictions within 5 years for theft or damage to prop- erty • Charges but no convictions of any of the above 18 respondents reported $1 million+ losses at practices. Those numbers don't surprise fraud experts and seasoned administra- tors. "In my experience as an admin- istrator for private eyecare practices, I've witnessed a wide variety of theft among staff and patients alike," said Jodie Boxe, vice president of market- ing and operations, IRIS International Consulting, Chicago. "It's important to address the different types of theft and how to mitigate the threat of loss through barriers, security features, and knowledge." Mr. Dawson has helped analyze several types of employee theft, the most common being cash theft from accounts receivables. Other common thefts he has witnessed are office per- sonnel writing checks to themselves or to vendors to pay personal bills, the use of the company credit/debit card for personal reasons, and even medi- cine theft. "These types of fraud can add up quickly and represent large dollar thefts over time. While these risks are common in any type of company, medical offices present some unique theft risks in that they deal with vol- ume," Mr. Dawson said. So, a patient could have various payments or credits coming from insurance companies, private pay, and managed discounts simultaneously. "The more financial transaction volume that exists, the more the opportunity exists to lose or hide the fraud in 'paperwork messes,'" he said. T here's a threat to your practice that you may not even consider—and it's literally right beside you every day. Employee theft can have a major impact on the bottom line of medical practices—and cause stress—yet most physicians and administrators spend little time thinking about it or prevent- ing it, said Steve Dawson, CPA, CFE, Dawson Forensic Group, Lubbock, Texas. "Through almost 32 years of in- vestigating fraud, I have learned that internal fraud prevention and theft prevention is a need all medical prac- tices have but do not know they have," Mr. Dawson said. "I have seen that this is not a major issue on the radar of doc- tors or practice administrators, but it should be." Just how big of a threat is employ- ee theft to medical practices? Consider this: A 2009 survey from the Medi- cal Group Management Association (MGMA) found that members report- ed 782 cases of theft totaling $94.6 million in losses. 1 The most common examples of theft were theft of receipts, cash on hand, disbursements (forging or altering a check), submitting fake invoices, paying personal expenses with company funds, and payroll and expense reimbursement. Eighteen percent of cases in the MGMA survey were for employee theft of $100,000 or more; of the $100,000 or more losses, 70% took place in smaller groups of 10 or fewer physicians. 1 In the survey, continued on page 20 It's the threat that ophthalmologists and administrators often miss

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