11 Signs There’s an Embezzler in Your Eye Care Practice

It was one of those stories you hear from a friend of a friend. “The doctor knew the reimbursement climate had become tougher and all, but he just didn’t think the practice was making as much money as it should.” It wasn’t.

A trusted medical office manager had been embezzling money for years, and the CPA auditor the practice was using as a safeguard was in on the scam. By the time I heard this particular story, the embezzlement had been detected, the office manager fired, and charges pressed. But the money was gone. The office manager was supposed to pay restitution, but she no longer had the money to repay. She’d spent it on cruises and clothes.

It’s a story that’s all too common. Consider these recent medical practice examples:

• During her seven years working at an internal medicine practice, an office manager stole more than $1 million. “The doctors placed their trust in the defendant so that they could focus on doing what doctors do: treating patients,” wrote the federal attorney prosecuting the case.
• A medical office receptionist collected for herself $446,000 worth of patient co-pays and insurance reimbursements. She also charged $218,000 to credit cards she took out under the practice’s name.
• A lead nurse established a company to purchase supplies and equipment, which she then purchased for the medical practice at steeply marked-up prices.
• During a five-year period, an office manager stole $1.5 million from an oncology practice. She wrote checks from the practice to her personal credit cards and posted the payments with labels like “oncology supplies” in the bookkeeping system.

These are people who’ve been caught, convicted, and who have made the headlines. Some embezzlers are never caught. Fraud experts estimate 5 percent of money earned across all industries is lost to employee theft, and health care is fourth in revenue lost to fraud. Business with 100 employees or fewer are more vulnerable than larger businesses, according to the Association of Certified Fraud Examiners (ACFE).

As a physician owner, you must face the fact that you’re a ripe target for fraudsters. You don’t have the time or inclination to fuss with basic bookkeeping and accounting, not to mention all the byzantine reimbursement details unique to medical practices.

And like most ophthalmologists or optometrists, you likely have what John L. Hughes, CFE, also of ACFE, describes as a “basic instinct of wanting to offer aid and comfort,” which makes it easier for unscrupulous folks to take advantage of your good intentions.

How to Spot Employee Theft Red Flags

We get into all the ways employees may be trying to steal from your medical practice here, but your best friend might be your gut. Here are 11 warning signs that one of your employees is embezzling money:

1. Your practice’s accounting processes seem disorganized.
2. There are gaps in your accounting records and discrepancies among your financial reports.
3. Claims are closed without payment.
4. Vendors call to complain your practice hasn’t paid your bills, or you’re receiving past due notices.
5. Patients complain that your practice has recorded their payments incorrectly.
6. An employee wants to work unusual hours when no one else is around.
7. A manager insists on doing routine tasks himself when clerical staff could be doing them.
8. An employee refuses to teach colleagues how to do the job.
9. An employee takes accounting materials home.
10. An employee never takes vacations.
11. You notice an employee has some lifestyle pressures, like a shady new live-in boyfriend.