Theft Prevention -
How to Avoid the Unthinkable

By: Ronald E. Nyman, Esq.

It is not a pleasant subject to write about, but theft of business assets and money affects thousands of entities throughout the United States including many physician practices. On numerous occasions I have listened to doctors who had someone working for them for several years and later learned that the employee was stealing from them. The details of the scenario are different but the overriding story is the same - "I hired this person a few years ago, she did a wonderful job, improved my collections - was a model employee. Then, suddenly, I find that she's been stealing co-pays and checks."

Most individuals, including me at one time, think that this can never happen to them - but, invariably, the risk is there and unfortunately, many physicians encounter the problem at least once in their careers. When theft is discovered in the office, many physicians respond in a similar fashion - terminate the employee (if still employed) and seek return of the monies either from the former employee or an insurance claim under a dishonesty bond. However, aggrieved physicians need to take additional steps to prevent future theft. As for all the other practitioners who have been spared this problem up to the present day, the old adage holds true in this case: "An ounce of prevention is worth a pound of cure."

Some important issues to consider:

1. Employee Screening: For all employees, whether or not they are billers, you should screen their background to confirm employment and education, and check for any credit or criminal problems. There are a number of companies that will do this screening for a nominal fee.

2. Division of Labor: The overriding philosophy here is to make sure that you have more than one person opening and processing your mail, posting checks and handling follow-up. Although this is not feasible in all cases, it should be done if possible. Dividing up tasks will allow one person to identify a discrepancy made by another person. If responsibility is put in the hands of one individual and that person is stealing, it will take longer to uncover the problem.

3. Lockbox: All money should be deposited in the bank the same day it is received. If this is not possible, all amounts should be placed in a lockbox for deposit the next day.

4. Day End Reports: At the end of the day, you should ask your payment posters to tell you how much they posted for the day. You should then run a day end report and reconcile the payment posting amount on the report against the amount that your posters reported to you. Any discrepancies should be resolved immediately.

5. Employee Dishonesty Insurance: Never leave home without it! Most commercial business policies will offer coverage for employee theft. It is inexpensive and important to have when you need it.

This article first appeared in the July/August 2001 issue of News Capsule, a publication of The Fairfield County Medical Association.