Estimated 1 in 6 physicians will be embezzled: How can you prevent it?
“I am always shocked in my 35 years of being a consultant of how this happens to physicians,” said Debra Phairas, president of Practice & Liability Consultants, during a presentation on embezzlement at AAO 2020 Virtual.
Despite the shock, embezzlement happens fairly often in healthcare. The Association of Certified Fraud Examiners ranked healthcare 5th highest in number of cases, and a Medical Group Management Association survey found that 83% of practice managers were affiliated with a practice where employee theft occurred, said Phairas.
Underlying factors that may lead to embezzlement by employees include incentives to commit fraud, the ability to rationalize the behavior, and a perceived opportunity to not get caught.
During the presentation, Phairas provided red flag behaviors physicians can be on the lookout for, including:
-Employees living beyond means
-Employees experiencing financial difficulties
-Employees with a wheeler-dealer attitude
-Employees with control issues, especially an unwilling to share responsibilities
-Employees undergoing divorce or family problems
“They start small and then they just keep going,” she said. “It usually happens with someone that [you] have a long relationship with that is trusted completely.”
Really thinking about management is one of the best ways physicians can take to stop fraud, said Phairas. This includes showing appreciation to staff, performing background checks on staff members, and implementing accounting control measures. Keeping an eye out for any red flags is also crucial.
As a final reminder, Phairas emphasized that most employees are trustworthy.
Phairas DL, et al. Avoiding and Preventing Embezzlement. Presented at: AAO 2020 Virtual.