Embezzlement in dental practices is a distressingly common issue that can have significant financial and operational repercussions. Wisdom co-founder Ashley Bond observed this at her father’s dental practice, and hosted a podcast episode to discuss the matter with a real world perspective.
A recent case in Indiana highlights the severity and complexity of this crime, demonstrating how it can undermine the trust within a dental office and jeopardize its financial health. The culprits were a mother and daughter team, both employed at the practice. This duo convinced patients to pay in cash, offering them a discount. However, instead of depositing the cash into the office’s bank account, they pocketed it. The practice owner noticed discrepancies in the accounts and initiated an investigation, leading to the discovery of over $50,000 in stolen funds.
How did this go unnoticed?
- Unauthorized Cash Payments: Patients were told to pay in cash for discounts that were never documented officially.
- Manipulation of Records: Payments were entered and then deleted from the system, keeping the practice owner unaware of the fraud.
Dental practice embezzlement statistics, courtesy of dental embezzlement experts, Prosperident:
The average amount stolen in dental office embezzlement is a staggering $109,000, it can happen more than once, and the culprits often go undetected for almost two years. Insurance and personal check payments can also be stolen.
Occurrence per provider statistics:
Once: 26% or more
Twice: 11%
Three times: 2%
Four or more times: 8%
Measures for prevention:
- Trust But Verify: While it's crucial to trust your team, it's equally important to have systems in place that verify all financial transactions.
- Monitor Cash Transactions: Cash payments are particularly vulnerable to theft. Ensure these are carefully tracked and reconciled daily.
- Audit Trails: Regularly review your audit trails to detect any unauthorized deletions or changes in the financial records.
- Separation of Duties: Separate financial responsibilities among different staff members to prevent any one person from having control over all aspects of the financial process.
- Cameras and Monitoring: Consider installing cameras in key areas like the front desk to deter potential fraudulent activities.
- Outsource dental billing, the more eyes the better. Remote team members are never physically hands on with cash or checks.
Embezzlement is a serious threat to dental practices, but with vigilant oversight and robust financial controls, it can be prevented. If you suspect irregularities in your practice’s finances or want to strengthen your defenses against fraud, consider conducting a thorough review of your procedures and systems. Stay informed and proactive to protect your practice from becoming a victim of such financial crimes. Reach out to a dental embezzlement expert such as Prosperident, or similar.
For further advice or assistance, don’t hesitate to reach out. We can offer free practice analysis to help you identify and mitigate risks in your dental revenue cycle management.
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