About 3 percent of the money spent on healthcare annually is lost to fraud. This unfortunate occurrence not only directly affects a dental practice, but drives up the cost of dental coverage for patients as well. Fortunately, there are precautions to take to reduce the chances of it happening. Though no one can predict where or when it will happen, fraud can come in predictable forms, and understanding it can be the key to preventing it.
Signs of Fraud
There are certain signs of fraud that can occur in a dental office setting:
- Routine failure to collect full payment from a patient without notifying the carrier
- Misreporting dates to circumvent calendar year maximums or time limitations
- Submitting claims for covered services when non-covered services are provided
- Providing unnecessary services
- Using another person’s ID to obtain benefits
Tips to Reduce Risk of Fraud
The best defense against fraud is to actively participate in the practice’s business affairs. Taking the time to set up an effective system of internal controls and paying close attention to financial affairs thereafter is key to preventing issues with fraud.
- Establish effective hiring practices. A big part of ensuring that fraud does not become an issue is by hiring honest workers. Minimize your exposure to dishonest employees and contractors by conducting thorough background checks, including educational achievements, work history, criminal background, and credit references to the extent permitted by law. It may even be helpful to use a third party expert to help mine all relevant sources of information.
- Adopt a code of conduct that includes a fraud policy. Educate your employees on what behaviors are unacceptable and make sure everyone knows how to report suspicious behavior. Set an example by tending to your own personal affairs outside the office.
- Separate your money management duties. By having two or more employees handle money management duties, you can ensure that they will monitor and cross-check each other’s work. When it comes to checks, it’s a good idea to sign them yourself after careful review of the associated documentation. Never sign blank checks.
- Use pre-numbered checks and duplicate, preprinted deposit slips.
- Run a daily schedule and check it against charges, insurance claims, and payments.
- Pay close attention to your monthly profit and loss records; take note of things that seem out of the ordinary. For example, if supplies usually run at 10% of income and it increases to 12% during the prior period, find out what caused the increase.
- Take personal responsibility for your practice management software. Make sure that each employee has a unique ID and password, granting or limiting access to information on a need-to-know basis.