In the first part of our embezzlement series, we discussed the who, what, and why of embezzlement. This second part will focus on lowering your chances of becoming an embezzlement victim.

The Perfect Target

David Harris, CEO of Prosperident, a company of experts investigating dental embezzlement, believes that no one can prevent the crime but that dentists are often easy targets because of their single-minded focus on producing dentistry, with little concern over the practice’s revenue cycle (D. Harris, personal communication, May 23, 2024). Harris says that the embezzler enters the practice looking for the strength of the owner’s oversight. Specific owner characteristics embolden the embezzler to act:

• Is the owner comfortable with viewing pre-printed day sheets?
• Who enters treatment?
• Does the doctor track the top-line revenue?
• Does the accountant receive pre-printed day sheets and other reports?
• Does the doctor have account access to third-party payers, vendors, etc?
• Does the office staff have too much control?
• Does the doctor allow office staff uninterrupted access to all parts or consecutive parts of the revenue cycle?
• Are doctors tracking month-end revenue numbers?

Owners who exhibit a lackadaisical attitude about the business of dentistry are prime targets for embezzlers because they fit the embezzler’s profile for a successful scam.

How do they do it?

According to Harris, embezzlement is a crime of adjustment, not cash theft, in our technologically dependent environment. Doctors seldom do more than glance at a manager-printed day sheet. Inattention to the account adjustments leaves owners vulnerable to continuously losing revenue. Since the average embezzlement is detected after two years of theft, doctors can lose a significant chunk of their assets before discovering the scheme. Additionally, Harris cites that accountants often only receive documents produced and delivered by the office staff, which allows the falsification to go undetected.

Delegation vs. Abdication

Fraud prevention plans start with a commitment by practice owners to manage their practices. Too often, owners divest control to the office manager so they do not have to wade into tiresome financial details. Preferring to practice clinical skills, many dentists unwittingly open the door to embezzlement because they abdicate their responsibilities under the guise of delegation (Prosperident, 2020). Dentists are unprepared in their business, management, and oversight training. They often rejoice when a competent office manager arrives and condones the hands-off management style. However, few office managers have formal training either. This creates a “perfect storm” scenario for would-be embezzlers. A dentist with no desire to exercise accountability and who extends trust to them allows embezzlers to thrive. Harris (2023) has this to say about practice ownership:

“If you want to own a dental practice and enjoy the numerous financial and lifestyle advantages of practice ownership, you must concurrently accept the responsibilities of being an owner. And one of the biggest responsibilities is oversight (p.134).”

Prosperident (2020) offers these helpful insights on owner accountability:

• Accountability is not abstract but actionable: Owners should design office operations around a culture infused with trust and verification.
• Accountability requires knowledge and time investment: Prosperident (2020) quips, “Administration is not a cruel joke that the world has played on the dental profession; it is a vital link in the chain between the treatment of patients and your financial well-being.”
• Accountability means operational decisions rest with you: In some cases, office managers begin to feel ownership of the office, often acting as a surrogate who knows what the owner wants. Lack of oversight allows those managers greedy for illicit gain to foil any initiatives owners pursue. Dental offices thrive in the team mentality, but remember who owns the team!
• Accountability thrives in an oversight environment: Owners must set up policies and stick to them. Set up job expectations and make sure they are performed as prescribed. Cross-train other team members so that no one holds the keys to all information and access. Allow only legitimate and infrequent unsupervised work opportunities. Ask managers to print reports while you stand by for them instead of letting the employees do it within their own timeframe. Print reports yourself and study them carefully for any discrepancies.

Dentists who have never required accountability may fear that employees will feel discredited. When introducing accountability measures, owners must ensure that employees understand the intent of the new oversight policies and procedures. Assure the staff that these positive changes will facilitate best business practices and assist operations when employees transition out of the office. Let the team know that you better understand your owner’s duties, including proper oversight, and that you will intentionally protect the office’s future, which helps preserve their jobs. Listen to their concerns but remain firm that the new operational tactics will be enforced.

In our next blog post, we will look at some tips on making operational changes to your office protocols to assist you in exercising appropriate accountability planning and oversight.

 

References

Harris, D. (2023). Healers versus stealers: How to outsmart the thief in your dental practice. Tellwell Talent. Kindle Edition.

Prosperident. (2020, July 20). Delegation versus abdication. Delegation versus Abdication – Prosperident

• Category: Business, Dental & Health Care