Dr. Allen Nazeri outlines how embezzlement happens in medical and dental practices. Watch for staff who control the books, resist new systems, delay posting charges, or don't bank money daily. Criminal backgrounds and financial stress are common motives, but chaotic offices enable theft.
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Hi, guys. Today's topic is about embezzlement in practices. Whether it's medical, dental, optometry does not matter in professional practices. So what I like to cover in this video is one of the most commonly ignored.
But often a serious and a major problem in many practices I visit as a consultant. As a matter of fact, the data shows that three out of five practices are often embezzled.
So as a consultant going in, I always look for certain red flags. I mean, obviously I do my assessment, but there are certain things that are considered red flags that come up, which I want to give you those red flags and see if you recognize those or if you see a pattern of it within your practice and so forth. And with the new technologies, obviously embezzlement is getting actually easier than being harder, okay?
And unfortunately, this is not limited to someone that you hire from outside. This can be happening from a family member or a close friend that is working for you. So. So let's take a look at some of the red flag that we do. But before I talk about the red flag, let's. Let's talk about why even they start embezzling you in first place, right? So one of the reasons is that maybe the staff has a criminal background and they keep moving from practice to practice and the doctor never really checked or investigated them before hiring.
Second, it could be that the office is extremely chaotic and disorganized, okay? Which makes.
Stealing much easier. Now, even if they're not stealing, maybe money is somehow being lodged, okay? So an office that is chaotic or disorganized often is losing money, okay?
Another reason could be that the staff feels they're underpaid for the value they're bringing into the practice. They somehow feel like the doctor is earning a lot of money and they resent that. They don't understand the fact that the doctor went to school, have all the school debts, all the financial risks and the investments, the liabilities, everything that the doctor's exposed, and somehow they feel.
You know, that they're entitled to take some of that money with them.
It could be that they're facing some financial problem in their life due to maybe gambling, drug or alcohol addiction, I don't know, divorce, other things that is causing a lot of pressure on them. So those are really the typical reasons. And I would love to hear from you in the comments section of this video if there are other reasons that you can add to the list. But now let's look at, look at some of the reasons or some of the red flags that you can look for when.
Inspecting an office or when you see things that are happening. Your office, number one.
The biggest red flag is that the doctor has no clue as far as how.
The management software works. And he doesn't know how to look at the report, read the report. If I ask them, how can you post a charge or post a payment? They don't know how to do it. That's a big, big flag that the doctor has no clue. So it's already.
Has a higher risk of being embezzled. Obviously disorganized and chaotic offices, okay? Because there are no systems in place, okay? It's much easier to steal. So that's a red flag. Front desk person or office manager who is not posting the charges and the payments on a daily basis. And they always have an excuse. You know what? The office was busy. I will get to it tomorrow morning. I am working so hard, I cannot get to it.
Another red flag are people who stayed with the practice for a very long time despite.
The fact that the labor market is very tight, despite the fact that the practice culture is not very good. The obviously wonderful, wonderful office managers that stay with practices all the time and they never steal a dime from a practice owner because the culture is good and so forth. But when you have a stressful, chaotic practice, and when I look at the HR attrition rate, it's very high, but this particular person has stayed there for many years. That's a red flag, okay?
Another possibility or another red flag could be that the person is very controlling and territorial, meaning that they do not want to assign.
Their jobs or delegate it to other people. And every time you have a new person in, they do not last a long time in the front desk. So they tend to do everything by themselves. They work odd hours, okay? Those are all red flag guys.
Another thing is people who are resistance to change to systems and processes. You bring a consultant and they come up with all sorts of excuse why this doesn't work. And they try to talk the owner out of working with the consultant because they do not want to change systems, okay?
Again.
Not taking money to the bank on a daily basis. That's a biggie. Because they can leave the money and the checks in the drawer and a few days later it's gone or it's ignored, and then somebody can just take the money away. Another red flag is high account receivables and the balances keep piling up and the money is not flowing in, okay? Yet the office is very busy, they're overstaffed, and they have.
A lot of balances sitting on the books. Another red flag is unexplained adjustments and deletions of accounts. Okay. Oh, this was a duplicate. I had to delete it. These bills needs to be adjusted because the insurance didn't pay. Okay. Okay. Another red flag is when there are a lot of patients calling with billing complaints. They're always a mix up in billings and so forth. Okay. But I think the biggest red flag would be someone who's responsible.
For multiple tasks within the financial aspect of a practice. That means they collect, they post charges, they post payments from the insurance companies, they adjust. Okay. That's a big red flag. On the next video, I will share with you the techniques that are often used by embezzlers to steal money and the steps you can take to stop it. My name is Dr. Allen. I'm a practice management consultant helping doctors develop, scale, and exit from their practices successfully. Please feel free to reach out to me with any questions on this topic or any other future topics that you'd like me to talk about. I appreciate you watching. Please be sure to hit thumbs up. Subscribe and share if you find value in this video. Thank you again for watching.
