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It is easy to focus on generating new revenue and maximizing reimbursement as the way to ensure a healthy bottom line, but are you also making sure that money and supplies are not disappearing as a result of fraud or theft? The average organization loses more than $9 a day per employee to fraud and abuse, and this represents about 6% of total annual revenue for most organizations, according to the Report to the Nation on Occupational Fraud and Abuse. Same-day surgery centers could be particularly vulnerable: The report warns that the most costly abuses occurred in organizations with fewer than 100 employees.1
"It is a same-day surgery manager’s job to protect the assets of the facility," says Robert W. Scheller Jr., CPA, vice president of operations for Aspen Healthcare, a surgical center development and management firm based in Boulder, CO. This protection includes being aware of all areas that may be potential risks for fraud and theft, he adds.
While any business that handles money and purchases supplies or equipment is vulnerable to employee fraud or theft, health care organizations such as same-day surgery programs are also vulnerable to Medicare or insurance fraud, says Dawn Q. McLane, RN, MSA, CNOR, executive director of Allied Physicians Surgery Center in South Bend, IN. "Miscoding might be accidental, but a manager needs to make sure it is not happening," she says. Don’t run the risk of an audit by Medicare or termination as a participant in a managed care contract as a result of an employee’s miscoding, she explains.
Obviously, the first place a manager would consider vulnerable to fraud or theft is any area that handles money, but you should also pay attention to purchasing areas, too, says McLane. "Theft can occur in supplies and instruments as well, not just money," she points out. Checks and balances must be in place to oversee purchasing in addition to areas that handle money, she adds.
To protect your program from employee theft, make sure that different people place orders, receive deliveries, and check invoices against purchase orders. By separating the responsibilities, you minimize the risk that equipment or supplies disappear, says McLane.
For the same reason, don’t have the same person collect the payments, post the amount to the accounts receivable ledger, and make the bank deposit, says Ronald Ralph, CPA, a partner in the health care services group of Crowe, Chizek, and Co., an accounting firm in South Bend, IN, that does business, public sector, and information technology consulting. For example, the receptionist takes a $100 copay from the patient and fills out a deposit ticket; a copy of the deposit ticket is sent to the accounts receivable clerk for posting, another person checks the deposit paperwork, and a fourth person takes it to the bank, Ralph explains.
If your same-day surgery staff is small, you can still take steps to ensure segregation of duties, says Ralph. The manager could have the bank statement sent to his or her home and review items posted to the account before sending it to the accounting department, he suggests. Detailed budget reports should be prepared monthly and monitored by board members, Ralph adds. "The board should also review adjustment reports that show claims submitted, payments made, and discounts given," he says. The visible proof that there is oversight and that people are paying attention to the program’s assets makes it more difficult for an employee to steal, Ralph explains.
Regular reports also make it possible to see fluctuations in receivables, deposits, managed care discounts, supply purchases, and other financially related items, says McLane. When you see fluctuations, you have a chance to investigate the reason, she says. While the reason for a change in ordered supplies might be a new surgeon that has scheduled more procedures than normal, it also could be a case of paying a vendor bill twice, she adds.
Employ outside consultants as another form of oversight, suggests McLane. An objective third party might see potential risks for theft or fraud in your procedures as well as identify current problems, she adds.
Employees need to know that they are going to be held accountable, says John W. Kolbas, CHBC, an executive in the health care services group of Crowe, Chizek, and Co. "There need to be policies and procedures that protect the facility’s assets," Kolbas says.
"All employees should know the protocols and understand their importance." The policies should be designed to fit your program, says Ralph. "They should also be specific. An example would be the manager will verify that the patient log is compared to billing records," he says.
Management needs to follow the protocols and not make exceptions if employees are to take them seriously, explains McLane. "I make daily bank deposits for my center, so if month end falls on a Saturday, I’m in the center on Saturday to make the deposit," she says. It would be easier for McLane to give the responsibility to one of the employees who are preparing month-end statements to make the deposit, but she points out, "You have to maintain the system without exceptions if you want it to work."
1. Association of Certified Fraud Examiners. Report to the Nation on Occupational Fraud and Abuse. Austin, TX; 1999.
For more information about fraud and theft, contact:
• Ronald L. Ralph, CPA, Health Care Services Group, Crowe, Chizek, and Co., 330 E. Jefferson Blvd., P.O. Box 7, South Bend, IN 46624-0007. Telephone: (800) 232-4694 or (219) 232-3992. Fax: (219) 236-8692. E-mail: Rralph@crowechizek.com.
• Robert W. Scheller Jr., CPA, Vice President, Operations, Aspen Healthcare, 603 S. Broadway, Suite B, Boulder, CO 80305. Telephone: (303) 499-4984. Fax: (303) 499-4905. E-mail: RschellerJ@aol.com.
• Dawn Q. McLane, RN, MSA, CNOR, Executive Director, Allied Physicians Surgery Center, 53990 Carmichael Drive, Suite 100, South Bend, IN 46635. Telephone: (219) 247-3377. Fax: (219) 247-3300. E-mail: email@example.com.