Management Essentials

Financial Controls Thwart Theft

By Farrell "Toby" Tyson, M.D., F.A.C.S.

At the end of the cold war, "trust but verify" was the mantra of the arms control agreements. This was because both sides hoped for the best but could not afford to be wrong. The same thing is true in an ophthalmology practice.

All doctors begin with a very trusting nature because we hope our patients will have complete trust in us. This carries over into our own desire to trust our employees. This utopian state lasts until we get burned — leaving a lasting impression. Once burnt, doctor/employee relations can become strained as the doctor constantly hovers over and micromanages the staff.

Most people are good at heart, but in these difficult times many staff members can be tempted by the dollars passing in front of them. I have always felt that in life you do not put yourself in compromising situations. The same should be true for your staff. It is in everyone's best interest to put checks and balances in place. This helps remove the temptations ever present in any business.

Safety in Numbers

There is safety in numbers when implementing financial controls. If only one person is involved in the handling or supervising of funds, then it only takes one individual to defraud. If two staff members are involved, they might trust one another enough to embezzle funds from your practice. Once more than three individuals are involved, it becomes increasingly difficult for them to conspire against the practice due to their own mistrust of each other.

In our office, we have two staff members who routinely make appointments. We then have individuals who check patients in and other staffers who check them out. The charge posting and payment posting is done by separate staff members. Payment posting cannot be performed until the daily deposit is made by the book-keeper. By having this separation of duties, it is very difficult for a patient encounter and payment to mysteriously get lost.

Software to the Rescue

Most practice management software has rudimentary checks and balances built in — one just needs to access them. Initially, practice management software should keep a log of all additions, deletions or changes to charge/payment/appointment information by the user. This provides an audit trail and an initial barrier to misconduct. Most programs allow for unique superbill numbers. These numbers, once printed at the beginning of the day, must be accounted for at the end of the day, preventing lost encounters and lost revenue.

Software can also enforce privileges of users so that only the appropriate staff members have access to their appropriate tasks. Remember, the physician should know and understand the software and have total access to the system. Too often, the physician cedes total control to the office manager, only to regret it down the road.

Basic Checks

The first financial controls to be implemented in an office deal with the inflow of revenue. All incoming payments should come to a P.O. Box. This prevents interception of payments by staff. A separate P.O. Box should be setup for all incoming bills.

All bank statements should go directly to the physician's home and be reviewed privately before being turned over to bookkeeping. All bills need to be signed off on by the physician before being input to the system. Then, only bills marked for payment will have checks printed. Only the physicians/owners should have check-signing ability. Usually the practice manager will also want to have permission to sign checks, but this can be a costly mistake.

Physician interaction in the billing and accounting process is key to preventing financial mismanagement. The initial time cost will more than pay for itself in preventing possible lost revenue and gaining knowledge.

Have a spouse or family member periodically inspect processes. This may anger staff, but is extremely effective. The staff has no idea how much or how little a spouse may know, thus throwing a large variable into the equation.

In the good old days of high reimbursement, practices had the luxury of allowing financial practices to be lax. In today's tough economic times, one can only ignore financial details at their own peril. A systematic and planned implementation of financial controls can provide both peace of mind and financial stability. OM