As if providing excellent care, navigating government regulations and juggling staff schedules were not enough, physician practices also face the serious threat of internal fraud.
Embezzlement and theft cost medical practices tens of millions of dollars annually, and the amounts involved in individual occurrences can be staggering: In a 2014 case in Florida, a woman who worked for a medical group was accused of embezzling well over half a million dollars to purchase luxury cars and rent a pricey home.
Physicians can avoid at least a portion of those losses by addressing some common managerial missteps, Seattle-based CPA firm Moss Adams LLP notes on its website.
Among the path-smoothers to embezzlement, according to Moss Adams, are failing to implement a payment reconciliation process, storing cash-box keys beside the front desk, posting payments before they are deposited at the bank, and making deposits only weekly or sporadically.
The firm recommends several steps physician groups can take to head off theft, including:
- Clarifying collection procedures for copayments
- Providing a receipt for every payment made
- Conducting payment reconciliation before close every day
- Keeping keys to cash boxes away from the front office and putting the boxes in fireproof safes overnight
- Not relying on just one employee to manage the accounting process
Advice on Advisers
The nightmare scenario for a physician seeking sound financial counsel is that he or she selects an adviser who is dishonest or incompetent. But it is also perilous to choose a perfectly honest adviser who is competent in the abstract but lacks an understanding of physician-specific investment needs.
For example, for many physicians it is vital to ensure that a potential adviser has an understanding of medical student debt, Robin Robertson, a Senior Wealth Adviser for Tennessee-based Millennium Brokerage Group, tells AMA Wire, an online publication of the AMA. An adviser should be readily able to discuss whether a physician should pay off his or her loans early on, as well as other loan repayment strategies.
Questions about disability also figure large in physicians’ financial planning. Advisers should be able to help physicians find “the Cadillac of disability policies,” Robertson tells AMA Wire, because their ability to earn a living is inextricably bound to their ability to work.
Newer physicians should consider partnering with advisers of a similar age, she adds. A young certified financial planner will have a minimum four years of experience but will still be affordable. Plus, younger advisers are willing to accept new clients, and the physician and adviser can form a solid relationship as their careers progress.