Hiltz & Associates Blog
Fraud, Embezzlement and Risk in the Dental Office
This was only my fourth investigation
In 2005, I received a call from a local dentist who told me he was in his office on a Saturday doing some work. He pulled a patient chart from the file cabinet and was stunned to see four $100 dollars bills neatly tucked inside.
This left the doctor feeling uneasy, and he called me. I went to his office on Sunday, and we started going through his Dentrix and business records.
After hour or so, I was able to confirm a few clear and compelling examples of theft. We would use these as “ammunition” to fire the office manager the very next day.
The next day morning, I drove to the doctor’s office to fire the office manager. At the time, I was inexperienced and very anxious. This would be the first time that I had to fire someone for stealing.
The doctor and I met his office first, then we called the manager in. I confronted her with the allegations, and she denied everything.
Then, she began to cry and “begged” the doctor to let her keep her job and “please don’t involve the police.”
The doctor did not know how to process this drama, so I opened the office door and told the ex-manager I would walk her off the premises.
Later, I uncovered that during the four years she worked for the dentist, she stole more than $50,000. She was eventually charged, convicted, and sentenced to prison. The court ordered her to pay the doctor back when she got out of jail, and I doubt she ever paid him a penny.
She was over-billing insurance companies for work that was not done, stealing cash payments and deleting computer records to hide her crime.
Supplies were stolen as well.
I also uncovered that during her last year of work, this woman stole more than 50 “Oral-B Professional” electronic toothbrushes – each at cost of about $100 each.
She sold many of the missing Oral-B toothbrushes to patients on a “cash-only” basis and took a more home to give away as Birthday and Christmas gifts.
How could this happen?
First, the office manager was responsible for ordering supplies and ordered as many Oral-B products as she wanted. The dentist did not check to see where the products went, he just paid the supply invoices.
Here’s an easy method to track the use of supplies that your office sells or gives away .
Create a unique “product code” in your practice management software to record when you sell, or give away, products like NiteWhite, MI Paste, Biotene, Oral-B, Sonicare, and more.
(I recommend that you use codes beginning with “P” to designate products you sell or give away.)
PMI = MI Paste $xx.xx
PNW = NiteWhite $xx.xx
PBT = Biotene Rinse $xx.xx
This will allow you to print a report of all products easily by selecting a range of “PAAA to PZZZZ”
Instruct employees that every time your practice sells or gives away a product, it must be “billed” to the patient, no exceptions.
If the product is being sold, the office can charge its usual fee.
If the product is given away, the fee can be entered as $0.00
At regular intervals (monthly or quarterly) print a report from your practice management software all the products that were recorded as either being sold or given away .
From this report, count the total number of each product that was sold or given away.
Compare this total against the total number of each product your office ordered from suppliers. You can check your supplier’s invoices for this purpose.
Then, add the “opening count” and subtract the “closing count” to calculate the difference; if any
Item: MI Paste
Opening count on hand at Jan 1: 12
Number ordered and received: 40
Number sold or given away : 30
Closing count on-hand at Jan 31: 10
(12+40) – (30+10) = 2 = number of MI paste unaccounted for.
This is a simplified overview and just one of the ways to record and track supplies sold and given to patients. A spreadsheet can be used for this purpose.
“If you need help, with this or have questions, please do not hesitate to contact me for assistance”
William (Bill) Hiltz BSc MBA CET