Avant has released a report with recommendations to safeguard clinics from internal financial fraud.
Reports from medical defence organisation Avant have shown fraud by medical centre employees is on the rise, with some practices losing up to $80,000.
Avant has released a series of recommendations for GPs and practice owners to avoid this issue in the future.
One of the preventative measures outlined by Avant was to invest in outsourced book keeping and payroll management to ensure compliance with financial reporting obligations.
“We’re not going to say you need to have anything external,” Avant risk advisor Gail Wang told The Medical Republic.
“It’s a practice-by-practice decision on their risk profile, and what their strategy is, and how big they are.
“They’re pretty basic governance measures that can be undertaken.”
Avant has described these financial fraud cases as “quite sophisticated”, with potential risk of not only lost revenue but also reputational damage.
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One clinic that the indemnifier has worked with was the victim of embezzlement to the tune of $100,000 over several years.
The embezzlement was only discovered after the practice manager took long service leave, prompting practice owners to seek temporary book keeping assistance.
What tipped off Avant in this instance – and can be learned from by other practices – was the numerous points for system manipulation present in unsecured financial systems.
“Medical software systems should restrict access to accounting functions, such as changing bank account details and authorising refunds,” Avant book keeping and payroll manager Michelle Graham said.
“Historical reconciliation audits can detect discrepancies in item numbers and financial transactions.
“Implementing a daily checklist for each doctor to review, approve and sign, confirming the item numbers billed for their sessions, provides a record to check any inconsistencies against.”
Reversing patient payments after they leave and bulk-billing the same patient to pocket the surplus cash was a fraud method mentioned by Avant, with other possible gaps for fraud including:
- The manipulation of MBS item numbers that ensure the doctor receives the correct payment with leftover surplus for the staff member committing fraud.
- Skimming gap payments where a receptionist bulk bills the patient but still charges them a gap.
- Charging separately for extras such as a script or dressing that will be directed to the receptionist’s bank account.
Avant has reaffirmed that whilst these cases are rare, they are something that should be considered as part of efficient and safe clinic practice.
“I think it’s like every risk in the business. If you don’t address a risk you have in your business, it can become a costly issue later on,” Ms Wang told TMR.
“This is a risk that businesses should be managing well and have appropriate structures in place.”
