It’s no surprise that medical practices commonly struggle with internal controls. Because many physician practices are small operations with one or two doctors, they oftentimes are staffed with one person in charge of multiple tasks. The front desk person may also be the employee who checks in and checks out patients, posts payments and handles billing. For these practices, naturally occurring internal controls are rarely in place. The good news is there are a few simple actions a physician practice can take that will make a big difference.
Physician Practice Internal Controls to Implement Now
Here are six common internal controls you can put in place now that will have a positive impact on your revenue cycle.
1. Separate financial and accounting duties.
If your financial and accounting duties are intertwined, you are not alone, but these roles should be segregated. In other words, the person taking payment should not be the same person who gets the bank deposit ready or makes the bank deposit. Take the copayment and put it in the practice management system, and then have the posting person apply it to the payment. Separating the financial function from the accounting function is a simple step you can take along the internal control process.
2. Reconcile your bank deposits to your practice management system daily.
To prevent embezzlement, reconcile your bank account deposits with your practice management system totals each day. If your front desk clerks say they collected $50 in cash one day, make sure that $50 has been accounted for and posted into the practice management system for that day. Daily checks and balances will prevent larger problems in the long run.
3. Reconcile your bank account each month.
In addition to the daily reconciliation, as a best practice reconcile your bank accounts on a monthly basis. Monthly reconciliations are especially crucial when tracking electronic funds transfers (EFTs). For example, if an EFT comes in after bank deposits have been checked for the day, your billing team may miss posting it. An insurance payment that wasn’t caught initially can be rectified as long as you have a solid process in place. Clear communication among your team will allow you to later go back and post the payment, and the issue is solved before it becomes a problem.
4. Pay attention to petty cash.
One of the most common ways people steal from a practice is from petty cash, as there are few controls in place to prevent it. Many offices have petty cash housed at the front desk for incidental expenses, but receipts often go missing when employees spend the money. Even though the amounts may be small, they can add up over time, costing you more than you think. Put a system in place to account for your petty cash expenses, and make sure you know your employees who are responsible. Whether it’s through a background check or other internal control, it’s important to pay attention to those who are handling your money.
5. Run background checks.
Background checks are a good idea for all practices, but they are a must-have for practices that handle large sums of cash. At a minimum, make sure you run background checks for any employees who are designated to handle large amounts of money. For example, an ophthalmology practice that performs LASIK, cataract, or other cash-paying surgery will want to make sure employees can be bonded. Investing in a background check for the right employee will pay off in dividends.
6. Implement internal controls on your check signatures.
Another key question to ask in your practice is who is signing the checks. Do you have only one person signing checks, or do you have more than one? Whoever it is, make sure you know them and are familiar with their signature. A simple signature check can go a long way in preventing fraud.
For many physician practices, having internal controls in place to protect your revenue cycle can be a challenge. However, by implementing a few simple steps, you can help ensure you are not losing the money you are bringing in. Take time now to implement common internal controls to safeguard your revenue.
Kathi Rennick is Director of LBMC Physician Business Solutions.