Protect Your Medical Practice from Healthcare Fraud with Professional Financial Management

Published by BradyRenner CPAs | July 6, 2022

According to the Department of Justice, patients in the United States collectively lose billions of dollars each year to healthcare fraud and abuse. For medical practices, this unfortunate reality decreases patient trust amidst the already-stressful insurance claims, billing, and payment management processes. Technological advancements in the field mean there are more moving parts to keep track of each year — and the burden on providers to manage financial systems while delivering care increases the likelihood of human error. Healthcare fraud remains a major concern for all medical personnel, but smaller practices are at a disadvantage with less staff to whom they can allocate tasks. A firm financial management strategy is essential for these practices to mitigate the risk of fraud.

This article will provide insight into the array of complex factors that create space for healthcare fraud to occur – as well as the financial management expertise employed by CPAs to protect small medical practices from this very real possibility. 

What types of fraud face the healthcare sector? 

It is important for providers to understand the most common instances of fraud in order to grasp the urgency of this problem. 

Outside threats 

With technological advances come many improvements to healthcare. Most notably, the comprehensive switch from paper to online records of patients’ personal and financial information has expedited participating practices’ organizational capabilities. Unfortunately, the industry-wide use of technology also allows for ransomware and data privacy issues — such as phishing emails and phone calls — to occur. For providers who are at care capacity, these incidents add significant stress and increase the likelihood of internal errors to patient information. 

Additionally, providers must be aware of identity theft schemes that prey on populations made vulnerable by illness and disease. Some patients reporting instances of medical fraud because of incorrect charges to their accounts may actually be victims of identity theft – but without the proper investigative techniques, this might not be communicated properly between provider and patient.  

Abusing the system  

Most healthcare fraud occurs somewhere along the chain of command within medical practices of all different sizes. Cases of healthcare fraud within an organization — whether intentional or accidental — can lead to a loss of patient trust, a damaged reputation, and future financial insecurity. 

Some of the most common instances of fraud happen when providers or some member of their staff:

  • Accept kickbacks, or additional compensation for referring patients to a specific facility, session, lab, etc. 
  • Abuse the coding system for insurance claims and bills by up-coding, or changing the billed procedure to a pricier one that did not occur 
  • Bill for canceled or no-show appointments (outside of late fees) 
  • Bill twice for the same appointment or service
  • Submit Medicare or Medicaid claims for services that were not provided

Small practices at risk 

Because single-physician and small group practices have less time and manpower to focus on billing and claims, they are more likely to make mistakes. Human error is a common culprit within healthcare organizations that can easily lead to complicated and reputation-reducing fraud accusations from patients. Whether or not fraud actually occurred, the damage may already be done in some cases.  

How are CPAs equipped to help prevent healthcare fraud?  

If you find that your practice is struggling to keep patient billing and insurance claims organized, a CPA may be just the resource you need to prevent fraud. While medical professionals are experts in their respective fields, many are inexperienced with other aspects of running a business, like financial management. Even administrative staff often lack the background to understand what is needed to secure patient accounts against threats. CPAs feel at home handling a wide range of financial accounts from clients with all types of backgrounds. Some CPAs also hold previous experience in the healthcare sector, making them more adept at taking on management responsibilities with ease and accuracy. 

While medical practitioners must focus on their patients, CPAs are solely focused on the numbers behind the practice – making them committed to catching and preventing mistakes. They are also well-versed and up-to-date on financial software. By balancing their commitment to the healthcare industry and their removal from it, CPAs position themselves as the perfect finance-minded partners to small practices. 

How does firm financial management mitigate fraud risk? 

In addition to their usual financial management role, CPAs can help reduce the risk of healthcare fraud by providing extra coaching to medical personnel from an accounting and risk management perspective. This can include how to identify indicators of suspicious charges to patient accounts, assistance with a protocol for reporting fraud, and suggestions to streamline accounts for small practices.  

Protect Your Practice From Healthcare Fraud  

Medical practices that choose BradyRenner gain access to financial expertise tailored to address long-running issues and concerns plaguing the healthcare industry. Our CPAs have experience in financial management for a range of practices, from physicians to dental offices, and many other essential healthcare services. We respect providers’ ability to deliver quality care amid an ever-evolving medical landscape. By providing the tools, knowledge, and manpower to mitigate the risk of healthcare fraud, we assure continued financial confidence for small medical practices. Contact your BradyRenner CPA today to learn more.