White Coat Larceny

5 surprisingly simple ways your fellow physicians may steal (and how to protect your practice)

By Jay A. Shorr, BA, MBM-C, MAACS-AH, CAC I, II, III

Jay.Shorr.Headshot.041913As discussed in Part I of this series, a medical practice is no different from any other business when it comes to the risk of theft and fraud—and it isn’t just your non-physician employees who may be guilty of misdeeds. Oftentimes, practices bring in new associates with similar or complementary specialties to help treat more patients and increase revenue stream, but what happens if your new associate is taking from the till?

Knowing what to look out for and how to guard against it can help keep your practice safe. Potential schemes may include:


Physician associates have full control of your patients’ protected health and personal information. It is not uncommon for a deceptive physician to keep personal records of patients. In fact, upon departure from your practice, they are entitled to copies of all of the patients they have treated. However, the legality of contacting those patients for future revenue opportunities is a different story, and may become a legal issue if it is in violation of any previously agreed-upon contractual agreements, such as noncompete clauses.

Remember: copying information for patients that your associate did not treat is another story. This is in direct violation of the physician/patient relationship since no relationship was ever established.

To catch a thief: Be clear. Have a written agreement with your associates that specifies ALL charts and patient information are properties of the practice, and are not subject for removal under any circumstances, either written or electronic.


New physicians in your practice may bring patients from their old practice, and you may have agreed to allow them to treat and charge such patients independently. This is typically done under a separate credit card or payment system, with the funds going directly into the treating doctor’s personal business account. Your associate gains the trust of your staff during this interim process and is not questioned about any improper actions.

But what if the associate then charges the practice’s non-legacy patients and deposits those funds into his or her legacy personal account? It can happen. Patients trust their physician and would not question where the funds get deposited. Many never realize any dishonest transactions are occurring, since they don’t know the financial arrangements among the physicians in a practice.

To catch a thief: Nip this in the bud. Don’t allow a legacy account when bringing on a new associate. The benefit of bringing on an additional colleague is to add revenue to the practice.


Physicians and vendor sales reps may have a side arrangement not for ordering products or services in your practice. For example, if a partner or associate is allowed to approve contracts for furniture or maintenance services in the office, a vendor may agree to provide services at the physician’s home in exchange for contract approvals at the office.

To catch a thief: Keeping a close eye on your supply orders is a must. Sign off on all deals. Audit the amount of supplies, and note any and all unusual increased activity that does not coincide with increased revenue.


Billing for fees and services to phantom patients who have not been treated as billed and receiving payments from the insurance company under the provider’s independent and/or group National Provider Identifier number is fraud. Additionally, billing a patient for services that were not performed is fraudulent. When uncovered during an audit, there is virtually nothing that can be done.

To catch a thief: Periodically monitor the explanation of benefits to ensure the billing matches the treatments.


Many times, a deal can be made with a patient in the exam room. For example, additional services may be given if the patient pays the physician directly. The physician either keeps the entire amount and states that no treatment was performed or submits an amount that was originally agreed upon for the service that was scheduled and not for the upsell.

To catch a thief: Advise patients that ALL procedures must be paid at the checkout counter, or collect the anticipated amount upon check-in. Always have an assistant in the room who is aware of the procedures performed.

Jay A. Shorr, BA, MBM-C, MAACS-AH, CAC I, II, III, is the founder and managing partner of The Best Medical Business Solutions, based in Fort Lauderdale and Orlando, Fla. He can be reached via [email protected].

 Read Part I in Shorr’s exciting “to catch a thief” series here.

Original citation for this article: Shorr, J. White coat larceny, Plastic Surgery Practice. 2014; January: 10