Keep on the watch for internal fraud and abuse

October 15, 2005

Fraud and abuse in the ophthalmologist's optical dispensary are difficult to detect. Once suspected or even discovered, it is even more difficult as well as time-consuming to assess what is really happening, and to what extent it is having a negative impact on the practice and dispensary.

Finally, even if detected with seemingly solid evidence, it is difficult to prosecute due to a variety of legal complexities.

Unfortunately, I have been prompted to write this article having encountered this problem several times as a consultant to dispensing ophthalmologists.

The first area to examine is the daily optical receipts.

If you do not have a computer system that tracks this by dispensary location, you do not have a handle on the possible abuses of this system. Another process is to provide oversight, usually the practice administrator, to monitor the financial transactions of the optical department. It has been my experience that this is the best solution for checks and balances.

It does not, however, take the place of a computer system that provides the ability to allow access to certain transaction data only by the administrative or optical management branch of your practice.

Tracking optician sales

The next way to keep an "eye" on the situation is to track each optician's individual sales production. This report, while providing essential sales productivity data, also offers insight into discounting that may be occurring and that does not meet your practice policies. In fact, it may indeed be far exceeding what you can afford.

To prevent this, the practice should have a firm written policy of eyewear discounting, both internally for employees and externally for the patients. That way one can avoid any abuse of these privileges. A word of caution: don't provide too high a discount to employees or patients. Be mindful of your overhead (salaries and fixed costs) and cost of goods and expenses, and remember, you are entitled to make a profit.

Now that you think you have your discounting in line, beware of the "adjustments" syndrome that I have seen plague many practices. Be sure that your optical employees cannot make arbitrary adjustments, changing eyewear prices that exceed proper discount policies at the dispensing table.

How does this happen? Dispensers may become intimidated by a patient's demands or tend to feel, rather than know, that the patient cannot afford the product, resulting in arbitrary discounting. While dispensers should be allowed to offer discounts that still meet the required retail margins, going overboard cannot be an option.

Regarding adjustments, make sure that on the medical side of the practice, billing information cannot also be "adjusted out" by a staff member. I have seen this occur when the billing staff gets behind on collections, so they wipe out patient charges to cover their inability to do their jobs properly. Make sure that daily patient charges, as well as collections, cannot be adjusted after the fact.