Presented to: OCHIN 11/17/2012 Presented By: Tiffany Couch Acuity Group PLLC HOW SECURE IS YOUR PRACTICE?

 Record Debt  Stock Market Roller Coaster  Housing market crisis….  Unemployment at all-time high READ THE HEADLINES Copyright 2012, Acuity Group PLLC

OCCUPATIONAL FRAUD DEFINED OPPORTUNITY PRESSURERATIONALIZATION OCCUPATIONAL FRAUD – Using one’s occupation for unauthorized personal gain through deliberate misuse of the employing entity’s resources or assets.

METHODS OF FRAUD 2012 ACFE REPORT TO THE NATIONS Copyright 2012, Acuity Group PLLC

Behaviors  Employee rarely absent; refuses to take vacations.  Employee refuses to relinquish control; train new employees.  Employee works long hours and/or when others are not present.  Employee appears to be living beyond means. Motivators Addictions High personal debt Personal crisis Attitude of entitlement Copyright 2012, Acuity Group PLLC KEY RED FLAGS

YOU ARE THE #1 VICTIM Organizations with fewer than 100 employees 31.8% of all cases reported Highest median loss ($147,000) than their larger counterparts Employees with 5+ more years are MOST LIKELY perpetrators Copyright 2012, Acuity Group PLLC SMALL BUSINESS BEWARE The typical U.S. Organization loses 5% of its annual revenues to fraudulent activity Report to the Nation on Occupational Fraud and Abuse

Copyright 2012, Acuity Group PLLC TYPICAL HEALTHCARE FRAUD SCHEMES

WHO’S TAKING THE MONEY? Copyright 2012, Acuity Group PLLC Tenure of Perpetrator — Median Loss Courtesy of Association of Certified Fraud Examiners (2012 Report to the Nations)

REALITIES - HOW IS FRAUD DETECTED? Courtesy of ACFE 2012 Report to the Nations Copyright 2012 Acuity Group PLLC

CLIENT PERCEPTIONS– ANTI FRAUD CONTROLS The sum or percentages in this chart exceed 100$% because many victim organizations had more than one anti- fraud control in place at the time of the fraud Courtesy of ACFE 2012 Report to the Nations

COMMON MISCONCEPTIONS  Banking  Checking signatures  Conversion of checks  My Bank Will Cover My Losses  Audits = Fraud Detection Tool  CPA will find it  Background Check Copyright 2012, Acuity Group PLLC

 Bank Statements  Who is reviewing?  Review front and back of cancelled checks  Review electronic debit activity on the statement  Segregate Duties  Even when resources are limited  Cash Business?  Verify cash is listed on the bank deposit slip  Ask Questions  Even if you know the answers – perception is the key Copyright 2012, Acuity Group PLLC EASY ACTION PLAN

 Front Desk  Should not be able to apply credits to patient accounts  Immediate endorsement of checks  Credit card processing – check reports  Disbursements  Approve vendors in advance  Insist on proper supporting documentation  Expense reimbursements must have receipts Copyright 2012, Acuity Group PLLC ADDITIONAL INTERNAL CONTROLS

 Seek Expert Opinions  CPA  Billing Experts  Bankers  Insurance Agents  Bank Products Can Help Protect  Positive Pay  Lockbox Services  ACH Controls Copyright 2012, Acuity Group PLLC CONSIDERATIONS

Copyright 2012, Acuity Group PLLC REMEMBER – TRUST IS NOT AN INTERNAL CONTROL! Tiffany R. Couch, CPA/CFF, CFE Acuity Group PLLC