“I have noticed an increase in the number of cases involving theft of patient and insurance refunds over the last few years.”
Here are are a few suggestions to help when processing refunds to patients or insurance companies.
Credit Card Refunds
Set up your merchant terminal so employees cannot issue a refund to a credit or debit card without proper authorization. (i.e.: employees will need to ask you to use your authorization PIN code or card to before they can process a refund)
Instructions are in your user guide, and you can always ask the company that processes your credit card payments for assistance.
Check your merchant service statements each month to look for any unknown refunds . They are easy to spot . If things do not add up, examine further to find out why.
TIP: IF AFTER you have initially started locked down your credit card terminal to require refund authorizations; you then observe your employee exhibiting odd (red flag) behaviors – then that’s a warning sign. Check your embezzlement red flags here
When refunding by check; if you can, prepare and mail the check yourself.
DO NOT prepare refund checks and give them to an employee to put in the mail. In fact, you should never give a check to an employee other than their own paycheck. Mail every check yourself – or have an external bookkeeper do it for you.
Look in the software and notes to confirm the patient’s correct address before mailing the check.
Whenever you are asked to issue a refund make sure it is legitimate. Examine the patient’s account, insurance EOBs, day-end merchant records and other documents you need to support that the refund is bona-fide.
It may be a good idea to make a “refund form” that your employees must complete and submit whenever a refund is requested. Keep a paper trail.
If you suspect that an employee has taken checks that you have issued for refunds in the past; go online to your bank and obtain images of those cancelled checks.
Examine the backsides of every cancelled check to see if the depositor information matches the payee information. What you are looking for are markings on the back side of the check that suggest it was deposited into the “wrong account”
Often, misappropriated checks end up being deposited into the same bank account that your employee deposits their payroll; so you can look for a match in deposit information .