What’s one of the most embarrassing things that can happen as a dentist? It’s embezzlement — and no one is immune! So, how do you prevent it from happening in your practice? To share what she learned the hard way, Kirk Behrendt brings in Dr. Stacey Hall from The Dawson Academy with tips to deter embezzlers from stealing your time, money, and energy. Don’t think it can’t happen to you! For the best practices to protect your office, listen to Episode 653 of The Best Practices Show!
Embezzlement is more complex than you initially think.
Don’t think that embezzlement can’t happen to you.
Have solid checks and balances in your system.
Always do background checks before hiring.
Trust, and verify.
“To my knowledge, I have never had anybody embezzle from me. I have always done checks and balances, checks with what we were supposed to collect, what was being deposited, and that sort of thing. I had a patient that came to me and said she thought somebody was stealing from me — and it was very cut and dry. It wasn’t like she could think it. It was, from what she presented, we knew. And it was, I think, more surprising because I and my whole team would have never thought this one person would have ever done it.” (3:47—4:30)
“You still think, ‘Okay, how did this happen? Has it happened before?’ But you’re also like, ‘Well, certainly, there has to be something in [the embezzler’s] life that made her do this for just a moment. There’s just a moment that she’s doing this. This was something that just happened. Maybe she owed some money. I don’t know.’ So, I automatically go into this compassionate, like, ‘There had to have been something that happened that made her do this. This couldn’t be a long-term thing because we certainly would have caught it.’” (7:56—8:29)
“[After finding out about the embezzlement and] I started digging, then I’m starting to get angry. I’m angry at myself, and I’m angry at the person doing this. I’m angry at the fact that she’s done this to a patient, and then the patient trusted us to hire somebody that wouldn’t do this. And then, also the patients’ trust that we’re also doing checks and balances. You start to go into this whole spiral. Even my front office ladies, as they start to learn what was going on, they start to feel angry, like, how did that happen around them? Or how did they never feel or get a sense that something like this was happening, or that she would be able to do that? I have pretty good intuition, and this one completely bamboozled me. I did not see this coming, whatsoever. So, I felt pretty lost.” (8:35—9:24)
“[Embezzlement is complex] because you think, ‘Okay. Well, there must have been adjustments. That’s how we can comb through. We can just tag all adjustments and say we would investigate all those cases.’ Well, even after we suspended her, my staff thought that she wasn’t coming to work the next day because there was a family emergency. We weren’t really talking about what was going on yet. In fact, we have somebody that leaves the office with a cell phone every weekend so that our patients, if they were to call for an emergency, actually get somebody on the phone. She was supposed to have the phone that weekend. And so, I called my office manager and I said, ‘Why don’t we make sure that Brittney goes and grabs the phone?’ She said that’s fine. So, Brittney goes to the office to grab the phone while Sarah is at the office — she accessed the office. It ends up that Brittney doesn’t know Sarah is not supposed to be there, and we don’t know what Sarah was doing on the computers that afternoon. But we do know, from that Monday after that, she had contacted a patient, told her that she wasn’t going to be at work on Monday over the weekend, and so if she wanted to get the work done with the discount she had promised her — so, then there was a whole other element. She was promising discounts to patients and saying, ‘You need to check out with me if you want the discount. I’m the only one authorized to give you the discount.’ She said, ‘If you want that discount, why don’t you bring the cash this weekend? I’m sorry to do this.’ So, she actually called the patient and collected $3,000 in cash. There’s a whole other element. There’s a cash element. You’re trying to figure out checks, and now you have cash. And so, then we were trying to figure out patients who usually pay with cash, and what would happen with them. We find that out. So, there’s the cash, and then there’s the checks. And to be honest with you, we have credit cards that are saved. You can’t see the credit card information if you were to look at the computer. But then, I’m like, ‘Well, did she ever get a credit card and use the credit card for little purchases?’ I don’t know that. That’s a whole other element that I don’t know yet, unfortunately.” (10:19—12:40)
“As we start to dig, we started finding some adjustments and some things, and we started calling patients and questioning and asking them to check their checks. It ends up that there were some patients that went and checked their checks. She was essentially banking on the fact that patients would not go back and look at their check in the computer and say, ‘Oh, yeah. That was actually endorsed, and everything was right there.’ Because I don’t go to check my checks. If I do write a check, I don’t go and make sure. Now, I always write the check — the payee section, I don’t let people stamp it. I’ve never done that. So, this was her telling patients that she was going to have somebody stamp it, and she actually would write it to herself instead. So, that was a huge target. And so, we had this collection of information to provide to the investigators.” (12:43—13:39)
“It ends up that we get the subpoena, and they get [the embezzler’s] bank records. So, let’s say that we had taken to the investigator about $9,000 to $10,000 worth of what we knew. That was just checks. This did not include the cash that we had figured out. It ends up that the investigator comes back to us with all the names on checks that were deposited with the amounts, and there was another $15,000 that we had no idea about. So, those were another whole group of patients that we needed to call. And they were patients that, it lined up. What they did is from January forward, thinking that maybe we thought this started happening at the end of winter, beginning of spring. Well, it ends up that — no. In fact, it was all the way back to January.” (16:51—17:42)
“We have an advocate. At first, I was like, ‘I don’t need an advocate. I’m just going to call the investigator.’ Well, they’re not always available, and so the advocate kind of holds your hand. I thought, ‘Oh, we can get through this.’ No. Having that advocate has been good to be able to call on.” (18:36—18:54)
“I’m frustrated. I’m mad. I go through lots of emotions. This steals from my paycheck — we make good money. We’re dentists. But it steals from the bonuses from my staff. They get bonuses. And so, it stole from the collections because this was money not collected. So, if we’re up to $30,000, that’s money that was stolen from my staff.” (19:42—20:08)
“I actually had the gift of somebody being able to do background checks for people starting to work at my practice when I was private. Now, you have Hartland. They do all that, and that’s the gift. Now, the thing is, if [the embezzler] did this for someone else and got away with it who was very old-fashioned dentistry, then this would have never come up.” (21:27—21:49)
“I’m all for people getting back on their feet, and I agree people can change. But when that came out that [the embezzler’s] charges could possibly be lessened, I about lost it because I’m like, ‘This is a lot of money. This was very methodical.’ Actually, even the fact that when I first was going to suspend her, I looked at her and asked, ‘Is there any reason why you think this would be happening, why a suspension would be happening? There are maybe some adjustments that look funny,’ she looked me dead in the eye — and I think nonverbal language is very loud. There was not one thing in her nonverbal language that made me think she [was telling] the truth. Now, I knew she was not telling me the truth. But what freaked me out even more was that she was so stoic about it. She looked me in the eye and was so serious about, ‘I have no idea why this would be happening.’ That actually scares me even more. I know this is probably not the first time. So, when they were talking about her charges being dumbed down — if there could be a word for it, dumbed down — I’m like, ‘No. Sorry, hell no. That’s not okay with me.’” (22:00—23:25)
“Everyone is a [potential] victim, whether you’re in a single practice, solo practice, or whether you’re with Heartland DSO. Believe me, we’re talking about this on a regular basis with my regional manager, district manager, you name it, of how to prevent this.” (24:44—25:02)
“With Heartland, I just handed that over to them and thought, ‘Okay, they’re doing the checks and balances.’ Well, I still need to do the daily, weekly, monthly checks and balances and be able to ask questions and be a little bit more involved. As much as I’ve never been a gross micromanager, asking questions is what always helps keep people in line. I think it gave me this moment of, ‘Okay, I need to still be involved in that so no one can feel that they could actually be able to get away with that.’” (26:34—27:13)
“What I would do different, I would have, at some point, made it so that each person walking in the building — yes, you have a key fob. In our building, we do have an alarm — I would have made sure each person had their own code so that I knew who was in, who was out. Again, we’re not huge. Even though I’m with Heartland, I still have a small practice. And so, I didn’t feel the need to do this major shift of making it feel like this big entity . . . Well, that’s changed.” (27:17—27:58)
“I agree with you on the computers, everybody having a login. Even when you’re logging into Dentrix, you’re on your Dentrix site, you’re logging in with your code. The problem is there’s still an issue with that, because sometimes I’m typing my notes on a computer in the back office, and sometimes I’m typing notes on my computer in my office. Maybe you get more strict with that. I don’t know. We do know that Sarah’s computer — she sat at her computer most of the time, and nobody else was really logged in there. But the thing is, when you do those checks and balances, that’s where it can get a little fuzzy or a little gray.” (28:01—28:43)
“The other thing that, looking back, I would have done differently is, we had some new staff at the time, and I think what she did is she took advantage of the fact that they didn’t know all the rules. If I wasn’t around, that’s when she would, on the sly, say to a patient, ‘I can give you a discount for cash if you want to bring that in.’ We don’t do discounts for cash. I know a lot of people do — it’s the thing. We don’t. It ends up that she was doing that on the side. But then, these new girls — she was training them. So, they thought she’s the one. If you want to know anything about your account, this is the girl you go to. She was like the leader up front. So, in their minds, she was doing everything that she was supposed to do.” (28:45—29:38)
“What we’ve done differently, one big thing is — what we found is that, yes, there were some adjustments. So, yes, those are things that are red flags for all offices. If you’re looking at your adjustments, that’s great. The thing is, it wasn’t all adjustments. But if there are adjustments, those have to be signed off by me. We have made this slip of paper. I know people are trying to go paperless. There’s still reason for paper. I’m sure you could find something to do it on, an iPad or phones, however you want to do it digitally, but anything that has to be signed off. The other thing is, because it was adjustments — but it wasn’t all adjustments. It was also if somebody was changing a fee on a code. So, let’s say that I bring somebody in. There are a lot of people that come in for a limited exam, and I’m like, ’You know what? They’re a patient of record. They just wanted me to look at something. Take that $99 off. Just make it zero.’ So, if we do any of that, like taking that code and taking it from $99 to zero, or if I am doing an MOD on a patient and I’m being an MOD-L, then I just say, ‘You know what? Change it in the computer, but still keep it at the charge that the patient was being charged that they thought that they were paying today.’ I’m fee-for-service so that, to me, is important. I don’t want them not to pay more and feel like they’ve been bamboozled. So, those instances, they can’t change the code unless they have this sign-off. Between myself going to the front and my office manager seeing that I’ve signed off on it, that’s where we see it, where things are allowed, so to speak.” (29:40—31:18)
“What’s the answer to the fact that what [the embezzler] was doing is — everything was right in the ledger. You check the ledger, you check the ledger, and then maybe two weeks later, before the month’s end, she would swipe the ledger of the patients as if they had never come in. And so, that check was still sitting there waiting for her. She didn’t actually put it in the computer. It was just in this cloud. She would take that ledger and swipe all the codes as if the patient never came in, and then she would take the check and deposit it. So, their account was zero. Their balance was zero. And so, that is one of those things that’s like, when are you really looking at the ledger to make sure everything adds up two weeks from now or three weeks from now? I don’t know what the answer is to that.” (31:25—32:13)
“I’m putting a little bit of pressure on software companies like Dentrix. Just like you were saying that you get an email or a text or something whenever there’s a red flag or somebody’s entering your office, why am I not getting a text — or, I don’t want a text for everything, but why aren’t we getting a diagram of all changes that were being made? Dentrix should be able to throw out, ‘There’s a red flag here. Your person, Sarah, on her account, made 15 changes in one person’s account today.’ Like, why aren’t they . . .? I mean, we have these software companies that supposedly — I think that they could change these things. I don’t know if it’s maybe risk management, like in the sense of, if they’re trying to say that they could prevent embezzlement and then they don’t, I don’t know if it’s a risk for them. I have no idea. But I’m going to put a little pressure on these software companies. And to be honest with you, the one that can come up with something that would be like, ‘There are red flags here,’ to try to prevent it, I think that we should all be applauding them and possibly buying into their service because I think it would be a great idea.” (32:16—33:29)
“The take-home is, build a system for the checks and balances. I think the one thing that gives me a little bit of security now is people having to sign off on all these things. Because I have so much going on, if somebody said, ‘Did you authorize that adjustment back in May for this?’ I’d have no idea. I don’t remember the conversation I had with the patient yesterday if somebody didn’t actually type it in the computer. So, that gives me a little reassurance. If there were any changes, if it’s not in the documents that I’ve signed off on it — it helps me. It gives me a little reassurance. It’s, again, the whole checks and balances. So, if there’s anything that I could say is a take-home, put together maybe one other thing in your system that helps you put a little reassurance that this isn’t happening to you.” (37:59—38:48)
2:17 Dr. Hall’s background.
3:20 How embezzlement came to light.
6:55 The emotional and financial toll of embezzlement.
24:15 Lessons learned and changes made.
35:17 The recovery period.
37:48 Last thoughts.
Dr. Stacey Hall Bio:
After completing her undergraduate degree from Virginia Tech in 1998, Dr. Stacey Hall graduated from VCU’s MCV School of Dentistry in 2002, receiving her D.D.S. She is a member of the American Academy of Cosmetic Dentistry, Academy of General Dentistry, the American Dental Association, and was awarded member fellowship to the International Congress of Oral Implantology in 2008. Dr. Hall is a scholar with the internationally renowned Dawson Academy.
She is part-time faculty with the Academy, assistant teaching for courses concerning occlusion and rehabilitation of worn dentition. Dr. Hall also leads their ambassador program. She and her husband, Michael, have been blessed with three beautiful daughters, Lanie, Gracie, and Abbie. She is a loyal Virginia Tech Football fan and enjoys boating, skiing, Bible study, and missions work.