ASSH Business of Hand Surgery Newsletter, July 2008, Vol. 3
Is Your Cash Safe? It Is If You Have a Drop Safe
by Jeffrey Babbitt
Of the 89 healthcare businesses surveyed by the Association of Certified Fraud Examiners (ACFE) in 2006, 19.1% were victims of skimming (cash stolen before it is recorded on the books), 12.4% of cash larceny (stolen after the cash is recorded), and 13.5% of check tampering.
This could easily be your Hand Surgery practice. A copay of $15 from a patient with arthritis of the thumb, $175 from the self-pay patient in for a follow-up visit about his flexor tendon, $25
coinsurance from the patient with a ganglion cyst getting a consultation about her surgical options, copays for PT and imaging visits—these cash and check payments pass through the hands of your staff every day.
Does all of the money you collect end up in the practice bank account? KZA consultant Abigail
Igarta has often “seen staff ... touching the deposit money to make change for themselves or make purchases for the office, but they do not replace the money.” A practice without cash controls makes skimming and stealing easy—and tempting.
To solve this problem, first you must lock up your cash. Standard equipment for the physician
practice should include a drop safe and a locked change drawer under the desk at the check-out station. The drop safe’s general features are designed to make your cash and checks easy to secure and nearly impossible for anyone but approved staff to retrieve. A drop, much like the slots or drops on Postal Service mailboxes, is easily accessible to staff who collect payments. An antifishing baffle prevents would-be thieves from removing anything through the slot. A lock secures the body of the safe from unauthorized entry. A drop safe would strongly protect against skimming and other forms of theft, while significantly reducing check tampering.
Of course, installing the drop safe and locked change drawer is only part of a more comprehensive cash-control plan including written policies and procedures for cash-handling tasks, background checks on all new employees, a proper daily close that requires a manager and one other staff member, and bonding for all cash-handling employees. These additional measures ensure accountability and responsibility.
Without a drop safe and a cash-handling protocol, you and your practice are at risk for cash loss. In contrast, a good cash-handling protocol gets the cash into the locked safe in a timely manner. Once there, the lock, the drop safe’s anti-burglary features keep it there until it’s time to deposit the money.
We surveyed online retailers BUYaSafe.com (www.buyasafe.com), Corporate Safe
(www.corporatesafe.com), Dean Safe Co. (www.deansafe.com), and Nationwide Safes
(www.nationwidesafes.com) for the range and variety of drop safes available in the current market. Security should be your primary criteria in buying a safe, but you will also want to determine the size safe you need and how much you are willing to spend. Drop safes range in price from less than $100 to well over $1,000, with prices generally rising with size, complexity of the lock, and level of security. Two of the most crucial security factors—the types of locks and the security ratings—are briefly explained below.
Locks
• Single-lock – This is the least secure type of lock and sells for between $40 and $225.
• Dual-lock – The second key lock doubles the security by placing responsibility on two people: the employee who performs the daily close and the manager. The cost is about double that of the single-lock safe ($119-$439). Both single and dual key-lock models are only available in smaller sizes.
• Combination lock – Smaller combination drop safes cost around $150-$500—a little more
than key-lock safes—but larger sizes are available for up to about $1,400.
• Electronic lock – More advanced technology gives you greater security for about $100 more
than the combination safe. This option might be best for large group practices with many
transactions.
• Biometric lock – The current gold standard for drop safes, these can be opened only with one person’s unique fingerprint and are therefore very difficult to “crack.” Unfortunately, a safe
featuring both a biometric lock and a drop slot is also very difficult to find. An Internet search
turned up only one online retailer—Corporate Safe Specialists—offering one model for $895.
Ratings
• Burglary – The Underwriter’s Laboratory (UL) rates safes only after an intensive test in which their own experts attack the safe for 15 minutes armed with power drills, welding torches, and more. If the “burglars” fail to break in, the safe is rated B (for “burglar”).
• Fire – Look for a fire resistance rating of at least a UL 350, which means that paper money and checks inside will not reach flammable temperature for one hour or more.
A simple idea and a relatively small investment, a drop safe can reduce your risk against
accidental and deliberate cash loss from inside and outside your practice, as well as other small disasters. Without it, you have more to lose than you know.
Other Cash Controls for Your Practice to Implement
• Perform background and credit checks on new hires.
• Bond all employees who handle cash, or check your umbrella insurance for theft coverage.
• Limit responsibilities until new employee has successfully passed probationary period.
• Post all patient transactions at time of service.
• Be sure to keep charge posting, payment posting, and refunds separate.
• Issue computer-generated (not hand- written) receipts for cash and other payments.
• Install locked change drawers.
• Institute tight daily close requiring two people minimum. KZA consultants can help you create a protocol.
• Number charge tickets/encounter forms and generate “Missing Ticket” Report.
• Run “Small Balance” Report and review “Credit Balance” Report monthly.
• Develop written policies and procedures for the following:
- Charge Capture (address timely submission, reconciliation process).
- Petty cash.
- Bad debt, referrals to collection agency.
References
1. ACFE. The 2006 Report to the Nation. Association of Certified Fraud Examiners, 2006.
available via http://www.acfe.com/documents/2006-rttn.pdf.
2. Corporate Safe. Finger Print Safes. Corporate Safe Specialists, 2008. available via
http://www.corporatesafe.com/store/item.asp?ITEM_ID=4.