You did everything right. You dictated the visit and the surgery promptly, documented perfectly, coded accurately, and yet still you aren’t paid. Why? Perhaps the systems in your practice allow receipts to be short-circuited in a variety of ways, and payments for the work you do are not being reconciled and credited to you. Here’s a step-by-step process to assess the internal cash controls in your practice.

Evaluate the encounter form
First, evaluate your encounter form, also known as a charge slip or superbill. This form communicates the services rendered for a particular patient, and why they were necessary, to your office staff. Is the form numbered by the computer system? If not, that’s a significant problem.

Numbered encounter forms are an important control. At the end of each day, your staff should be able to account for the encounter forms for every patient seen in the office—both scheduled and worked-in. This can be done in two ways: by running a missing ticket report or verifying charge slips against the appointment schedule.

Missing forms may mean missing money in the form of copayments or prior balance dollars that were collected and not recorded. Lack of managerial oversight may tempt staff to pocket the cash and mark the encounter forms of cash-paying patients as “no shows.” Avoid this by insisting that all paying patients received computer-generated receipts.

The employee who opens the mail should run a calculator tape of all checks sent in as payments. After the business office applies the payments, the charge-posting total on the summary transaction report should match the total on the calculator tape. The office manager should include the explanations of benefits (EOBs), the checks, and the calculator tape in the daily close documentation.

Institute a proper daily close
Your practice management system should produce a “Daily Close Sheet” similar to the one shown in Figure 1 on page 35.

The daily close process enables check-out and billing specialists to accurately account for all charges for office visits, tests and injections, hospital visits, emergency department treatments, and surgery, as well as all cash, check, and credit card payments collected at the time of service or received in the mail or electronically from patients and insurers. In other words, it’s a snapshot of all the financial activity in your practice for the day.

The daily close packet serves as a record of daily activity and includes supporting financial documentation. It is produced after the relevant reports and copies from front- and back-office staff have been collected and you or your practice manager has verified that everything balances. Store the daily close form with the following source documents:

• computerized daily close reports
• encounter forms
• appointment schedule
• time-of-service check copies
• copies of mailed-in checks
• EOBs that came with insurance checks
• credit card slips
• bank deposit slip
• deposit receipt

By scanning the original paper copies and storing the information on a computer disk (labeled with the day’s date), you can decrease physical storage space and speed up retrieval time.

Post all patient transactions at time of service
All patient transactions must be posted at the time of service—not the next day or at the end of the week. Ensure that all paying patients receive a computer-generated, printed receipt. Make sure that computer printers are conveniently located and accessible by checkout staff—never allow staff to claim they were “too busy” to print a receipt. Handwritten receipts are the devil’s mischief. Official receipts show that patients have verified that their entire payment was entered.

Evaluate your receipt/deposit procedures
Take a closer look at your methods for receiving and depositing payments into the practice’s bank account. Suppose a practice sees 80 patients a day, and each patient pays a $20 copayment. The practice has collected $1,600 by the end of the day—more if patients also pay any prior balances. Can you afford to let those funds accumulate in your office until the end of the week?

One way to speed deposit of checks from patients and insurers is to institute remote check deposit. With this technology, your receptionist scans checks into your account, just like a teller, and there is no waiting for that end-of-the-week trip to deposit the money.

In addition, some practices opt for the more expensive option of a lockbox—a bank-controlled box where payments are directed and deposited the same day. Some large practices use remote check deposit at the office and have large insurance checks sent to the lockbox, if they aren’t using electronic funds transfer. Practices using electronic funds transfers eliminate paper checks by having the insurance company wire payments into the practice’s bank account.

Install a locked daily change drawer
At the reception desk, install a locked daily change drawer so staff can make change for patients who pay in cash.

In practices without change drawers, staff may resort to making change out of their own wallets—definitely not a good business practice. For patient convenience and professionalism, keep $200 to $300 in small bills ($1, $5, and $10) for making change. Each day, have staff balance the change drawer and account for the cash.

Institute a procedure for large cash payments
To protect the practice from being short-changed—and the cash handler from being accused of stealing—institute a procedure for handling large cash payments. The following precautionary steps should be taken with large payments of $500 or more in small bills:

• Bring the patient to a back room with a second staffer as a witness.
• Count the bills in front of the patient and witness.
• Place the cash in a large envelope and seal it with tape.
• Have both the patient and witness sign the envelope.
• Keep the envelope in a safe along with the rest of the money to be deposited.

Perform background, credit checks on new hires
When hiring, identify potential high-risk candidates by performing both background and credit checks. Companies such as Select Smart can verify criminal background and credit history for a minimal investment of about $75. Even after establishing audit controls and conducting background checks, persistent oversight is still the best preventive measure against embezzlement.

If you are unaware of your office’s cash handling protocol, take this opportunity to evaluate every step in the process and engage the help of your accountant or a consultant to make positive changes. By being proactive, you minimize your chances of being a victim of theft in your own practice.

Abigail Igarta, MBA, is a consultant with KarenZupko & Associates, www.karenzupko.com

For more information, visit the AAOS online Practice Management Center at www.aaos.org/pracman (Member login required)