Theft Introduction and Explanation:
Mara: We are going to be talking today about something that every single practice deals with and that is employee theft. Now, for the sake of today’s conversation, we’re obviously going to be talking about the cosmetic/aesthetic industry. If you have heard lectures from Jay any other time in conference history then you’ll know this is something that he is an expert at as far as giving tips and tricks on looking at how to prevent that, how to spot theft, and what to do if you find it. Jay, let’s start with the fact that 82% of medical practices report theft in their office.
Jay: Well, in all honesty, there are so many different types of theft and fraud, and I consider fraud to be bad. I consider embezzlement to be bad. Anything, where somebody decides that they want to be a partner without signing a formalized partner agreement in the legal sense of the word to me, is that and there are many different types of that. For example, I’ve seen situations even unfortunately in my former practice where patients had their valuables in the exam room and while they were having a laser treatment performed, they had the shutter goggles, the dark goggles, and an unscrupulous medical assistant went through their purse. Unbeknown, the medical assistant took off their goggles and then filtered through the purse.
Receipts and Deleted Transactions:
Jay: Collected receipts from patients, this goes at the checkout process where you may end up going in and checking out through practice management software, and then when the checkout person has the opportunity they go in and they delete a transaction that’s been posted. So what happens is the patient physically gets a receipt for the transaction, the person in your office goes and deletes the actual transaction. This happens, especially when it’s a cash transaction because it’s very hard to do if it’s a credit card transaction because it was processed. Or if you scan a check, once that check has been scanned, it’s very difficult to process it. So that’s collected receipts from patients and what I say the solution to that is really to create and have a deletion report similar to that of EMR and medical records. There always is a trace, so produce a deleted report and see what is deleted because there are many legitimate reasons to have a deleted transactions. For example, I have two Maras let’s say and one is m-a-u-r-a or it’s m-a-r-a and it’s s-h-o-r-r or s-h-o-r-e. It might be, especially in certain communities where you may have a heavy Latino base, a heavy Jewish base where they have a lot of common names.
Mara: How many Morris Cohen’s did you have in your practice?
Jay: Now we had a lot of Morris’s, Vinny’s and we had Rodriguez’s and Lopez’s right. I even make that mistake in my own address book, when I’m sending an email, I hit m-a and hit enter. I send it to marry somebody when I really meant to send it to Mara. So there are reasons why you visibly delete a transaction and then post it. This is just something you have to be careful about in deletions of transactions, and just go back and look at a deletion record and review it. Now office and medical supplies, this is true as well. I used to have a time wherein August and September I would tell my staff, each one of you has an allotment of two legal tablets, a box of pencils, have a dozen pens, take them home to your kids for school supplies. It wasn’t because we had a lot of single moms, we had a lot of married moms and you know couples, but it was a way for us to actually kind of like give a bonus to people for school supplies. What that did, it actually prevented that because people end up taking school supplies, office supplies, unknowingly.
Skin Care Product Theft:
Mara: What about skincare products?
Jay: This was a real big one, I either had to worry about it from patients, or even potential in staff. We did not have an open display of skincare products because you don’t want people looking at it and putting it in their purse. We instead had an open display with boxes with nothing in them. There are cases and clients that take some of the major brand products, empty it out, and steal the product. You can peel the cap off and put it back with a generic product and I hate to say that it happens. The classic story is we were in a physician’s office, plastic surgeon’s office and we uncovered a theft and we told the doctor at dinner that night on-site visit. The doctor reacts by saying, “I make enough money, I can’t track all of that, or I can do without that employee.” I’ll give you an example of what it was. He was a PA for another practice and what he was doing was telling the other practice to pay him by the procedure plus the consumable of which he was stealing. It’s the old trick of the vodka bottle that a teenager is used and empty out the vodka and then refill it with water and I’ve had that happen with Botox, a little bit for me and a little bit for you. Whether it’s a skincare product, back bar,
Mara: Hold on real quick now, when you’re talking about the old water and the vodka bottle, and I was a good kid I didn’t pull this but believe me I know people that did. How did you find out? How did the practice find out that this was going on, because I want you to tell that story about how you found out, how you dealt with it?
Jay: It would come in two ways. The first way I found out is I kept getting a lot of fewer responders and non-responders. I knew that when we mixed our neuromodulator with two and a half cc’s of saline that each time it was 4 units. That’s simple, 3 is 3.3, 2 is 5, and 1 is 10. When you’re doing the D concentration level, and when you do the same amount of units in the Chrome Abela and the talus, and these are the same patients that are coming back, you kind of know how many units you have put in the anatomy of the face. When they kept coming back, and these are the days we never charged by the unit we charged by the area, with three touch-ups. So when the same Mara patient would come back for their two week follow up, we kept saying that they were less responsive into the upper brow, or in certain areas that they never had before. Women came back prior to the two week follow up, we took photos and we didn’t see the movement that we would have seen.
Mara: This is another really good case of why every single patient needs before and after photos.
Jay: This became more of a problem and what I was noticing is we were a very large purchaser of the neuromodulator product. If we would buy 25 bottles in a week or every two weeks, every one of you out there will know that if you buy 10 bottles, 20 bottles, 50 bottles at one time they’re usually, if not all, going to come in at the same number. If you ordered 10 bottles, 25 bottles today, and 25 bottles tomorrow they’re probably not going to be the same because of the hundreds of thousands of bottles that are distributed by the manufacturer. And of course, in a day, they’re going to come in with different lot numbers. These were the days before EMR and then with the exception of EMR, I would track a lot of numbers that were the non-responders. At one point in time, they were all the same. I would call the manufacturer and they said, send us a bottle of the product. Well, it’s not hard to do because I used to save 5 to 10 bottles a day or two days because as we all know at the end you take all your bottles, you pop the tops, you extract, you know the amount that’s left in the bottle and you can get a good amount of Botox on the bottom of the bottle. I took those bottles and sent them back to the manufacturer and of course, the question was, was your dilution right? They told me that’s not what this dilution rate is and I was shocked to understand this. So what I ended up doing was diluting it myself and sending that bottle full with 100 units back to the manufacturer because it’s not as if it was the bottom of the barrel. It was a full bottle because I wanted to find out what was it about blue bottle.
Mara: You had a busy practice, so how does one uncover which team member did it? How do you handle the situation once you discover that? We’ve run into all sorts of situations where we go into a practice and on a site visit we see all sorts of things being stolen. I’m not talking about theft of prescription pads, I’m talking about a syringe of this or a syringe of that. We’ve seen this happen where someone will say, I don’t want an MA to do it, I’m more efficient when I mix it myself.
Jay: We just uncovered one of the two major ways that I did it. I was the keeper of the product, so if there were syringes then every bottle is numbered and every syringe is numbered. I had an inventory list on every bottle and who it was that injected every bottle of the neuromodulator by the unit 10th or whatever and who it was injected into. I did this for multiple reasons, I did it for inventory reasons and I did it in the event of a recall. Now, I had a suspicion of who my unscrupulous employee was and I only gave that employee a specific lot number. I gave other doctors different lot numbers so that when I had nonresponders and lower responders, I could limit it down to a specific lot number because each one had their own lot numbers. What I did know is it wasn’t the owner of the practice. I had a MA come to me and say, I think we have a problem because this PA always has a syringe in her lab coat and does not allow anybody to mix the product. I called the PA out and I said you’re not allowed to do this. The PA reacted by saying, “well, but it helps me and this one says that I also don’t need a medical assistant working with me and we were a very busy practice. We had several medical assistants per provider because you’re moving money from room to room, and we had 12 exam rooms.
Prescription Pad Theft:
Jay: Now, moving on to prescription pads, it used to be that there was an actual prescription pad and sometimes there still is a piece of paper. What we’re finding more and more often and we’ve actually had several situations where a practice that we connect with comes to us and says, “I have had one of my team members,” or, “I even had a colleague log in under my system and prescribe to themselves.” Number one they are not legally able to do that because they are not able to legally prescribe that medication under somebody else’s name, especially without their consent. I’ve seen this happening more and more, we’re in the midst of a pandemic stress levels are high, doctors are able to prescribe different drugs that can maybe take the edge off if you’re feeling overworked, overrun, or whatever that is.
Mara: Two questions that I’d love for you to focus on is how does one find out that this is happening in their practice and what do you look for in your practice to see this happening? Then, what do you do next?
Jay: One client calls us and says, “I got a call from a pharmacy that one of my employees called in a narcotic drug, and the diagnosis didn’t match the drug prescribed.” The doctor says, first of all, who is the patient? When the physician realized it was an employee and it is was a licensed employee they certainly couldn’t sweep this under the carpet, because now you have bigger problems than just calling in the prescription in their name. Now you may potentially have an employee under the influence of a narcotic drug. With that being said, you’ve got to terminate the employee immediately. Now they are under criminal prosecution. Whether you call the Board of Nursing, that may be a matter of ethics. I would never suggest giving a good reference to the next employer or prospective employer. Another way was we had a client in California and they had a pharmacy downstairs from their office. The pharmacy called the doctor and said, it is unlikely for you to be prescribing these high doses of testosterone because this doctor has never prescribed testosterone that has been tilled by the pharmacy downstairs. The doctor asked who prescribed it and it happened to have been another doctor on the floor, not in his office, but a colleague down the hallway. I said, you reject the prescription and you need to call that doctor and have a one on one eyeball to eyeball visit and say that this is intolerable. Personally, how could you ever put me in this situation? As it is the doctor very shortly thereafter went out of business and moved out of the building and is nowhere to be found. The moral of the story is, doctors can get reports from drug manufacturers on what they prescribe.
Mara: When there is a theft, what are the steps legally that the practice needs to take to make sure that they’re reporting it and not missing any of the steps? Who does it need to be reported to?
Jay: I would report it to local authorities and make sure there is a record. I would also report it, depending upon the quantity, to the DEA, if it was a DEA prescribed drug. You have to record for it as an internal use just in case you’re ever audited.