Frightful Stories for the Practice Owner--The Refund Reaper

Frightful Stories for The Practice Owner

Just in time for Halloween, we have spooky stories guaranteed to make your skin crawl and (hopefully) have you checking, and double checking your practice and your pockets to be sure that you aren’t the next victim of these real-life horror stories that happened at a practice near you.

The Refund Reaper

Hiring close friends and family is sometimes the only option you have in the event a staff member has given you little to no notice, or in the event you haven’t had a chance to find the just-right fit. Having a person with which you are well acquainted under your employ takes away the necessary “by the book” training period.

It also invites a less than guarded approach and an oft too casual relationship where your money is concerned. The ever-trusting practitioner, thankful to his/her family or friend coming to the rescue, leaves or even gives the keys to the safe right over.

The following is a story of The Refund Reaper, a friend of 10 + years to a husband and wife practice who found themselves at the mercy of the cruel heart of dishonesty when their friend turned from righteous to reaper without even knowing it! *

Dr. J & his wife were expecting their first child Diane, a close friend for over 10 years had been working with them for 6 months leading up to the joyous occasion after their long-term and only staff member had left without notice. The stress of transition put Dr. J’s wife on bedrest, taking her away from the practice. The couple were thankful when Diane had offered her services, even agreeing to working “off the clock” to get the backlog caught up. Little did the unsuspecting Dr. J and his ill wife know, there was a nightmare brewing behind the scenes.

Diane’s husband had lost his job which was causing her financial stress, her husband was pressuring her to find a way to get the “greedy” Dr. J to pay her more!

Diane was now fully in control of the practice, she input all the insurance payments and handled all the checks as they came through the mail. She took all the patient payments from over the counter, and even ran deposits to the bank for Dr. J until his wife was well enough to resume her duties.

It was a Thursday evening, with a full moon, when something in Diane snapped and The Reaper of Funds took over her mind. Seeing the amount of money coming in through the mail from her work billing insurance, and all the money coming in over the counter from her friendly smile and patient management caused the nightmare to begin.

Her husband had researched a way for her to get money from credit card transactions that would be hard to catch onto and trace until they had enough to make a difference. Diane calculated that if she took just 20% of the over the counter transactions, she could make an extra $12,000 a month, four times the salary the “greedy” employers were paying her monthly.

She justified her actions to herself, how could her friends use her like they were? How could they, in good conscience knowing her own struggles with her husband’s job, only pay her $3,000 a month? It was only right that she give herself an edge up, after all she was doing them the favor!

The Reaper’s scheme was simple, when the patient chose to pay with their debit or credit card, she would take her own debit card and credit the transaction back to her account. She would credit the patient’s account, so they were none the wiser, and then adjust the balance off as a write off and code it as an insurance requirement.

Poor Dr. J and his wife attributed their loss in income to the transition. It wasn’t until after their baby was born and Dr. J’s wife was able to begin resuming her duties that they realized what had happened. At this point, 9 months had gone by, and the total damages were well over $50k.

Not only did it cost them financially, they had to file with the State and other departments which resulted in audits to be sure that there was no other information compromised and to ensure The Reaper had not also sold or distributed the information to other third-party identity theft rings. Their patients were notified which cost them over 25% of their patient base. By the time the nightmare was over they had over $120k in fines and lost profits.

I wish this nightmare was just a silly story in time for Halloween, but it is in fact a true tale. Protect yourself by following these steps:

1. Friend, family, or stranger must always be treated the same. Do background checks on everyone every 3 years.

2. Be careful to never give one-person access to everything, it creates a psychology that not only endangers you and your practice, but makes it easier for criminals to work your system.

3. Implement the Accountability Triangle © - regardless of practice size, our system creates boundaries to protect you, your patients, and your staff from fraud and theft.

4. Talk to your merchant services provider about creating strict protocol for refunds and/or credit/debit transactions, or restrict them altogether. Practitioners should rarely, if ever, need to credit back a transaction. Refund in the form of a check is a safer bet.

5. Work with a merchant services provider like our partner TYSYS, who creates a bridge into almost any EHR system posting directly to your patient’s account creating a wall of protection from fraudulent posting and activity that could cost you.

For more information on how to protect yourself, or how to learn more about

The Accountability Triangle © email us at:

Be safe from The Reaper!

*This is a true story

– names and details have been altered to protect the identity of those