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Year-End Financial Scams Targeting Medical Practices

November 17, 2015

Medical practices are constantly targeted by scammers, but the end of the year is an especially busy time for two types of fraud. Scammers use invoice fraud to take advantage of increased patient and payment volume as well as increased payables and invoices. As the tax season approaches, many physicians are also the target of dangerous tax and investment schemes. Make sure you and your staff are on high-alert during this busy time to protect your business and your money.
Invoice Fraud
Invoice fraud is the billing of businesses for goods and services they never received, didn’t order or don’t need. This type of fraud peaks at year-end when criminals know your office receives a higher than usual amount of invoices. In many cases, the volume of payables and invoices your office receives may double at this time of year. This type of volume creates an opportunity for criminals and scammers to submit false bills, inflated bills or duplicate bills.
Scammers will submit bills for just about every expense your practice would logically incur, including printing, insurance, licensing, supplies and even taxes, labor standards violations and other scary and serious-sounding government fees. These invoices may be overtly fraudulent and others may be sophisticated and nearly undetectable. Fortunately, there are ways to identify these types of scams.
Here are a few red flags to look for:
  • Calls, emails or letters asking for updated payment or credit card info, especially if the card isn’t expired.
  • Fake websites, malicious links in emails and attachments from unknown vendors or creditors. Opening an infected attachment can give hackers access to everything on your computer, including patient information.
  • Phone numbers and addresses are incorrect or unverifiable.
  • Bill correspondence and websites with major grammatical or spelling errors, or other unprofessional markings.
  • A series of invoices with consecutive numbers from the same vendor (are you their only client?) as well as duplicate invoices or invoices in amounts or frequencies outside of your regular spending patterns.
Aside from paying for something you don’t want, need or never saw, there are more serious implications involved with invoice scams. Scammers now have access to your credit card number and bank account numbers. The first fraudulent invoice may be just the beginning of a long trail of fraud and identity theft. It is good practice to regularly check your bank accounts for fraudulent charges and immediately dispute any unauthorized charges. The end of the year is also a good time to check your credit score for any unusual activity.

Make sure you are employing safeguards to proactively thwart scamming attempts. The person paying your bills should be extra vigilant, especially at the end of the year. Invoices and account numbers that are regularly used should be matched to the bills they pay, and once the payment has been made, confirmation of the receipt of certain purchases and deliveries should be made.
Insurance fraud
The fourth quarter is an active time for physicians and their team of professional advisors. For this reason, physicians are frequently targeted for a variety of tax and investment schemes at the end of the year. Whether you are being asked to consider a new life insurance policy or a captive insurance company, make sure you are working with a trustworthy and experienced professional. It can be very dangerous when done by inexperienced advisors and promoters. Many physicians have been punished for doing the right thing with the wrong people. Do your due diligence and carefully consider the people you do business with.