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How to guard against fraud at the surgery

Fraud at practices could be rising, so GPs should take preventive measures, advises Russell Finn.

Nurses: up to 200 UK practices may be at risk of legal/financial problems because a ‘nurse’ working for them is not properly registered (Photograph: SPL)
Nurses: up to 200 UK practices may be at risk of legal/financial problems because a ‘nurse’ working for them is not properly registered (Photograph: SPL)

Practices should take care not to put temptation in the way of practice team members who, if heavily in debt, and desperate enough, might steal from colleagues or forge signatures on practice cheques.

Although fraud at practices is not a common occurrence, when it does occur, it is often low value and opportunistic.

But there have been instances of fraud by skilled criminals.

Not all fraud (deception deliberately carried out to secure unfair or unlawful gain) is to do with money. Some types, such as faking qualifications, are potentially just as - or even more - serious if committed by people posing as healthcare professionals, thereby putting patients' lives at risk.

There are, for example, instances of 'rogue' nurses working for GP practices. According to a recent Nursing and Midwifery Council report, up to 200 UK practices may be at risk of serious legal/financial problems because a 'nurse' working for them is not properly registered. This is likely to be because references and certificates were not followed up and checked to see if they were legitimate. Yet practices can readily check whether nurses are fully registered by visiting www.nmc-uk.org/Search-the-register

Signs of fraud
The usual sign that a financial fraud has taken place will be a drop in the practice's bank account balance from the level that the GPs and practice manager were anticipating for the month.

This fall will also appear in the accounts as a reduction in bottom line profit and partners' 'current' accounts (not bank accounts but an accounting term for partners' cash invested in the practice).

This should prompt further inspection to see if there are any other tell-tale signs that a fraud has taken place. Such signs include:

  • Unexplained increases in costs.
  • Unexplained drops in income.
  • Unusual explanations for missing items.
  • Regular payments falling out of sequence.
  • Unexplained delays in income arriving.

To protect the practice it is important to identify and put controls in place in the following key risk areas:

  • Cash/cheques.
  • Access to the chequebook/payments process.
  • Access to drugs.
  • Sending of signed cheques.
  • Authorisation of claim forms and supplier payments.
  • Signing off monthly payroll totals.

Effective deterrents
The most effective deterrent is to create a culture where no one would think they could perpetrate a fraud without serious consequences. Implementing controls in the risk areas below is a good way to start.

Not all practice frauds are by rogue staff - one (or more) of the GP partners may be the fraudster. Such cases are harder to spot as the partners may be able to bypass controls and identification processes.

One example of this is a case where a GP partner was falsifying additions to the registered list - including 23 patients living in a one-bedroom flat owned by the GP - and adding them to the PCT returns. This was picked up in audits by the PCT and the case was referred to NHS Protect (formerly NHS Counter Fraud service).

In such cases, the missing money would have been paid into the practice and then extracted again. So the fraud could be picked up internally by using some of the methods in the box below.

Prevent fraud at the practice
Fraud Identifier Control
False cheques written out.
  • Higher than expected expenses.
  • Cheque stubs’ details do not agree with the cheques.
  • Countersign all cheques while stub is still attached.
‘Duplicate’employees/false overtime.
  • Higher than average employment costs.
  • More payments than staff.
  • Multiple payments throughout the month.
  • Sign off payroll print outs and agree to payments.
  • Only one payroll run per month or week.
Petty cash/medical report income theft.
  • Petty cash disappears.
  • Records either non- existent or do not agree
  • Keep proper petty cash records and do regular reconciliations.
Fake suppliers or continuing to write cheques to old suppliers.
  • No goods or services ever arrive.
  • Higher than average expenses.
  • Prior authorisation of all new  suppliers.
  • Review existing ‘authorised’    suppliers regularly.
Drugs theft.
  • Loss generated on drug reimbursements.
  • Often need to reorder.
  • Do regular stock checks.
  • Conduct a full review of all prescriptions signed over a set period.

It is prudent not to give any one partner too much control over the practice finances. For example, do ensure that large value cheques must be countersigned by more than one partner and that administrative tasks are shared out or rotated among partners.

If you have concerns about a possible fraud, first follow your standard internal reporting procedure. However, if you do not have one in place or you suspect that the fraud may involve individuals responsible for the procedure, you can report them to NHS Protect in confidence.

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