This Dental FraudBuster tip tells us why employee theft should not be ignored and discusses the steps required to confront and terminate employment of a dishonest employee.

“I’ll just let her go”

This is the first thought many dentists have when first confronted by employee dishonesty.

They feel the best solution to their “dishonesty problem” is to terminate the person’s employment and move on.

Well it seemed like a good idea at the time….

Let’s face it, no rational person enjoys confrontation

Confrontation is unpleasant and in certain situations, we will take great strides to avoid it.

Confrontation.
Dentists face it every day.

Some dentists avoid accusing their employee of stealing – even if they have proof.

They doubt they have “enough” proof.

They fear being sued for wrongful termination.

They fear “bad publicity” or are uncertain if the employee will make complaints to the dental board about them.

Others will say “It’s not worth the cost of prosecution.”

With thinking like this, no wonder so many dentists decide it’s just easier to “let her go”

Fear, Uncertainty and Doubt* can lead to poor choices.

*Hiltz & Associates is a no FUD firm

Here are just a few of the things that can go wrong when you decide to let a dishonest employee go “without cause”.

YOUR EX-EMPLOYEE IS HIRED BY ANOTHER OFFICE

Soon after firing your employee, you learn they were hired by another dentist. Ugh… now “your problem” has become “their problem”. 

Some dentists have discovered their former employee was caught stealing in another office. Awkward…..

The ex-employee “bad-mouths” you and your practice.

There is a high probability that your former employee will start to bad-mouth you at her new workplace, and to her friends, and to your patients.

They will make frivolous allegations, saying that you abuse drugs, alcohol or children. Others will say you commit fraud, have psychological illness, have an extramarital affair, or are a gambling addict.

They do this to tarnish your reputation in order to build a wall between you and the new office where they work.

THEY CONTINUE TO STEAL FROM YOU, YOUR EMPLOYEES AND PATIENTS

While your employee was working for you, they had access to information about you, as well as your employees,  patients and business.

After you have fired the employee, they can use this information to withdraw money from your bank account, obtain credit lines or credit cards in your name. (yes, it is easier than you are thinking)

You may also be unexpectedly billed for things you did not purchase. For example, if you have a charge account with a local merchant (business supplies, furniture, etc) your former employee may be successful in charging items to your account.

They may use the credit card information they obtained from you, your employees and patients to commit additional frauds, months after they have been fired.

YOU ARE SUED FOR WRONGFUL TERMINATION

All dishonest employees maintain a strong sense of self-entitlement towards their employer’s money, and this self-entitlement does not stop after they have been fired.

When you fire a dishonest employee “without cause“, they may decide to hire an employment lawyer and threaten to sue you; unless you agree to settle and pay-up!

Here is a what happened in one of my cases from many years ago. (for brevity, I have left out many details)

The dentist suspected his employee was stealing and decided because he was in an “at will” state, he decided to fire her.

The dentist confronted the employee and fired her for stealing. The former employee quickly filed a wrongful termination suit based on discrimination.

The dentist then asked me to conduct a fraud examination to confirm if his suspicions of fraud were indeed true.

I subsequently uncovered approximately $60,000 in theft, and submitted my report of losses to the dentist.

The dentist tried to use the $60,000 theft as ammunition against in the wrongful termination lawsuit.

It did not go well.

The judge advised the dentist that the theft was not admissible in the wrongful termination lawsuit.

The court ruled that because the theft was discovered after the employee was fired, it was not admissible.

The dentist lost the wrongful termination lawsuit and was ordered to pay $80,000 to his former employee. He subsequently filed a counter suit for damages.

YOUR PATIENTS COMPLAIN

Dishonest employees use various methods to conceal their thefts. These methods invariably leave a trail of adulterated records behind in your office.

Soon after the employee is gone, patients may start complaining that their statements are not correct.

I already PAID THIS!”

Why is is still showing as being owed?”   

The replacement staff may not know how to properly respond to these patient complaints.

Patients can (and do) lose faith in the office. “If they can’t keep my account straight, how can they do dentistry?”

YOUR UNEMPLOYMENT TAX GOES UP

In many states, being fired for cause or misconduct will bar the employee from receiving unemployment benefits.

When you do not fire for cause or misconduct, your former employee will likely get unemployment benefits and you will see an increase in your Federal Unemployment Tax payments.

Now, that’s like being ripped off twice!

The employee stole from you, and now you are paying increased unemployment taxes as a result.

This is a jagged and bitter pill to swallow.

PATIENTS LEAVE YOUR PRACTICE

If a dishonest employee has been in the practice for many years, they will have developed friendships and relationships with many patients. Those patients will ask about the employee when they no longer see them practice.

“Why is she not working here anymore?”   

“What happened to Janie, where is she gone?”  

Some patients will see you as the “bad person” (yes, this happens)    Those patients believe you should not have dismissed someone they liked or considered their friend.

INSURANCE COMPANIES START ASKING QUESTIONS OR WANT TO AUDIT

It is common for a dishonest employee to commit healthcare fraud by over-billing insurance companies for work that was not done.  These schemes can go on for months or years, all under the watchful eye of a dishonest employee.

The dishonest employee was the person responding (and quelling) questions by patients and insurance companies regarding charges.

Now that the employee is gone, no one is there to deflect questions from the insurance companies and patients. Your new staff are not prepared to respond to these questions.

Employee perpetrated healthcare fraud wound up costing one dentist over a quarter-million dollars, that she was required to repay back to the insurance companies.

YOU SET A BAD EXAMPLE TO STAFF 

The employees that remain with your practice after you “let her go” may feel you made a poor choice.

Some employees may feel you should have investigated and fired her for theft. In some cases, this is enough to cause an employee to quit and leave the practice.

How to “fire” a dishonest employee

PUT THE ONUS ON THE EMPLOYEE

When you initially discover theft and want to fire the employee immediately, but only have a few allegations or suspicions to go on, I recommend using a reverse onus approach.

The reverse onus approach places the burden of proof on the employee. (i.e.: “she offered no other choice but for me to terminate her employment”)

I strongly caution against using this method without obtaining professional guidance in advance. Feel free to contact me if you require assistance.

GENERAL STEPS TO FOLLOW

The safest approach is to  provide the employee with an employment suspension letter giving notice to the serious allegations that have been uncovered and to provide the employee with 2 business days to respond to the allegations contained in the letter.

If the employee fails to respond, or their response is not satisfactory, then you will exercise your right as the employer, to terminate their employment terminated accordingly.

If the written allegations are clear and compelling, it unlikely that the employee will be able to provide a meaningful response that can absolve them of their dishonesty.

If the employee does provide a suitable explanation, then their employment suspension is lifted, and they are paid for the time while they were on suspension. This is why any allegations against the employee must be clear and compellingyou do not want the employee to offer any plausible explanation that would clear them of the allegations. I’ve used this method dozens of with 100% success.

Using this approach, if the employee subsequently commences wrongful employment termination action against you, then taking this step will demonstrate that you gave the employee every opportunity to explain their conduct, and they failed to do so.

Initial consults are complimentary and confidential

I am always happy and grateful when dentists contact me for guidance.

If you have questions or concerns, please do not hesitate to contact me for a consult.

Contact Bill

How to mentally prepare yourself before terminating employment

Lisa Mergens has some good suggestions on how to mentally prepare for an employment termination, written from the perspective of when you are firing someone “without cause”.

Lisa Mergens offers her suggestions on how to prepare for an employment termination.

William Hiltz BSc MBA CET

Bill Hiltz is the CEO of
Hiltz & Associates
and the creator of
Dental FraudBusters.