Where and how were my insurance checks “cashed”?

Posted on February 12, 2022

by William Hiltz

FraudBuster Tips for Dentists

Tracing a missing insurance check.

Members of our Dental FraudBusters group on Facebook can ask an anonymous question which is then posted to the group for discussion.

One member of our Official Dental FraudBuster Facebook Group asked this question which :

“How do we find out where and how insurance checks were “cashed” by someone other than whoever is authorized – NOT deposited?”

Anonymous Dental FraudBuster

FaceBook Discussion

The Official Dental FraudBuster Facebook Group is private, so I can only share my own FaceBook comments.

This was my response:

Tracing a single missing insurance check

I will presume that this question is asking about a single check, and that you (the anonymous asker) have already determined that the check was mailed to your practice, and you have no record of receiving it.

Step 1: Contact the insurance company that issued the check and ask them for an image of the cancelled check. You’ll want the front and back sides.

Step 2: Examine the reverse side of the check and there will be clues as to where it was deposited. Depending on the banks involved, you may see an account number, a routing number, an ATM machine ID or other information recorded on the back of the check.

If you can determine the depositing bank, you can seek recovery your funds from the depositing bank, which will require you to complete affidavit of forgery and issue a written demand to that bank.

If you are unable to determine the bank where the check was deposited, you can request request a payment trace from insurance company that issued the check. This will take time and require the insurance company’s bank to initiate a Federal Reserve Payment Trace Request.

Tracing multiple missing insurance checks

If you have uncovered that multiple insurance checks are missing, there can be several reasons to account for what happened:

the insurance checks arrived at the practice, but were not deposited
the checks were lost in transit while being taken to your bank for deposit
the checks were lost in the mail
the checks were taken by a dishonest patient or visitor to the practice
the checks were taken by a dishonest employee (this is more common than you may think)

Unintentional error is the cause of #1 to #3.

Intentional dishonesty is the cause of #4 and #5

If your practice has multiple missing insurance checks, you must consider the real likelihood that a dishonest employee was responsible and conduct your inquiry discreetly so as not to alert the employee.

If a dishonest employee was responsible for the missing checks, it is in your best interest to keep employees in the dark while you confirm where the the missing checks were deposited.

If a dishonest employee suspects that you are “on to them“, most will take evasive action to block, hide or destroy incriminating evidence to hamper and delay future investigation and financial recovery.

Some dishonest employees feel they have nothing to lose and decide to “make one last big grab” from the practice before suddenly walking out the door without any notice or explanation.

If you contact an insurance company to request information about the missing checks, make sure that the insurance company is aware and that all communication regarding check inquiries must be with you; and NOT through your office.

That said, in cases where multiple insurance checks are missing, the best decision is for the practice owner to consult with an expert (like Hiltz & Associates) for proper advice and guidance before making any decisions about what to do next.