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November 22, 2010

How to Handle Employee Theft Claims

Most health care professionals must trust their employees to handle the financial aspects of their practices and in almost all cases this trust is well-placed. However, there can be a bad apple in the barrel. What steps should you take when you discover that an employee is stealing from your practice? 

Conduct a Fair and Accurate Investigation 

When a theft is detected, you must move quickly to investigate and discipline the employee. If an employee is caught by direct observation, the "investigation" should be straightforward. However, more often than not, an employee theft is suspected based upon indirect or circumstantial evidence, such as another employee report or in the results of an audit. In such cases, an investigation is necessary. However, do not unnecessarily delay the investigation, since criminal and civil statutes of limitation will begin upon discovery of the loss. 

An investigation should follow certain guidelines: 

  1. It should be done by a management employee other than the supervisor who first noticed or reported the theft.
  2. Determine whether the employee should be immediately suspended or whether the theft would be best confirmed by monitoring the employee’s continued actions.
  3. Maintain strict confidentiality to avoid exposure to defamation or alerting any accomplices.
  4. If the theft is complex and substantial, retain an expert to assist you in the investigation, such as a CPA.
  5. Do not seize an employee’s property without consent.
  6. Interview all witnesses individually and for current employees, make a clear warning about their duty to maintain confidentiality.
  7. Document all interviews and obtain the signatures of the persons interviewed.
  8. Interview the employee suspected of the theft at the last stage of the investigation and have a witness present. Do not insist on a confession and do not make any promises. If the employee offers to return the stolen corporate property or make full or partial restitution for the loss, accept it but with no promises as to whether the practice or healthcare provider will pursue further remedy or take further action. It may be that the practice will drop the matter in a minor incident, but partial restitution may not lead to full voluntary restitution and you will want to think through the appropriate level of discipline before making any promises. Remember, it’s the practice’s property and you shouldn’t have to bargain to get it back.
  9. At the conclusion of the investigation, determine whether the practice has have evidence that the theft occurred and that it is attributable to the employee. If you do, determine the appropriate level of discipline. Often termination is the only alternative.

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