Dental Office Fraud-Be One Step Ahead

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Dental Office Fraud – Be One Step Ahead

Unfortunately, many dental offices experience some form of dental fraud whether they realize it or not.  Whether you are aware of fraud the disheartening part is that often the perpetrator is a long term “trusted” employee with access to mail, computer records, and bank accounts. These employees become very skilled at covering up their tracks. The following case study is based on an actual case with names changed.

Case Study

Dr. Manning had been practicing for twenty years and had a trusted Practice Manager who was in the office full time. One of the areas of responsibility for the Practice Manager was managing the dental care offered to team members and their families by the dentist as an employee benefit.

Dr. Manning’s Practice Manager (Sue), felt uneasy about some facts supplied by a two year administrative employee regarding her partner’s employment and benefit status. Sue believed the spouse likely had some dental benefits for the employee and her family of seven.  Trusting her instincts, Sue called an insurance carrier she thought could be providing benefits to the employee’s spouse and asked for confirmation of benefits.  The employee working for the insurance carrier would not reveal the information.

Sue decided to call the dental software vendor to ask for a report showing any unusual activity on the employee account. Sue learned through a software report (that she was unaware of) that $60,000 treatment had been submitted to the insurance carrier which was direct deposited into the employee’s bank account.  The employee had been submitting claims for her family of seven twice a week while Sue had lunch. The employee was entering treatment, sending the claim electronically and then deleting the transactions.

Once Sue had all the facts and proof of fraud it was reported to the insurance company then the employee was charged and convicted.

Dental Fraud Methods

Of course, the case study illustrates one method of defrauding the employer but there are others.

A claim or claims can be submitted by a team member who is working with a patient to defraud the office and insurance company. In this scenario, the employee submits a claim for treatment that was not completed nor diagnosed, then the insurance funds are sent to the patient who shares the proceeds with the employee.

In another scenario, a team member could submit fraudulent claims on behalf of patients (without the patient’s knowledge). This patient or patients have direct payment to the dental office. The team member often is responsible for opening the mail, posting payments and office banking.  The team member then stamps the cheque with the Doctor Signature stamp and will ask the bank teller to cash the cheque for the dentist. 

Fraud can also occur when a team member takes cash payments from patients. The employee will take the cash and print a receipt for the payment. After the patient leaves the employee applies a credit adjustment or write off for the treatment and pockets the funds.


Knowledge is your best defense against fraud. First and foremost know your software and invest in continuing education just as you would for your clinical skills. In key areas of the software no one in your office should know more about the software than you. Learn how to check reports in your software and do it regularly. These include modified transactions, credit adjustments, write-off transactions and any other reports that your software supplier suggests. Have your team use a password protected sign-in and make sure they sign out whenever they are not on a terminal. Be the only person responsible for granting authorization in the software for access to any of these reports.

If you suspect any misdoings in your office then notify Practice Liability at RCDSO immediately.  By taking immediate action you can avoid the perception of being complicit or protecting an employee.


We certainly hope that fraud has not or will not occur in any dental office.  The old adage, “Don’t put all your eggs in one basket” fits this case study. Do not fall prey to placing blind trust into an employee, no matter how devoted or faithful they seem. 

Protect yourself by knowing your practice management software. Be aware of security pitfalls and limit employee access to certain software functions and reports.

As the business owner you are responsible for protecting your patients and your business from people who engage in fraudulent activities.


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