Examining Where Fraud Occurs in Dental Practices

Did you know that fraud in dentistry costs around $12.5 billion every year? We’re talking about filing false insurance reimbursements, intentionally miscoding procedures, and outright theft from the practice. Not knowing is not the answer. No one wants to have five percent or more of their practice’s revenue just disappear, not to mention how badly a case of fraud could tarnish a practice’s reputation. As they say, knowledge is power, and it starts by being aware of where dental fraud usually occurs.


Where to Look for Fraud

Even though most dentists prefer sitting chairside, you still need to be the boss who notices the little things and has the pulse of the practice. Don’t leave oversight to your staff, no matter how great they are. Below I’ve laid out four areas where you’re more likely to find fraud in dentistry than in other industries. Some accounting jargon is included free of charge.


  • Billing: This includes billing for services not actually completed, misrepresentation, and upcoding. Be careful how you incentivize your staff. In one practice, front desk employees were altering records and submitting false claims to insurance because the dentist had tied their bonuses to profit margins. Sure, they increased the practice’s profit, but they also committed insurance fraud. In this case, the dentist can be held liable for the actions of the employees.
  • Cash Crimes: This includes cash larceny and skimming. Someone might steal from petty cash or even pocket a cash payment from a patient. Both types of discrepancies are easy to explain away or cover up if no one is looking.
  • Payroll: Chances are that one person is responsible for cutting the checks in your office. If no one else looks carefully at the books, that person has the power to add accrued PTO to pay stubs or alter the number of hours worked. In one dentist’s case, the payroll coordinator paid the cleaning crew more often than they worked; it just so happened that the cleaning crew was her husband. Convenient, huh?
  • Expense Reimbursement: An employee can submit a fake receipt for office supplies or inflate mileage reports. This can usually be avoided by requiring timely paperwork and checking it with your own eyes.


Watch for Red Flags

Fraud is difficult to catch, and we don’t want to accuse Janet, who’s been a stellar employee for 10 years, without 110% proof. That’s why fraud remains undetected in so many dental practices. Educate yourself on the warning signs. If you notice something that doesn’t add up, I encourage you to investigate the matter further.


The ADA has this behavior list that I find really helpful. This behavior is considered suspicious by fraud experts, but keep in mind that it is not meant to be all-inclusive. Here’s a quick glance at what I thought was most pertinent:


  • An employee is suddenly making extravagant, personal purchases without explanation.
  • Patients begin making complaints about inaccurate billing statements.
  • The employee does not take time off from work or stays after hours to finish up; this might signal an unwillingness to share workspace or files that would reveal the fraudulent activity.
  • Before hiring, a previous employer gave a vague, negative review; this might mean that fraud was suspected but not proven.
  • An employee is facing personal problems like illness, addiction, divorce, etc. These types of issues might cause the employee to act out of character or encounter financial difficulty.


I want to caution you not to suddenly become overly suspicious. Just because someone is going through a rough patch or often works long hours, doesn’t mean there’s fraud afoot. You need to take the whole situation in context, and always look at the numbers. (Correct) numbers don’t lie.


If you suspect fraud might be happening at your practice, contact us as we can help access the situation. Our team at Dental CPAs can help by conducting a fraud check-up or a financial audit. Contact the Dental CPAs team here or call us at 410-453-5500 to schedule a consultation.