How to prepare for a government fraud investigation

Expert advice from an exclusive interview with WileyRein's Kirk Nahra

Whether or not they've committed wrongdoing, payers are increasingly becoming the targets of significant fraud investigations. So it pays to prepare financially and operationally for this possibility.

FierceHealthPayer: Anti-Fraud interviewed Kirk J. Nahra, J.D., a partner in the Washington, D.C., law firm WileyRein, to bring readers expert advice on this topic. Nahra (pictured) specializes in privacy, information security, compliance and fraud issues for the healthcare and insurance industries.       

FierceHealthPayer: Anti-Fraud: How can insurers decrease the likelihood that they'll be investigated for committing fraud?

Kirk Nahra: Deal well with complaints. Most fraud cases are generated by whistleblowers. Research and anecdotal evidence show most whistleblowers brought problems to their companies' attention and only became whistleblowers when problems weren't fixed. So solving problems identified by whoever brings them forward is a good way to reduce the likelihood of an investigation.        

FHPAF: Why should insurers anticipate becoming the subject of a fraud investigation?

Nahra: Payers are more likely to be investigated these days because more of them participate in government healthcare programs. And the government's anti-fraud effort is increasingly and disproportionately focused on government programs rather than the commercial side of healthcare fraud. The government also is aggressive in making connections to government programs even in situations where it's not obvious that you're participating in a government program. The real issue is not so much how to avoid investigations as it is how to prepare for them and deal effectively with them if they happen. 

Many insurers think a fraud investigation won't happen to them, but that's not a very good bet. If you're a Medicare carrier in one state and you see insurers doing the same job elsewhere are being investigated, make the connection to your business. This doesn't guarantee that you'll be investigated, it just means you should prepare for that possibility.

FHPAF: Many payers have errors and omissions insurance. In light of that, is buying extra insurance necessary to protect against fraud invesitgation costs? 

Nahra: The answer isn't an automatic "yes." Getting involved in insurance relationships for something like a fraud investigation means you're giving up some control of how you handle the investigation and how you protect yourself, because the insurance company now has a say in it. And that's not always a good idea. While it's always worth considering insurance, I would be real careful about an insurance program that forces you not to use counsel you want to use, or forces you to get the insurance company's sign-off on too many things. You may have reasons to resolve cases that are different from the incentives an insurance company has, and you've got to be careful with that.