What should you do if you suspect (or know) that you and your health care business is under investigation for Medicare or Medicaid fraud? Proceed carefully, because your reputation, career, and freedom could all be at stake. Here's what you should know.

A lot of effort is being put into fraud investigations.

Medicare and Medicaid fraud are hot issues these days. The FBI says that health care fraud costs taxpayers billions of dollars every year and threatens the entire economy. The FBI oversees the majority of health care investigations and has personnel specifically assigned to that task in each of its offices.

There are special "Strike Forces" designed to combat health care fraud as if it were a war and The Affordable Care Act has funneled $350 million into programs designed to enforce health care laws and prosecute offenders. At the end of 2013 alone, there were more than 2,000 health care fraud investigations going on.

Some investigations have ulterior motives.

While there certainly are instances of health care fraud happening, a lot of innocent people get caught in damaging investigations. Some of those investigations may begin, unfortunately, through anonymous reports by disgruntled former employees or employees who see an opportunity to make a fortune by becoming "whistleblowers." Under the False Claims Act, a whistleblower stands to make 15-25% of any recovered damages in a fraud case involving Medicare or Medicaid. That's a significant amount of incentive for someone to point to accidental billing mistakes as evidence of fraud. 

The investigation will search for specific types of activity.

Investigators have the power to search your home, tear apart your office, seize your records, and take your computers in search of potentially fraudulent activity:

• billing for "phantom" procedures that were never done
• billing for "phantom" patients under stolen identification
• patients whose medical records don't support their diagnosis
• treatments that weren't medically necessary
• providing patients with inexpensive services and billing for expensive ones, or "upcoding"
• billing a provider twice for one service, known as "double billing"
• providing patients with generic drugs at brand-name prices
• taking kickbacks for patient referrals
• falsified time sheets

Investigators will also typically interview anyone associated with your practice, including nurses, physicians, health care aides, pharmacists, record keepers, secretaries, office managers, and accountants. Current and former employees may be intimidated by investigators and threatened with prosecution themselves as they're simultaneously pressured for information.

A comprehensive defense strategy is best.

When you are defending against allegations of health care fraud, you want to take a comprehensive approach:

• conduct an internal investigation to determine if there are any billing or coding errors that could be mistaken as fraud
• offer current and former employees the opportunity to meet with an attorney so that they understand their rights before speaking with investigators
• provide legal counsel for anybody that seems to be targeted in the investigation
• make sure that employees don't attempt to cover up honest mistakes by destroying records or trying to conceal them, which could lead to obstruction charges 

Finally, make sure that you have a criminal defense attorney like one from Law Offices Of Timothy J Ormes working with you as soon as you figure out that you are being investigated. Don't turn over any records or meet with investigators for an "interview" until you've spoken with an attorney that can represent you.

Keep in mind that, as an individual, you can be fined up to $250,000 and imprisoned for up to 5 years for every instance of fraud. That means that just four instances of billing errors deemed "fraud" would result in a million dollar fine and a year prison term of 20 years.