Healthcare fraud investigation requires more than technical skills—it demands a solid understanding of legal foundations, theoretical frameworks, and strategic thinking. At a recent Codoxo industry event, Kelly Bennett, a payment integrity subject matter expert with K Bennett Consulting, shared insights from her two decades in healthcare fraud investigation that can help SIU professionals build stronger cases and achieve better outcomes. Here is what she shared.
Understanding the “Why” Behind Fraud
Before diving into investigative techniques, Bennett emphasized understanding the theories that explain fraudulent behavior. The fraud triangle (and its variations, the fraud diamond and pentagon) provides practical insight into what drives people to commit fraud:
- Opportunity – Particularly abundant in healthcare systems
- Pressure – Financial need or other motivations
- Rationalization – Common justifications like “Medicaid doesn’t pay enough”
- Capability – Knowledge and skills to execute the scheme
- Arrogance/Entitlement – The belief that “I deserve this”
Understanding these elements helps investigators recognize patterns, identify system vulnerabilities, and spot cases more likely to meet prosecutorial standards.
The Critical Importance of Reading the Law
Bennett’s most emphatic advice: read the actual statutes. Don’t rely on summaries. Take each law, break it down into its elements, and understand what prosecutors need to prove.
She recommends creating a comparison table with federal healthcare fraud statutes in one column and state equivalents in another. When a case triggers a potential violation, read both versions. Key federal laws include:
- Anti-Kickback Statute (42 USC 1320a-7b)
- False Claims Act (31 USC 3729-3733)
- Healthcare Fraud (18 USC 1347)
- Wire Fraud (18 USC 1343)
- Mail Fraud (18 USC 1341)
Understanding the elements of each statute helps investigators recognize when evidence points to violations. For example, the Anti-Kickback Statute requires four elements: two parties, exchange of remuneration, knowledge of impropriety, and intent to induce referrals. When you see evidence of three out of four elements during an investigation, that’s your signal to loop in legal counsel or law enforcement.
Building Strong Partnerships
Effective fraud investigation requires collaboration. Bennett stressed the importance of partnerships with:
- Law Enforcement: FBI, HHS OIG, Medicaid Fraud Control Units
- Regulatory Agencies: Even oversight bodies can be fraud-fighting partners
- Professional Associations: NHCAA and others provide networking and information-sharing
- Working Groups: Local healthcare fraud task forces bring together public and private sectors
Practical Investigation Fundamentals
Establish a consistent process: Whether conducting audits, desk reviews, or on-site inspections, having a standardized investigative process prevents endless tangents and ensures completed investigations.
Know your documents: Create a master list of document types commonly needed (medical records, billing records, corporate documents, financial records, etc.) and understand who has them, how to obtain them legally, and how to maintain chain of custody.
Master the interview: Bennett shared three essential closing questions for every interview:
- Is there anything I didn’t ask that you think I should know?
- Is there anyone else I should talk to?
- Is there anything else you’d like to say?
These simple questions often reveal unexpected, valuable information.
Coordinate with law enforcement: Before conducting interviews or site visits on cases that might lead to prosecution, check with law enforcement. Ask: “Would this hinder a future case?” They can answer without directing your investigation.
Understanding Burdens of Proof
Know the different standards and what they mean for your cases:
- Beyond a Reasonable Doubt: Criminal prosecution (highest burden)
- Preponderance of the Evidence: Civil litigation (more likely than not)
- Prima Facie: Administrative proceedings (basically, “probably true”)
This explains why prosecutors might decline a criminal case but pursue it civilly, or why administrative remedies might be available when prosecution isn’t.
Essential Resources
The HHS Office of Inspector General website offers invaluable resources, including their annual Work Plan—essential reading since HHS priorities often signal industry-wide trends. The Department of Justice also provides enforcement alerts about cases and emerging schemes.
The Bottom Line
Healthcare fraud drains resources from the system that we all depend on. The foundations Bennett outlined—understanding criminal theory, mastering relevant laws, building partnerships, and developing solid processes—help investigators identify better cases, build stronger referrals, and strategically close fraud mitigation gaps.
As fraud schemes evolve, investigators must stay curious, keep learning, and leverage their professional networks. The fight against healthcare fraud is a collaborative effort that protects the integrity of our healthcare systems.