Employee health care benefits fraud takes many shapes including filing claims for services not received, using another employee’s benefits, and forging receipts or invoices.

This fraud is not only a drain on resources, it is a crime. However, an employer who suspects its employee is taking advantage of health benefits is in a precarious position. The duty to investigate must be bridled by considerations of the employee’s rights and the practical impact of the investigation on workplace morale.

First, an employer cannot conduct a fair and thorough investigation unless he or she knows the benefits that are being provided and can discern what conduct is or is not an abuse of those benefits. A cautious employer will ensure adequate training, not only those involved in the investigation, but also those involved in decision-making or discipline as a result of that investigation. Both the investigators and the decision makers must be familiar with the company’s benefits and the law to either gather the facts or make decisions based on those facts.

Moreover, investigations are most effective when they are conducted quickly and quietly. If there is a suspected problem, employers should not hesitate to get to the bottom of that problem. However, because what is suspected may be very explainable or the result of inadvertence on the part of the employee, employers should resist the (very normal) temptation to jump to a conclusion during an investigation. Besides the legal ramifications of doing so, lowering employee morale is the more serious and immediate practical impact of prejudging. Simple courtesies and attention to privacy help to mitigate the risk of these investigations on what employees feel about their workplace. More importantly, a concerned employer will reach a better result if the facts are allowed to be developed instead of reaching a conclusion and backfilling facts to meet that conclusion.

Further, it is helpful to take steps to get ahead of potential problems. Proactive employers inform employees of job expectations at the outset of employment. If that employer maintains an employee handbook, that handbook can be a valuable tool in informing employees that misuse of employee benefits could result in discipline up to and including termination. Carefully crafted language regarding the necessity of an investigation may also be helpful to establish a standard and limit expectations. Even if there is no employee handbook, a document with these items can be created and signed-for to acknowledge receipt and understanding of the employer’s expectations.

Most importantly, employers must observe confidentiality; perhaps the single most delicate and dangerous issue in health care benefits investigations. The Health Insurance Portability and Accountability Act of 1996 and other federal and state laws provide very specific rights to employers regarding the details of his or her healthcare. While this makes an investigation more cumbersome and time-consuming, the alternative will invariably expose an employer to litigation. There are four practical points to consider. Training is crucial. A management level employee that is trained on these issues can nip many of these problems in the bud. That person can be a designated human resources professional or some other management-level employee. While the title is not important, adequate training certainly is.

The reduction of fraudulent claims for health benefits is one instance where health care providers and employers are in lockstep and many healthcare providers offer resources to help avoid and detect fraud, including database management and investigation assistance, often at little or no additional charge. Employers are paying a great deal of money to provide health benefits to employees and taking advantage of these resources makes sense.

Professional human resources investigators may be the employer’s best option for a company whose management does not yet have adequate investigation training. Non-lawyer human resources professionals give the employer some basic awareness of the law and substantive investigations ability without the immediate expense of hiring a lawyer on an hourly basis to conduct interviews and gather documentation. While certain situations may eventually necessitate the assistance of an attorney, a for-hire human resources professional may provide valuable savings in conducting an investigation.

Lastly, maintaining an ongoing relationship with an employment lawyer is always a good idea. If management is properly trained, it is not always necessary to engage an attorney to perform an investigation in-house. However, some potential problems are serious enough to warrant paying for an unbiased opinion and a fresh set of trained eyes could make all of the difference. Moreover, every investigation presents a different spin on the facts and lawyers trained on employment issues and the legal nuances that affect each set of facts can offer quick suggestions and warnings to avoid larger (and more expensive) problems later.

Paying for a few conversations now is much better than defending a lawsuit later.