Blog post written by Camden Webb, guest blogger and partner at Williams Mullen. (He is also the attorney that filed the NCTracks lawsuit with me).

It’s a heart-stopping moment, but it happens regularly: A Medicaid provider, who never had any problems with the State of North Carolina, receives a letter from the North Carolina Attorney General’s Medicaid Investigations Division, or “MID”, informing her that she is the subject of an investigation of Medicaid billing practices. The MID’s core mission is to investigate and prosecute health care fraud committed by Medicaid providers. If you receive a letter from MID, it is an extremely serious matter and can instantly change everything you. You need to know what MID is, how you might become the subject of an investigation, and what to do if you are.

What is MID? MID is a subdivision of the North Carolina Department of Justice that is tasked primarily with investigating Medicaid fraud. MID has two main divisions, civil and criminal. The civil division investigates cases in which a provider may have made a false statement in order to obtain reimbursement payments. The civil division uses special powers granted by the North Carolina False Claims Act to investigate providers, determine if there is enough evidence to show a false statement resulting in reimbursement payments from Medicaid, and thereafter file a civil lawsuit to recover the money.

MID’s criminal division employs prosecutors whose job is to investigate, file criminal charges against, and convict providers who have intentionally and willfully obtained reimbursement payments under false pretenses. The MID website itself describes Medicaid fraud to include circumstances in which providers intentionally bill Medicaid for services not actually provided, use an improper procedure code to bill for a higher priced service when a lower priced service was provided, bill for non-covered services by describing the services as covered services, misrepresent a patient’s diagnosis and symptoms and bill Medicaid for a service that is medically unnecessary, or falsifies medical records. Any such acts could result in criminal prosecution.

As a responsible Medicaid provider, you might conclude that you would never have to worry about an MID investigation. After all, MID is tasked with investigating fraud, and the vast majority of providers honestly and lawfully provide services and submit reimbursement requests for those services. However, the new reality in Medicaid is that many honest providers can and do find themselves dealing with an MID investigation. A prime example, which happens frequently, is when DHHS finds a “credible allegation of fraud” regarding the provider. One would conclude that a “credible allegation of fraud” would be limited to hard evidence that a provider intentionally obtained reimbursements based on false information or some other bad act. However, the Medicaid regulations define a “credible allegation of fraud” to include the results of claims data mining. In other words, a “credible allegation of fraud” can be based simply on a computer analysis of a provider’s billings to Medicaid, and this has indeed been the basis of DHHS’ referral of cases to MID for investigation. For this reason, a number of honest providers have indeed found themselves the subject of an MID investigation, having to contend with the difficulty that such an investigation brings.

There are several key things that providers must know about an MID investigation. If you find yourself the subject of such an investigation, keep the following in mind:

• The first and most important: get a lawyer. The stakes in an MID investigation are extremely high, to include the potential for conviction of a crime. Proceeding without advice of counsel is very risky. Everyone who is subject of an investigation has substantial and important rights, but it takes an expert in this area of the law (and not necessarily me or my firm) to competently advise someone who is the subject of an MID investigation.

• Always remember that the State’s investigators and lawyers only work for the State. MID is staffed with competent, dedicated investigators and attorneys, and my dealings with them show that they are straightforward people. However, their job is to investigate fraud, and if you are the subject of an investigation, they have received information indicating that you may have committed fraud. You therefore should exercise caution when speaking with them, you are under no obligation to answer questions, and you certainly are under no such obligation without first hiring an attorney.

• Ensure that all your records are properly preserved. Part of MID’s investigation will certainly be a request to inspect and copy your records related to Medicaid billing, such as patient files, employee timesheets, records relating to claims submissions, and contracts with service providers. Any loss of such records will have to be explained, and if a loss occurs after a provider has received notice of an investigation, the provider could be accused of having destroyed records. It is therefore crucial that you preserve your records, both the ones on paper and the electronic data containing relevant information.

• Do not discuss the investigation or your Medicaid billing practices with anyone except your lawyer. Because you are the subject of an investigation that is based on information that may indicate you committed fraud, you must be careful about what you say. If you discuss matters with anyone but your lawyer, those persons could be compelled to testify about what you said, and it is not uncommon for someone to misquote, misunderstand, or otherwise misreport what someone has said. Speaking only with your lawyer is the safest course.

• Finally, be patient with the process. Being the subject of an MID investigation is stressful and frustrating, but MID currently is backlogged with a huge number of cases. This means that it will take time for the investigation to conclude. Expert counsel can help you through this process, but recognize that it will take a long time for it to conclude.