There will never be a "perfect" time to confront her. Just do it. As for what to say, i would suggest:
1. If she lies, then put your hand up in a "stop" position and say "PLEASE STOP IT. We both know you're lying right now, and it's incredibly disrespectful."
2. If she confirms it, say "I'm really sorry to hear that -- that's so disappointing. Looks like we both have some decisions to make," and end the conversation right there so you can re-group and seek out some guidance from us and others.
