State files appeal in Nitta Medicaid case

The state Attorney General’s Office is appealing a decision made last month to resume Medicaid reimbursements for a Hilo physician accused of fraud.

In September, the state Department of Human Services cut off payments to obstetrician and gynecologist Dr. Frederick Nitta following a preliminary investigation into allegations of fraudulent billing. According to insurer Hawaii Medical Service Association, Nitta’s office had been overpaid more than $1.2 million for urine drug screening tests between Jan. 1, 2012, and June 30, 2014.

In contesting the decision to cut off his reimbursements, Nitta argued at a Jan. 6 administrative hearing that the overbilling had been the result of insurance companies providing his staff with the wrong billing code to be used for the drug tests he was administering to patients.

In January, Nitta told the Tribune-Herald that as many as 40 percent of the women who come to him for care are addicted to or abusing drugs, and the drug screens play an integral role in his care for his clients. As many as 90 percent of his clients are covered by Medicare, Medicaid and the state’s Med-QUEST division, which caters to low-income residents.

On Feb. 11, a state hearings officer overturned Nitta’s payment suspension, finding that there had not been a “credible allegation of fraud,” against the doctor.

“There is no evidence of an intentional deception or misrepresentation,” with regards to Nitta’s billing, hearings officer Lane Ishida wrote in his decision.

“Reviewing all the facts and evidence before me, I am persuaded that there was a good faith mistake based upon a misunderstanding of the billing codes. … The evidence also shows that other physicians also made the same error in billing. These other errors were not to the extent that Claimant (Nitta) made, but nevertheless, the same error was made.”

In a March 5 filing with the Hilo Circuit Court, the Attorney General’s Office argues that the hearings officer’s decision “is clearly erroneous” because it assumes the Department of Human Services relied “on a single allegation, fact or evidence, when the evidence indicates otherwise,” the appeal reads.

“Further, the hearing officer clearly erred because he did not consider all the evidence before concluding that there was good cause to forego suspension of payment because it was in the best interest of the Medicaid program.”

A call placed to the state Attorney General’s Office seeking comment on the suit was not returned as of press time Monday.

Nitta had not yet been made aware of the appeal filed by the state, but said Monday afternoon that it was not a surprise.

“I’ve been waiting a month to see if they would appeal it (the Feb. 11 decision), and when I didn’t hear anything I thought maybe they wouldn’t,” he said Monday.

“They’re trying to get their money back. … It’s been over six months and I haven’t gotten paid.”

Nitta said that recently some insurers began reimbursing him again as a result of the ruling, but if he isn’t reimbursed in full, it could force him to close his practice, leaving all his patients with few options in seeking health care.

“I’m seeing 60 people a day,” he said. “I’m the only one that’s taking them. … Nobody’s taking new patients.”

In January, patients and co-workers held a sign-waving campaign along Kamehameha Avenue as a show of support for Nitta, who they said was taking a stand to combat drug abuse. Nitta said that he had seen firsthand the effects that drug abuse has on families, and especially on newborn babies, and he has taken it upon himself to test his patients and give them the help they need to quit drugs.

“This thing is too big,” he said of drug addiction among East Hawaii residents. “I’m trying to focus on pregnant girls … but it’s everywhere. … The system is broken.”

Email Colin M. Stewart at cstewart @hawaiitribune-herald.com.