EXCLUSIVE: Hilo's 'welfare doctor' vindicated again - Hawaii News Now - KGMB and KHNL

EXCLUSIVE: Hilo's 'welfare doctor' vindicated again

Eric Seitz Eric Seitz
HONOLULU (HawaiiNewsNow) -

Exonerated of fraud charges for a second time, Hilo's welfare doctor is now seeking payments from the state and insurers that accused him of bilking Hawaii's Medicaid program.  "There are hundreds of thousands of dollars of reimbursements that should have been paid that have been held back," said Eric Seitz, attorney for Dr. Frederick Nitta.

"Most doctors would have gone out of business because of this experience. He basically financed his practice, didn't pay himself and paid his staff out of pocket."

On Friday, Circuit Judge Greg Nakamura upheld a February ruling by a state hearings officer Lane Ishida that Nitta did not defraud the state's Medicaid system and that the overbillings of more than $1 million were unintentional.  According to Seitz, the judge "was disturbed" by the department's appeal since Ishida's finding of "no credible allegations of fraud" should be considered a final decision by the department.

"I never committed any fraud, I know that and everybody else knows that," said Nitta.  "I don't even care about the money. The point is, I'm trying to help people."

Nitta is called Hilo's welfare doctor because more than 90 percent of his patients are on Medicaid, Medicare or Medquest. By his own estimation, Nitta said he's helped deliver more than 5,000 newborns since he opened his business more than two decades ago.

But it's his practice of drug testing moms that got him in trouble last year. Insurers say he used a special drug kit to test mothers for 14 different types of drugs, billing them for each of the 14 tests. They said he's only allowed to bill for one test.  About 30 percent of new mothers in some parts of the Big Island test positive for drugs.

Seitz said Nitta's error is a common mistake doctors make due to the complexity of medical billing rules.  "I'm very seriously contemplating filing a lawsuit against the people in the department who have been pursuing Dr. Nitta because frankly there never has been any justification for any of this," said Seitz.

Seitz said Nitta is seeking Medicaid reimbursements of several hundred thousand dollars that were suspended by the Department of Human Services over a five-month period.  Nitta said insurers such as HMSA may owe him even more money.  He said an audit conducted by his experts found that while HMSA and AlohaCare reimbursed his office for the drug test but they didn't pay for more than $2 million in routine office visits and other services he provided for patients during the past three years. "The coders looked at it and said, 'oh there, there's another 40 deliveries that didn't get paid for," Nitta said. "Or here, Dr. Nitta, I don't know how many thousands of office visits you didn't get paid for."

Meanwhile, the Department of Human Services says it's waiting for the judge's written order before it decides what it will do next.

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