EXCLUSIVE: Hilo's 'welfare doctor' fights fraud charges

EXCLUSIVE: Hilo's 'welfare doctor' fights fraud charges
Published: Jan. 8, 2015 at 4:58 AM HST|Updated: Jan. 8, 2015 at 10:26 AM HST
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HILO, BIG ISLAND (HawaiiNewsNow) - A man affectionately known as Hilo's welfare doctor for aiding the underserved stands accused of fraud. But many on the Big Island are rallying to his defense.

In September, the state cut off Medicaid reimbursements to Dr. Frederick Nitta, saying he overbilled the program more than $1.2 million when he gave drug screening tests to patients.

But Nitta said it was all a mistake, involving wrong billing codes.

"How can I help people get off drugs ... get them off drugs before they deliver their baby if I'm going to be a hypocrite and commit fraud," said a tearful Nitta.

Right now, he's one of the only OBs taking new patients in Hilo.

But without Medicaid reimbursements, many fear people will go untreated.

Thera Owens said she and her husband Bruce spent two years looking for a doctor before they found Dr. Nitta.

"It's hard finding a doctor no matter what insurance you have, especially if you have (health) problems," said the Hilo resident.

Owens credits Nitta for saving her 3-month-old daughter Grace's life.

"We wouldn't have this baby if it wasn't for Dr. Nitta. We had emergency room doctors preparing us for a miscarriage because we were bleeding heavily," Owens said. "There's this beautiful baby girl that we have because he helped me."

Crystal Cabanatan also credits Nitta for saving her life.

"I was a full-blow addict, a raging drug addict. I did every drug that was in front of me," Cabanatan said.

"I did meth, shot up meth, smoked oxys and I didn't think Dr. Nitta could help me. He got me clean."

This week's hearing even drew a hometown celebrity: Cardinals second-baseman Kolten Wong.

The Hilo native grew up with Nitta's son and said he's like a second father.

"You can tell it's a simple mistake. He wasn't planning on taking money from these guys or anything like that," Wong said.

"He's one of the main guys here on the Big Island who takes care of people who have nowhere else to go."

More than 90 percent of Nitta's patients are on Medicaid, Medicare or MedQuest and nearly all of them are asked to take a drug test before Nitta sees them.

Nitta said he requires the testing because the drug problem on the Big Island has grown to epidemic proportions. About 30 percent of the pregnant women he treats test positive for drugs, he said.

"My son got addicted to pills and I had to fight him for years. And a lot of his friends were addicted and that's how I got aware about what was going on," he said.

The drug test used by Nitta allows for the testing of up to 14 different drug classes. Nitta said his officer workers were told by a manufacturer's representative and by other physicians that he could bill for each of the 14 tests.

However, HMSA recently told him that was improper, prompting Medicare's watchdogs to investigate.

"The pattern of the numbers of drug kits he was billing the state for all seemed to indicate that it was in fact fraudulent," said Kurt Kresta, an investigator for the Department of Human Services.

But Nitta's attorney Eric Seitz said that proving a fraud case requires the state to show that Nitta intentionally overbilled Medicaid with idea of profiting from that.

He said Nitta did none of that and will pay back the money.

"There is no credible allegation of fraud. Yes, there was overcharging but the explanation for the overcharging is based on a lot of confusion," said Seitz.

"Doctor Nitta, by overwhelming evidence, is not the kind of person who could or has defrauded anybody. He's simply not capable of that."

The dispute underscores problems physicians face when dealing with the arcane world of healthcare billing codes.

Jeri Leong, executive director of the Healthcare Coding Experts of Hawaii, said billing codes can be very confusion because they change so much.

During the past year, insurers HMSA, UHA Healthcare and AlohaCare have all had to issue clarifications and guidances on how to bill for these types of tests.

Medicare issued similar guidances in 2010, 2011, and 2012.

"There's mass confusion out there," Leong said.

"We have other clients who have billed for these similar services and so this is an area we have been researching and advising on."

For now, Nitta said he's still seeing his clients even though he's not getting paid for them.

"There will be a public health crisis if they continue to withhold reimbursements from him," said Seitz.

"At some point, he's gonna have to close his doors because he cannot continue to do that."

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