EXCLUSIVE: Ruling overturns Hilo doctor's Medicaid suspension

HONOLULU (HawaiiNewsNow) - For more than five months, the man known as "Hilo's welfare doctor" has been forced to take patients for free after he was accused of defrauding the state's Medicaid program.

But on Wednesday, a state hearings officer overturned Dr. Frederick Nitta suspension from the Medicaid program, saying the fraud allegations were "not credible."

"I feel somewhat vindicated but it's already taken a lot out of me," Nitta said in an interview in his Hilo office.

"But I'm not gonna give up because I know the truth and I know how many girls I've taken off drugs."

The state suspended Nitta from receiving Medicaid reimbursements after accusing him of bilking more than $1 million from the program.

The overbilling was for drug screening tests that he provided to nearly all of his patients over the past several years. Ninety percent of those patients are on Medicaid, Medicare or Med-QUEST. And many are at a high risk for drug addiction.

According to the state, Nitta administered 14 different drug screens to each patient, billing Medicaid each time, even though he's only allowed to bill for one.

In his ruling, state hearings officer Lane Ishida conceded that mistakes were made but said there was no intentional fraud.

Ishida pointed to similar unintentional errors by other Big Island doctors. He also noted that the billing rules for these drug tests are so murky that insurers have had to issue several clarifications for doctors seeking to be reimbursed for these tests.

Meanwhile, Nitta said his staffers were told by drug testing company's sales representatives that they're allowed to bill that way.

Eric Seitz, Nitta's attorney, said his client plans to repay the state and will pursue the drug company for the faulty advice.

"I think it's a disgrace that a doctor of Dr. Nitta's stature was suspended without any kind of hearing," said Seitz.

"Fortunately, he's been able to keep his practice afloat without getting paid for the past 5 and-a-half months. But we were getting close to a potentially disastrous situation."

A spokeswoman for the state Human Services Department had no comment.

Nitta, an obstetrician, is one of the few doctors who takes in new Medicaid or Medicare patients on the Hilo side. He says he helps delivers between 200 to 400 babies each year.

Nitta' supporters on the Big Island have rallied behind the doctor, who they say was treated unfairly by the state.

They see Nitta as a hero, who has fought hard against drug addiction in the community.

Some studies have found that up to 50 percent of pregnant mothers on the Big Island have tested positive for drugs.

"There's no words to describe how angry the community was when it found out what Dr. Nitta was going through and how serious it was," said Hilo resident Ashilen Medeiros.

Added state Sen. Josh Green:

"He is so passionate about what he did so I'm pleased with the decision he was vindicated."