Hilo doctor loses court case

HILO — A Hilo obstetrician/gynecologist has lost a court battle over the state’s demand that he repay more than $200,000 in reimbursements for services to Medicaid patients.

Hilo Circuit Judge Greg Nakamura issued a brief written judgment Wednesday in favor of the Department of Human Services and DHS Director Pankaj Bhanot over Dr. Frederick Nitta, who sued after a hearing officer ruled that Nitta wasn’t entitled to $205,220.86 in insurance reimbursements he received from DHS as a Medicaid primary care provider.

Nakamura’s ruling, which contained no commentary, was filed about six weeks after Nitta’s patients crowded the judge’s Hilo courtroom for a hearing on Nitta’s lawsuit.

Eric Seitz, Nitta’s Honolulu attorney, said his client would appeal Nakamura’s ruling. Seitz said he thinks the judge “did not do a particularly thorough job” in Nitta’s case.

“I’m somewhat disappointed and it’s uncharacteristic,” Seitz said Thursday. “(Nakamura) did not address a number of very critical issues, as far as I’m concerned. So we’re going to have to go elsewhere and see if we can convince judges elsewhere that we’re right and he’s wrong.”

Seitz called the DHS investigator, Kurt Kresta, a former Dallas police detective, “heavily biased and impeached and incompetent.” He said Kresta was the only testifier at the administrative hearing that led to Nitta’s lawsuit and “presented information he had obtained from third parties by telephone or through other means, that was never actually verified or delivered to us or presented to the hearing officer in any kind of reliable manner. The judge said apparently that was OK.

“The judge said it’s OK to require Dr. Nitta to repay in excess of $200,000 when none of the figures that purportedly were overpaid were verified in any form. And (Nakamura) also basically upheld their claim that Dr. Nitta had not personally certified that he was eligible to receive that money. But there is no doubt that he performed the services, and this is an electronic certification process.

“And, as far as I know, no one anywhere, ever, has been required to disgorge money that was properly earned and properly paid, just because there was some sort of defect in the electronic signature process. Maybe that’s something that they would have (Nitta) redo. Maybe they would disqualify him from further payments until he does it properly. But, after the fact, to require him to pay back some $200,000 for services that he indisputably provided is, in my view, a gross injustice.”

Seitz said Nitta has not made any repayment demanded by DHS.

“He hasn’t paid it back and I have no intention of paying it back until we exhaust appeals, and that means, in all likelihood, going into federal court and suing the state over these issues,” he said.

DHS spokeswoman Keopu Reelitz said the department is “still looking into the decision” and “unable to provide additional details at this point.”

This isn’t the first time a dispute concerning Medicaid reimbursements to Nitta has landed in court. In September 2014, DHS cut off Medicaid payments to Nitta, accusing him of fraud after a preliminary investigation found his office was overpaid more than $1.2 million for urine drug screening tests between 2012 and 2014.

Nitta contested the decision, and in February 2015 a state hearings officer overturned Nitta’s payment suspension, finding there had not been a “credible allegation of fraud” against the doctor and that any overbilling resulted from insurance companies providing Nitta’s staff with an incorrect billing code to be used for the drug tests he administered to patients.

In March 2015, the state attorney general appealed to Hilo Circuit Court, arguing the hearing officer’s decision was “clearly erroneous.” Nakamura upheld the hearing officer’s ruling that overturned the payment suspension, finding there were mistakes made in the way Medicaid was billed but no intentional fraud.

Email John Burnett at jburnett@hawaiitribune-herald.com.