by Andrew Walden

Hawaii is worst in the USA for pursuing Medicaid fraud, but the Hawaii Department of Human Services (DHS) and the Attorney General’s office did spend seven years litigating against an honest doctor in Hilo, Frederick Nitta, MD, who had the audacity to work as a General Practitioner.

In the end, DHS lost. 

Moreover, the unanimous 5-0 Hawaii Supreme Court decision in Nitta vs DHS, November 4, 2022, opens the door to increased Medicaid payments in chronically doctor-short rural Hawaii.

Here are some key excerpts from the State Supreme Court ruling:

More than ninety percent of Dr. Nitta’s patients … are eligible for Medicaid or Medicare and do not have other doctors. Thus, although he is a board-certified OB/GYN physician, Dr. Nitta provides Primary Care Physician (PCP) services for his patients, is recognized in the community as a PCP, and provides a broad range of services to his patients.

Hence, in 2013, at the suggestion of an AlohaCare representative, a staff member from Dr. Nitta’s office enrolled him in the Program via the DHS website. The parties do not dispute that Dr. Nitta was attested to have a specialty designation of family medicine, general internal medicine, or pediatric medicine.

It appears Dr. Nitta first learned he was participating in the Program when he received a letter from DHS dated July 7, 2015 telling him he was ineligible because he did not satisfy Rule requirements. Then, in a letter dated November 6, 2015, DHS demanded repayment of $205,940.13 in payments made to him via the Program….

The Hawaiʻi Medical Association (“HMA”) and the American Medical Association (“AMA”) (“amici”) filed an amicus brief. Amici highlighted the critical and worsening physician shortage in Hawaiʻi, noting that primary care has the greatest shortage, especially for Medicaid patients in East Hawaiʻi.  Amici posited that DHS’s continued recoupment efforts against physicians providing primary care services to Medicaid beneficiaries only worsens the shortage. Amici also urged that the payments to Dr. Nitta were consistent with the ACA’s purpose to “benefit physicians that provide primary care services to the Medicaid population.” ….

While the ICA appeal was pending, the Sixth Circuit issued its Averett opinion invalidating the Rule that set forth additional eligibility requirements for the Program.… In Averett, Tennessee’s Medicaid agency, TennCare, had sought to recoup an average of more than $100,000.00 per physician from twenty-one physicians practicing in family medicine in rural Tennessee….

On February 11, 2022, the ICA published an opinion ….  The ICA adopted the Sixth Circuit’s analysis in Averett and held the circuit court wrongly concluded that Dr. Nitta was ineligible by relying on the Rule….

On May 23, 2022, DHS filed its application for writ of certiorari, arguing (1) Dr. Nitta was still ineligible for enhanced payments….

DHS contends that Dr. Nitta was ineligible because his “primary specialty designation” was OB/GYN, not family medicine, general internal medicine, or pediatric medicine….  We disagree with DHS…a physician can have more than one specialty….

Congress clearly intended the enhanced payments as incentives for the provision of primary care services, regardless of a physician’s other practice areas.…

We agree with amici that:

“… These low Medicaid payment rates do not provide adequate incentives for physicians to participate in Medicaid, limiting access to physicians’ services by Medicaid beneficiaries. In addition, low Medicaid payment rates discourage young physicians and other health professionals from entering careers in primary care, undermining efforts to address the shortage of primary care practitioners in many areas of the country….”

PDF: Read Full Decision

HTH: Hilo doctor prevails in high court decision regarding reimbursements  

AMA: Ob-gyn can keep $205,000 in Medicaid pay that state tried to recoup