Medicare & Medicaid

“Arbitrary” action has doctor on hook for $205,000 in bonus pay

Tanya Albert Henry , Contributing News Writer

Although a Hawaii obstetrician-gynecologist in a medically underserved area spent more than 60 percent of his time providing patients with primary care services, state officials say he cannot collect higher Medicaid payments allowed under a 2010 federal law designed to encourage physicians to provide this care.

On top of that, the state told the Hilo physician, Frederick Nitta, MD, that he must pay back the $205,000 he has already been paid for care he provided Medicaid patients and billed for at the higher rate.

If Hawaii courts allow the state’s “arbitrary and capricious” interpretation of the law’s provision to remain intact, physicians will be forced to deny vital medical services or risk closing their practices, the Hawaii Medical Assn. and the Litigation Center of the American Medical Association and State Medical Societies said in a friend-of-the-court brief they filed in a lawsuit challenging the state’s interpretation of the law.

“This does not bode well for Hawaii’s people and their ability to access vital medical services, especially in light of the shortage of primary care physicians in Hawaii,” the HMA and Litigation Center told the court in its amicus. Hawaii—with an aging physician population and high cost of living—was already short 900 physicians in 2016. That number has been rising, up 43 percent from 2012 when the state was short 622 doctors, the brief says.

The Intermediate Court of Appeals of the State of Hawaii will decide whether Hawaii’s Department of Human Services is correctly interpreting a provision under the Health Care and Education Reconciliation Act that, among other things, allowed physicians to receive increased Medicaid payments for certain primary care services in 2013 and 2014.

The law says eligible physicians must either “self-attest” as family physicians, general internists, pediatricians or a subspecialist in a specialty recognized by the American Board of Medical Specialties, American Board of Physician Specialties or the American Osteopathic Association. Also, at least 60 percent of Medicaid codes the physician bills must be primary care related codes that the law names.

When the rule was promulgated, the Centers for Medicare & Medicaid Services published guidelines to help states and physicians interpret the law. In one Q&A document, CMS stated that physicians board certified in non-eligible specialties who provide primary care and meet the 60 percent threshold could still be eligible for the enhanced payments.

The guidance says the state “could” verify that the physician provides primary care “by determining that the physician represents himself in the community as a family practitioner, as evidenced by medical directory listings, billings to other insurers, advertisements, etc.”

The state looked at the guidance and primarily relied on Dr. Nitta’s medical directory listings and advertisements to determine his eligibility. As a result, they said, he is not eligible because he identifies himself as an ob-gyn.

But the HMA and Litigation Center say the state’s interpretation is too narrow. In their amicus brief, the physician organizations emphasize that the guidance says listings and ads are examples of ways the state “could” determine eligibility and that the “etc.” implies there are other ways to determine eligibility.

“The state didn’t consider the physician’s patients and East Hawaii’s community’s testimony on his practice characteristics,” the brief states.

While many patients initially see Dr. Nitta for obstetrics or gynecology care, he also provides them with primary medical care services because it difficult for patients to find additional physicians for routine internal medicine, pediatric or family medicine needs. Often, East Hawaii physicians specializing in these areas are not accepting new Medicaid patients.

“Dr. Nitta is recognized by other doctors and medical providers in the East Hawaii community as a primary care provider and has been accepted and paid by medical insurers as a ‘primary care physician.’ Further, at a hearing on the matter, hundreds of people provided written and oral testimony supporting a finding that Dr. Nitta is indeed a primary care physician,” according to the amicus brief.

The state also claims that less than 60 percent of Dr. Nitta’s billing was for the primary care-related codes the law outlines. The state used paid billing codes, which account for all services billed under the physician’s provider number. For example, that would include ancillary services such as urine testing and blood work that other professionals provide under the physician’s supervision.

The HMA and Litigation Center say this approach skews the ratio. After a full audit of Dr. Nitta’s records, an auditor concluded that well over 60 percent of the physician’s time was spent providing primary care treatment and services to Medicaid patients, the brief says.

The state is seeking repayment from at least one other physician in a shortage area and the HMA and Litigation Center told the court “it is inevitable that more local physicians will be notified that substantial amounts are owed to [the state] for alleged overpayment.” If that happens, “local physicians will be forced to make the difficult choice of denying medical services or risk closing their practices,” the amicus brief warns.

That, the brief notes, is the opposite of what Congress intended with the enhanced payments, which was to encourage physicians to provide primary care services to the Medicaid population.

The brief says that “because access to primary care is critical for ensuring continuity of care, improving overall health and reducing health care costs, [the state’s] interpretation of CMS Final Rule and guidance cannot be allowed to prevail to the detriment of Hawaii’s people and their health.”