A Hawaii ob-gyn who also provided primary care services to patients in an underserved area is entitled to retain the $205,000 in enhanced Medicaid payments the government was trying to recoup from him, the state supreme court has ruled.

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Hilo physician Frederick Nitta, MD, spent more than 60% of his time providing primary care to patients in the medically underserved area in which he practices medicine. But state officials claimed that he couldn’t collect higher Medicaid payments created under a 2010 law designed to encourage physicians to provide this care.

The Hawaii Department of Human Services (DHS) also had demanded that he pay back the $205,000 he had already been paid for the care he provided Medicaid patents and billed for at the higher rate.

After years of litigation, Hawaii’s highest court ruled in the physician’s favor.

“Congress clearly intended the enhanced payments as incentives for the provision of primary care services, regardless of a physician’s other practice areas,” the Hawaii Supreme Court said in its  November ruling (PDF).

The court quoted extensively from the amicus brief (PDF) that the Litigation Center of the American Medical Association and State Medical Societies and the Hawaii Medical Association (HMA) filed when Nitta v. Department of Human Services, State of Hawaii was at the appellate court level.

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“Amici highlighted the critical and worsening physician shortage in Hawai’i, noting that primary care has the greatest shortage, especially for Medicaid patients in East Hawai’i,” the Hawaii Supreme Court said, noting that DHS’ “continued recoupment efforts against physicians providing primary care services to Medicaid beneficiaries only worsens the shortage.”

The court referenced the AMA Litigation Center and HMA brief (PDF) cited articles and other reports that showed “‘on neighbor islands, in particular, patients often wait four to five months for a doctor’s appointment. On Hawai’i Island, it is sometimes two to three times more difficult to find a PCP [primary care physician]. Consequently, many residents seek care at the nearest hospital emergency room, costing them ‘upward of $600–$800 for an emergency room visit, as opposed to the average co-ay of $15–$50 for a visit to a primary care physician.’”

Who qualifies as “primary care?”

The Hawaii DHS had argued to the state supreme court that medical directory listings were the deciding factor of a physician’s practice characteristics. In refuting that argument, justices again referred to the AMA Litigation Center and HMA brief, noting that it “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.’”

The AMA-HMA brief also pointed to Centers for Medicare & Medicaid Services (CMS) published questions and answers regarding how states can review a physician’s eligibility for the enhanced payment program.

“There, the CMS provided a nonexhaustive list of ways a state could verify a physician’s practice characteristics (i.e., how the physician represented himself in the community, medical directory listings, billings to other insurers, advertisements, etc.),” the court’s opinion said.

The AMA-HMA brief also “contended other evidence demonstrated Dr. Nitta’s PCP status,” the court noted. That includes “recognition by other doctors and medical providers in the East Hawaii community as a PCP,” and “acceptance and payment by medical insurers and a PCP” and “hundreds of written and oral testimony by people in support of a finding that he is a PCP.”

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And finally, the court cited the amicus brief’s argument that the DHS “ ‘formula to determine the sixty-percent-threshold requirement [was] in complete disregard for actual medical practice’” because paid billing codes don’t take into account the “‘percentage of total services provided in a managed care environment by that physician.’ ”

Dr. Nitta reflected on the case in an interview with the Hawaii Tribune-Herald.

“I could have just paid them back. Instead, it’s probably costing me more to fight them in court over and over and over. But that doesn’t matter, because it’s not right what they’re doing.”

Find out more about the cases in which the AMA Litigation Center is providing assistance and learn about the Litigation Center’s case-selection criteria.

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