Nitta v. Dep't of Human Servs.

• Decision Date: 11 February 2022
• Docket Number: CAAP-17-0000432
• Citation: 151 Hawai‘i 123,508 P.3d 1209
• Parties: Frederick NITTA, M.D., Appellant-Appellant, v. DEPARTMENT OF HUMAN SERVICES, State of Hawai‘i, and Cathy Betts, Director, Appellees-Appellees
• Court: Hawaii Court of Appeals

151 Hawai‘i 123

508 P.3d 1209

Frederick NITTA, M.D., Appellant-Appellant,

v.DEPARTMENT OF HUMAN SERVICES, State of Hawai‘i, and Cathy Betts, Director,¹ Appellees-Appellees

NO. CAAP-17-0000432

Intermediate Court of Appeals of Hawai‘i.

FEBRUARY 11, 2022

On the briefs:

Eric A. Seitz, Della A. Belatti, Honolulu, Bronson Avila, for Appellant-Appellant

Heidi M. Rian, Lili A. Young, Deputy Attorneys General, for Appellee-Appellee Department of Human Services, State of Hawai‘i

Jeffrey S. Portnoy, Honolulu, (Cades Schutte), for Amicus Curiae Hawaii Medical Association and American Medical Association

LEONARD, PRESIDING JUDGE, NAKASONE AND MCCULLEN, JJ.

OPINION OF THE COURT BY MCCULLEN, J.

This is a secondary appeal from an administrative proceeding regarding a physician's eligibility for enhanced payments through Medicaid's Primary Care Physician (PCP ) Program. Appellant-Appellant Frederick Nitta, M.D. (Dr. Nitta ) appeals from the Circuit Court of the Third Circuit's² judgment and the underlying decision and order in favor of Appellee-Appellee Department of Human Services (DHS ), State of Hawai‘i. On appeal, Dr. Nitta challenges the Circuit Court's finding that he was ineligible to participate in the PCP Program, thereby entitling DHS to monetary recoupment for Medicaid enhanced payments.

I. BACKGROUND

Medicaid provides medical assistance to qualifying individuals and families, and is jointly funded and administered by the federal and state governments. 42 U.S.C. § 1396-1. In 2010, Congress enacted the Affordable Care Act, which included a temporary increase in payments to particular physicians who provided primary-care services to Medicaid patients [hereinafter, Medicaid Enhanced Payment Statute ] requiring:

payment for primary care services (as defined in subsection (jj)) furnished in 2013 and 2014 by a physician with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine at a rate of not less than 100 percent of the payment rate that applies to such services and physician under part B of subchapter XVIII (or, if greater, the payment rate that would be applicable under such part if the conversion factor under section 1395w-4(d) of this title for the year involved were the conversion factor under such section for 2009)[.]

42 U.S.C. § 1396a(a)(13)(C) (emphasis added).

At the federal level, the Centers for Medicare and Medicaid Services (CMS ) administers the Medicaid program, and promulgated its rule relating to 42 U.S.C. § 1396a(a)(13)(C), the Final Medicaid Payment Rule . 42 C.F.R. § 447.400. Requiring board certification or a sixty-percent billing threshold, CMS's Final Medicaid Payment Rule provided:

(a) States pay for services furnished by a physician as defined in § 440.50 of this chapter, or under the personal supervision of a physician who self-attests to a specialty designation of family medicine, general internal medicine or pediatric medicine or a subspecialty recognized by the American Board of Medical Specialties (ABMS), the American Board of Physician Specialties (ABPS) or the American Osteopathic Association (AOA). Such physician then attests that he/she:

(1) Is Board Certified with such a specialty or subspecialty and/or

(2) Has furnished evaluation and management services and vaccine administration services under codes described in paragraph (b) of this section that equal at least 60 percent of the Medicaid codes he or she has billed during the most recently completed CY or, for newly eligible physicians, the prior month.

42 C.F.R. § 447.400(a).³

At the state level, DHS, through its Med-QUEST division, is responsible for administering the Medicaid PCP Program in Hawai‘i. 42 C.F.R. § 447.400. DHS's online PCP Attestation Form relied on and tracked CMS's Final Medicaid Payment Rule as follows:

Increases in reimbursement are limited to physicians who attest that they are either:

1. Practicing in the specialty of family medicine, general internal medicine, or pediatric medicine, or a subspecialty of one of these specialties recognized by the American Board of Medical Specialties, the American Osteopathic Association, or the American Board of Physician Specialties (refer to application form); and

2. a. Are board certified in the eligible specialty in which they practice, or

b. Have billed at least 60% of Medicaid services provided, using the E&M vaccine administration codes list above, during calendar year 2012. For newly eligible physicians, the 60% billing requirement will apply to Medicaid claims for the prior month.

Additionally, the instructions for DHS's Attestation Form stated that the "attestation may NOT be completed by anyone on the provider's behalf. Attestations that are submitted by anyone other than the individual provider named in the attestation constitutes a false claim for Medicaid reimbursement which may result in civil and criminal penalties ...."

Dr. Nitta, a board certified Obstetrician-Gynecologist (OB-GYN ) who has practiced as both an OB-GYN and a PCP for more than twenty years in Hilo, Hawai‘i, enrolled in the PCP Program. Dr. Nitta testified that he treats his patients for any ailments, such as strokes

and heart attacks, because his patients do not have other doctors.⁴ Dr. Nitta also testified, "I've been providing primary care in the Big Island, not because I wanted to, it's because the patients don't have doctors. ... I have no choice. I have to do it." He estimated that over 90 percent of his patients are eligible for Medicaid or Medicare.

At the suggestion of an AlohaCare representative, a staff member from Dr. Nitta's office completed the online PCP Attestation Form on DHS's website. Dr. Nitta, himself, was unaware he was participating in the program until he received DHS's July 7, 2015 letter notifying him that he was ineligible for the program. In that letter, DHS informed Dr. Nitta that it found him ineligible because: (1) "[p]ractice characteristics show [he was] not practicing in one of the designated specialties or sub-specialties[;]" (2) "Med-QUEST has no record that [he was] board certified in one of the designated specialties or sub-specialties[;]" and (3) "[a] review of claims history shows the designated codes ... did not comprise at least 60% of all paid Medicaid claims billed to Med-QUEST."

DHS subsequently demanded repayment in the amount of $205,940.13, prompting Dr. Nitta to request an administrative hearing. Following the administrative hearing, the hearings officer found that Dr. Nitta (1) was not board certified in one of the specified specialties or recognized subspecialties, (2) was not known in the community as a PCP practicing in the specified specialties or recognized subspecialties, (3) did not self-attest, and (4) did not meet the sixty-percent billing threshold. The hearings officer then concluded that DHS correctly determined Dr. Nitta "was not eligible to participate in the [PCP] Program as set forth in Title 42, Code of Federal Regulations § 447.400," and that there was an overpayment of $205,220.86.

Dr. Nitta filed exceptions and administratively appealed. DHS's deputy director sustained the hearings officer's decision and adopted it as DHS's final decision.

On appeal to the Circuit Court, Dr. Nitta attached to his opening brief the complaint in Averett v. U.S. Department of Health and Human Services, a case in the United States District Court, Middle District of Tennessee, filed by a group of Tennessee doctors. In its answering brief, DHS asserted, among other things, that the plaintiffs in Averett were not similarly situated to Dr. Nitta and, thus, were distinguishable.

Relying on the Medicaid Enhanced Payment Statute, CMS's Final Medicaid Payment Rule, and DHS's Self Attestation Instruction, the Circuit Court found that Dr. Nitta failed to self-attest that he satisfied the PCP Program's requirements, and Dr. Nitta was not board certified in one of the specialties. In light of those findings, the Circuit Court concluded there was no need to reach the sixty-percent billing threshold issue. The Circuit Court then found an overpayment of $205,338.88. Dr. Nitta filed a timely appeal with this Court.

While this appeal was pending, the United States Court of Appeals for the Sixth Circuit rendered its opinion in Averett v. United States Dep't of Health & Hum. Servs, 943 F.3d 313, 319 (6th Cir. 2019), affirming the lower court's decision invalidating CMS's Final Medicaid Payment Rule. Averett, 306 F. Supp. 3d 1005, 1020-21 (M.D. Tenn. 2018). We ordered, and the parties filed, supplemental briefing as to the effect, if any, Averett has on this appeal. Dr. Nitta argues that, based on Averett, he was entitled to enhanced payments. DHS, however, avers that Averett supports its conclusion that Dr. Nitta was "never qualified for the program because he did not practice in a qualified specialty by his own self designation on his Medicaid provider application and his [National Provider Identifier] application."

II. STANDARD OF REVIEW

This court must determine whether the circuit court was right or wrong in its decision, applying the standards set forth in Hawaii Revised Statutes (HRS ) § 91-14(g) (2012) to the agency's decision. HRS § 91-14(g) provides:

Upon review of the record the court may affirm the decision of the agency or remand the case with instructions for further proceedings; or it may reverse or modify the decision and order if the substantial rights of the petitioners may have been prejudiced because the administrative findings, conclusions, decisions, or orders are:

(1) In violation of constitutional or statutory provisions; or

(2) In excess of the statutory authority or jurisdiction of the agency; or

(3) Made upon unlawful procedure; or

(4) Affected by other error of law; or

(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6) Arbitrary, or capricious, or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

"Under HRS § 91-14(g),...