Prominent dermatologist admits his overbilling was a fraud
A prominent Honolulu dermatologist yesterday admitted to overbilling HMSA more than $178,000 for acne surgeries he didn't perform.
On behalf of his corporation, Dr. Norman Goldstein agreed to pay a fine of more than $386,000 -- double what it fraudulently overcharged the Hawaii Medical Service Association.
Goldstein's corporation, Norman Goldstein, M.D., Inc., pleaded guilty in federal court to committing health care fraud and admitted to overbilling HMSA over a three-year span.
As a part of a plea agreement with the U.S. Attorney's Office, the corporation would also be placed on five years' probation and pay a $500 assessment.
Honolulu dermatologist Dr. Norman Goldstein admitted yesterday to knowingly overbilling HMSA over a three-year span for surgeries he did not perform.
The guilty plea came in an "information" filing by the U.S. Attorney's Office, a move that U.S. District Judge J. Michael Seabright called "unusual." Typically, such cases are presented to a grand jury, which issues an indictment.
Goldstein, on behalf of his corporation, admitted to knowingly billing HMSA from 1997 to Dec. 20, 2000, for about 20,000 acne surgical procedures when his non-physician medical staff actually administered cryotherapy -- a less-invasive procedure in which liquid nitrogen is applied to the face.
Cryotherapy then was $9.30 less per person in HMSA reimbursement rates.
Beginning in 2001, HMSA changed its compensation rates so that doctors received more for cryotherapy -- $35.60 more than for the acne surgeries. From then on, Goldstein's corporation correctly billed HMSA even though patients had been receiving the same treatment in the previous years.
Goldstein is still continuing his practice and has refunded HMSA. However, HMSA is no longer his provider.
Lawyers are still debating whether Goldstein's corporation should pay about $270,000 in HMSA's attorney fees incurred from this case since 2002.
The judge had called the plea agreement "very fair" given the high fine. However, an HMSA official said there are mixed feelings about the case being against the corporation rather than Goldstein himself.
"We would have preferred if it was against the individual, because the sentencing would have been applied in an individual capacity rather than for a corporation," said Paul Goto, assistant compliance officer with HMSA.
Sentencing for Goldstein's corporation is set for Sept. 4.