Criminal charges against a central Utah physician who is suing the state Medicaid fraud unit could intensify a rift between law enforcement and small-town doctors.
Dr. Richard B. Nay faces four second-degree felony counts for allegedly filing false claims for medical payments totaling more than $4,000. Nay, 44, knowingly misrepresented the type, quality and quantity of services rendered, according to charges filed Wednesday in 3rd District Court.Prosecutors allege the Gunnison family practitioner billed Medicaid at higher rates for emergency room and office services than he did private insurance companies and other health-care providers.
The Medicaid Fraud Control Unit analyzed Medicaid data banks maintained by the Utah Department of Health, which administers the state's Medicaid program. Nay showed up as a statistical "outlier," meaning that a disproportionate number of his procedures were billed to Medicaid and were not consistent with peers in central Utah, according to court documents.
Rural doctors contend the fraud team unfairly targets them because their fee-for-services billing logs are more readily available in the health department's computer than are their urban counterparts' managed-care records. Furthermore, physicians say investigators storm their offices, demanding patient files in full waiting rooms and then try to bully them to pay fines to escape criminal prosecution.
Denis Kroll, Medicaid Fraud Control Unit director, said he knows of no instance where his team has employed unprofessional tactics. Investigators, he said, are attempting to eliminate fraud, waste and abuse of the "open cookie jar" Medicaid system.
Those sharply divergent views have fueled a yearlong battle between doctors and law enforcement as to how the fraud unit should go about its work. Nay filed a civil complaint in federal court Nov. 30 against the Medicaid fraud unit, the Utah Department of Public Safety and an individual investigator, basically claiming the unit doesn't know how to do its job.
The Utah Medical Association, which has worked with state officials to soften what they perceive as a harsh investigatory approach, was careful not to read any tit-for-tat into Wednesday's charges against Nay.
"I'm not ready to say the criminal charges are a response, a back-at-you type of response" to Nay's lawsuit, said Mark Fotheringham, UMA spokesman. "You never know what the attorneys are doing in the background."
Fotheringham did say charges and lawsuits have a tendency to close down communication.
"I don't think (the relationship with law enforcement) will deteriorate again. I think it will stay about the same. I think we made some real progress and established some things," said Dr. George Cannon, former UMA president. "But I don't think we'll be sitting at the table again soon."
State officials say the charges were the culmination of a 15-month investigation of Nay and have nothing do with his civil suit.
"If we file criminal charges in a case, we believe not only that the act was criminal but the intent was criminal," said Scott Reed, an assistant attorney general who oversees the Medicaid fraud team.
Peter Stirba, Nay's attorney, called the charges "a completely misguided prosecution of a superb doctor." The state's case, he said, lacks facts and is based on the "quicksand" of a statistical analysis. "They just misinterpreted their own statistics."
At least one of Nay's patients thinks the charges will scare doctors from seeing Medicaid recipients in Gunnison and other small towns. "What's going to happen to us Medicaid people in rural Utah?" said Mike Stewart.
Gunnison Valley Hospital administrator Greg Rosenvall raised that question before Nay was charged. He expressed concern about what he called the Medicaid fraud unit's "abusive tactics" in a Nov. 8 letter to the Attorney General's Office. A significant number of the hospital's medical staff don't intend to sign new contracts to provide Medicaid after January 2000, he said.
"This alarming development," he wrote, "has placed Gunnison Valley Hospital's ability to provide emergency care services at risk."