Oral Argument Before the Hawaii Supreme Court — No. SCWC-17-0000432
No. SCWC-17-0000432, Thursday, August 25, 2022, 2022, 10 a.m.
FREDERICK NITTA, M.D., Respondent/Appellant-Appellant, vs. DEPARTMENT OF HUMAN SERVICES, STATE OF HAWAI‘I, Petitioner/Appellee-Appellee, and CATHY BETTS, DIRECTOR, Respondent/Appellee-Appellee.
The above-captioned case has been set for oral argument on the merits at:
Supreme Court Courtroom
Aliʻiolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813
The oral argument was livestreamed for public viewing via the Judiciary’s YouTube channel at YouTube.com/hawaiicourts.
Attorneys Petitioner Dept. of Human Services, State of Hawai`i:
James W. Walther, Erin N. Lau, and Lili A. Young, Deputy Attorneys General
Attorneys for Respondent Frederick Nitta, M.D.:
Eric A. Seitz, Della Au Belatti and Bronson Avila
NOTE: Certificate of Recusal, by Associate Justice Paula A. Nakayama, filed 05/24/22.
NOTE: Order assigning Circuit Judge Shirley M. Kawamura, in place of Nakayama, J., recused, filed 06/15/22.
NOTE: Order accepting Application for Writ of Certiorari, filed 06/28/22.
NOTE: Amended Notice of Setting for Oral Argument due to rescheduling from 08/24/22 at 10:00 a.m. to 08/25/22 at 10:00 a.m., filed 08/22/22.
COURT: Recktenwald, C.J., McKenna, Wilson, and Eddins, JJ., and Circuit Judge Kawamura, in place of Nakayama, J., recused.
In 2013 and 2014, Dr. Frederick Nitta, a board certified obstetrician/gynecologist practicing in Hilo, Hawai‘i, received enhanced Medicaid payments via the State’s Medicaid Primary Care Physician (“PCP”) Program. Authorized by the Affordable Care Act, the program enabled physicians “with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine” to receive increased payments for providing primary care services to Medicaid patients in 2013 and 2014. The State of Hawai‘i’s Department of Human Services (“DHS”) administers the program via its Med-QUEST division.
In 2015, DHS notified Dr. Nitta that he was ineligible for the program because he did not meet the requirements of the underlying federal rule and demanded repayment of over $200,000. Dr. Nitta’s challenges to the demand were denied in an administrative hearing, an administrative appeal with DHS, and by the Circuit Court of the Third Circuit (“circuit court”). Dr. Nitta then brought a secondary appeal to the Intermediate Court of Appeals (“ICA”).
While the ICA appeal was pending, the United States Court of Appeals for the Sixth Circuit issued an opinion in Averett v. United States Dep’t of Health & Hum. Servs, 943 F.3d 313 (6th Cir. 2019). The ICA adopted the Sixth Circuit’s analysis in Averett and held invalid the federal rule outlining the eligibility requirements of the program. Determining that DHS and the circuit court relied exclusively on that rule, the ICA vacated their rulings against Dr. Nitta and remanded the case to the DHS Administrative Appeals Office for “further proceedings as may be necessary.”
On certiorari, DHS argues that the ICA’s vacatur and remand was improper because: (1) Dr. Nitta was still ineligible for the enhanced payments under the federal statute; (2) the circuit court’s conclusions relied on the express language of the federal statute; and (3) DHS was required to recoup the overpayment because there was never money appropriated to pay Dr. Nitta.