Arkansas Democrat-Gazette (Little Rock)

June 12, 2007 Tuesday
Correction Appended

Failed to keep data properly, Dilday admits Charged with Medicaid fraud, doctor pleads to misdemeanor

BYLINE: BY NELL SMITH ARKANSAS DEMOCRAT-GAZETTE

SECTION: ARKANSAS

LENGTH: 651 words

A psychiatrist accused of charging the Arkansas Medicaid program for procedures he didn’t perform pleaded guilty instead on Monday to a misdemeanor charge of failure to maintain and supply medical records.
He agreed to pay $20,000 and will serve no jail time.
Dr. James “Kurt” Dilday, a 1998 candidate for lieutenant governor, had been charged with one count of felony Medicaid fraud, along with a felony count of failure to maintain patient records for five years.
Dilday, formerly of Little Rock, pleaded guilty to a misdemeanor record-keeping charge because, his lawyer said, he hadn’t held onto the records long enough.
“He had not kept the records for five years, which is what the law requires,” said Timothy Dudley.
Dilday did not respond to a request for comment left with Dudley on Monday.
In court records, the state claimed that Dilday billed Medicaid – the government health insurance for the poor – for procedures he did not perform and office visits that did not occur. According to the state, between Jan. 2, 2001, and July 16, 2002, Dilday billed Medicaid for 75 electroconvulsive shock treatments, a therapy that directs electricity into a patient’s brain to induce a seizure, for which there were no corresponding bills from a hospital or an anesthesiologist. At $495 each, the total billed to Medicaid was $37,125.
The state also said that Dilday billed for at least 200 office visits that never occurred.
The “billing irregularities” were discovered during a Medicaid review process where health care providers’ billing records are examined for potential problems, such as excessive usage, said Julie Munsell, a spokesman for the state Department of Health and Human Services, which administers the Medicaid program.
Dilday agreed to pay a $1,000 fine and $19,000 in restitution to the state.
Asked why the state settled, Gabe Holmstrom, spokesman for the attorney general, said, “We took the best deal for the state. … There’s risks associated with the prosecution of a case and there’s uncertainties of what a jury or this jury in particular will do.” In 2004, Dilday’s medical practice, Biological Psychiatry Associates P.A., pleaded no contest to 30 counts of insurance fraud. The company charged insurance companies $130,732.94 for services the psychiatrist never performed, including heart surgeries. Dilday paid full restitution and a $100 fine.
In that case, Dilday also had been personally charged with 34 counts of insurance fraud along with his medical practice, but all of the personal charges were dismissed along with four of the counts against his company.
The Arkansas State Medical Board then revoked Dilday’s medical license for “persistently and flagrantly” overcharging for services he did not perform.
The doctor now lives in Alabama, Dudley said, and is looking for employment. He said he didn’t know whether Dilday intends to start another private practice there. According to the Alabama Board of Medical Examiners, he held an Alabama license in 1985 that expired in 1986. Dilday applied to have his Alabama license reinstated in 2005, but withdrew his application.
In October 2005 the Ohio Medical Board granted Dilday a “training certificate,” which allowed him to practice under the supervision of other physicians. Dilday was then hired as a fellow by University Hospital, a close affiliate of the University of Cincinnati College of Medicine. However, in October 2006, after newspaper articles in Arkansas and Ohio were published, the State Medical Board of Ohio revoked the training certificate that allowed him to practice.
“We are pleased with how this turned out,” Holmstrom said, “because now he no longer lives in Arkansas, he had his medical license revoked, and he had to personally plead guilty to a crime. At the end of the day, we would much rather have him have a conviction on a misdemeanor than an acquittal on a felony.”