The medical practice of prominent Honolulu dermatologist Norman Goldstein has agreed to pay $356,363 in fines for overbilling the Hawai'i Medical Services Association.

Goldstein pleaded guilty on behalf of Norman Goldstein M. D. Inc. to a charge of healthcare fraud for overbilling HMSA about 20,000 times.

He acknowledged that from 1997 to 2000, his practice billed HMSA for acne surgery when it actually provided cryotherapy involving liquid nitrogen.

During that time, the reimbursement for acne surgery was $43.60 while the cryotherapy was $34.30.

Goldstein, 72, wasn't charged in the case, but is the president of the corporation and acknowledged in court that the practice overbilled HMSA $178,181.60.

As part of a plea agreement, the corporation will pay a fine of double the amount of overbilling and the prosecutors will not pursue charges against the doctor. Brook Hart, lawyer for the corporation, said his client already paid HMSA back the $178,181.60.

One lingering issue is whether the corporation must pay HMSA restitution for the organization's legal fees during earlier arbitration proceedings over the billings.

Instead of sentencing the corporation immediately as Hart requested, U.S. District Judge Michael Seabright scheduled the sentencing for Sept. 4 to allow HMSA to provide its position on the issue.

HMSA attorney Paul Goto said the amount the organization is seeking is probably about $270,000 in restitution.

Hart later said Goldstein is still practicing, but is no longer with HMSA.

Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com.