Resolution of a pending federal criminal case against a company headed by prominent Honolulu dermatologist Dr. Norman Goldstein was delayed yesterday because authorities had no plan to identify and repay former patients of Goldstein's who were overcharged for his services.

Goldstein's company, Norman Goldstein M.D. Inc., admitted to a charge of healthcare fraud for overbilling Hawaii Medical Service Association for some 23,000 patient visits from 1997 to 2000.

The company, which has since been closed, repaid HMSA $178,181.60 and agreed to pay a fine of twice that amount — more than $356,000 — to the government.

U.S. District Judge Michael Seabright was to finalize that agreement in court but delayed the hearing until March to find out how many patients had been overcharged and by how much. Also still to be resolved is a request by HMSA to be paid an additional $216,000 in legal expenses it claims it incurred as a result of the fraud.

Brook Hart, attorney for Goldstein and his company, said that patients paid pennies or a few dollars too much for services that were provided as long as 10 years ago and that identifying them and determining and paying any balance due would likely cost more in postage than the worth of the individual claims.

But parties in the case could not say how many patients were affected by the fraud. The 23,000 patient visits involved multiple visits by the same patients, Hart and Paul Goto, lawyer for HMSA, said.

Goto estimated that 800 to 1,000 individuals were involved.

Seabright said changes to federal law require that a good-faith effort must be made to determine restitution claims by victims of crimes, balanced against whether the task would "unduly complicate or prolong" the legal proceedings.

Seabright said he was"not particularly happy" about what he said was "a deafening silence" from the U.S. attorney's office on the subject of patient restitution.

Goldstein was not charged in the case but acknowledged in court previously that the company he headed overbilled HMSA. Goldstein's medical corporation, which has since closed, charged HMSA for acne surgery when in fact it performed cryotherapy using liquid nitrogen. Acne surgery was reimbursed $43.60 while the reimbursement for cryotherapy was $34.30.

Hart said the case was a "billing mistake" and stressed that Goldstein was not charged personally. His practice was "grossing about $1 million a year" and the false charges generated about $43,000 a year, Hart said.

"He wouldn't have taken such an enormous risk for $40,000 a year when he was grossing over a million," Hart said.

The case "has had really negative impacts" upon Goldstein, who was Physician of the Year in Hawai'i in 1993 and is a professor at the University of Hawai'i's medical school, Hart said.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.