The state Department of Human Services has determined a Hilo obstetrician did not commit fraud after he was accused of overbilling Medicaid by $1.2 million.

Dr. Frederick Nitta was accused of overbilling Medicaid for drug tests he conducted on his patients. In September the Human Services Department’s Med-QUEST Division suspended payments to him while they conducted an investigation on the alleged overbilling.

According to a decision issued Wednesday, hearing officer Lane Ishida described the overpayment as a “good faith mistake” due to confusion and misunderstanding over complex billing codes.

Ishida said the payment suspension will be overturned.

Last month Nitta’s friends, patients and colleagues held signs showing support for him on Kame-ha-meha Avenue in Hilo, according to the Hawaii Tribune-Herald.

Nitta’s attorney, Eric Seitz, said it was just a mistake that occurred over a period of about four years. Seitz said the payments should not have been suspended, noting the matter caused enormous hardship to Nitta.

Nitta owes money to Medicaid, Seitz said, and the state and Nitta will work out a payment plan.