YAKIMA, Wash. -- Dr. Rosa Martinez hugged her patients Thursday after a federal judge gave her a significantly reduced sentence for pleading guilty to overcharging federal insurance plans in her medical practice.

The overcharges to Medicare and Medicaid amounted to $22.07.

U.S. District Court Judge Fred Van Sickle sentenced Martinez to a year of probation and a $1,000 fine in connection with her agreement to plead guilty to three misdemeanor counts of overcharging Medicare and Medicaid. She must also pay a $25 penalty for each misdemeanor.

Prosecutors had sought four years' probation, 120 hours of community service and a fine of up to $5,000. The maximum sentence could have been six months in prison.

The overcharges to which Martinez pleaded guilty stemmed from a physician assistant in her office billing for certain services at the doctor's rate instead of the lower physician assistant rate.

The physician assistant could have legitimately billed at the higher rate if Martinez had been present in the office -- and thus supervising -- as required by federal law. But Martinez was not in the building at the time.

Martinez told the judge during the sentencing hearing that she wasn't aware of the federal requirement but nevertheless took responsibility for violating it.

Van Sickle said he saw no risk that Martinez would engage in the same behavior in the future.

"Clearly, this is not any type of overt crime," he said.

He also appeared moved by the testimony of one of Martinez's former patients and the presence in the audience of about 35 other patients.

"It's clear to me you are the type of person who believes the medical practice demands spending time with patients," he told Martinez. "You seek to provide the best medical treatment for them."

Rocio Burkhardt, a former patient and friend of Martinez's, testified that she frequently referred sick and indigent people to the doctor because she knew they would get much needed medical attention for free.

Burkhardt said she sent one or two people every few months to Martinez over a 14-year period for pro bono medical care.

Van Sickle rejected requiring community service of Martinez.

"The kind of work you do is such that imposing some form of community service would not make sense,"
he said.

It's been a three-year ordeal for the Mexican-born physician, who has been practicing family medicine since 1993 in Yakima.

Federal prosecutors charged Martinez, 56, in 2006 with scheming to defraud Medicare and Medicaid and prescribing controlled narcotics for medically unnecessary reasons. If convicted, she could have gone to prison for 20 years.

At trial, a jury convicted her on eight felony health-care fraud charges but acquitted her on the charges of practicing outside the scope of her practice by treating drug-addicted patients for chronic pain with prescription narcotics.

Jurors weren't able to reach a verdict on two related charges of unlawful distribution of narcotics.

Van Sickle granted her a new trial, but the parties reached a plea agreement before it started.

J.J. Sandlin, Martinez's lawyer, said "it killed us" to plead guilty to the three misdemeanors but, he said, his client had run out of money. Martinez said she lost her home in the process of defending herself against the charges.

After the first trial, Sandlin hired an expert in medical billing and coding to examine the government's case against Martinez on the health-care fraud charges -- those charges on which prosecutors had won a conviction on eight counts.

The expert concluded that the convictions were based on misrepre-sentations by government auditors who reviewed Martinez's billing records.

"It gutted the prosecution's case," Sandlin said.

Martinez is also nearing the end of state-imposed conditions on her practice. In 2007, medical-quality assurance regulators found she practiced "below the standard of care" with patients taking prescription narcotics.

They required her to write prescriptions in triplicate, take additional medical education classes and be evaluated by a third-party physician. Martinez said she has completed the first two requirements and is in the process of finishing the third.

* Leah Beth Ward can be reached at 509-577-7626 or lward@yakimaherald.com.