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A Hamilton doctor received $350,000 of taxpayers' money by enrolling 45 patients at his practice without their knowledge.
His fake patients included four dead people.
Dr Suresh Kumar Vatsyayann also let his unqualified wife perform cervical smear tests, give contraceptive injections and vaccinate children, says a Health Practitioners Disciplinary Tribunal ruling.
And the GP breached patient privacy by performing a smear test on a woman while a male patient was in the same room at the same time, separated by only a curtain.
Dr Vatsyayann, known as the "free GP" because he treated patients without charge, declined to comment last night.
He was found guilty yesterday of professional misconduct by the disciplinary tribunal, which has the power to strike him off the register of doctors.
The former Waikato District Health Board member ran for the Hamilton mayoralty and has been an outspoken critic of the public health system, once going on hunger strike.
He was suspended as a DHB member by chairman Graeme Milne over an email in which he referred to the board as "racist, vindictive, suppressing, spiteful and oppressive".
This week's finding is the second time he has been judged to have broken the rules of the medical profession.
In 2008, Dr Vatsyayann was found guilty of professional misconduct for producing false and misleading clinical notes.
He was censured, fined $5000 and ordered to pay some of the prosecution costs.
Former patient Gloria Duncan-Kiriwera gave evidence at the first misconduct hearing.
She told the Herald last night that Dr Vatsyayann was very supportive when her 13-year-old daughter died of spina bifida.
"We went to see him in the morning because she wasn't feeling well. He knew her, so as soon as he saw her, he knew to call an ambulance ... She died later that day. But he knew people; he was great."
She originally forgave the GP because he was a "great doctor who really got to know his patients". But her view changed when she found that Mrs Subash Vatsyayann - whom she had allowed to immunise her children - was not a qualified nurse.
"I suppose I'm angry now ... I can't believe he let her inject my children. I honestly thought she was a trained nurse."
Ms Duncan-Kiriwera said she could not believe the doctor had false enrolments, as he was the "free GP".
"He was supposed to be doing a good thing," she said.
This week's professional misconduct ruling relates to patient records kept at the Family Clinic, on Vardon Rd. Dr Vatsyayann was the clinical director.
The Ministry of Health started investigating the practice after the Waikato DHB received three complaints in August 2007.
Eight patients alleged they had been enrolled at the clinic without their consent, so ministry investigators seized a copy of the practice's enrolment and registration records.
They found 45 patients who did not know they were registered at the clinic. Four people had been added after they died.
In its ruling, the tribunal said Dr Vatsyayann used the names of people who been for a one-off appointment at the clinic, patients' family members and people who had never been to the clinic.
Dr Vatsyayann denied the allegations and said the false enrolments were made because of computer issues and through human error.
He said some of the people did know they were registered at the clinic.
The tribunal said the Waikato DHB had recovered about $150,000 from a possible $350,000 paid for patients who should not have been enrolled because there were no signed enrolment forms.
The patients were enrolled between July 2005 and January 2007.
In its ruling, the tribunal said that at a meeting in August 2006, Dr Vatsyayann instructed staff to complete all fields, including enrolment fields, so Government funding could be obtained for more patients.
"The only sensible conclusion is that by then, Dr Vatsyayann was deliberately attempting to increase the number of enrolled patients," it said.
While his conduct might have initially been simply careless, "as time went on and Dr Vatsyayann became more aware of the financial implications, his conduct was no longer very careless; it was quite deliberate", the tribunal said.
Dr Vatsyayann did not deny that his untrained wife performed smear tests, contraceptive injections and child vaccinations, but said she had "extensive relative experience".
He denied the allegation of giving a smear test while a male patient was on the other side of a curtain, saying the woman was mistaken.
The Professional Conduct Committee and Dr Vatsyayann have two weeks to make submissions to the tribunal on the penalty to be imposed.