An article on reinstatement of doctors to the Medicaid and Medicare programs which appeared on Nov. 12, contained an incorrect tabulation. The story should have stated that in the past year or so 20 doctors or other medical practitioners who had been suspended from the programs for fraud or other billing practices were reinstated.

The federal government, which every year with great fanfare boots dozens of doctors out of the Medicare and Medicaid programs for cheating, is quietly letting them back in, according to Department of Health, Education and Welfare records.

Sometimes a doctor can get back in within a year of two after being convicted of Medicare of Medicaid fraud in a federal or state court.

In the past year or so, 94 doctors and other medical practitioners who previously had been suspended from treating Medicare and Medicaid patients because of fraudulent billing practices have been reinstated in the two programs. Doctors who treat eligible elderly patients under Medicare are reimbursed by the federal government; those who treat eligible poor patients under Medicaid receive federal and state reimbursement.

Virtually all of the 94 were convicted in a court of law, thrown out of the two programs, but then allowed back after hearings.

Although convictions for Medicare and Medicaid frauds are running about 200 a year in federal and state courts, a doctor doesn't always lose his license to practice. If he doesn't, and has paid his fine or served his time, he can apply to HEW to be reinstated in the programs.

Take the case of Dr. Leonard S. Horwitz, a doctor of podiatric medicine in the Denver area. According to HEW records, Horwitz was charged with billing Medicare for services not performed, including incisions for drainage and abscesses when in fact he was only routinely trimming toe-nails. HEW records note drily that trimming toenails is not a covered service except in cases of circulatory disorders."

After a jury trial in federal court, Horwitz was found guilty on 22 courts and fined $10,000. His conviction later was upheld in the U.S. court of appeals.

He then was excluded from participating in the Medicare and Medicaid programs for a year, but applied for reinstatement and was allowed back in the programs last April.

Another example: Dr. Jimmy Valentine, a Sacramento general practitioner, was convicted on four Medicaid counts and excluded from the programs, but was reinstated last February.

Overbilling or fraudulent billing by an individual doctor or other medical provider in the programs may involve relatively small sums.However, the federal government will pay about $45 billion for both programs combined in fiscal 1980, and at least several billion of this, according to conservative estimates, is wasted for a variety of realsons -- one of which is excessive, or fake billing.

If a doctor is caught bilking the government, why is the subsequently accepted back in the federal programs?

Part of the reason, according to Capitol Hill aides who worked on 1977 legislation requiring automatic suspension for cheaters but allowing reentry, is that he may be the only doctor willing to provide services to some low-income or unserved neighborhood. So the government may want to keep him in the programs, carefully watched.

"In some sections of New York and other cities," said one legislative aide, "the doctors have all left."

Rural areas also frequently lack physicians.

The House Ways and Means Committee, in its report on the bill, said at the time that it was "concerned that suspension could deny adequate access to medical care to persons eligible" for Medicaid and Medicare because

Another factor, however, is the concept that a doctor convicted of a relatively small fraud, once fined or imprisoned, has paid his debt to society. rIf, after suspension, he then applies to get back in the programs and examination indicates that he is not likely to do it again, it is considered fair to give him a second chance.

According to experts on the legislation, until 1977 there was no legal provision for automatic suspension from Medicare and Medicaid, even after conviction. In many cases, doctors continued in the programs even while their trials were going on and after being convicted, without interruption.

The 1977 law for the first time made it mandatory to suspend someone who had been convicted. The physician then could be reinstated only after a hearing. (A conviction under either the Medicare or Medicaid program brought auromatic exclusion from both.)

"We assumed rehabilitation." one HEW official said. "he's embarrassed, humilated, he may be frightened. He won't do it again."

HEW said it does not have firm figures on the number of individuals excluded from the Medicaid program and then let back in by state Medicaid agencies -- only on cases where the federal government made the exclusion and the restored the offender's standing. The 94 reinstatements in the past year involve persons ousted by HEW and then allowed back in.

Records of HEW and state medical agencies reveal a variety of fraudulent billing practices. Sometimes a doctor sees the patient and actually performs services, but they may be excessive or unnecessary, such as performing dozens of blood tests a month or ordering needless surgery. In other cases, physicians may perform some minor service and bill for more expensive services not actually performed. In still others, the whole bill may be imaginary.

"It's unbelievable, the kinds of things they get caught for," said one HEW official. "A doctor goes on Army reserve duty and is out of town. His nurse sees his patient, and then charges the government the doctor's fee. Another bills for service while he actually was away in Europe on vacation."

Although convictions have been running at around 200 a year recently, HEW officials believe this will rise.

The federal government is funding new state Medicaid fraud units that officials believe will make it much easier to catch cheating of all types.