Dr. John Costino at a July court hearing on fraud charges. Dale Gerhard

CAPE MAY COURT HOUSE — North Wildwood physician Dr. John Costino and his wife, Barbara, pleaded not guilty Friday morning in Superior Court to a three-count indictment alleging health care fraud.

The Costinos declined comment outside court. John Costino said only that he would comment in the coming weeks after reading the transcripts from the grand jury.

Prosecutors allege Costino submitted paperwork for treatments and physical therapy that were never provided or were administered by unlicensed aides. The charges, which are third-degree offenses, relate to 30 alleged incidents with three patients between 2004 and 2006.

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The Costinos were re-indicted in August after Superior Court Judge Raymond Batten in December threw out a prior 124-count indictment for health care claims fraud and conspiracy, citing a lack of specificity in the indictment.

John Costino, whose medical license was revoked indefinitely in 2009, also faces other charges including second- and third-degree charges of distribution of controlled dangerous substances relating to his former medical practice.

Costino was arrested in 2007 following an investigation into alleged insurance fraud and illegal distribution of prescription pain medication.

The state's case against Costino includes an undercover investigation in which police officers posed as exotic dancers trying to obtain prescription painkillers.

In April 2007, an undercover officer recorded a conversation in which she said she had no pain "but wanted something that would help her relax," according to a state court appellate decision released in August. The woman received a prescription for 30 oxycodone tablets, the documents show.

The appeals court said the jury could not hear the recording of that conversation, with a Class II officer from Ocean County, but the officer can testify about the conversation.

Costino, a physician in Cape May County for more than 30 years, specialized in pain management, treatment of heroin addiction and geriatric medicine.

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