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In re Silberman

Decided: June 18, 1979.


On appeal from Board of Medical Examiners.

Lynch, Crane and Horn. The opinion of the court was delivered by Horn, J.A.D.


Appellant Alexander Silberman, Doctor of Podiatry, appeals from a final order and decision of the Division of Consumer Affairs, Board of Medical Examiners (Board), which is dated December 9, 1978 and which revoked appellant's license to practice podiatry and, pursuant to N.J.S.A. 45:5-11, assessed a penalty of $3,600 plus investigatory costs of $1,025.*fn1

The foregoing final order and decision were the culmination of a proceeding initiated by the Attorney General by his complaint (twice supplemented) which charged appellant with "unprofessional, dishonorable or unethical conduct in the practice of podiatry," in violation of N.J.S.A. 45:5-8. The complaint specifically alleged that appellant charged Blue Cross-Blue Shield and Medicaid patients for more expensive podiatric services than he actually rendered, and that he subjected patients to unnecessary X-ray exposure merely for the purpose of claiming payment from insurance companies.

Thereafter hearings were held before a hearing examiner, who recommended that "a judgment of not guilty be entered" as to all the charges against defendant. The Board, however, rejected the examiner's recommendation, made independent findings of fact and entered the final order and decision as stated. Appellant's motion for a stay of the decision of the Board was denied by the Board but granted by us, with a direction that appellant file a bond or cash deposit in the sum of $5,000, to secure payment of the penalty and costs. We

also accelerated the hearing of the matter. Appellant thereafter complied with the direction of this court by depositing $5,000 in a savings account to be paid to the State in the event of affirmance.

Appellant's argument fundamentally projects a two-prong attack upon the Board's findings and determination: first, that the evidence adduced at the hearings did not support the findings, and second, that it was not legally proper for the Board to overrule the hearing examiner's findings and thereby substitute its own. We disagree with both of these contentions.


Appellant came under investigation by Blue Shield and the New Jersey Department of Human Services, Division of Medical Assistance and Health Services, because a computer analysis showed he instituted an unusually large number of claims for radical excisions of toenails. Following his suspension effective January 21, 1975 from the State's Medicaid program, appellant requested a hearing, which was held late in 1975 before a hearing officer for the Division. The hearing officer concluded that the evidence before him did not warrant continuation of the suspension and recommended that the suspension of appellant be terminated.

However, on April 4, 1977 the Director of the New Jersey Division of Medical Assistance and Health Service reversed the hearing officer's decision. The Director found that the State had met its burden of proving by a preponderance of the believable evidence that appellant did in fact submit claims and received payment from Medicaid for more expensive podiatric services than were rendered. The Director ordered that appellant's original two-year suspension be affirmed, but that due to the length of the suspension appellant had already served he could immediately apply for reinstatement to the Medicaid program. This order was not appealed.

On February 9, 1978 the Attorney General filed the instant complaint, which in addition to referring to the earlier proceedings resulting in appellant's suspension as a Medicaid provider asserted that appellant submitted claims for radical excisions and hammertoe corrections that were not performed, and that any medical services appellant rendered were of a noncompensable palliative nature, such as clipping of toenails or care of corns and calluses. The complaint also charged appellant with subjecting his patients to unnecessary X-ray exposure.

The State demanded that the Board suspend or revoke appellant's license to practice podiatry, pursuant to the Board's powers as stated in N.J.S.A. 45:5-8. The State also demanded the imposition of penalties for each listed offense, as well as costs.

Of central importance at the succeeding hearing before the hearing examiner was whether the medical services which appellant supplied to his patients were of a kind which would permit him to charge Blue Shield and Medicaid for radical nail excisions and for hammertoe capsulotomies. According to Barry Veltman, a senior utilization analyst for Blue Shield of New Jersey (whose computer analysis of submitted claims prompted the original investigation of appellant), in 1976 under Blue Shield's most basic contract a doctor was paid $37 for a radical nail excision and $16 for a nonradical excision. Blue Shield's description for appellant's disputed claims is:

Radical excision of nail, partial or complete, including destruction of nail matrix, with or without removal of subungual exostosis (permanent surgical removal of chronic ingrown or deformed nail).

A nonradical excision (which does not include removal of the nail matrix) is described by Blue Shield as follows:

Excision of nail, partial or complete, including nail bed or nail fold, with or without excision of subungual exostosis (e.g., for fungus ...

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