NEWARK - A committee of the New Jersey State Board of Medical Examiners has temporarily suspended the license of North Jersey doctor Kenneth Zahl, accused by the State of repeatedly violating board orders that placed restrictions on his medical and billing practices, Attorney General Zulima V. Farber and Consumer Affairs Director Kimberly Ricketts announced. Zahl allegedly created false and deceptive patient records to cover up the alleged violations.

Following a hearing conducted over a three-day period in Trenton, a committee authorized by the board found that Zahl's continued practice represents a clear and imminent threat to the public's health, safety and welfare and "that no action short of the temporary suspension of the license of Dr. Zahl could adequately protect the public."

Zahl's suspension will take effect March 9. Until then, he is permitted to treat only patients who had been scheduled for appointments or procedures prior to the committee's decision. Zahl must also make arrangements for the transfer of the care of all his patients prior to March 9. The suspension order will be reviewed by the full board at its next meeting on March 8, at which it can vote to accept, reject or modify the committee's ruling.

Zahl, an anesthesiologist who maintained practices in Newton, Union, Rockaway, Morristown and Saddle Brook, previously had his license revoked by the board after he was accused by the State in 1999 of deceptive billing practices and professional misconduct. Zahl appealed to the Appellate Division of State Superior Court, which stayed the revocation on the condition that Zahl comply with certain restrictions imposed by the board.

"The Board of Medical Examiners previously found that this doctor falsified patient records and retained duplicate payments from insurers for services," Director Ricketts said. "Now he allegedly has violated orders put in place by the board to curb such conduct. Given the violations alleged in the State's complaint, the board's action is appropriate."

The committee's action stems from a four-count administrative complaint filed by the Attorney General alleging, among other things, that Zahl failed to comply with the board orders, which required him to have his medical and billing practices observed and reviewed by monitors.

Under the terms of the orders, Zahl was permitted to submit bills only for services he performed that were observed by the practice monitor and recorded in a log. In addition, Zahl was required to provide the billing monitor "unfettered access" to all original patient medical records.

The State's complaint alleges that Zahl violated those orders by:
• billing for procedures and/or services performed outside the presence of the practice monitor and without review by the billing monitor;
• providing false and deceptive responses to the Attorney General's demand for information;
• failing to comply with the board's order to pay attorneys fees; and
• failing to provide records and billing information to the billing monitor in a timely fashion.

Deputy Attorney General Paul R. Kenny, section chief for professional boards prosecutions, and Deputy Attorney General Jeri Warhaftig are handling this matter for the State.

In 2003, following a hearing at the Office of Administrative Law, an administrative law judge found that Zahl manufactured false and inaccurate patient records; retained duplicate payments from insurance companies for services rendered to patients; and inserted overlapping time entries into records of at least 100 patients, among other things. Following the ALJ's ruling and findings, the board revoked Zahl's license and ordered him to pay more than $250,000 in penalties, attorneys fees and costs. Zahl appealed the order to the Appellate Division, which affirmed the board's findings, but stayed the revocation pending a further hearing before the board. The State appealed the stay to the New Jersey Supreme Court, where the case is now pending. Oral arguments have been scheduled for March 6.

The Appellate Division's stay was conditioned upon Dr. Zahl's satisfaction of the reporting requirements imposed by the board and oversight of the financial and billing activities at his medical practice.

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