The Star-Ledger

Licensed N.J. Workers Owe State $13.8M In Overdue Fines

The Star-Ledger — Sunday, October 30, 2011

By Christopher Baxter / Statehouse Bureau
The Star-Ledger

TRENTON — Licensed professionals such as doctors and accountants owe New Jersey $13.8 million in overdue fines for everything from lying about their education to sexually harassing a patient during a checkup, and state officials concede they haven't done enough to collect the money.

The unpaid fines were disclosed by state officials after The Star-Ledger reviewed six years worth of records from New Jersey's 46 licensing and disciplinary boards that are charged with protecting consumers from dishonest or dangerous professionals. The review showed that, in all, 28 percent of fines leveled by these boards went uncollected.

State officials who oversee the discipline of professionals say the problem is partially the result of boards using different methods to keep track of penalties over the years, making it tougher to figure out which offenders didn't pay their fines. The boards also failed to aggressively pursue the money owed to them because of staffing limitations, they said.

"Consumers are going to these professionals, and some of them did things that meant they needed to be fined or reprimanded, yet they're getting away with not paying," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a government watchdog group. "If there are no punishments for what they do, then they'll continue to do it."

In response to questions from The Star-Ledger, state officials said changes are already in the works. Thomas Calcagni, head of the Division of Consumer Affairs, which oversees the boards, said that by the start of next year, all the boards will use a new, automated debt-tracking system.

He said he plans to create a position within the division's fiscal department to oversee the collection of fines, and for the first time, the division will revoke someone's license if they continuously refuse to pay.

"Is the current recovery rate acceptable to us? The answer is no, we can do better," Calcagni said. "We're sensitive to the economic realities here and our aim in most cases is to simply collect the fine owed, not to put the professional out of business."

The state's licensing and disciplinary boards oversee about 600,000 professionals, from doctors and nurses to funeral directors and hairstylists. When one of them breaks state rules or the law, a board may issue a fine, revoke their license, or do both, depending on the infraction.

Fines range from as little as $100 to more than $100,000. For example, a dentist was fined $2,500 last year for improperly giving a patient six tooth implants that had to be replaced. A psychiatrist was fined $15,000 this year for sexually harassing a patient by running his hand under her shirt and touching her breast.

But not everyone pays up. In 2004, an administrative law judge upheld a $150,000 penalty against a chiropractor who treated patients without a license, but the division says it hasn't collected it.

Jonathan Eisenmenger, executive director for the boards overseeing dentists and chiropractors, said some people honestly admit their mistakes and pay the fines, while others simply ignore them. If the division does not collect the money within 90 days, the debt goes to the state Department of the Treasury, which farms it out to collection agencies.

Andy Pratt, a spokesman for Treasury, said that the state is trying to collect the money owed to Consumer Affairs, but that its collection agencies have to consider two things: how much it costs to collect, and how likely someone can pay up.

"The incentives for collection agencies, who get a percentage for doing this, are to go after the biggest amounts they think they can collect, and not smaller debt that someone doesn't have the ability to pay," Pratt said. "When you're fining people because they violated particular rules, a certain segment of that population is not reputable. And not-reputable people are harder to collect debts from."

The unpaid fines also get filed in court and reported on a professional's credit report. But like any debt, Calcagni said, some can just never be collected.

"I can't say with any certainty why collection rates were lower at certain times in the past or how licensees may perceive our fines," he said. "What I can say is that we've identified our sometimes-inconsistent approach to tracking and collecting debt as a possible factor, which is why we're tightening up."

A Star-Ledger review of division records from 2005 through 2010, obtained through the state's open records law, shows some boards do a far better job at collecting fines than others. For example, the boards that oversee nurses and real estate appraisers collected only about 50 percent of fines issued during the past six years, records show.

George Hebert, executive director of the state Board of Nursing, said staffing cutbacks have forced him to focus attention on licensing and disciplinary actions, the board's main responsibilities, rather than chasing debt.

"We're collecting the money as well as we can with the resources we have," Hebert said.

Other boards — such as those overseeing hairstylists, veterinarians and pharmacists — had collection rates above 80 percent, records show. Calcagni warned that some of the fines reported as unpaid may be on payment plans and not delinquent. But because of the way the division keeps its records, he could not say how much was delinquent or not.

Under the new system, the division will more aggressively go after the money before sending it to the Treasury Department.

"I can't say whether money owed has ever fallen through the cracks in the past," Calcagni said. "But with the lack of uniformity in using the (computer) system, it seemed like a real risk."

Organizations that represent the state's licensed professionals worry that the changes could prompt the division to become too heavy-handed and put people out of work in a tough economy.

"It's difficult to see taking away someone's license for just not paying a bill, versus taking away someone's license for something they did that was an egregious act against a patient," said Josephine Minardo, executive director of the New Jersey Psychological Association, which represents about 2,000 psychologists.

Jay Rowe, president of the New Jersey Electrical Contractors Association, said the boards should not be so hard on professionals who get a license and try to follow the rules. "Revoking a contractor's license for not paying a fine is in fact revoking his ability to earn money to pay the fine in question," Rowe said.

Pat Barnett, chief executive officer of the New Jersey State Nurses Association, said unpaid fines for minor violations, such as renewing a license late, may not warrant such strict consequences. But it might be appropriate when fines are issued for more serious malpractice.

"Not paying attention to the rules that govern your license may speak to your seriousness about it," Barnett said.

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