More Details Emerge Regarding MedQuist Class Action Settlement
The Association for Healthcare Documentation Integrity (AHDI) has updated its website to include
answers to frequently asked questions regarding the
proposed settlement to the class action lawsuit brought against MedQuist on behalf of certain current and former MedQuist transcriptionist employees. The FAQ page lists the free resources it will make available to eligible members of the class as part of the settlement. As to when these benefits will be made available, the FAQ page includes this statement:
"The settlement has not yet been approved by the court, and the free program offered by AHDI to qualifying class members as provided in the settlement will not become available until after the settlement is approved by the court and becomes final. AHDI will be notified regarding the status of the settlement after the fairness hearing scheduled for March 26, 2009 and more information will be posted."
The FAQ page also states that membership in AHDI is not a requirement in order to take advantage of the benefits granted to the settlement class members.
This FAQ web page also includes a link to http://www.transcriptionistsettlement.com/, a website that has evidently been set up by the claims administration firm tasked by the court to administrate the class action settlement. A notice at the bottom of the home page of this site states, "THIS SITE IS NOT OPERATED BY MEDQUIST. THIS CLASS ACTION SETTLEMENT IS SUPERVISED BY THE COURT AND IS ADMINISTERED BY A CLAIMS ADMINISTRATION FIRM THAT HANDLES CLAIM PROCESSING. THIS IS THE ONLY AUTHORIZED WEB SITE FOR THIS SETTLEMENT. PLEASE DO NOT RELY UPON OTHER SITES THAT SET OUT DIFFERENT AND UNAUTHORIZED INFORMATION."
This site actually includes a wealth of information relating to the settlement process, with links to PDF copies of numerous legal documents pertaining to this case. Among these are the Class Notice, Stipulation of Settlement, Preliminary Approval Order, Complaint, and Summary Notice. The Complaint gives a detailed account of the specific allegations made against MedQuist, including this from Paragraphs 37 and 38:
"MedQuist personnel knowingly inflated line counts for bills sent to customers, and deflated line count calculations for payment to its transcriptionists. These line counts were manipulated using a 2:1 line count ratio, wherein the true line count was lowered for the purposes of payroll and inflated for the purposes of billing, so that the amount of lines charged to a client for a transcribed report exceed the amount of lines paid to the transcriptionist by a 2:1 margin, and sometimes higher. The ratios and formulas employed in these manipulations were designed to create a 3:1 bill-to-pay ratio, where the dollar amount billed to a client exceeded the compensation paid to the transcriptionist by a multiplier of 3.
MedQuist's deliberate plan to overcharge customers and underpay transcriptionists to achieve the desired profit margins and revenue "results" became known among employees of MedQuist as "padding the file" or "burning the books" or "jacking up" formulas."
However, in the Stipulation of Settlement, Sections 3.4 and 3.5 state:
"Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Named Plaintiffs in the Litigation. Defendants specifically deny the allegations in the complaint that they created and participated in a systematic scheme of wrongful conduct, or any wrongful conduct at all, to undercount the true number of characters and/or manipulate lines transcribed by Named Plaintiffs or the Settlement Class with purpose and effect of reducing compensation. Defendants further deny that MedQuist breached any contractual obligations owed to Named Plaintiffs and/or the Settlement Class. And Defendants deny that the Named Plaintiffs or the Settlement Class have suffered any damages or were otherwise harmed in any way as a result of the conduct alleged in the Complaint. Defendants firmly believe that the evidence developed to date supports their position that there is no liability in the case."
"Defendants have concluded nonetheless that further conduct of the Litigation could be protracted and expensive and potentially disrupt its ongoing business operations, and that it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like the present Litigation."
And remarkably, in the Plaintiff Letter in Support of Settlement, the plaintiffs' counsel admits that
"Plaintiffs...do not believe that a better outcome is possible were this litigation-or any individual litigation-to proceed any further...Plaintiffs concluded that their prospects were adversely impacted by factual developments that diminished the likelihood of being able to carry their burden of proof at trial. Plaintiffs have not been able to develop the case that they believed to exist at the outset of the litigation."
Insight into how the parties came to agree that the settlement should go to AHDI is also found in the Plaintiff Letter in Support of Settlement:
"Initially, Plaintiffs sought to negotiate a substantial monetary settlement to be distributed directly to class members. MedQuist, however, was resistant to the magnitude of Plaintiffs' demand. Further, because MedQuist did not believe it had engaged in any inappropriate conduct and was confident it would prevail on the merits, it was unwilling to agree to any settlement including a direct distribution to class members...the best settlement that Plaintiffs were able to negotiate was a payment to benefit the class indirectly...Plaintiffs consulted with their industry expert, as did MedQuist. Our objective was to identify an organization dedicated to benefiting medical transcriptionists individually and collectively. In response to the Court's question as to why the parties elected AHDI: AHDI is the only organization that meets these requirements."
(As a side note, in reading through both the Plaintiff Letter in Support of Settlement and the Joint Letter in Support of Settlement, it appears to me that the judge in this case was particularly interested in understanding why the parties felt AHDI was the appropriate beneficiary of the settlement funds.)
Also of interest is a link to the Agreement with AHDI, which includes important details about the various free benefits AHDI will offer to eligible class members. These include limitations on the number of each free resource which will be made available. Examples include the Credentialing Prep Course/Specialty Course option which is limited to 3000 seats; Educational Presentations (Webinars) limited to 1500 seats; Educational Product Bundle limited to 2000 bundles; Knowledge Base and Information Portal (Benchmark KB) limited to 1500 subscriptions; Individual Professional Memberships limited to 2000, with all of these limitations on a first come, first served basis. These limitations are not included on the AHDI FAQ page mentioned previously, although that site does state, "Certain participation limitations apply."