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More Details Emerge Regarding MedQuist Class Action Settlement

Published January 19, 2009 1:40 PM by Jay Vance
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."

12 comments

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Alaska NC

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Electra Electra, Cheap Airline - Cheap Airline, Cheap Airline April 18, 2009 11:12 AM
Iowa DE

I too worked for MQ but, fortunately, only for a brief time.  I just could not figure out why I was not making the kind of money I expected to make with them.  Of course, there was no way to tell what an accurate line count was (unless I wanted to retype every word on my own computer).  

I once belonged to AAMT, but when their membership fees were increased so substantially I figured that was an expense I really did not need, at least not in my area of the country.  We are a little behind the times here.  Being a CMT does not really mean much here.  

So, how do I feel about MQ giving the settlement money to AHDI?  Not very good.  There is really little benefit for me from AHDI.  There just is not much I need from them.  I think I would feel better if I only got $20 from MQ, AND AN APOLOGY. They really need to apologize to each employee, client, and anyone else affected by their GREED!

Nancy Alexander

Nancy Alexander, GP/pulmonology - MT, IC February 23, 2009 12:16 AM
Panama City FL

ADHI can do nothing for me just as AAMT had done nothing for me when I was a member.  Being in this field for 30 years, I have little interest in anything they have to offer.  

Had AAMT been an organization which truly represented MTs, the organization would have stood by us with guidelines which protected us from being exploited by companies such as MedQuist.  

Rather, they print a book each year which sets "standards" including the "new" way to type follow up/follow-up/followup.  Or 3-mg/3mg/3 mg.  With each new revision taking away our ability to make an income based on "line counts" and allowing seasoned MTs to be at the mercy of editors who pick apart a report, sending the MTs into a panic as they are placed on "100

% QA, leading to each report being scrutinized.  Who can work under this kind of stress?

Give me a break.  Patients are dying due to medical errors and that has nothing to do with whether there is a hyphen or not.  

Court reporters, which is the legal equivalent to a medical transcriptionist, would never have to be put in front of a firing squad at every turn, even after years in the field.  

No, ADHI does not deserve one penny of the money which I lost because of the criminal activity which MQ resorted to during a time in which they reported "recorded earnings which were so substantial, it was noted in an SEC filing.

Back off ADHI.   You do you represent me.

Wendy, Radiology - Transcriptionist, Bassett February 7, 2009 1:07 AM
Visalia CA

I gave up my membership in the AAMT years ago when they doubled their membership dues because the only "benefit" I ever got was the one page in the Journal with the new words & I thought $150 a year was a pretty steep price for 4 sheets of paper.  I recently renewed via the on-line membership, which is more reasonable.  I also used to be certified, but I let that lapse because it never got me one darn thing professionally or financially, & it was too much trouble keeping up with the CECs.  Having said all that, &

this is probably neither here nor there, but this tactic is pretty much SOP for MQ, handing out one lump to one entity, rather than recognizing each individual employee.  For example, rather than rewarding any particular MT for a job well done, they have a monthly word-finding game in their on-line community.  At some point, they draw 3 or so names from all the entries & only those people get a gift certificate.  Same thing with Nat'l MT Week. . . Numerous MTs enter various contests, & in the end, they choose ONE person who WINS a trip to the Nat'l AHDI Convention.  Then, there are a few other 2nd & 3rd place "prizes," most of which are electronic items manufactured by Philips, who used to own a huge share of MQ.  In other words, the "prizes" probably didn't cost MQ one thin dime, but we MTs were supposed to compete with one another, above and beyond working our regular shifts, & HOPE that our name was drawn out of the hat.  In other words, there was NO recognition based on merit - skill, seniority, loyalty, dependability, or any of that stuff.  Rewards were handed out by the luck of the draw, literally.  I thought Nat'l MT Week was an opportunity for employers to THANK their employees for the hard work they did every day. . . without which the MTSO wouldn't exist at all.  Apparently, MQ doesn't see it that way.  They see the MTs as a necessary inconvenience whose sole raison d'etre is to provide income for management, who outnumber MTs by about 3 to 1, as nearly as I can figure.  Again, I will not be taking advantage of any of the settlement "benefits" because I don't need them.  Oh, well.

Marlo, MT February 5, 2009 10:37 AM
Del Valle TX

I see some of the benefits that AHDI is able to bring to the table for the MedQuist MTs that are still in the business and don't already have, i.e., resources for getting a CMT, KB, etc.

I guess what I would like to have seen AHDI do was refuse to be the middle-man for MedQuist, and instead strongly encourage MedQuist to do the right thing and pay those poor MTs the money that they cheated them out of.

AHDI claims to be a professional organization for the MT, but I really didn't see AHDI go to bat for those MTs to get a lump sum of money. Instead it looks like AHDI gave MedQuist what they wanted and never made an argument for what the MTs wanted and needed, money that was rightfully theirs.  Truly a sad day.

Not a MedQuist MT February 3, 2009 2:10 PM

Deborah, I wouldn't presume to tell anyone how to feel. AHDI was not part of the decision to provide the settlement offer to an organization. We were simply approached to be the organization who would oversee those benefit programs. Quite frankly, the first question we asked was, "Why isn't this money going directly to MTs?" For reasons MedQuist has publicly provided in the documents Jay references above, that was not an option MedQuist entertained. Beyond that, I can't speak to the fairness of it. I can only say that when we were asked to receive these funds and use the money to provide professional development programs for the qualifying MTs, we agreed to do so. We didn't solicit these funds and we were not involved in the settlement decision.

For the record, I was transcribing on a very difficult hematology/oncology account just last year, Deborah, with some very challenging dictators. I gave that account up to finish writing the BOS 3e and as soon as I'm done with the BOS 3e workbook, I intend to pick my part-time transcription up again. I don't feel I can adequately represent our members and make meaningful decisions for them if I don't keep my hands in the profession.

I have been an MT for 21 years and have spent plenty of time pulling my hair out over ESL dictators. I ran an MT business for 8 years where our work flow was frustratingly inconsistent, and I had to deal with offshore competition every day of the last 3 years I ran that business.  It is assumption on your part that just because I (or anyone else) works for AHDI, that we're out of touch with any of that. My entire life has been shaped by it.

And the career choices I've made to keep a roof over my family of 5 (I have a new baby at home) have been unfortunately driven by these same changes in our industry. I sold my business and barely made a profit (had too much debt trying to keep it afloat) because I just couldn't justify the stress of worrying about where the work was coming from or where it was going, whether my clients were going to pay me, whether I could make payroll, etc.  I took advantage of the professional connections I'd made through AAMT/AHDI membership and charted a different course. I work for AHDI today (and write books, as you say...I wrote the BOS 3e while I was pregnant with my 3rd child) because I believe in creating opportunity wherever you can for yourself.  That doesn't make me an elitist. It just means I do what I have to for my family...just like you do.

Lea Sims January 28, 2009 12:33 PM

Not provide for the many trodden down HUH? Outstrip your resources? Mine have been outstripped for several years...first requiring rent on the machine, the extra phone line and then the high speed internet connections....now there is NO WORK and I still have costs....I know people are getting sick and going to hospitals and having tests and etc. etc. I would rather have a lump sum in MY NAME to do with what I WANT TO. I don't trust AHDI any more than I did MedQuist which is why I Quit them and am leaving the profession altogether!! Come on, when is the last time you transcribed something dictated by a sloppy ESL resident dictator on a bad phone line with beeping, pinging and excess noise in the background. Last time I checked you had a regular paycheck or were writing articles or books....don't condescend to tell me how I should feel, Lea, I don't appreciate it. I just did not have time to get involved, because I was too BUSY trying to survive!!!

Deborah Southam, CMT January 22, 2009 4:47 PM
Vernal UT

It is comforting to see, after looking through some of these documents, that corporate/association double-speak is alive and well.

Nae January 20, 2009 8:52 AM

Also, at Jay's encouragement, I thought I would clarify here that AHDI did NOT solicit this arrangement or settlement money from MedQuist. We were never privy to what was going on with this court case, that the plaintiffs had not met their burden of proof, nor that the attorneys were discussing a settlement. We were approached by the MedQuist attorneys who were seeking our agreement to receive the settlement funds and oversee the programs being offered. The program offerings had to be approved by MQ and I believe also had to be reviewed by the plaintiff's attorneys.

It's important for people to understand that we are merely administering this benefits program for MQ. Membership in AHDI is not required. AHDI agreed to do this because we saw it as an opportunity to provide services and products to MTs who we might not otherwise have had access to.

Lea Sims January 19, 2009 2:28 PM

Thought I would respond to that last comment, Jay. AHDI felt it essential that we put a cap on those offerings to limit our expense to no more than the settlement. In other words, given the high number of past and current MedQuist employees...IF every single one of them came forward for these benefits, the outlay for providing those benefits would greatly exceed the settlement money being provided, and AHDI cannot subsidize that additional cost. The offerings will be available on a first-come, first-served basis and for a limited window of time (one full year). Interested qualifying employees will need to take advantage of those resources during that time. It was the only way AHDI would agree to manage that money and those programs.

Lea Sims January 19, 2009 2:05 PM

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January 19, 2009 1:44 PM

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    Jay Vance, CMT
    Occupation: Medical Transcription Industry Consultant
    Setting: Yuma, AZ
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