A Medical Device Daily

Integrated Healthcare Holdings (IHHI; Santa Ana, California) said that it has agreed to settle a number of pending lawsuits with Orange County Physicians Investment Network (OC-PIN), which is owned primarily by local physicians and is one of IHHI's largest shareholders, and certain related parties of OC-PIN.

The litigation grew out of a lawsuit filed by IHHI in May 2007 against two of its former directors and one current director alleging various breaches of fiduciary duties owed to the company. The dispute escalated over the past two years when the directors cross-complained against IHHI and OC-PIN filed a number of lawsuits seeking to oust the company's former CEO and to assert various shareholder rights. None of the parties admitted any wrongdoing in connection with the settlement.

Maurice DeWald, IHHI's chairman, said "I could not be more pleased that IHHI is turning the page on this unfortunate chapter in our company's short history. The board of directors, management, and our dedicated employees are now looking forward to concentrating all of our efforts on providing quality health care to our patients."

IHHI's recently named president/CEO, Kenneth Westbrook, was also happy and relieved that the parties were able to settle their differences out of court. "When I started here just over three months ago, I quickly realized that settling this litigation was key to unlocking the vast potential of our four hospitals that are so critical to the delivery of health care in Orange County," Westbrook said. "It is a new day for IHHI. I am ecstatic that all parties have found a way to put this behind them and focus on working together to provide the best possible service to our patients and the community."

Integrated Healthcare Holdings owns and operates the following four acute care hospitals in Orange County, California: Western Medical Center in Santa Ana; Western Medical Center in Anaheim; Coastal Communities Hospital in Santa Ana; and Chapman Medical Center in Orange.

In other legalities, MedQuist (Mount Laurel, New Jersey), a provider of medical transcription services, reported entry of final judgment approving settlement and dismissing the consolidated medical transcriptionist class action commenced against the company following disclosure of the results of the internal review of its historic billing practices in July 2004.

As originally reported by MedQuist in December 2004 and October 2005, certain individual medical transcriptionists commenced class action litigation against the company alleging that MedQuist systematically and wrongfully underpaid medical transcriptionists. After it became clear that plaintiffs could not prove the claims alleged against MedQuist, the parties reached a settlement, whereby MedQuist agreed to an injunction requiring it to implement certain measures to ensure transparency in medical transcription pay.

As part of the settlement, the company also agreed to pay $1.5 million, about $1.1 million of which will be given to the Association for Healthcare Documentation Integrity to fund programs for the general benefit of medical transcriptionists and the medical transcription industry.

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