A Medical Device Daily
MedQuist (Mount Laurel, New Jersey) a medical transcription service organization, reported the resolution of several material legal matters.
In the resolution of the U.S. Department of Justice (DoJ) investigation, the company noted that it originally received an administrative HIPAA subpoena for documents from the DoJ in December 2004. The subpoena sought information primarily about the company's provision of medical transcription services to governmental and non-governmental customers.
The information was requested in connection with a government investigation into whether MedQuist and others violated federal laws in connection with the provision of medical transcription services. MedQuist said it fully cooperated with the DoJ from the inception of the investigation.
Pursuant to the settlement agreement, MedQuist has agreed to pay the U.S. government $6.6 million.
The company has also reported the dismissal with prejudice of a shareholder putative class-action lawsuit filed in the Superior Court of New Jersey, Chancery Division, Burlington County. The suit was filed on Jan. 22 of this year by MedQuist shareholder Alan Kahn against the company, Koninklijke Philips Electronics (Philips; Amsterdam, the Netherlands) and four of MedQuist's former non-independent directors — Clement Revetti Jr., Stephen Rusckowski, Gregory Sebasky and Scott Weisenhoff.
The complaint alleged that defendants breached their fiduciary duties of good faith, fair dealing, loyalty, and due care by purportedly agreeing to and initiating a process for a sale of the company or a change of control transaction which would allegedly cause harm to plaintiff and the putative class. Plaintiff sought both monetary and injunctive relief.
The company also said that on Nov. 7, the shareholder derivative action that was being pursued by Newcastle Partners and Arklow Master Fund was voluntarily dismissed without prejudice.
In other legalities, a patient who was surgically implanted with Medtronic's (Minneapolis) Infuse Bone Graft product for an off-label use suffocated due to severe throat and neck swelling, according to James A. Dunlap Jr. & Associates and Page Perry LLC, who filed the lawsuit in California along with another national law firm.
The complaint alleges, among other things, that Medtronic improperly promoted the Infuse Bone Graft product for a cervical lumbar surgery procedure, when the product was not approved by the FDA for that use. The suit says the Infuse product may cause severe swelling in the neck and throat that restricts breathing and can lead to suffocation of the patient if used off-label for unapproved uses, particularly spinal surgery performed from the back.
The suit said the FDA has received more than 200 reports of significant side effects resulting from off-label use of the device, particularly in the cervical spine, a number of which have led to serious and potentially life-threatening complications.
According to the FDA, complications typically occur within two to 14 days after the implant surgery. Some individuals required insertion of feeding tubes, tracheotomies, anti-inflammatory drugs and additional surgery to drain the implant site.
The suit said data presented at a recent spine conference reflected a 59% complication rate in cervical spinal surgeries using Infuse. The study was conducted by a group of North Carolina surgeons between July 2005-December 2007 and involved 76 patients.