A Medical Device Daily

MedQuist (Mt. Laurel, New Jersey) reported that the U.S. District Court in New Jersey has issued an order dismissing key claims against it brought by a small group of hospital clients (South Broward Hospital District, dba Memorial Regional Hospital, et al. v. MedQuist, Inc. et al., Case No. CV-05-2206-JBS-AMD).

The court held that plaintiffs could not make a claim that the company had violated the federal RICO statute, thus eliminating any claim against it for treble damages. The court also found no claim that MedQuist had engaged in unfair or deceptive practices in violation of state law, or made any negligent misrepresentations.

The court, without reaching a decision of whether any wrongdoing had occurred, allowed plaintiffs to proceed with their claims against the company for fraud, unjust enrichment and an accounting. The company said it continues to believe that these claims are "without merit" and will continue to "vigorously defend" against any such claims.

The court also sanctioned plaintiffs' law firm, Greenberg Traurig, for Rule 11 violations, stating that "Plaintiffs' counsels' failure to review their own clients' transcription services contracts prior to filing this suit was not objectively reasonable." Rule 11 is designed to "discourage the filing of frivolous, unsupported or unreasonable claims."

"We are encouraged by the court's order and its decision to sanction plaintiffs' counsel for failing to adequately investigate the claims filed against MedQuist," said Howard Hoffmann, MedQuist CEO.

The company said the primary allegations against it in the South Broward case stem from how MedQuist interpreted and applied the AAMT line billing unit of measure, developed in 1993 by industry organizations in an attempt to help standardize billing practices and eventually was widely used. It said that because of "inherent ambiguities" in the unit of measure, the billing was applied inconsistently and eventually renounced by the groups that had originally developed it.

MedQuist said it began transitioning its line-based customers off that unit of measure in 2000 and eliminated the unit of measure in April 2005, calling on others in the industry to do the same.

In August 2004, MedQuist notified its customers that the company would be attempting to contact them to try to resolve their billing concerns. MedQuist said it has approached customers and offered to resolve any issues related to the company's prior use of the line and other billing related issues, resulting in resulted in accommodations representing a substantial portion of the company's AAMT line billing.

"We've had a number of very good discussions with our customers . . . and resolved the vast majority of these residual AAMT line issues productively and equitably," said Hoffmann.

MedQuist is a provider of electronic medical transcription, health information and document management products and services.