NEW JERSEY-BASED MEDQUIST PAYS U.S. $6.6 MILLION TO RESOLVE FALSE CLAIMS ACT ALLEGATIONS

WASHINGTON -- Medical transcription service provider MedQuist Inc. has paid the United States $6.6 million to resolve allegations under the False Claims Act that it overbilled federal government clients, the Justice Department announced today. From 1998 onward, MedQuist provided medical transcription services to several federal government clients, including the Department of Veterans Affairs (VA), the Department of Defense (DOD) and the Public Health Service (PHS), part of the Department of Health and Human Services (HHS).

The government alleged that, from approximately 1998 through 2004, the Mount Laurel, N.J., company knowingly overbilled VA, DOD and PHS for medical transcription services. Certain federal contracts called for MedQuist to bill according to a transcription industry billing standard called the "AAMT line." Other contracts at issue imposed slightly different billing standards.

"The federal government relies on its contractors to provide accurate billing information and it thus will act vigorously against allegations of knowing overbilling," said Gregory G. Katsas, Assistant Attorney General of the Civil Division of the Department of Justice.

The settlement resolves in whole or in part allegations made in two qui tam actions, by which the False Claims Act permits private citizens to bring lawsuits on behalf of the United States. Under the settlement, relator Christopher Foley will receive $450,000 and relator Susan Purdue will receive $144,000.

The cases were investigated by the U.S. Attorney's Office for the District of Massachusetts and the Justice Department's Civil Division. The investigation was conducted by the FBI, the Office of Inspector General for the Department of Veterans Affairs, the Defense Criminal Investigative Service, the U.S. Postal Inspection Service, U.S. Army Criminal Investigation Command and the Office of Inspector General for the Department of Health and Human Services.