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AAMT [2006-02-12]
I have to agree with Sam - AAMT = American and should stay here!!!
AAMT should be ashamed, especially in light of offshore concerns. How is this going to help those of us in America? I think AAMT needs to rethink offshore training...
Peter Preziosi, PhD, CAE – Executive Director - What are you thinking?
AAMT [2006-02-07]
They obviously forgot what their initials stand for.
AAMT to start offering its first medical transcription training program in the Philippines. [2006-01-29]
IT education institution Informatics recently signed up with the American Academy of Medical Transcription (AAMT) to start offering its first medical transcription training program in the Philippines.The training modules intend to improve both English communication skills and medical knowledge from basic to intermediate in students hoping to work in the medical transcription business growing in the country.
Among the modules are English grammar and style essentials, foreign accent dictation, human anatomy and physiology, pharmacology, diagnostic procedures, laboratory medicines, medical word building, and medico-legal concepts and ethics.
Participants with medical backgrounds would have 150 hours of lecture and 160 hours of on-the-job training. Those without medical skills would have 220 lecture hours and 160 hours of on-the-job training.
The program intends to train about 2,000 medical transcribers to enter the workforce this year, according to Informatics director for corporate learning Paul Dumaguin.
Statistics from the Medical Transcription Industry Association of the Philippines indicate that over 7,000 medical transcribers are needed to meet the demand of the medical transcription business.
The US is currently the biggest source of medical transcription and 45 percent of the work is being done by India.
Dumaguin said that medical transcribers can work for existing firms, but have an option to work at home as independent transcribers.
“Trainees typically obtain employment with an MT outsourcing firm, but with the growth of the industry, they have other options as well, such as putting up their own MT businesses,” Dumaguin said.
The worldwide medical transcription business is expected to grow to 25 billion US dollars within the next three years.
M-Tec and The Andrews School Approved by AAMT/AHIMA [2005-11-02]
According to the AAMT web site,
Upon the recommendation of the AAMT Review Committee, the following medical transcription programs have been approved by the Approval Committee for Certificate Programs (ACCP), a joint committee established by AAMT and AHIMA for certifying and approving medical transcription education programs.
http://www.AAMT.org/ScriptContent/mtapproved.cfm
M-TEC offers quality distance education training for the novice, the healthcare professional wanting to make a career change, and continuing education programs for the practicing MT. Special discounts are available on continuing education and refresher products for AAMT members. The M-Tec Skillbuilding Wizard is available through the AAMT Store and offers 54 CECs to certified medical transcriptionists. This is also a great resource for companies offering continuing education classes for their employees.
The Andrews School has been providing quality medical transcription education and training since 1989. With what we believe to be the best program, instructors, and advisory staff in the MT community, the Andrews School has a proven track record, graduating thousands of students who have gone on to successful MT careers. The Andrews School offers distance learning opportunities via the Internet anywhere in the country. Graduates are able to work from home after completion of the program.
Related Links
Medical Transcription Program Approval Manual
AMEN, but [2008-10-27]
Wow, you sound just like me. That is the same refrain.... been using it for years.
For some bizarre reason, the vast majority of MTs that I know are the wimpiest, most spineless, sniveling, self-effacing, subservient, groveling people on the planet. They will take all kinds of abuse -- verbal, psychological, financial -- from an employer, complain to each other yet kiss the employer's feet: Thank you, thank you, thank you oh great one for being so kind as to give me a job; I don't deserve it, I am not worthy!
Of course the above was exaggerated for effect. But you get the picture.....
For years I have tried to get the complaining MTs together to walk down to HR en masse. NOPE! One by one they dried up: I need this job! As if they would be fired, even though common sense tells you that no way will they fire an entire group at once.
Your/our suggestion is a good one; unfortunately I think it is too late. Our profession is doing the death rattle and has been for a while now.
AAMT could have launched a public education campaign aimed at the end-user/consumer -- THE PATIENTS -- but of course they failed. They were too busy taking money from large MT services and bamboozling the rank-and-file MTs -- taking our $130 per year while educating us. They sold us out.
If the emphasis had remained on quality, this would not be happening. The sad truth is that nobody cares about patient care. Not docs -- nobody.
Stand firm! [2008-04-08]
I agree. I actually knew someone who typed some work with no spaces after a new client complained about the cost and said something about being ripped off because of paying for spaces. The gal that did this was actually a past president of AAMT, years ago I might add. She took it on the chin, took the next few tapes home, and returned a few reports with no spaces, no line spacing, etc. The office manager flipped her lid and went nutso on her. Hmmm, my friend said, I don't do anything I don't get paid for. End of story, end of a headache account. I still smile when I think of that story. That would be like a surgeon saying, Oh, I don't get paid for the stapling your wound shut, so I had the nurse use the masking tape. Single spacing after a period makes me crazy too. Do the math. It just to rip us off a bit. Think about how many spaces are saved over thousands and thousands of transcribed lines with single spacing after periods, and know if you are doing that you are undermining the profession and everyone in it. Quit being stupid. If your employer disagrees, tell him/her to have at it themselves.
VBC/MAKE A STAND [2007-10-15]
Something needs to be done with this...I made more money transcribing in the 80s than I do now, isn't that going backwards..WE NEED TO UNITE..maybe start AAMT or whatever they are called and let them know how we feel,..the idea about not accepting jobs that have VBC is a great one! Now, if we could just get everybody to do it....
VBC- just another way to rip us off. Dowetypereportslikethisnottomentionalltheworkwedonotgetpaidfor! [2007-05-26]
Do we get paid when the doctor changes his mind and redictates? No. Do we get paid extra when the doctor does not dictate the date of exam or the correct one, and we have to dig through 100 patient sheets? No. Do we get paid for looking up the spellings of doctors' names and addresses? No. Does the amount we are now getting paid cover software expenses, AAMT dues, business license, tax accountant, reference books, computers, car expenses for those accounts that insist on tapes that only put 1-2 reports on the tape that do not even cover gas or time spent driving/getting dressed, IT techs, phone lines, template setups, training other MTs, call-in systems, transcribers, foot pedals, office rent, medical expenses related to work injuries, paid time of when seeing a doctor for these injuries, surgeries, etc.? Not hardly. I have 7 years of experience working over 120 hours a week, 7 days a week and make less per line than the first 2 weeks I was interning in college. Jeesh, we have to hit the space bar to separate words. If you have radiculopathies as bad as I do, each keystroke hurts like heck, and I should get paid for it. Unfortunately, I cannot say space to my computer, and it magically puts it in. Just for once, instead of the doctors cutting our paycheck, why not going after the overpaid HIM department who came up with this hairbrain idea!!! They are on salary. It does not cost them money to go to the bathroom, yet everytime we take our hands off the keyboard, we pay! How would the HIM department like to read their reports like this? Laboratorydata:Completebloodcountstodayevealawhitebloodcellcountof,000/mm3,hemoglobin of2.3gm/dL,andaplateletcountof93,000/mm3.
I say they can pick up my medical bills, which in the last 2 years were over $3 million with us paying over $90,000. Did I remember to include all the money it costs in lost work to apply for a job only to get ripped off on your paychecks or have them pay so late that after late fees, there is nothing left. Oh yeah, advertising, websites, e-mail accounts, FTP, cell phone, fax lines, equipment, equipment, equipment.
VBC stands for visible black character. They are trying to drive our salary down even further! [2007-05-26]
VBC means no payment for spaces, formating, paragraphs, nothing. These HIM department people just sit at the desks all day coming up with more ways tocut our pay even more the whole while theycollectingsalaries increases yearly, and AHID (formally AAMT) will probably endorse this as a way to brown nose other healthcare-related industries to get them to become members, thereby increasing AHID (AAMT memberships with dues/revenue pretty much the same way they did with overseas transcription companies, which as everybody knows has resulted in lower pay for US transcription.
Supply and demand [2006-07-31]
That is only going to supply the industry with cheaper labor! If the demand is that high for MTs then it would seem we would be paid more since there do not seem to be enough of us, right? Then here comes AAMT to the rescue with the latest of their nutty ideas - training people to do our jobs for even less! Seems to me that would flood the labor pool with new MTs (I use the term loosely here) and drive down our wages.
I am so glad I gave up my membership and CMT years ago when I saw the direction they were going. I still have friends who are AAMT members who, IMHO, appear to be brainwashed. One person told me recently that the USA does not have enough people interested in becoming an MT and that is why AAMT is recruiting overseas and it will not impact our jobs at all. Argh!
clarification [2006-06-30]
AAMT described here is not the AAMT you think it is. its a name of one of the training
schools in the philippines. happens to bear the same acro,
MedQuist Announces Unaudited Financial Results, 6 Million in Operating Loss [2006-05-11]
MT. LAUREL, N.J.--(BUSINESS WIRE)--May 11, 2006--MedQuist Inc. (Pink Sheets: MEDQ.PK) announced today certain preliminary, partial and unaudited financial results, and provided updated information regarding previously-announced litigation and governmental investigations and proceedings. Once the Company completes the financial assessment and review of its billing practices disclosed in the Company's previous filings with the SEC, KPMG LLP, the Company's independent registered public accounting firm, will complete the audit the Company's financial statements. The Company is continuing the process of working toward becoming current in its periodic reports pursuant to the Securities Exchange Act of 1934. The Company's review of its current and prior period unaudited financial statements, as well as KPMG LLP's audits for those periods, may identify adjustments or reclassifications which may be reflected in the periods to which they relate. At this time, the Company cannot estimate the total costs of (i) the billing review, (ii) defense of the class action matters, (iii) the SEC investigation, and (iv) compliance with the Department of Justice investigation, all of which have been previously disclosed in either the Company's filings with the SEC or the Company's press releases. Accordingly, the only costs related to the defense of these matters that have been included in the results below are actual costs incurred through March 31, 2006 by the Company. Because the completion of the billing review and resolution of the litigation and governmental investigatory matters are pending, the Company is not certain whether any changes to the accounting treatment of any component of its consolidated financial statements will be required and, if any changes are necessary, whether any such changes would have a material impact on its current or prior period consolidated financial statements. Accordingly, the financial information set forth below is preliminary, unaudited, and subject to change based on the completion of the financial assessment and review of the Company's billing practices, resolution of the class action matters and governmental investigations and proceedings, and the completion of the review and/or audit of its financial statements, as appropriate.
The financial information and related narrative discussion set forth below is derived from the Company's internal books and records. The Company cautions investors not to place undue reliance on the financial information presented below. As a result of the developments described above and in the Company's previous SEC filings, the Company's financial statements have not been audited or reviewed by KPMG LLP, its independent registered public accounting firm. The financial information contained in this press release also has not been audited or reviewed by an independent registered public accounting firm. Such information is not a substitute for the information required to be reported in the Company's Forms 10-K and Forms 10-Q that have not yet been filed. There can be no assurance that the results of the billing review, and resolution of the litigation and governmental investigatory matters will not have a material adverse effect on the Company's revenue, results of operations and financial condition.
Legal Proceedings
Investigations and Proceedings Commenced by the SEC and the Department of Justice
As previously announced, the Securities and Exchange Commission (the SEC) is currently conducting a formal investigation of the Company. The Company will continue to fully cooperate with the SEC.
As previously announced, the Company received an administrative HIPAA subpoena for documents from the United States Attorney's Office for the District of Massachusetts on December 17, 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 continues to cooperate fully with the Department of Justice.
Shareholder Securities Litigation
As previously announced, a shareholder putative class action lawsuit was filed against the Company in the United States District Court District of New Jersey on November 8, 2004. The action, entitled William Steiner v. MedQuist, Inc., et al., Case No. 1:04-cv-05487-FLW (the Shareholder Putative Action), was filed against the Company and certain former Company officials, purportedly on behalf of an alleged class of all persons who purchased MedQuist common stock during the period from April 23, 2002 through November 2, 2004, inclusive (the Class Period). The complaint specifically alleged that defendants violated federal securities laws by purportedly issuing a series of false and misleading statements to the market throughout the Class Period, which statements allegedly had the effect of artificially inflating the market price of the Company's securities. The complaint asserts claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. Named as defendants, in addition to the Company, were its former president and chief executive officer and its former executive vice president and chief financial officer.
On August 16, 2005, a First Amended Complaint in the Shareholder Putative Class Action was filed against the Company in the United States District Court District of New Jersey. The First Amended Complaint named additional defendants, including certain current and former directors, certain former Company officers, the Company's former and current external auditors and Koninklijke Philips Electronics N.V. (Philips). Like the original complaint, the First Amended Complaint asserted claims under Sections 10b and 20(a) of the Securities and Exchange Act of 1934 (the Act) and Rule 10b5 of the Act. The Class Period of the original complaint was expanded 20 months and now includes the period from March 29, 2000 through June 14, 2004. Pursuant to an October 17, 2005 consent order approved by the Court, Lead Plaintiff Greater Pennsylvania Pension Fund filed a Second Amended Complaint on November 15, 2005. The Second Amended Complaint dropped Philips as a defendant, but alleges the same claims and the same purported class period as the First Amended Complaint. Plaintiffs seek unspecified damages. Pursuant to the provisions of the Private Securities Litigation Reform Act, discovery in the action is stayed pending the filing and resolution of the defendants' motions to dismiss, which were filed on January 17, 2006, and will be fully briefed by May 26, 2006. The Court has not set a hearing date on the motions. The Company believes that the claims asserted in the Second Amended Complaint are without merit, and is vigorously defending the action.
Customer Litigation
As previously announced, a putative class action was filed in the United States District Court Central District of California. The action, entitled South Broward Hospital District, dba Memorial Regional Hospital, et al. v. MedQuist, Inc. et al., Case No. CV-04-7520-TJH-VBKx, was filed on September 9, 2004 against the Company and certain present and former Company officials, purportedly on behalf of an alleged class of non-Federal governmental hospitals and medical centers that the complaint claims were wrongfully and fraudulently overcharged for transcription services by defendants based primarily on the Company's use of the AAMT line billing unit of measure discussed below. The complaint charges fraud, violation of the California Business and Professions Code, unjust enrichment, conversion, negligent supervision and violation of the Racketeer Influenced and Corrupt Organizations Act. Plaintiffs seek damages in an unspecified amount, plus costs and interest, an injunction against alleged continuing illegal activities, an accounting, punitive damages and attorneys' fees. Named as defendants, in addition to the Company, were a senior vice president, its former executive vice president of marketing and new business development, its former executive vice president and chief legal officer, and its former executive vice president and chief financial officer.
On December 20, 2004, the Company and individual defendants filed motions to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the putative action to the United States District Court District of New Jersey. On February 2, 2005, plaintiffs filed a Second Amended Complaint both adding and deleting named plaintiffs in an attempt to keep the putative action in the United States District Court Central District of California. On March 30, 2005, the United States District Court Central District of California issued an order transferring the putative action to the United States District Court District of New Jersey.
On August 1, 2005, the Company and the individual defendants filed their respective Answers denying the material allegations contained in the Second Amended Complaint. On August 31, 2005, the Company and individual defendants filed motions to dismiss the Second Amended Complaint for failure to state a claim and a motion to dismiss in favor of arbitration, or in the alternative, to stay pending arbitration. On December 12, 2005, the plaintiffs filed an Amendment to the Second Amended Complaint. On December 13, 2005, the Court issued an order requiring plaintiffs to file a Third Amended Complaint.
Plaintiffs filed the Third Amended Complaint on January 4, 2006. The Third Amended Complaint expands the claims made beyond issues arising from contracts based on AAMT line billing and beyond customers billed based on an AAMT line, alleging that the Company engaged in a scheme to inflate customers' invoices without regard to the terms of individual contracts and even in the absence of any written contract. The Third Amended Complaint also limits plaintiffs' claim for fraud in the inducement of the agreement to arbitrate to the three named plaintiffs whose contracts contain an arbitration provision and a subclass of similarly situated customers. On January 20, 2006 the Company and individual defendants filed motions to dismiss the Third Amended Complaint for failure to state a claim and a motion to compel arbitration of all claims by the arbitration subclass and to stay the case in its entirety pending arbitration. On March 8, 2006 the Court held a hearing on these motions, and took the matter under submission. The Court has not yet ruled on the motions. The Company believes that the claims asserted have no merit and intends to vigorously defend the putative action.
Medical Transcriptionist Litigation
Hoffmann Putative Class Action
As previously announced, a putative class action lawsuit was filed against the Company in the United States District Court Northern District of Georgia. The action, entitled Brigitte Hoffmann, et al. v. MedQuist, Inc., et al., Case No. 1:04-CV-3452, was filed with the Court on November 29, 2004 against the Company and certain current and former Company officials, purportedly on behalf of an alleged class of current and former employees and statutory workers of MedQuist, who are or were compensated on a per line basis for medical transcription services (the Class Members) from January 1, 1998 to the time of the filing of the complaint (the Class Period). The complaint specifically alleged that defendants systematically and wrongfully underpaid the Class Members during the Class Period. The complaint asserted the following causes of action: fraud, breach of contract, demand for accounting, quantum meruit, unjust enrichment, conversion, negligence, negligent supervision, and Racketeer Influenced and Corrupt Organizations Act violations. Plaintiffs sought unspecified compensatory damages, punitive damages, disgorgement and restitution. On December 1, 2005, the Hoffmann matter was transferred to the United States District Court District of New Jersey. As discussed immediately below under the heading Myers Putative Class Action, the Company believes that the claims presently asserted have no merit and intends to vigorously defend the putative action.
Myers Putative Class Action
As previously announced, a putative class action entitled, Myers, et al. v. MedQuist Inc. and MedQuist Transcriptions, Ltd., Case No. 05CV 4608 (JBS), was filed against the Company on September 22, 2005 in the United States District Court District of New Jersey. The action was brought on behalf of a putative class of MedQuist's employee and independent contractor transcriptionists who claim that they contracted with the Company to be paid per AAMT line, but were allegedly underpaid due to intentional miscounting of the number of characters and lines transcribed. The named plaintiffs asserted claims for breach of contract, unjust enrichment, and request an accounting.
The allegations contained in the Myers case are substantially similar to those contained in the Hoffmann putative class action and the two actions have now been consolidated. A consolidated amended complaint was filed on January 31, 2006. The named plaintiffs assert claims for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment and demand an accounting. On March 7, 2006 the Company filed a motion to dismiss all claims in the consolidated amended complaint. The motion has now been fully briefed. The Court has not set a hearing date on the motion. The Company believes that the claims asserted in the consolidated actions have no merit and intends to vigorously defend the suit.
Derivative Litigation
On October 4, 2005, the Company announced the dismissal with prejudice of a shareholder derivative action filed in United States District Court District of New Jersey. The suit, Rhoda Kanter (Plaintiff) v. Hans M. Barella et al. (Defendants), was filed on November 12, 2004 against Philips and ten current and former members of MedQuist's Board of Directors. MedQuist was named as a nominal defendant.
In a ruling dated September 21, 2005, the Court found Plaintiff's allegations that MedQuist's Board members breached their fiduciary duties to the Company to be insufficient. The Plaintiff had alleged that for a period from 2001 through 2004, the Defendants violated their fiduciary duties by permitting artificial inflation of billing figures; failing to adequately ensure accurate and lawful billing practices; and failing to accurately report the Company's true financial condition in its published financial statements. To the contrary, the Court concluded: Far from alleging facts supporting a substantial likelihood of liability, Plaintiff here has painted a picture of a board of directors that acted responsively given the circumstances . . . . On October 3, 2005, plaintiffs filed a motion for reconsideration of the Court's order dismissing the action with prejudice. On November 16, 2005, the Court denied Plaintiffs' motion for reconsideration. On December 13, 2005, Plaintiffs filed a Notice of Appeal with the United States Court of Appeals for the Third Circuit.
On March 21, 2006, Plaintiff filed her opening brief on appeal. On April 20, 2006, MedQuist and the other defendants filed their opposition briefs. The appeal will be fully briefed by May 4, 2006. The Court of Appeals has not set a hearing date for the appeal.
Customer Accommodations
As previously disclosed, the primary allegations in a number of the litigation matters relate to how the Company interpreted the AAMT line billing unit of measure. The AAMT line billing unit of measure was developed in 1993 through a collaboration among several industry organizations with the intent of providing standardization in industry billing practices. However, due to inherent ambiguities in the definition of this unit of measure not fully anticipated at the time of its introduction, AAMT line-based billing was applied inconsistently throughout the medical transcription industry and eventually renounced by the groups initially responsible for its development. Despite these issues, a number of companies in the industry have continued to use AAMT line-based billing, and some customers still request proposals and contracts based on the AAMT line.
Like many medical transcription service providers, MedQuist once used the AAMT line unit of measure to calculate invoices for many of its medical transcription clients. It has been widely recognized and well documented throughout the industry, however, that the AAMT definition of a line is inherently ambiguous and subject to a wide variety of interpretations. In fact, no single set of AAMT characters was ever defined for this unit of measure. Accordingly, MedQuist began the process in 2004 of transitioning its AAMT line-based customers off the AAMT line unit of measure and, in April 2005, the Company completely eliminated the use of the AAMT line for billing and called on other industry transcription providers to follow its lead.
Due to these AAMT line unit of measure ambiguities, and the disparity in its interpretation, health care providers have raised concerns regarding charges for transcription services by their respective transcription providers, including the Company. In response to those concerns, and to foster ongoing business relationships with its customers, the Company has approached certain customers and offered to resolve any issues related to their prior AAMT line and other billing related issues.
As previously disclosed, the Company's Board of Directors has authorized Company management to make accommodation offers, up to an aggregate amount of $65.0 million, to certain customers to resolve any concerns over AAMT and other billing related issues. As of March 31, 2006, (i) the Company has entered into agreements with certain customers who have accepted accommodation offers to resolve concerns over AAMT and other billing related issues, and paid or credited an aggregate amount of $31.3 million as an accommodation to those customers and (ii) additional accommodation offers have been made by the Company to certain other customers in the aggregate amount of $11.9 million. From April 1, 2006 through the date of this release, the Company has entered into agreements with additional customers and paid or credited an aggregate amount of $2.9 million and has extended accommodation offers to additional customers in the aggregate amount of $1.1 million. Company management currently intends to make additional accommodation offers in the future, consistent with the Board's authorization described above, although the timing and amount of such offers have not yet been determined and the Company's plans may change in the future. The accommodation offers do not represent an estimate of potential liability, if any, in any of the previously disclosed litigation or investigatory matters pending against the Company.
The Company is unable to predict how many customers, if any, will accept the outstanding accommodation offers on the terms proposed by the Company, nor is the Company able to predict the timing of the acceptance (or rejection) of any of these outstanding accommodation offers. Until such offers are accepted, the Company may withdraw or modify the terms of the accommodation offers at any time. In addition, the Company is unable to predict how many of the future offers, if made, will be accepted on the terms proposed by the Company. The Company believes that its existing cash resources and cash flows from operations are sufficient to fund all of the customer accommodation offers it may make.
By accepting the Company's accommodation offers, the customer must agree, among other things, to release the Company from any and all claims and liability regarding prior AAMT and other billing related issues. The accommodation offers made to date, and those offers which may be made in the future, are not an admission of liability by the Company of any wrongdoing or an admission or acknowledgement that its billing practices with respect to such customers were or are incorrect. MedQuist Inc. -- Preliminary and Unaudited Financial Information
(in millions)
----------------------------------------------------------------------
Three months ended
----------------------------------------
March 31, 2006 March 31, 2005
------------------ ------------------
Revenues $ 97 $ 108
Operating loss $ (8) $ (2)
----------------------------------------------------------------------
As of As of
March 31, 2006 December 31, 2005
------------------ ------------------
Cash $ 164 $ 178
Debt $ - $ -
Three Months Ended March 31, 2006
Revenues:
Preliminary, unaudited results indicate that the Company's revenues decreased $11 million to $97 million for the three months ended March 31, 2006 from approximately $108 million for the comparable 2005 period. This decline in revenues is largely due to decreases in transcription outsourcing services and product sales of $9 million or 10%, and $2 million or 27%, respectively. The decline in transcription outsourcing revenues is largely due to a decrease in the volume of lines transcribed primarily related to clients for whom we no longer provide transcription services. Additionally, pricing pressures continued on the base transcription business during the first quarter 2006, but revenues were impacted far less by pricing pressures than in the comparable 2005 period. Management expects that pricing pressures will continue for the foreseeable future but that the introduction of several new sales initiatives and improved customer service programs should cause transcription volume to stabilize or improve throughout the duration of 2006.
Operating Loss:
Preliminary, unaudited results indicate that our operating loss increased $6 million to a loss of approximately $8 million for the three months ended March 31, 2006 from an operating loss of $2 million for the comparable 2005 period. The operating loss of $8 million was primarily attributable to $9 million of costs associated with the following: (1) costs related to the ongoing billing review including (i) legal fees incurred in connection with governmental investigations and proceedings and defense of the class action matters and (ii) non-legal professional fees; and (2) increased expenses related to prior years' accounting reviews and audit. Operating loss was also impacted by the $11 million decline in revenues over the same period.
Balance Sheet Highlights:
As of March 31, 2006, the Company had $164 million in cash and cash equivalents and no debt. The $14 million decrease in cash as of March 31, 2006 compared with December 31, 2005 was primarily attributable to accommodation payments ($10 million) and capital expenditures ($4 million). There were no issuances of capital stock or other securities for the three months ended March 31, 2006.
The Company expects to incur significant costs and expenses in the future relating to the ongoing billing review, defense of the class action matters and governmental investigations and proceedings, and accommodation agreements. These costs and expenses include (i) legal fees relating to the SEC and Department of Justice investigations and proceedings, (ii) legal fees relating to defense and resolution of the litigation matters described above, (iii) customer accommodation payments and credits, and (iv) non-legal professional fees. The timing and level of these costs and expenses is, in many cases, not within the Company's control. While the Company is unable to predict the timing and level of these costs and expenses, the Company currently believes that it has sufficient resources, including cash on hand and cash flow from operations to fund these costs and expenses. However, there cannot be any assurance that unanticipated changes in the level of these costs will not exceed the Company's available cash resources, nor can there be any assurance that sufficient financing from external sources will be available to the Company on acceptable terms, if at all. In the event that the Company's cash requirements exceed its available cash resources, or if the timing of such costs and expenses requires the Company to divert cash resources away from operations, the Company may not be able to execute its operating plan, which could have a material adverse effect on the Company's business and results of operations.
Other Developments
Restructuring:
As previously disclosed, in conjunction with the Company's movement to a single national service and support organization, a restructuring plan was developed in 2005 to consolidate approximately forty-eight (48) operating facilities and centralize certain components of the business in order to improve operating efficiencies. The Company is expecting to incur total restructuring costs of up to $8.5 million associated with this plan through the end of the fourth quarter of 2006. The Company incurred $1 million of restructuring costs for the three months ended March 31, 2006. This restructuring is expected to generate annualized savings of approximately $18.5 million. The Company realized approximately $1.9 million in savings during the three months ended March 31, 2006. Specifically, the Company has shifted resources to a single national service delivery and support organization for all of the Company's services and products and is in the process of eliminating local service centers.
The plan does not contemplate reductions of, and the Company has no current intentions to reduce, its medical transcription workforce. Rather, the Company will continue in its efforts to hire additional qualified transcriptionists. Further, although the Company is consolidating its local service centers as described above, customer-facing teams, led by account managers, will continue to coordinate customer support on the local level. The customer-facing teams will continue to work with and be supported by the Company's centrally managed customer service organization.
You mean AMT [2006-03-24]
So, are they going to take the American out of the AAMT then?
I hate to see where our country will stand in 50 years the way we are pushing our jobs away.
I'll quit paying taxes if they use it to train overseas MTs [2006-03-21]
G et AL can take a bite out of that one if they think that is the direction they will take this program! After all, the approved programs are online and AAMT provides certification overseas, so what is to stop the big MT corporations who are devoloping facilities to house 5000 MTs in India and other locations from using MY tax money to train overseas MTs???
Medical Transcription Recognized as an Apprenticeable Occupation [2006-03-14]
CHICAGO--(BUSINESS WIRE)--March 10, 2006--Graduates of selected medical transcription training programs will now have access to registered apprenticeship programs, as the U.S. Department of Labor (DOL) has now declared medical transcription to be an apprenticeable profession - the first step in establishing a national apprenticeship program. The Office of Apprenticeship Training, Employer and Labor Services approved the application for apprenticeability determination submitted by the Medical Transcription Industry Association (MTIA) along with the American Association for Medical Transcription (AAMT).
Having a recognized apprenticeable occupation will provide a pipeline of medical transcription professionals entering into a workforce facing a serious labor and skills shortage. stated Keith Flannery, Vice President, MTIA. Workforce development under the standards established by this apprenticeship program will aid in facilitating the transition between student and an employable, productive, and qualified medical transcriptionist.
Given the challenge the industry faces in recruiting qualified candidates to meet the ever-increasing demand for real-time, quality healthcare data, a registered apprenticeship program couldn't be developed and launched at a more critical time, stated Peter Preziosi, PhD, CAE, AAMT Executive Director. Workforce development is essential to ensuring that documentation experts are in place to assist the industry in transitioning to an electronic health record and to preserving the quality and integrity of the health record in that future.
The Registered Apprenticeship Program, sponsored by the Medical Transcription Industry Association (MTIA), will offer structured on-the-job learning and related technical instruction for qualified medical transcriptionists entering the profession. The two associations, along with the Office of Apprenticeship Training, Employer and Labor Services, are finalizing program details.
Medical Transcription is a crucial process in the provision of quality healthcare in our country. This is a hallmark program for the industry, said Sean Carroll, President, MTIA.
HERE's more of what he thought 10/05...sm [2006-02-21]
TAMT NEWS
Texas Association for Medical Transcription
____________________________________________________________________
A recognized component of AAMT October 2005
SPECIAL MESSAGE FROM PETER PREZIOSI, PhD, CAE
I would challenge this group to think of new and expanded roles for transcriptionists in the electronic health environment. Let’s not think of transcription as it is today but as a role that is at the nexus of health information and information technology.
Transcriptionists should be reattached from the physician dictator and deployed to the entire electronic health record, ensuring that data captured, documentation, and report generation is accurate, complete, and appropriately placed throughout the record. Emerging roles for the Transcriptionist include database administrator, data abstraction, data coding, etc. Once both the profession and the industry embrace this concept, we must quickly put together the educational infrastructure and partner with the technology vendor community to build the software to support this vision, creating an emerging role in the workplace. This new role in the EHR expands the value of transcription, gets transcription away from production and being considered a commodity, and makes us true team players in quality patient documentation. Think of the individuals we could attract to the profession if this were the scope of practice!
This is a long-term vision that requires us to begin now to reposition both the profession and the industry. Let’s not wait for the crisis to worsen.
Peter Preziosi, PhD, CAE
Executive Director
American Association for Medical Transcription
100 Sycamore Avenue
Modesto, CA 95354
(209) 341-2445
(209) 527-9632 fax
peter@AAMT.org
www.AAMT.org/ca/texas/newsletter.doc
AAMT [2006-02-12]
I have to agree with Sam - AAMT = American and should stay here!!!
AAMT should be ashamed, especially in light of offshore concerns. How is this going to help those of us in America? I think AAMT needs to rethink offshore training...
Peter Preziosi, PhD, CAE – Executive Director - What are you thinking?
AAMT to start offering its first medical transcription training program in the Philippines. [2006-01-29]
IT education institution Informatics recently signed up with the American Academy of Medical Transcription (AAMT) to start offering its first medical transcription training program in the Philippines.The training modules intend to improve both English communication skills and medical knowledge from basic to intermediate in students hoping to work in the medical transcription business growing in the country.
Among the modules are English grammar and style essentials, foreign accent dictation, human anatomy and physiology, pharmacology, diagnostic procedures, laboratory medicines, medical word building, and medico-legal concepts and ethics.
Participants with medical backgrounds would have 150 hours of lecture and 160 hours of on-the-job training. Those without medical skills would have 220 lecture hours and 160 hours of on-the-job training.
The program intends to train about 2,000 medical transcribers to enter the workforce this year, according to Informatics director for corporate learning Paul Dumaguin.
Statistics from the Medical Transcription Industry Association of the Philippines indicate that over 7,000 medical transcribers are needed to meet the demand of the medical transcription business.
The US is currently the biggest source of medical transcription and 45 percent of the work is being done by India.
Dumaguin said that medical transcribers can work for existing firms, but have an option to work at home as independent transcribers.
“Trainees typically obtain employment with an MT outsourcing firm, but with the growth of the industry, they have other options as well, such as putting up their own MT businesses,” Dumaguin said.
The worldwide medical transcription business is expected to grow to 25 billion US dollars within the next three years.
MedQuist Announces Preliminary, Partial and Unaudited [2006-01-19]
MT. LAUREL, N.J. --(Business Wire)-- Jan. 19, 2006 -- Medquist Inc. (Pink Sheets: MEDQ.PK) announced today certain preliminary, partial and unaudited financial results, and provided updated information regarding previously-announced litigation and governmental investigations and proceedings. Once the Company completes the financial assessment and review of its billing practices disclosed in the Company's previous filings with the SEC, the Company expects that KPMG LLP, its independent registered public accounting firm, will review and/or audit the Company's financial statements, as appropriate. The Company is continuing the process of working toward becoming current in its periodic reports pursuant to the Securities Exchange Act of 1934. The Company's review of its current and prior period unaudited financial statements, as well as KPMG LLP's audits for those periods, may identify adjustments or reclassifications which may be reflected in the periods to which they relate. At this time, the Company cannot estimate the total costs of (i) the billing review, (ii) defense of the class action matters, (iii) the SEC investigation, and (iv) compliance with the Department of Justice investigation, all of which have been previously disclosed in either the Company's filings with the SEC or the Company's press releases. Accordingly, the only costs related to the defense of these matters that have been included in the results below are actual costs incurred through December 31, 2005 by the Company. As described in the Customer Accommodations discussion under the heading Legal Proceedings, an accrual has been made in an amount up to which the Company's Board of Directors has authorized the Company to make accommodation offers to certain of its customers. Because the completion of the billing review and resolution of the litigation and governmental investigatory matters are pending, the Company is not certain whether any changes to the accounting treatment of any component of its consolidated financial statements will be required and, if any changes are necessary, whether any such changes would have a material impact on its current or prior period consolidated financial statements. Accordingly, the financial information set forth below is preliminary, unaudited, and subject to change based on the completion of the financial assessment and review of the Company's billing practices, resolution of the class action matters and governmental investigations and proceedings, and the completion of the review and/or audit of its financial statements, as appropriate.
The financial information and related narrative discussion set forth below is derived from the Company's internal books and records. The Company cautions investors not to place undue reliance on the financial information presented below. As a result of the developments described above and in the Company's previous SEC filings, the Company's financial statements have not been audited or reviewed by KPMG LLP, its independent registered public accounting firm. The financial information contained in this press release also has not been audited or reviewed by an independent registered public accounting firm. Such information is not a substitute for the information required to be reported in the Company's Forms 10-K and Forms 10-Q that have not yet been filed. There can be no assurance that the results of the billing review, and resolution of the litigation and governmental investigatory matters will not have a material adverse effect on the Company's revenue, results of operations and financial condition. Legal Proceedings Investigations and Proceedings Commenced by the SEC and the Department of Justice As previously announced, the Securities and Exchange Commission (the SEC) is currently conducting a formal investigation of the Company. The Company will continue to fully cooperate with the SEC. As previously announced, the Company received an administrative HIPAA subpoena for documents from the United States Attorney's Office for the District of Massachusetts on December 17, 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 continues to cooperate fully with the Department of Justice. Shareholder Securities Litigation As previously announced, a shareholder putative class action lawsuit was filed against the Company in the United States District Court District of New Jersey on November 8, 2004. The action, entitled William Steiner v. MedQuist, Inc., et al., Case No. 1:04-cv-05487-FLW (the Shareholder Putative Action), was filed against the Company and certain former Company officials, purportedly on behalf of an alleged class of all persons who purchased MedQuist common stock during the period from April 23, 2002 through November 2, 2004, inclusive (the Class Period). The complaint specifically alleged that defendants violated federal securities laws by purportedly issuing a series of false and misleading statements to the market throughout the Class Period, which statements allegedly had the effect of artificially inflating the market price of the Company's securities. The complaint asserts claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. Named as defendants, in addition to the Company, were its former president and chief executive officer and its former executive vice president and chief financial officer. On August 16, 2005, a First Amended Complaint in the Shareholder Putative Class Action was filed against the Company in the United States District Court District of New Jersey. The First Amended Complaint named additional defendants, including certain current and former directors, certain former Company officers, the Company's former and current external auditors and Koninklijke Philips Electronics N.V. (Philips). Like the original complaint, the First Amended Complaint asserted claims under Sections 10b and 20(a) of the Securities and Exchange Act of 1934 (the Act) and Rule 10b5 of the Act. The Class Period of the original complaint was expanded 20 months and now includes the period from March 29, 2000 through June 14, 2004. Pursuant to an October 17, 2005 consent order approved by the Court, Lead Plaintiff Greater Pennsylvania Pension Fund filed a Second Amended Complaint on November 15, 2005. The Second Amended Complaint dropped Philips as a defendant, but alleges the same claims and the same purported class period as the First Amended Complaint. Plaintiffs seek unspecified damages. Pursuant to the provisions of the Private Securities Litigation Reform Act, discovery in the action is stayed pending the filing and resolution of the defendants' motions to dismiss, which were filed on January 17, 2006, and will be fully briefed by May 1, 2006. The Company believes that the claims asserted in the Second Amended Complaint are without merit, and is vigorously defending the action. Customer Litigation As previously announced, a putative class action was filed in the United States District Court Central District of California. The action, entitled South Broward Hospital District, dba Memorial Regional Hospital, et al. v. MedQuist, Inc. et al., Case No. CV-04-7520-TJH-VBKx, was filed on September 9, 2004 against the Company and certain present and former Company officials, purportedly on behalf of an alleged class of non-Federal governmental hospitals and medical centers that the complaint claims were wrongfully and fraudulently overcharged for transcription services by defendants based primarily on the Company's use of the AAMT line billing unit of measure discussed below. The complaint charges fraud, violation of the California Business and Professions Code, unjust enrichment, conversion, negligent supervision and violation of the Racketeer Influenced and Corrupt Organizations Act. Plaintiffs seek damages in an unspecified amount, plus costs and interest, an injunction against alleged continuing illegal activities, an accounting, punitive damages and attorneys' fees. Named as defendants, in addition to the Company, were a senior vice president, its former executive vice president of marketing and new business development, its former executive vice president and chief legal officer, and its former executive vice president and chief financial officer. On December 20, 2004, the Company and individual defendants filed motions to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the putative action to the United States District Court District of New Jersey. On February 2, 2005, plaintiffs filed a Second Amended Complaint both adding and deleting named plaintiffs in an attempt to keep the putative action in the United States District Court Central District of California. On March 30, 2005, the United States District Court Central District of California issued an order transferring the putative action to the United States District Court District of New Jersey. On August 1, 2005, the Company and the individual defendants filed their respective Answers denying the material allegations contained in the Second Amended Complaint. On August 31, 2005, the Company and individual defendants filed motions to dismiss the Second Amended Complaint for failure to state a claim and a motion to dismiss in favor of arbitration, or in the alternative, to stay pending arbitration. On December 12, 2005, the plaintiffs filed an Amendment to the Second Amended Complaint. On December 13, 2005, the Court issued an order requiring plaintiffs to file a Third Amended Complaint and set forth a briefing schedule for the filing of anticipated motions to dismiss the Third Amended Complaint, which have been set for hearing on March 8, 2006. Plaintiffs filed the Third Amended Complaint on January 4, 2006. The Third Amended Complaint expands the claims made beyond issues arising from contracts based on AAMT line billing and beyond customers billed based on an AAMT line, alleging that the Company engaged in a scheme to inflate customers' invoices without regard to the terms of individual contracts and even in the absence of any written contract. The Third Amended Complaint also limits plaintiffs' claim for fraud in the inducement of the agreement to arbitrate to the three named plaintiffs whose contracts contain an arbitration provision and a subclass of similarly situated customers. The Company believes that the claims asserted have no merit and intends to vigorously defend the putative action. Medical Transcriptionist Litigation Hoffmann Putative Class Action As previously announced, a putative class action lawsuit was filed against the Company in the United States District Court Northern District of Georgia. The action, entitled Brigitte Hoffmann, et al. v. MedQuist, Inc., et al., Case No. 1:04-CV-3452, was filed with the Court on November 29, 2004 against the Company and certain current and former Company officials, purportedly on behalf of an alleged class of current and former employees and statutory workers of MedQuist, who are or were compensated on a per line basis for medical transcription services (the Class Members) from January 1, 1998 to the time of the filing of the complaint (the Class Period). The complaint specifically alleged that defendants systematically and wrongfully underpaid the Class Members during the Class Period. The complaint asserted the following causes of action: fraud, breach of contract, demand for accounting, quantum meruit, unjust enrichment, conversion, negligence, negligent supervision, and Racketeer Influenced and Corrupt Organizations Act violations. Plaintiffs seek unspecified compensatory damages, punitive damages, disgorgement and restitution. On December 1, 2005, the Hoffmann matter was transferred to the United States District Court District of New Jersey. The Company believes that the claims presently asserted have no merit and intends to vigorously defend the putative action. Myers Putative Class Action As previously announced, a putative class action entitled, Myers, et al. v. MedQuist Inc. and MedQuist Transcriptions, Ltd., Case No. 05CV 4608 (JBS), was filed against the Company on September 22, 2005 in the United States District Court District of New Jersey. The action was brought on behalf of a putative class of MedQuist's employee and independent contractor transcriptionists who claim that they contracted with the Company to be paid per AAMT line, but were allegedly underpaid due to intentional miscounting of the number of characters and lines transcribed. The named plaintiffs assert claims for breach of contract, unjust enrichment, and request an accounting. The allegations contained in the Myers case are substantially similar to those contained in the Hoffmann putative class action and the two actions have now been consolidated. On January 3, 2006, a consent order was executed pursuant to which the Hoffmann and Myers plaintiffs will file a single, consolidated class action complaint on or before January 31, 2006. As with the Hoffmann putative class action, the Company believes that the claims presently asserted in the Myers action have no merit and intends to vigorously defend the consolidated actions. Derivative Litigation On October 4, 2005, the Company announced the dismissal with prejudice of a shareholder derivative action filed in United States District Court District of New Jersey. The suit, Rhoda Kanter (Plaintiff) v. Hans M. Barella et al. (Defendants), was filed on November 12, 2004 against Philips and ten current and former members of MedQuist's Board of Directors. MedQuist was named as a nominal defendant. In a ruling dated September 21, 2005, the Court found Plaintiff's allegations that MedQuist's Board members breached their fiduciary duties to the Company to be insufficient. The Plaintiff had alleged that for a period from 2001 through 2004, the Defendants violated their fiduciary duties by permitting artificial inflation of billing figures; failing to adequately ensure accurate and lawful billing practices; and failing to accurately report the Company's true financial condition in its published financial statements. To the contrary, the Court concluded: Far from alleging facts supporting a substantial likelihood of liability, Plaintiff here has painted a picture of a board of directors that acted responsively given the circumstances . . . . On October 3, 2005, plaintiffs filed a motion for reconsideration of the Court's order dismissing the action with prejudice. On November 16, 2005, the Court denied Plaintiffs' motion for reconsideration. On December 13, 2005, Plaintiffs filed a Notice of Appeal with the United States Court of Appeals for the Third Circuit. Customer Accommodations The primary allegations in a number of the litigation matters relate to how the Company interpreted the AAMT line billing unit of measure. The AAMT line billing unit of measure was developed in 1993 through a collaboration among several industry organizations with the intent of providing standardization in industry billing practices. However, due to inherent ambiguities in the definition of this unit of measure not fully anticipated at the time of its introduction, AAMT line-based billing was applied inconsistently throughout the medical transcription industry and eventually renounced by the groups initially responsible for its development. Despite these issues, a number of companies in the industry have continued to use AAMT line-based billing, and some customers still request proposals and contracts based on the AAMT line. Like many medical transcription service providers, MedQuist once used the AAMT line unit of measure to calculate invoices for many of its medical transcription clients. It has been widely recognized and well documented throughout the industry, however, that the AAMT definition of a line is inherently ambiguous and subject to a wide variety of interpretations. In fact, no single set of AAMT characters was ever defined for this unit of measure. Accordingly, MedQuist began the process in 2004 of transitioning its AAMT line-based customers off the AAMT line unit of measure and, in April 2005, the Company completely eliminated the use of the AAMT line for billing and called on other industry transcription providers to follow its lead. Due to these AAMT line unit of measure ambiguities, and the disparity in its interpretation, health care providers have raised concerns regarding charges for transcription services by their respective transcription providers, including the Company. In response to those concerns, and to foster ongoing business relationships with its customers, the Company has approached certain customers and offered to resolve any issues related to their prior AAMT line and other billing related issues. The Company's Board of Directors has authorized Company management to make accommodation offers, up to an aggregate amount of $65.0 million, to certain customers to resolve concerns over AAMT and other billing related issues. As of December 31, 2005, (i) the Company has entered into agreements with certain customers who have accepted accommodation offers to resolve concerns over AAMT and other billing related issues, and paid or credited an aggregate amount of $20.5 million as an accommodation to those customers and (ii) additional accommodation offers have been made by the Company to certain other customers in the aggregate amount of $13.8 million. From January 1, 2006 through the date of this release, accommodation offers have been made to additional customers in the aggregate amount of $1.7 million. Subject to the previously mentioned authorization of the Company's Board of Directors, Company management currently intends to make additional accommodation offers in the future, although the timing and amount of such offers have not yet been determined and the Company's plans may change in the future. The accommodation offers do not represent in any way the Company's estimate of potential liability, if any, in any of the previously disclosed litigation or investigatory matters pending against the Company. The Company is unable to predict how many customers, if any, will accept the outstanding accommodation offers on the terms proposed by the Company, nor is the Company able to predict the timing of the acceptance (or rejection) of any of these outstanding accommodation offers. Until such offers are accepted, the Company may withdraw or modify the terms of the accommodation offers at any time. In addition, the Company is unable to predict how many of the future offers, if made, will be accepted on the terms proposed by the Company. The Company believes that its existing cash resources and cash flows from operations are sufficient to fund all of the customer accommodation offers it may make. By accepting the Company's accommodation offers, the customer must agree, among other things, to release the Company from any and all claims and liability regarding prior AAMT and other billing related issues. The accommodation offers made to date, and those offers which may be made in the future, are not an admission of liability by the Company of any wrongdoing or an admission or acknowledgement that its billing practices with respect to such customers were or are incorrect. -0- *T MedQuist Inc. - Preliminary and Unaudited Financial Information (in millions) ---------------------------------------------------------------------- Three months ended ----------------------------------- 12/31/2005 12/31/2004 ---------------- ---------------- Revenues (1) $ 96 $ 112 Operating loss (1) $ (78) $ 0 Cash (2) $ 178 $ 196 Debt (2) - Current $ 0 $ 25 - Long term $ 0 $ 0 Twelve months ended ----------------------------------- 12/31/2005 12/31/2004 ---------------- ---------------- Revenues (3) $ 411 $ 456 Operating (loss)income (3) $ (98) $ 25 Cash (2) $ 178 $ 196 Debt (2) - Current $ 0 $ 25 - Long term $ 0 $ 0 ---------------------------------------------------------------------- Notes: (1) Information presented for the three months ended (2) Information presented as of the date noted above (3) Information presented for the twelve months ended *T Three months ended December 31, 2005 Revenues: Preliminary, unaudited results indicate that the Company's revenues decreased from approximately $112 million for the three months ended December 31, 2004 to approximately $96 million for the comparable 2005 period. The decline in revenues is largely due to a decrease in the volume of lines transcribed primarily related to clients for whom we no longer provide transcription services. Additionally, while pricing pressures continue on the base transcription business, the pricing pressure has not had as great an impact on revenues during the second half of 2005 as it did in the first half. Management expects that pricing pressure will continue for the foreseeable future but that the introduction of several new sales and improved customer service initiatives will cause transcription volume to stabilize or improve in 2006. Operating Income: Preliminary results indicate that operating income declined $78 million from approximately $0 million for the three months ended December 31, 2004 to an operating loss of approximately $78 million for the comparable 2005 period. The operating loss was attributable to the following: restructuring charges ($4 million), audit fees in connection with the Company's 2003, 2004 and 2005 fiscal years ($4 million), asset impairments ($2 million) and $69 million in costs incurred during the three months ended December 31, 2005 related to the ongoing billing review, including: (i) customer accommodation payments and accruals ($60 million), (ii) legal fees incurred in connection with governmental investigations and proceedings and defense of the class action matters, and (iii) non-legal professional fees. Operating income in 2005 was also impacted by the $16 million decline in revenues over the same period. Fiscal 2004 results reflect $6 million in costs related to the ongoing billing review. Twelve Months ended December 31, 2005 Revenues: Preliminary, unaudited results indicate that the Company's revenues decreased from approximately $456 million for the twelve months ended December 31, 2004 to approximately $411 million for the comparable 2005 period. The decline in revenues is due to (i) a decrease in the volume of lines transcribed primarily related to clients for whom we no longer provide transcription services and (ii) reductions in transcription service rates due to pricing pressure in the medical transcription industry. Management expects that pricing pressure will continue for the foreseeable future but that the introduction of several new sales and improved customer service initiatives will cause transcription volume to stabilize or improve in 2006. Operating Income: Preliminary, unaudited results indicate that operating income declined $123 million from an operating income of approximately $25 million for the twelve months ended December 31, 2004 to an operating loss of approximately $98 million for 2005. The operating loss was attributable to the following: restructuring charges ($4 million), audit fees in connection with the Company's 2003, 2004 and 2005 fiscal years ($4 million), asset impairments ($2 million) and $101 million in costs incurred in 2005 related to the ongoing billing review, including: (i) customer accommodation payments and accruals ($65 million), (ii) legal fees incurred in connection with governmental investigations and proceedings and defense of the class action matters, (iii) non-legal professional fees, and (iv) costs associated with separation and replacement of the Company's management team, including members at the executive level. Operating income in 2005 was also impacted by the $44 million decline in revenues over the comparable period, which represents the impact of both the pricing pressures experienced most strongly in the first six months of 2005 and of volume declines throughout the twelve months ended December 31, 2005. Fiscal 2004 results reflect $15 million in costs related to the ongoing billing review. Balance Sheet Highlights: At December 31, 2005, the Company had $178 million in cash and cash equivalents and no debt. There were no additional issuances of capital stock or other securities for the twelve months ended December 31, 2005. The Company expects to incur significant costs and expenses in the future relating to the ongoing billing review, defense of the class action matters and governmental investigations and proceedings, and accommodation agreements. These costs and expenses include (i) legal fees relating to the SEC and Department of Justice investigations and proceedings, (ii) legal fees relating to defense and resolution of the litigation matters described above, (iii) customer accommodation payments and credits, and (iv) non-legal professional fees. The timing and level of these costs and expenses is, in many cases, not within the Company's control. While the Company is unable to predict the timing and level of these costs and expenses, the Company currently believes that it has sufficient resources, including cash on hand and cash flow from operations to fund these costs and expenses. However, there can be no assurance that unanticipated changes in the level of these costs will not exceed the Company's available cash resources, nor can there be any assurance that sufficient financing from external sources will be available to the Company on acceptable terms, if at all. In the event that the Company's cash requirements exceed its available cash resources, or if the timing of such costs and expenses requires the Company to divert cash resources away from operations, the Company may not be able to execute its operating plan, which could have a material adverse effect on the Company's business and results of operations. Other Developments Restructuring: As previously disclosed, in conjunction with the Company's movement to a single national service and support organization, a restructuring plan has been developed which consolidates approximately forty-eight (48) facilities and centralizes certain components of the business. The Company is expecting to incur restructure costs associated with this restructuring plan of up to $8.5 million and the restructuring is expected to generate annualized savings of approximately $18.5 million. Specifically, MedQuist has shifted resources to a single national service delivery and support organization for all of the Company's services and products, eliminating local service centers. This transition has resulted in the consolidation of approximately thirty-eight (38) facilities as of December 31, 2005, with ten (10) more scheduled over the next six months. The plan does not contemplate reductions of, and the Company has no current intentions to reduce, its medical transcription workforce. Rather, the Company will continue in its efforts to hire additional qualified transcriptionists. Further, although the Company is consolidating its local service centers as described above, customer-facing teams, led by account managers, will continue to coordinate customer support on the local level. The customer-facing teams will work with and be supported by the Company's centrally managed customer service organization.
M-Tec and The Andrews School Approved by AAMT/AHIMA [2005-11-02]
According to the AAMT web site,
Upon the recommendation of the AAMT Review Committee, the following medical transcription programs have been approved by the Approval Committee for Certificate Programs (ACCP), a joint committee established by AAMT and AHIMA for certifying and approving medical transcription education programs.
http://www.AAMT.org/ScriptContent/mtapproved.cfm
M-TEC offers quality distance education training for the novice, the healthcare professional wanting to make a career change, and continuing education programs for the practicing MT. Special discounts are available on continuing education and refresher products for AAMT members. The M-Tec Skillbuilding Wizard is available through the AAMT Store and offers 54 CECs to certified medical transcriptionists. This is also a great resource for companies offering continuing education classes for their employees.
The Andrews School has been providing quality medical transcription education and training since 1989. With what we believe to be the best program, instructors, and advisory staff in the MT community, the Andrews School has a proven track record, graduating thousands of students who have gone on to successful MT careers. The Andrews School offers distance learning opportunities via the Internet anywhere in the country. Graduates are able to work from home after completion of the program.
Related Links
Medical Transcription Program Approval Manual
Integrity [2005-10-11]
You're so right!! Outsourcing is really a dangerous business because it isn't about quality of patient care; it's all about money. I have been a medical Transcriptionist for 29 years and I have seen this profession devolve to that of a factory worker on a production line. Not that there's anything wrong with working in a factory, but we have a much more grave responsibility upon us because what we put in a report, if incorrect, can potentially cause harm or even death to a patient. This fact alone motivates me to give meticulous attention to make sure I get it right, even if it takes long periods of listening and re-listening and lots of research to do so. We need to stop and think, if this were my mother, my father, my loved one, or myself, would I want someone to be racing through the process of transcribing a history and physical, consultation, operative report, or any other medical report to see how many lines can be produced for the day?? If this is what we've devolved into, then it's time for me to get out of this profession because I refuse to be driven by how many lines per hour I can transcribe versus the quality and accuracy of what I transcribe.
There are so few who really understand, especially in management, what being a really good medical transcriptionist entails. Transcribing medical dictation and doing it accurately requires a tremendous amount of knowledge, skill, and research, as well as paying attention to the smallest of details in order to prevent harm to patients. I fear we're headed in a very dangerous direction. The fact that an organization like AAMT ascribes to this line-count/productivity mentality baffles me. Patients' health and lives should be our top priority and we should be so very careful not to misinterpret what a doctor is dictating. This often involves a lot of painstaking effort, but it's worth the time it takes to get it right.
Dictaphone Expands ichart Speech-Certified [2005-09-09]
Dictaphone Expands ichart Speech-Certified Transcription Network; Responds to Increasing Demand with Certification Program and Call for Additional Transcription Partners
American Association for Medical Transcription (AAMT)
Annual Convention and ExpoHONOLULU--(BUSINESS WIRE)--Sept. 6, 2005--Today at the American Association for Medical Transcription (AAMT) Annual Convention and Expo, Dictaphone announced the creation of the healthcare industry's first Speech-Certified Transcription Network in response to the substantial growing demand for its ichart(R) Managed Services solutions. ichart Managed Services combines Dictaphone's industry-leading speech recognition technology with transcription services performed by Dictaphone's Speech-Certified Transcription Network, which has been trained to edit on the company's speech recognition platform. This combination of labor and technology delivers lower-cost, high-quality medical transcription with rapid turnaround. All Dictaphone transcription service partners are required to pass its rigorous certification program to ensure even higher levels of service excellence and proficiency in speech recognition editing.
ichart Managed Services is quickly proving what we suspected when we introduced the product less then one year ago: that using speech recognition to drive down the enormous costs and improve the quality of transcription is the future of medical documentation outsourcing, said Don Fallati, senior vice president of marketing for Dictaphone. The overwhelming response we've had from the market is driving us to create the first Speech-Certified Transcription Network, offering our clients the most talented and best-equipped group of 'speech recognition-enabled' transcription service providers.
Speech-Certified Transcription Providers are thoroughly trained, evaluated and benchmarked against specific industry-standard quality, speed and customer service metrics. Those that meet the strict criteria will receive certification and will be reevaluated quarterly to ensure continued adherence.
Tamara Brown, president and CEO of Encompass Medical Transcription, Inc., a member of Dictaphone's Speech-Certified Transcription Network, said, ichart has allowed us to increase the volume of work Encompass can do with our existing staff and enabled us to train new medical transcriptionists to generate high-quality reports at a higher level of productivity. Headquartered in Wisconsin, Encompass is a U.S. medical transcription company that employs only U.S.-based medical transcriptionists.
We welcome and encourage other medical transcription companies to join the Speech-Certified Transcription Network, Fallati said. The interest we've seen from potential partners wanting to participate in the program has been significant and reflects the broad momentum in our industry for acquiring the skills associated with speech recognition.
About Dictaphone's ichart Managed Services
Dictaphone's ichart Managed Services offering aims to meet the needs of organizations currently relying heavily on outsourced transcription but who are attracted to the savings that can be generated by speech recognition. The program blends Dictaphone technology with transcription services performed by Dictaphone's Speech Certified Transcription Network who have been trained to edit on the company's speech recognition platform. Customers receive a blended line rate covering work that is transcribed traditionally as well as documents edited from speech recognition. Frequently, significant savings can be achieved by healthcare organizations over current line charges.
About Dictaphone Healthcare Solutions Group
Dictaphone is the world's largest supplier of dictation, transcription and speech recognition systems and services that simplify and enhance the production and management of paperless electronic patient information. Through the integration of speech recognition and natural language processing within existing health information management workflow, Dictaphone systems are helping healthcare organizations save money and improve patient care by increasing the speed, accuracy and usability of their medical documentation. For more information, please visit www.dictaphone.com or call 1-888-350-4836.
(MTIA): Billing Method Principles Beacon Award Finalists [2005-08-12]
Medical Transcription Industry Association (MTIA): Billing Method Principles Beacon Award Finalists and Winner Announced
Two years ago, a set of Billing Method Principle Statements were designed to provide a means to evaluate any medical transcription billing method, or internal transcription cost accounting method, whether existing or proposed. These Principle Statements do not, in and of themselves, suggest or intend to suggest any preferred billing method. Rather, they seek to acknowledge and preserve a creative, broad spectrum of methods while simultaneously reaffirming strong fundamentals on which the medical transcription industry can flourish.
The Billing Method Principles are Verifiability: A medical transcription billing method should be subject to verification with such verification being available to parties to the transaction. Definability: A medical transcription billing method should accurately define all measurements and be free from definitional ambiguity. Measurability: A medical transcription billing method should allow for complete understanding of the formulas used in its calculation and result in a clear and concise invoice. Integrity: A medical transcription billing method should be fair and honest, resulting in invoices that accurately reflect and charge for services rendered. Consistency: A medical transcription billing method should be generally reliable and consistent in its application.
Companies competing for the Beacon Awards were scored on their description of the BMP approach, i.e., their marketing, sales and support activities, operational components, technical components, business components, case studies, and references. Based on these criteria, a distinguished panel of judges from AAMT, AHIMA, and MGMA scored Cymed, Inc. as the overall winner of the 2005 Beacon Award.
MTIA's Beacon Awards demonstrate their (MTIA's) commitment to a standard of integrity in the relationship between transcription service and client. Sandy Fuller, Executive Vice President and COO of AHIMA, and a member of the panel of judges.
The Beacon Award should not be interpreted to recognize or offer any opinion on the winner's competency, integrity or service capability--it is solely an evaluation of their description of their BMP approach and their client reference comments.
MTIA congratulates the companies who were chosen as finalists: Acusis 2nd Runner Up, Webmedx 3rd Runner Up, and DRC 4th Runner Up.
MTIA is a nonprofit membership association founded in 1993 to represent medical transcription companies of all sizes. For more information about MTIA, contact Elaine Olson, Executive Director, at 800-543-MTIA or eolson@mtia.com.
MedQuist Announces Key Findings of Independent Review [2005-08-05]
MedQuist Announces Key Findings of Independent Review of Client Billing
MT. LAUREL, N.J., July 30 /PRNewswire-FirstCall/ -- MedQuist Inc. (MEDQ.PK), a leading provider of electronic medical transcription, health information and document management services, today announced the key findings of an independent review of the company's billing methods. The findings were presented to the company's Board of Directors, which initiated a broad program of changes and reforms to the company's business practices. The Board of Directors also took disciplinary action against certain company employees.
The Board of Directors announced today changes in its senior management. Howard S. Hoffmann, an experienced and accomplished interim manager, has been appointed as MedQuist's interim CEO with a clear mission to implement the changes and reforms to the company's business practices, including its billing practices, and to bring the company current in its SEC filings. Steve Rusckowski, who had temporarily assumed the CEO position in December 2003 in addition to his Board position and led the company through the difficult period of the independent review, will continue as a member of the MedQuist Board. The Board also announced that it has accepted the resignations of its Chief Financial Officer, Brian Kearns, and its Chief Legal Officer, John Suender.
This was an extremely thorough and comprehensive review that has clearly identified areas in which we must make changes and improvements, said Scott Weisenhoff, the lead Director on the review.
Added Howard S. Hoffmann, who is also a principal and partner at Nightingale Associates, LLC, of Stamford, CT.: Our priority mission now is to work with our customers to clarify and, where appropriate, rectify any problems, make the needed changes and reforms internally, and become current in our SEC filings. The changes we are making address a pressing industry challenge and our goal is to ensure that billing methods are reliable, accurate, measurable and verifiable to customers using transcription services. We hope that our actions will encourage other medical transcription companies to address the challenge presented by AAMT line-based billing methods.
Review Findings
The review, conducted for the Board of Directors by Debevoise Plimpton LLP and PricewaterhouseCoopers LLP, identified a number of issues regarding the company's billing practices. The review found that with respect to its contracts that called for billing based on the AAMT line, the company used ratios and formulas to determine the number of AAMT transcription lines for which clients were billed rather than counting the number of relevant characters to determine a billable line as provided for in the contracts. With respect to these contracts, the company's use of ratios and formulas as a surrogate for counting was generally not disclosed to the clients. In addition, a company employee explained inaccurately to KPMG LLP (KPMG), the company's outside auditors, the computation of AAMT lines on one of the company's major transcription platforms. The use of ratios and formulas caused some clients to be billed more and some to be billed less than if the counting method provided for in the contracts had been used. In addition, the ratios and formulas for certain client accounts were changed by the company, generally without disclosure to clients, in order to affect profit margins. Due to the ambiguities inherent in the AAMT line definition and the limited extent of the information available to the company for earlier periods, the company is unable at this time to determine with any reasonable certainty the aggregate amount of overbilling.
The AAMT line definition was originally developed in the early 1990s by three major medical transcription industry groups, including The American Association for Medical Transcription (AAMT). They defined a line as 65 characters and also defined the term character to include such things as macros and function keys. However, these definitions turned out to be inherently ambiguous and difficult to apply in practice. AAMT itself withdrew its endorsement of these units of measure in 1998. However, many buyers of transcription services have continued to purchase transcription services and issue requests-for-proposals that ask for quotes in AAMT line units.
The review concluded that the rationale for using the ratios and formulas was to adopt a consistent and commercially reasonable billing method, given the lack of common standards in the industry and the ambiguities inherent in the AAMT definition. The review found no evidence that the amounts MedQuist billed clients, in general, were commercially unfair or inconsistent with what competitors would have charged. Moreover, MedQuist has been able to attract and retain clients in a competitive market.
The next step for the company is to assess the financial impact on customers and on MedQuist. When the financial assessment has been finished and KPMG has completed its consideration of the review findings, and pending any additional work KPMG may believe appropriate to do as a result of the findings, MedQuist anticipates that KPMG will then be able to complete its audit of the company's 2003 financial statements and its review of MedQuist's interim quarterly results. Until KPMG's audit and review have been completed, MedQuist will be unable to finalize its financial statements and file its Form 10-K for the year ended December 31, 2003 and its Form 10-Q for the quarter ended March 31, 2004. The company also will likely not be able to file its Form 10-Q for the quarter ended June 30, 2004 in a timely manner. Because the company has not yet completed its financial assessment and the results have not been reviewed by KPMG, MedQuist is unable at this time to estimate with any reasonable certainty the effect that the review of its billing practices may have on its reported revenues, results of operations and financial position.
MedQuist has also been informed by the staff of the Securities and Exchange Commission that the SEC has opened a formal investigation of the company. The company will continue its efforts to cooperate with the SEC, as it has since it voluntarily advised the SEC of the company's review of its billing methods.
Business Practice Reforms and Management Changes
The Board of Directors has outlined a broad program of business practice changes and reforms that will be instituted beginning immediately. Highlights include: * Enhance a mandatory and formal ethics training program that was
recently instituted.
* Accelerate an existing program that is migrating clients from several
disparate legacy billing platforms to the company's new platform,
DocQment Enterprise Platform, or DEP. The company intends to utilize
only consistent, client-verifiable billing units of measure.
Additionally, the company will meet with clients currently billed on
the basis of an AAMT line definition to determine an alternate and
verifiable unit of measure acceptable to the client pending their
agreement to convert to the new platform. MedQuist has succeeded in
converting approximately 35% of its transcription revenue to DEP.
* Develop definitive and clear protocols for count methodology and
billing, institute periodic internal audits and new reporting
mechanisms to make sure all billing systems are in accordance with
client contracts.
* Reform the contract review and administration process to clarify any
ambiguous terms with respect to units of billing, and develop a
centralized contracts administration database to track compliance with
client contracts.
* Expand the customer feedback system to allow entry, by any employee, of
customer comments and complaints.
* Assign a Chief Compliance Officer to develop, maintain and enforce
compliance with all company policies and procedures.
The Board also took disciplinary action against five MedQuist employees. Said Gregory Sebasky, MedQuist's President: We believe that we have done what is necessary and appropriate in light of the results of the review. We will continue to build a strong and motivated organization and continue MedQuist's commitment to a high standard of ethics and customer satisfaction.
Statements in this press release that are not historical facts are forward-looking statements within the meaning of the securities laws and regulations. These include statements regarding becoming current in SEC filings, solidifying relationships with our customers and any other expectations or anticipated events. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially.
Health Care Associations Judge CyMed as Nation's Top [2005-08-02]
Health Care Associations Judge CyMed as Nation's Top Transcription Service Provider; Representatives from AHIMA, MGMA and AAMT select CyMed for MTIA Beacon Award RICHMOND, Va.--(BUSINESS WIRE)--Aug. 1, 2005--CyMed, Inc. was honored today with the first ever Beacon Award for service excellence and billing clarity by the Medical Transcription Industry Alliance (MTIA). The award was established by the MTIA Billing Methods Principles (BMP) committee to recognize the industry's top outsourced service provider who demonstrates application of the BMP pricing ideals of verifiability, definability, measurability, consistency and integrity. MTIA, which serves the interests of more than 1,000 national competitors, recruited senior executives from the American Health Information Management Association (AHIMA), the Medical Group Management Association (MGMA), and the American Association of Medical Transcriptionists (AAMT) to judge the competition between the market's top vendors.
CyMed's case study and references made the difference, noted Scott Faulkner, MTIA's BMP committee chair and ex-officio member of the judging panel. MTIA is proud to represent an alliance that includes many strong and ethical transcription service providers, but in the end, it's how well you satisfy the interests of the customers that really matters. CyMed came out on top of this year's competition simply because their clients convinced the judges that they earned it.
Although we have received numerous recognitions for our technology and business growth, being selected as the winners of the first Beacon Award is special because many of the evaluation criterions were based on actual client experiences, commented Robert Lynch, CyMed's President and CEO. Since AHIMA, MGMA and AAMT represent our clients and employees respectively; we feel their recognition of us as MTIA's top transcription service provider brings credibility to our Six Sigma approach and confirms our market leadership with respect to customer satisfaction.
About CyMed
CyMed provides economical outsourced medical transcription and records management services through proprietary processes based on Six Sigma quality management principles and applied industry leading technology. Health care providers rely on the company to cost-effectively convert recorded free-form medical dictation into electronically formatted patient records. Headquartered in Richmond, VA, CyMed is a portfolio company of Hagerty Peterson Company, LLC (www.HagertyPeterson.com). For more information on CyMed, visit www.cymedinc.com, email info@cymedinc.com, or call 800-456-8951.
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