MedQuist Hit with Class Action By Greenberg Traurig; Hospitals, Defrauded by Nation's #1 Medical Transcription Service, Rush to Join Class

Business Wire, Oct 4, 2004

WASHINGTON -- "Over bill rates reached as high as 50% on some invoices," says Investigator; Suit is the First to Use Consumer Fraud Laws by Companies Against Another Company

Florida's South Broward Hospital District and international law firm Greenberg Traurig LLP announced today they have brought a class action suit against MedQuist (MEDQ.PK), a publicly-traded company based in Mt. Laurel, New Jersey and the world's #1 vendor for electronic medical transcription services, following an independent investigation of MedQuist's billing procedures.

Delisted from NASDAQ June 16, MedQuist identified accounting errors following the complaints of an employee. In its public statements, in late July, the company detailed the results of an independent audit by Debevoise & Plimpton LLP and Pricewaterhouse Coopers which found some hospital clients were overbilled for transcription services. As a result of the investigation, MedQuist replaced their CEO and fired their chief financial officer and chief legal officer. The Securities & Exchange Commission has also launched an investigation of the company.

SSI Advisors, a management consulting company headquartered in New York, spent almost a year for one large hospital system evaluating MedQuist's over billing problem. Based on invoices reviewed, SSI Advisors' principal, Jeffrey Litvack, found through their analysis that the MedQuist over bill rates reached as high as 50% on some invoices and estimated a loss exceeding ten (10) million dollars to the hospital system. Mr. Litvack can be reached at jlitvack@ssiadvisors.com.

The class action has been filed in the United States Central District of California by the international law firm Greenberg Traurig LLP who charges that MedQuist "knowingly and fraudulently overcharged for transcription services."

"MedQuist's fraud and over billing was intentional and that the fraudulent invoicing was designed specifically so that it was nearly impossible for the customers to trace the actual costs of the services provided," said Mark Hogge of Greenberg Traurig's Washington, D.C. office.

The class is expected to grow as it's anticipated that as many as 4,600 hospitals nationwide and in Canada are clients of MedQuist and that the losses due to MedQuist's fraud are expected to be quite significant. The class action is expected to be one of the largest ever taken by corporations and one of the first to use consumer fraud laws by companies against another company.

MedQuist is the single largest transcription company in the world.

About Greenberg Traurig LLP

Greenberg Traurig LLP is an international, full-service law firm with more than 1,400 attorneys and governmental professionals in 24 offices in the United States and Europe. The firm is ranked No. 10 as reported in The National Law Journal's listing of the largest law firms in the U.S. Greenberg Traurig offices: Albany, NY; Amsterdam, The Netherlands; Atlanta, GA; Boca Raton, FL; Boston, MA; Chicago, IL; Dallas, TX; Denver, CO; Fort Lauderdale, FL; Los Angeles, CA; Miami, FL; Morristown, NJ; New York, NY; Orange County, CA; Orlando, FL; Philadelphia, PA; Phoenix, AZ; Silicon Valley, CA; Tallahassee, FL; Tysons Corner, VA; Washington, D.C.; West Palm Beach, FL; Wilmington, DE; and Zurich, Switzerland. For additional information, visit the firm's Web site at www.gtlaw.com.