|Does bin Laden have US Army medical files?
Asheville woman blows whistle; MedQuist denies story
Could Osama bin Laden and other terrorists have access to the medical records of thousands of retired and active duty American military personnel? That's one possibility according to a story of overseas outsourcing, broken promises, corporate intimidation and massive technological failure told by Susan Purdue, a former employee of the MedQuist medical transcription company. (A full interview will air Sunday afternoon from 1 until 4 p.m.on WWNC-AM 570.)
Purdue said MedQuist, had contracted with the Veterans Administration to transcribe voice dictation from doctors at Veterans Administration Medical Centers around the world. According to Purdue, some of this transcription work has been done by offshore workers in India and Pakistan. Purdue says American transcriptionists are paid 10 to 12 cents per line. Companies in India and Pakistan will do an entire page of notes for less than 25 cents. MedQuist's Web site notes the company has "10,000 US/based transcribers." No mention is made of overseas workers.
The Tribune contacted MedQuist for comments on the allegations raised in this story. According to Dale Iorillo, Executive Vice President of MedQuist's Eastern Division: "In response to your question on whether MedQuist outsources the processing of military medical records offshore, the answer is categorically no. The company does not send medical information of any kind related to VA patients offshore. All of those records are maintained in the U.S."
MedQuist is listed at MEDQ on the NASDAQ and is 71 per cent owned by Netherlands-based Royal Phillips Electronics. Purdue was one of the first Asheville area employees for MedQuist and its predecessor, MedTran. The local office closed this week.
Purdue served as the Asheville office's computer systems administrator. As such she routinely saw transcribed files that were being transferred back to the company's file servers. She said she first noticed something was wrong shortly after the terrorist attacks of September 11, 2001. "I noticed documents coming through the system that were dated 12 to 14 hours in the future. I couldn't understand that. We had a company rule that we would provide a 24 hour turnaround. Accurate time stamping was critical. When I asked management where those files were coming from I was told they were offshore stuff. I thought Bermuda or the Bahamas. They said no, it was India and Pakistan."
Realizing the Veterans Administration hospital system was one of the firm's largest customers, Purdue said she asked, "Are veterans records being transcribed in India and Pakistan?" Purdue said her manager told her to mind her own business, get back to work, do her job. "I assumed it was private work coming in and for a while I ignored it."
The situation changed in January 2002 when she saw a file that contained areport from an American soldier who had been shot in leg in Kandahar, Afghanistan. "He was telling his doctors where he had been, what unit he was with, what weapons he had been firing and said he wanted to get back because his unit was being redeployed to the Korean DMZ."
Purdue said she realized this was the file of an active duty soldier and contacted the Veterans Administration Central Office. She learned that MedQuist was doing the physicals for all the pilots and many other soldiers and airmen that were going overseas. These files contained vital information such as name, rank, home address, names of relatives, current duty station and locations to which records should be sent including upcoming overseas assignments.
If released to the wrong hands, this data could jeopardize missions, endanger families and provide other vital information to the Taliban, Al Qaeda or other regimes including Iraq and North Korea.
Purdue said she raised her concerns with a corporate vice president at the company's national technical meeting in Atlanta in April, 2002.
"We were sitting at a table with several other corporate and regional company officials. This one VP said, 'Sue, I'm a veteran, too. Sometimes we have to go along to get along. Don't let your ethics ruin a perfectly good career.' Everybody heard what he said. Nobody said anything."
Purdue emphasized the significance of keeping American service records in the U.S. by recounting the story of a Pakistani transcriptionist who allegedly threatened to post medical records on the Internet unless she was paid by her employer. "She certainly knew the value of this information. There existed a very real possibility that terrorists can use these records to target the service member's families, as well as steal the identity of service members. A service member could be captured and his or her captors could know more about the service member then he or she knows about themselves."
After being rejected by MedQuist management, Purdue contacted the VA Network Operations Center in Martinsburg, VA, and spoke with the chief of operations, Od White, from Asheville. She said she also spoke with Cynthia Burkes with the security branch of the VA. They all said, "You're in trouble, you need a lawyer."
Recounting her story during a telephone interview, Purdue's voice suddenly dropped to a whisper. Her husband, Paul, is an Irish citizen who is in the U.S. on a green card. She is afraid of what may happen to them. "I should have gone to the FBI sooner than I did," she said. "I'm afraid. Paul might be deported and I'm going to disappear."
Purdue contacted a local lawyer, Susan Lewis, who sent her to Mike Matthews, a labor lawyer in Charlotte. "I told him the story and he freaked out," Purdue recalled. "He contacted the National Security Agency, the FBI, and the Dept. of Homeland Security. Then he said I needed a criminal lawyer to get federal immunity from prosecution."
Purdue's next attorney was Sean Devereux of Asheville. Together with her husband Paul, Susan and attorneys Lewis and Devereux, met with FBI on August 7, 2002. Purdue said she provided complete documentation of the overseas outsourcing including patient lists, phone logs of who she talked to; e-mails and internal e-mails from the company that instructed her not to talk to anyone about this.
The FBI said they would investigate. But after several months nothing happened. Purdue said Matthews told Purdue she would have to notify her employer in order to protect herself. On Sept. 16, 2002, she did so with an e-mail message notifying them that she had met with FBI.
What followed was a year of what Purdue feels was intentional persecution from local and corporate management. Because she had notified her employer she said she was protected from dismissal by federal whistle blower statutes. According to Purdue, these regulations did not prevent her from being ostracized.
"My office was in the computer file server room. We had computers generating heat and they turned off my air conditioning. During the summer it was 100 degrees in there. I'd go into the break room and conversations would stop. People would start whistling or leave. No one would speak to me."
In desperation, Purdue said she faxed a letter to the White House and to the President of the VFW. She also sent one to Senator John Edwards, whose office got the EEOC involved. "They told me they only protect you if it's sexual, age or disability. There's nothing for whistle blowers."
Purdue also tried NC and US Departments of Labor. "They had no idea what to do; they referred me to administrative law judges. The judge told me I was protected by Sarbanes-Oxley. OSHA said I should file a complaint."
In April 2003, Purdue finally contacted OSHA. "I was at the end of my rope. As soon as MedQuist received notice of my claim they gave me a $500 per week raise, turned the A/C back on and put the lock on my door again so I could lock it. They also resumed inviting me to staff parties."
OSHA dismissed the claim. The OSHA investigator told Purdue, "I'm not saying the retaliation didn't happen, I'm just saying you can't prove it."
After the dismissal, MedQuist's regional vice president called her at home on February 12, 2004, and said, "Tomorrow's your last day at the office."
The Asheville MedQuist office at 932 Hendersonville Road closed March 31. According to a manager who was in the office, no one was fired, no one was laid off and there were no transcriptions being conducted in India or Pakistan.
The Sarbanes-Oxley Act of 2002 to which Purdue referred was passed by congress in the wake of the Enron financial failure. It protects financial whistle blowers and prevents companies from shredding or otherwise disposing of documents during an accounting inquiry. It also requires that financial statements filed with the SEC be certified by the CEO and CFO.
If Purdue's allegations of overseas outsourcing are confirmed, she said they may have created so much profitability on MedQuist's government contracts that the contract might be considered procurement fraud. Nearly coincidental with her disclosures, MedQuist announced on March 24 that "it will not be able to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2003 with the Securities and Exchange Commission (SEC) by the March 30 extended filing deadline."
MedQuist's president, Gregory M. Sebasky, issued the following statement in response to the Tribune inquiry regarding the delay in releasing financial statements: "As to the possible billing irregularity issues at MedQuist, the internal review will provide a clear picture of the situation and we cannot comment further until such time as the review is completed. The potential irregularity was identified by one of our employees who brought this to our attention as part of our management controls. The most important issue here is that we want to ensure that the review is conducted accurately and thoroughly - no matter how long the process takes.
We have a very large customer base, and by virtue of that fact alone, it will take time for a comprehensive review to be completed."
Meanwhile, whistle blower Susan Purdue is looking for a new job. Her major concern is that her husband may be deported. She also hopes that Senator Edwards can get Congress to investigate MedQuist's transcription practices for Veterans Administration contracts, and what she believes is the retaliation aimed at her because of her honesty and conscience.
Purdue said she has spent her life savings on legal fees while the government has done nothing to protect her.
Recognizing that MedQuist denies the allegations it is too soon to judge. But if Purdue's allegations are confirmed, thousands of American soldiers, veterans and their families will be safer because one American citizen had the guts to come forward and do the right thing.
This special report filed by Bill Fishburne for The Tribune. Copyright 2004
Bill Fishburne is a co-founder of The Asheville Tribune and operates Fishburne Communications, a public relations agency. He hosts the Bill Fishburne show on WWNC-AM 570 Sunday afternoons, 1-4 p.m.
_____________________________________________________________________________________________________________MedQuist Clams Up
Company fails to Respond to Questions; New SEC filings Indicate Stock Listing in Jeopardy
The Asheville Tribune and I apparently have been put on a "do not contact" list following last week’s disclosures regarding possible
outsourcing of Veterans Administration medical transcriptions to a company in India.
MedQuist, a NASDAQ listed company in New Jersey that is 71 percent owned by the Dutch company Royal Phillips, closed its Asheville office last week and laid off the system administrator who had accused them of outsourcing Veteran’s Administration medical records overseas.
On March 24 the company announced it would fail to meet the Security and Exchange Commission’s extended deadline of March 30 for filing its Annual Report on the required 10K form. On March 31 the NASDAQ responded with notification to MedQuist that they would be de-listed from the exchange on April 8 unless they filed an appeal. Also, MedQuist’s trading symbol was changed from MEDQ to MEDQE to indicate their out-of-compliance status.
MedQuist promptly filed the appeal and issued proper notification with an SEC 8K report. The appeal provides MedQuist up to six weeks of additional time to prepare the 10K or to explain why they cannot provide financial statements. If they are de-listed due to a lack of financial information they would also be excluded from trading in the Over The Counter (OTC) market.
None of this has been picked up in the mainstream media. But many other worms in the medical transcription can have come to light.
David Lazarus, columnist for the San Francisco Chronicle, independently came up with other examples of questionable outsourcing of medical transcriptions to companies in Pakistan and the Philippines. A Website www.privacyforvets.com had 30,000 hits after The Asheville Tribune posted the story on its Website. I had whistle blower Susan Purdue on my Sunday afternoon talk show on WWNC-AM 570. She also appeared on the Web-based morning radio program, www.thepowerhour.com hosted by Joyce Riley.
While working on that story we spoke with a public relations representative at Ruder Finn, Inc., the agency representing MedQuist. The young lady obtained two denials from the firm in short order and we included them in the story.
But when we got back to her with follow-up questions we received no reply.
The nature of our questions may be considered provocative but the company’s denials were issued in the present tense. There was no statement denying that what Purdue alleged happened was untrue. For the record, here are some of the questions MedQuist won’t answer:
Are you aware of the allegations (Susan Purdue) has made regarding outsourcing medical transcription overseas?
MedQuist’s Web site says there are 10,000 US/based MedQuist transcriptionists.
Are there any who do MedQuist work overseas?
If so, did any work for MedQuist on VA medical records? If so, how do you guarantee confidentiality of the data? If so, How do you comply with HIPPA regulations?
Does MedQuist have transcribers in India? Pakistan?
Have you ever? When? If in the past but not now, when were they discontinued? Have military transcriptions been outsourced overseas? Do you think it is a security risk to outsource to transcribers in those countries?
What impact could overseas outsourcing of military records have on your relationship to government agencies such as the Veterans Administration or other medical organizations?
What specific allegations of improper billing have been brought to the board’s attention? Would this include the possibility of federal charges of "procurement fraud" due to excessive profit margins due to overseas transcriptions under federal contracts?
Has MedQuist been investigated by the FBI or any other regulatory or criminal agency regarding these allegations?
Was the company’s decision to delay release of the 10-K annual report prompted by concerns over possible criminal liability under the
Sarbanes-Oxley Act of 2002?
Finally, it is our understanding that Susan Purdue has invested her life savings in defending herself during her testimony on legal fees. If the company’s Board of Directors internal audit substantiates Susan Purdue’s charges, will she be compensated for bringing the problems to management’s attention?
But those weren’t the best questions. I saved them for last:
Questions for Gregory M. Sebasky, new MedQuist
President and CEO: Are any MedQuist loans, notes or other financial
instruments dependant upon maintaining listing on the NASDAQ, or being
able to be traded in the OTC market? Please provide a list of insider
trading since the date of Susan Purdue's e-mail notifying management
she had contacted the FBI, on Sept. 16, 2002. This list should cover
all current and former corporate executives and those
considered by the SEC to qualify as "insiders."