Since MQ did not consistently use the formula systems it was hard to identify

done. They acknowledge what they did on their web site.

That they did not do what they had contracted with their clients (hospitals) and things like that.

__________________

"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 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.

..."

http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=MEDQ&script=410&layout=-6&item_id=599205

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