WebMD Execs Charged With Accounting Fraud

January 15, 2006

Dec. 19, 2005 â€” The Justice Department charged 10 former executives of the

former Medical Manager Health Systems Inc., a former unit of WebMD Corp., with

conspiring to fraudulently inflate the reported earnings of Medical Manager

by over $16.8 million between 1997 and 2001.

____________________________________

Among those charged is former Medical Manager CEO Mickey Singer, 58, and

former CFO Lee A. Robbins, 64. Both are charged with conspiracy to commit mail,

wire, securities fraud, and money laundering.

The government charged that the executives used " round-trip " transactions to

create fraudulent revenues.

" Corporate executives are bound by the law to provide truthful information

about their company's finances to the investing public, " said Alice S. Fisher,

assistant attorney general in the Justice Department's criminal division, in

a statement. " The marketplace requires honest, full disclosure and

accountability. The Justice Department will continue to aggressively pursue

those

executives who choose criminal fraud over responsible financial reporting as

their

way of doing business. " '

Medical Manager was based in Tampa, Florida, from 2000 to 2005. It is now

known as Emdeon Practice Services, a partIof Emdeon Corp., and is based in

Elwood Park, N.J.

WebMD's public offering could bolster â€˜mother ship'

By _Rick Ramseyer, Contributing Writer_

(mailto:rick.ramseyer@...)

09/01/05

(ELMWOOD PARK, NJ) -- Emdeon Corp.'s plans to take its WebMD Health division

public could be just what the doctor ordered to boost the company's

investment value.

Emdeon â€“ which in August changed its corporate name from WebMD to avoid

confusion with its health division â€“ intends to make an initial public

offering

of stock this fall for WebMD Health, which provides information services for

consumers, clinicians, employers and health plans through online portals and

publications.

" Essentially they didn't believe the stock (Nasdaq: HLTH) was receiving full

credit for the value being created in the division, " said Kumpel,

senior vice president of healthcare equity research for Friedman, Billings,

Ramsey & Co. in Arlington, Va. " So earlier this year they stated emphatically

they

were going after an IPO of 10 percent to 14 percent of the value of [WebMD

Health] as a minority carve-out of ownership interest. "

Emdeon thus will own up to 90 percent of WebMD Health stock â€“ expected to

trade separately on Nasdaq under the symbol WBMD â€“ and will benefit if the

IPO

is a home run.

" Theoretically, if WebMD does particularly well in the aftermarket, it can

act like a rocket to pull up the mother ship, " Kumpel says.

" This has little or nothing to do with healthcare per se, " says Brown,

vice president of Forrester Research in Cambridge, Mass. " Here's a stock that

a lot of people bought in the go-go years of e-health. Like many of these

companies, they wobble around and investors say, â€˜Hey, where's my value?' And

one strategy is to take a high-profile component of the company, one that

people feel is undervalued, and separately price it in the equity market. "

Analysts also cite the significance of a three-year agreement that calls for

WellPoint â€“ the largest U.S. health insurer â€“ to integrate WebMD Health

applications into WellPoint's member portals " to provide disease-management

tools, offer risk assessments, store self-reported health information and

generate customized personal health news, " according to a Friedman, Billings,

Ramsey

research report. " This deal shows the strategic value of WebMD's tools as

more corporations consider consumer-directed health plans. "

Study Questions Reality of 'Toxic Mold' Illness

Researchers Found Other Explanations for Sickness By _Salynn Boyles_

(http://www.webmd.com/content/Biography/7/1756_53655.htm)

WebMD Medical News Reviewed By _Brunilda Nazario, MD_

(http://www.webmd.com/content/Biography/7/40428.htm)

on Friday, September 30, 2005

Sept. 30, 2005 -- Thousands of lawsuits have been filed in recent years by

people who say exposure to mold in their homes or workplaces made them ill.

Now a medical review of 50 cases that ended up in court shows little evidence

to support the claims.

Researchers reported that in every case, other medical causes could be

identified to explain the illnesses believed to be caused by the condition that

has come to be known as " toxic mold syndrome. "

They concluded that no credible medical evidence has emerged to link mold

exposure to the wide range of serious medical conditions associated with toxic

mold syndrome_toxic mold syndrome_

(http://www.webmd.com/content/article/101/106072.htm) .

" We know that mold can make people sick if they end up in the foods they

eat, " Oregon Health & Science University professor of medicine Emil J. Bardana

Jr., MD, tells WebMD. " But there is little evidence that inhaled environmental

mold exposure can cause the serious illnesses_little evidence that inhaled

environmental mold exposure can cause the serious illnesses_

(http://www.webmd.com/content/article/99/105412.htm) that have been attributed

to it. "

December 15, 2004

Dealing With SAIF - Sick and feeling like a criminal

by Mason, KATU News

Salem, Ore. - Westmoreland says she's used to feeling sick, out of

money and unable to work. The hard part she says is being treated like a

criminal.

Westmoreland says battling what her doctors call a toxic reaction to mold,

has been debilitating. But worse than all that, the 44-year teacher is being

treated like a crook by the State Accident Insurance Fund (SAIF) " like I'm

trying to get something from someone, " she says.

The accusations come from what's known as IME's, independent medical exams

that SAIF officials use to weed out false claims against the insurer.

Westmoreland may have real reasons to suspect the bias of the exams.

A survey just released by The Department of Consumer and Business Services,

a regulating agency; found 53 percent of IME doctors thought there was bias

in the work they did.

_ Mason's First Report_

(http://easylink.playstream.com/katu/team2/041215mason_saif_inves_p1.wvx)

_Watch Part 2 _

(http://easylink.playstream.com/katu/team2/041215mason_saif_inves_p2.wvx)

After linking memory loss, muscle coordination and flu-like symptoms to a

severe reaction to mold in her classroom nearly two years ago, Westmoreland has

found herself in a treacherous netherworld between medicine and law where

every victim is a suspect and every claim a potential legal battle.

Such are the chances you take when you claim you got sick or injured on the

job in Oregon. But now, it's a world getting added scrutiny from state

regulators in Oregon as well as state senators like Eugene's Vicki .

" There are starve-out tactics that are being used, " says . " Delaying

claims so these people can't put food on their table and can't pay their bills

- so that they're forced to sign agreements. "

has been a critic of SAIF for more than a year, from the way it paid

exorbitant consulting fees to former governor Neil Goldschmidt, to the way

she says SAIF mishandled public records.

SAIF officials say they only deny 17 percent of all claims, and the new head

of the agency, Rocklin is quick to defend the agency.

" We pay claims promptly and we treat injured workers responsibly, " says

Rocklin.

Agency officials declined to talk specifics about the Westmoreland case or

allow their contracted doctors to speak with KATU citing the confidentiality

of medical records.

In Westmoreland's case the exam was scheduled by SAIF to determine if mold

from the Talent Middle school was indeed the culprit behind the teacher's

illness.

" It was the most degrading and humiliating experience I think I've ever been

through, " says Westmoreland. " It was as if the doctor had already made up

his mind in advance. "

Westmoreland also says the doctor treated her in a disrespectful and

condescending manner.

The exam was scheduled by SAIF for October 20th of 2003 at Oregon Health

Sciences University in Portland. But before Westmoreland made the 10-hour round

trip to Portland she was curious about the doctor who would be examining her.

In a Google search Westmoreland found numerous hits for the doctor she was

scheduled to see, Emil J. Bardana Jr. MD. He was a well-respected allergy

specialist and had published numerous articles about mold in the work place.

" There was just one problem, " says Westmoreland. " It didn't look like he

believed mold was a serious long-term health problem. "

" Basically I told SAIF I want another doctor, and they said 'no' I had to go

or the claim would be denied, " she says.

Westmoreland's worst fears were confirmed when Bardana filed his report to

SAIF on November 3, of 2003.

Bardana's report issued to SAIF found, " no logical explanation for the

symptoms, " found certain neurological problems to be " bizarre " and further

believed that she was being " led astray " by her personal physician and other

specialists that said that mold had indeed been the culprit.

While SAIF officials will not release the exact amount paid to Bardana the

do say the average fee for such an exam ranges from $500 to 600. But they say

that fee does not affect the objectivity of the studies.

Among those who challenge Bardana's assertions are Westmoreland's personal

physician, and specialists from well-respected medical schools including

University of Southern California.

" There's a lot of second guessing here, " says Stone MD of Ashland

referring to Bardana's opinion. " There's nothing about this she wantsâ€¦the

only

thing she gets from this is a lot of frustration. "

Countering Bardana's assertions, in a medical report filed in August of this

year, Kaye Kilburn of USC medical school reported that Bardana's implication

regarding a lack of mold sensitivity is " wrong and reflects naivete. " He

also referred on one occasion to Bardana's " shallow approach. "

SAIF also ordered an Independent Neuropsychological Evaluation of

Westmoreland. The report by Donna C. Wicher concluded that Westmoreland

suffered from a

Conversion Disorder.

Defined in the report the disorder is not an intentional production of

physical symptoms but have a psychological component.

Wicher also concluded that Westmoreland's test results were inconsistent

which suggested that her symptoms were the result of a " personality structure. "

While each physician spent several hours with Westmoreland, those who've

spent years teaching alongside her can't believe that her symptoms are all in

her head.

" The first time I heard that I laughed, " says Ayers. " It's hogwash. "

Ayers, who hired Westmoreland at Talent middle school as a health teacher in

1995 says her colleague was one of the hardest workers at the school.

" She's a person of amazing integrity, " says another teacher, Toni Drew,

" I've never seen someone put so many volunteer hours into anything. "

From grants to public service awards Westmoreland seemed to be on the track

to being a principal until she started feeling ill two years ago. Now

Westmoreland says she can't complete the most simple of tasks including how to

estimate when her daughter needs to be picked up from the bus stop.

But Westmoreland is not alone. Four others including teachers Cari Baker and

Wileman also have claims against SAIF for mold related illness at

Talent middle school.

" This is like some kind of nightmare, " says Wileman " Our credit cards

are maxedâ€”I can't go to the store and buy a sack of groceries right now. "

Baker, Wileman and Westmoreland are all financially strapped. Westmoreland's

unpaid medical bills alone total nearly $50,000.

All three cite the IME process as flawed for its lack of objectivity.

" It's a joke---they're not independent at all, " says Wileman.

After the three women received a copy of their IME, they began comparing

notes. What they found was disturbing to say the least, and a sign that the

reports may be cut and pasted by those contracted by SAIF.

In Baker and Westmoreland's reports there are two identical paragraphs which

include the pronoun " she " when referring to conversations with other

teachers at the school.

One of the sentences includes a grammatically incorrect sentence. It reads,

" She apparently was also driving in a vehicle had onset of symptoms. "

Baker also says that in her report she noticed that Bardana had included a

sentence about a growth on her breast that did not happen to her but to a

colleague. Also, says Baker, there were comments about alcohol use that were

untrue.

A public affairs spokesperson from OHSU told KATU that the errors in cutting

and pasting were " inadvertent. "

The teachers also say they were sent bills for the IME's that demanded

immediate payment.

Rocklin says if a bill was sent it was in error because the exams are paid

for by SAIF.

The teachers say the bills were sent repeatedly and constituted harassment.

All three say they have suffered, not just at the hands of SAIF but also

from a school district that has failed to support them and in some cases

discredited them professionally.

Rocklin, who faced a handful of suspicious senators in Salem at yet another

hearing about IME's is clearly trying to the bottom of the controversy.

" Clearly we don't want workers to feel any intimidation, " says Rocklin.

_ACP Medicine | Visitor Section | Peer Review Board_

(http://www.acpmedicine.com/acp_peer.htm)

January 15, 2006

Nothing surprises me any more. (God, but I loved Webvan...: (

snk1955@... wrote: WebMD Execs Charged With Accounting Fraud