Colette G. Matzzie

Brendan Delaney worked for New York City’s Division of Health Care Access and Improvement, and the system he was assigned to help implement at Rikers was eClinicalWorks. He found problems that, he alleged, put patients at risk: one patient’s information appearing in another patient’s record, errors in the medication module, laboratory results tracked incorrectly, security flaws. He documented and tracked them, often late at night after a full day’s work, and gave detailed information to city officials and investigators. In 2011 he left his city job and went on to advise hospitals and other providers on electronic records.

In 2015 Matzzie and her colleagues filed his complaint under seal in the federal court in Burlington, Vermont, as United States ex rel. Delaney v. eClinicalWorks. The False Claims Act let them file wherever jurisdiction was proper, and Matzzie said they chose Vermont after prosecutors in the U.S. Attorney’s office there expressed interest. Tristram J. Coffin, a former U.S. attorney for Vermont, and Eric Poehlmann of Downs Rachlin Martin served as local counsel.

Sixteen Drug Codes

The 2009 economic-stimulus law offered Medicare and Medicaid incentive payments to doctors and hospitals that made meaningful use of certified electronic-health-records software. A vendor obtained certification by passing tests administered by an independent body approved by the Department of Health and Human Services, and providers relied on the certification when they claimed the payments.

The government alleged that eClinicalWorks had obtained its certification by concealing from its certifying body that the software did not meet the requirements. Certified software had to be able to retrieve any drug code from a complete database; eClinicalWorks, the government alleged, had hard-coded the sixteen standardized drug codes the test would call for. It also alleged that the software did not accurately record user actions in its audit log, in certain situations did not reliably record diagnostic-imaging orders or perform drug-interaction checks, and failed the data-portability requirements meant to let providers move patient records to another vendor. The government alleged kickbacks as well: at least $392,000 paid to influential customers to recommend the product, along with consulting and speaker fees.

The case remained under seal while the government investigated, and during 2016 eClinicalWorks sent its customers a series of safety advisories, among them a December notice on medication management and drug-allergy interactions. The government filed its complaint in intervention on May 12, 2017. On May 31 the company agreed to pay $155 million; its three founders were jointly and severally liable with it for all but $80,000, which a developer and two project managers paid.

A five-year corporate integrity agreement with the Office of Inspector General of Health and Human Services required eClinicalWorks to retain an independent organization to assess its software quality control, notify customers promptly of safety problems, provide software updates free, and let customers transfer their data to another vendor without penalties or service charges. Owen Foster, an assistant U.S. attorney in Burlington, was one of the government’s lead lawyers on the case. Delaney’s share of the recovery was about $30 million. “Accurate and reliable electronic health records are essential to good patient care and safety,” Matzzie said.

In the Name of the United States

Matzzie came to whistleblower cases from public-interest and government litigation. She graduated magna cum laude from Georgetown University Law Center, where she was a senior articles editor of The Georgetown Law Journal, and clerked for Judge Dolores K. Sloviter of the United States Court of Appeals for the Third Circuit. From 1995 to 1999 she was a staff attorney at Public Citizen Litigation Group, working on public health and safety, consumer protection, access to information, separation of powers and access to the civil justice system.

From 1999 to 2004 she was a member of the Civil Appellate Staff of the Justice Department’s Civil Division, which handles the government’s civil appeals, and she served as a trial attorney on the department’s tobacco litigation team. A qui tam suit is brought in the government’s name. At Phillips & Cohen she has argued in federal district courts and courts of appeals, won published decisions awarding clients relator shares for their contribution to the government’s recovery, and assisted other whistleblowers’ counsel in the federal courts, including the Supreme Court. She has taught a seminar in public interest advocacy as an adjunct faculty member at Georgetown.

A Wire and a Marketing Lecture

Robert Heiden sold drugs for Boehringer Ingelheim in Florida for fourteen years. In 2005 he filed a whistleblower suit under seal in the federal court in Baltimore alleging that the company had paid kickbacks and had promoted drugs for uses the Food and Drug Administration had not approved: Aggrenox, approved to prevent secondary strokes, for reducing the risk of heart attacks; Atrovent and Combivent, untested in children, for children with asthma and for coughs from colds and flu, and at doses above those approved; Micardis, approved for hypertension, for preventing metabolic syndrome and early kidney disease. Matzzie represented him with Peter Chatfield.

At the government’s request Heiden wore a wire and recorded conversations. He analyzed 1.5 million pages of documents and more than two million call notes kept by sales representatives, and prepared background notebooks for the government’s questioning of at least fifteen witnesses. After he had left the company, he arranged for an undercover FBI agent to attend a Boehringer Ingelheim marketing lecture that promoted Micardis for unapproved uses. On October 25, 2012, the company agreed to pay $95 million, and the government awarded Heiden more than 21 percent. “Even the FBI was impressed with his help,” Matzzie said.

Heiden had left Boehringer Ingelheim over concerns about its marketing practices and become a district sales manager in Florida for Hawthorn Pharmaceuticals. A separate suit he filed in Plano, Texas, in 2007 alleged that Hawthorn marketed prescription drugs that had not been approved or tested for safety or effectiveness, among them the skin treatments Hylira, Zaclir and the Zacare Kit, while doctors were led to believe they were approved, and that Medicaid and other programs had paid for them from 2003 to 2009. On March 28, 2012, Hawthorn and its parent, Cypress Pharmaceutical, agreed to pay $2.8 million in a settlement that included Hawthorn’s chief executive, and Heiden received 21 percent.

Rebates, Surcharges, Life-Limited Parts

Former Sodexo employees, her clients, alleged that the food-service company had kept rebates, credits and discounts from its suppliers, about 14 percent on average, that should have reduced the costs of the public schools and universities it served: twenty-one school districts, most of them in Western New York, and the State University of New York. In July 2010 Sodexo paid $20 million under New York’s False Claims Act and agreed to disclose rebates in its future public contracts and to pay for three years of independent audits of its rebate program.

The General Services Administration had negotiated a fixed-price contract for the government’s landline and long-distance voice and data services that allowed only limited surcharges. In a suit filed in 2007, her client alleged that Verizon billed the government tax-like surcharges it was not entitled to impose, property-tax surcharges and carrier cost-recovery charges among them. The practice allegedly began in 1999 under MCI, which held the contract before Verizon acquired the company in 2006. On April 5, 2011, Verizon paid $93.5 million to resolve billing from 2004 to 2010. Verizon, Matzzie said, had been charging the government “for Verizon’s own property taxes and other costs of doing business.”

Christopher Harvey was a lead aircraft conformity specialist for AAR Corp. in Melbourne, Florida. His suit, filed in 2015 in the federal court at Fairview Heights, Illinois, near the U.S. Transportation Command at Scott Air Force Base, alleged that AAR Airlift Group had failed to maintain nine aircraft carrying U.S. troops and cargo, mostly in Afghanistan, from January 2012 to June 2018, including by failing to track and replace life-limited parts, while representing them as “fully mission capable,” as its contracts required. On July 6, 2021, AAR agreed to pay $11 million, along with a Federal Aviation Administration penalty of $429,273; Harvey’s share was $2.16 million. Matzzie represented him with her partner Claire Sylvia.

The School-Meal Contract

Jeffrey Mills was executive director of the Office of Food and Nutritional Services of the District of Columbia Public Schools from 2010 to 2013. In those three years he introduced breakfast in the classroom, an after-school supper program and salad bars, and put the meal standards of the District’s Healthy Schools Act into effect. District funds, he said, should “feed students the best quality food at the lowest cost.”

His suit, filed in 2013 in D.C. Superior Court under the District’s False Claims Act, named Chartwells, the schools’ food-service contractor since 2008, its partner Thompson Hospitality, and Chartwells’ parent companies in the Compass Group. It alleged that the schools had paid millions of dollars more than they should have while meals arrived late, in insufficient numbers, or of poor quality or spoiled, and that Chartwells’ purchasing arrangements with large manufacturers and vendors conflicted with its obligation to provide food at the lowest available price.

Attorney General Karl A. Racine’s office investigated and, on April 20, 2015, filed its own complaint in the case; Assistant Attorneys General Jane Drummey and William Causey worked on it with Bennett Rushkoff, chief of the office’s Public Advocacy Section. On June 5, 2015, Chartwells paid the District $19.4 million. On July 14 the company wrote to the D.C. Council that it would leave the contract.

On August 17, 2018, CBS’s Whistleblower devoted an hour to Mills’s case and Delaney’s. The program included the two whistleblowers, Owen Foster, and the husband of a woman who died of a brain aneurysm after a brain scan ordered through the eClinicalWorks system was missed. Matzzie appeared as well, and of the school-meal case she said that while they were suing on behalf of the government, “our goal was always to ensure quality school food programs for the kids.”

Two More Cases in Burlington

Amanda Long had been vice president of product management at Modernizing Medicine, a records vendor in Boca Raton, Florida. Matzzie and Coffin represented her in a case filed in Burlington in 2017. The government, which intervened, alleged that the company had taken kickbacks from Miraca Life Sciences for steering its users to Miraca’s pathology laboratory, had worked with Miraca to donate its software to practices to increase their laboratory orders, and had paid customers and others in the industry to recommend its product, and that the software did not always let physicians record information in RxNorm and SNOMED CT, the standard drug and clinical vocabularies the incentive program required. On November 1, 2022, Modernizing Medicine agreed to pay $45 million, and Long received about $9 million. Lauren Almquist Lively, an assistant U.S. attorney, and Foster, by then a former one, handled the case for the government.

Elizabeth Ringold and Toby Markowitz were clinical providers who used NextGen Healthcare’s software at the South Carolina Department of Corrections. Their case, filed in Burlington in 2018, alleged that NextGen had obtained certification for software it knew would not meet the requirements, passing the tests with functions embedded in a temporary version of a separate product, its Knowledge Based Model. The software released to providers, the government alleged, could not fully record a patient’s active problem list or family health history, create a referral summary for every patient, or record vital signs and calculate body-mass index correctly; the company was also alleged to have paid providers for referrals of its software. On July 14, 2023, NextGen agreed to pay $31 million. “Strict adherence to the terms of the government’s incentive programs is critical,” Matzzie said.

The three Vermont cases came from people who worked inside the products: a technician who helped implement eClinicalWorks at a jail, the executive who managed Modernizing Medicine’s product, and two clinicians who used NextGen’s software in a state prison system. In two of them the government alleged that the software shown to a certification test differed from the software providers received: sixteen drug codes hard-coded for the test at eClinicalWorks, functions embedded for the test in a temporary version of another product at NextGen.