Probe into IDX continues as whistleblower case drags on

January 28, 2004

Allegations of wrongdoing center on NIST contractThe legal feud between IDX Systems and a former employee continues to fester. Neither side is saying much, and there appears to be no resolution in sight.The original complaint is

Allegations of wrongdoing center on NIST contract

The legal feud between IDX Systems and a former employee continues to fester. Neither side is saying much, and there appears to be no resolution in sight.

The original complaint is sealed under federal law governing "qui tam" actions. These actions allow people or groups with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the federal government. Dr. Mauricio Leon, formerly a senior researcher with IDX, filed a qui tam action against IDX in May. Although the complaint is sealed, IDX has indicated that it involves the application process for a contract with the U.S. Commerce Department's National Institute of Standards and Technology (NIST). Leon had criticized the company's interest in the NIST deal. The U.S. Attorney's office has been investigating.

The NIST agreement involves a $9.2 million project awarded to IDX in 2001 and renewed in 2003. Under that agreement, IDX is creating electronic clinical practice guidelines called Sharable Active Guideline Environment (SAGE).

Calls to IDX CEO James Crook were directed to Margo Happer, director of communications for the South Burlington, VT, company. She confirmed that the action involving Leon has not been resolved. While Happer said the company has a policy of not commenting on pending litigation, she stated that the NIST deal is continuing smoothly.

The action has had no obvious impact on the company. IDX share prices have risen steadily, from $15 to nearly $27, since the complaint was filed eight months ago.

Happer would not comment on whether any kind of settlement might be forthcoming in the near future. Ricardo A. Guarnero, a Seattle attorney who specializes in whistleblower actions and who has represented Leon in the IDX litigation, did not respond to telephone calls.

Leon sued in May 2003 after IDX filed a complaint against him the previous month asking that it not be considered retaliation if the company fired him. That complaint followed a yearlong effort on Leon's part to get IDX to hire an independent auditor to investigate his concerns about the NIST.

Once terminated, Leon complained he was fired in violation of his rights. He also filed a complaint with the U.S. Department of Labor in May 2002, alleging that IDX conspired to defraud the government and acted to intimidate him as a whistleblower.

Leon further alleges that IDX unlawfully released protected medical information under privacy rules of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).