CityMD to Pay $12M to Settle COVID-Related False Claims Allegations

It was submitting claims for payment to the Uninsured Program for people with insurance.

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iStock/Andres Victorero

City Medical of the Upper East Side, PLLC, Summit Medical Group, P.A., Summit Health Management, LLC, and Village Practice Management Company, LLC, which collectively do business as CityMD, and manage and operate approximately 177 urgent care practices in New Jersey and New York, have agreed to pay $12,037,109 to resolve allegations that they violated the False Claims Act by submitting or causing the submission of false claims for payment for COVID-19 testing to a Health Resources and Services Administration (HRSA) program for uninsured patients.

HRSA’s COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program (the Uninsured Program) provided claims reimbursement to health care providers, generally at Medicare rates, for testing uninsured individuals for COVID-19, treating uninsured individuals with a COVID-19 diagnoses, and administering COVID-19 vaccines to uninsured individuals.

The Justice Department alleges that, from Feb. 4, 2020, through April 5, 2022, CityMD knowingly submitted or caused to be submitted false claims for payment for COVID-19 testing to the Uninsured Program for individuals who had health insurance coverage when CityMD administered those tests. The United States contends that CityMD did not adequately confirm whether those individuals had health insurance coverage before submitting their claims to the Uninsured Program, including but not limited to certain individuals for whom CityMD had health insurance cards on file. The Justice Department further contends that CityMD caused outside laboratories to submit false claims for COVID-19 testing to the Uninsured Program in connection with individuals who had health insurance coverage by issuing requisition forms erroneously indicating that patients were uninsured. 

CityMD received credit in the settlement under the department’s guidelines for taking voluntary disclosure, cooperation, and remediation into account in False Claims Act cases. CityMD cooperated with the United States’ investigation by, among other things, voluntarily contracting with a third party to assist the United States in determining the amount of the losses the United States contends were caused by claims submitted by CityMD to the Uninsured Program for patients who had health insurance as described above.

“The Uninsured Program provided critical financial support for COVID-19 related testing and treatment for uninsured Americans during the height of the pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement reflects the department’s commitment to ensuring that the pandemic relief programs created by Congress were used as intended.”

“Uninsured Americans who were at risk from COVID-19 were covered by emergency funding programs that made available to them the testing, vaccines, and treatments that they needed,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “The alleged misuse of these funds is something we cannot and will not tolerate. Today’s settlement ensures that the money that was obtained inappropriately will be returned to the government.”

This civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Steven Kitzinger, a patient of CityMD. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.  The qui tam case is captioned United States ex rel. Kitzinger v. City Practice Group of New York LLC d/b/a CityMD, Civ. No. 2:20-cv-20111-SRC-CLW (D.N.J.). Mr. Kitzinger will receive $2,046,308 as his share of the recovery. 

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Inspector General.  

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