People wait in in a queue to enter CityMD, a health clinic that gives coronavirus disease (COVID-19) testing, on the Upper West Side because the Omicron coronavirus variant continues to spread in Manhattan, Recent York City, U.S., December 19, 2021.
Andrew Kelly | Reuters
Walgreens-backed CityMD can pay $12.04 million to settle Covid fraud allegations brought by the Department of Justice, the department announced on Friday.
From February 2020 to April 2022, CityMD, which operates over 100 walk-in urgent care practices in Recent York and Recent Jersey, allegedly obtained fraudulent government reimbursements for Covid tests by submitting false claims to a Covid program specifically designated for uninsured patients, even when their patients had medical insurance.
The U.S. Attorney’s Office for the District of Recent Jersey brought the allegations under the False Claims Act, a law that incentivizes whistleblowers to file lawsuits related to potential fraud by providing them a portion of the federal government’s winnings in successful cases.
“Uninsured Americans who were in danger from COVID-19 were covered by emergency funding programs that made available to them the testing, vaccines and coverings that they needed,” U.S. Attorney Philip R. Sellinger said in a Friday statement. “The alleged misuse of those funds is something we cannot and won’t tolerate.”
Stephen Kitzinger, a CityMD patient, initially alleged the fraud in 2020. As a reward for bringing the case to the federal government’s attention, Kitzinger will receive over $2 million of the settlement.
Kitzinger’s attorney didn’t immediately reply to a request for comment sent outside of normal business hours.
CityMD cooperated with the federal government’s investigation and hired a third-party firm to assist the federal government determine how much was lost in connection consequently of the alleged fraud, in line with the DOJ.
CityMD said it denies the allegations but has decided to settle in an effort to to avoid the prices of dragged-out litigation.
“The recent settlement is neither a finding of liability nor an admission of wrongdoing, and CityMD denies the allegations. Nonetheless, we settled this matter to avoid the price and burden of prolonged litigation,” a CityMD spokesperson said in a press release to CNBC on Saturday. “CityMD is happy with the health care services we provided to patients throughout the pandemic.”
