CityMD agrees to a $12 million settlement over alleged COVID-19 claims fraud

CityMD, an urgent care center group operating approximately 177 locations in New York and New Jersey, has agreed to pay over $12 million to the Department of Justice (DOJ) to settle alleged False Claims Act violations related to reimbursement for COVID-19 testing.

The DOJ alleges that CityMD submitted or caused the submission of false claims for payment to a Health Resources and Services Administration program that offered reimbursement to providers at the Medicare rate for COVID-19 testing, treatment, and vaccination for uninsured individuals during the pandemic.

Specifically, the DOJ alleges that between February 4, 2020, and April 5, 2022, CityMD submitted reimbursement claims for COVID-19 testing even when patients had their own private insurance coverage at the time of administration. This misconduct caused outside laboratories to submit false claims by issuing forms indicating that the patients were uninsured, according to the DOJ.

The settlement resolved the initial allegation brought by Steven Kitzinger, a patient who received a COVID-19 test at a CityMD clinic in 2020. Kitzinger will receive over $2 million of the settlement due to a provision of the False Claims Act that gives whistleblowers a portion of the funds.

Although CityMD did not ultimately take responsibility for the violations, it cooperated with the DOJ in its investigation and voluntarily contracted with a third party to help determine the amount of losses. The company received credit in the settlement for its cooperation.