CityMD Agrees To $12M Settlement for Misusing COVID-19 Relief Funds

Last Friday, the DOJ (Department of Justice) reported that City Medical of the Upper East Side, PLLC, and its affiliates, collectively known as CityMD, agreed to a settlement of $12 million in connection with alleged fraud related to COVID-19 testing, treatment, and vaccine administration for uninsured individuals. 

Between a two-year period, CityMD allegedly violated the False Claims Act by submitting claims for services provided to patients who were not actually uninsured, including where CityMD already had health insurance information on file, and by not sufficiently verifying the insurance status of individuals before billing the Uninsured Program. Additionally, CityMD was alleged to have caused outside laboratories to send false claims by mislabeling insured patients as uninsured. 

Notably, the DOJ stated that this case was started by a whistleblower who was a patient of CityMD. Whistleblowers are often insiders who work for or with a defendant company; however, this case is another example of a successful whistleblower action initiated by a consumer/patient of the defendant company. The DOJ reported that the whistleblower will receive $2.05 million from the settlement as his share of the recovery. 

The DOJ also noted that CityMD received credit in the settlement for its cooperation with the investigation by voluntarily disclosing the issues and working with a third party to assess the financial impact. This cooperation likely influenced the terms of the settlement. 

Principal Deputy Assistant Attorney General Brian M. Boynton emphasized the importance of ensuring that pandemic relief funds were used appropriately, while U.S. Attorney Philip R. Sellinger stated “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.” 

If you believe to have any information relating to possible healthcare fraud and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please do not hesitate to contact us for a free and confidential consultation.