People wait in line to get into CityMD, a health clinic offering testing for the coronavirus disease (COVID-19), on the Upper West Side as the Omicron coronavirus variant continues to spread in Manhattan, New York City, U.S., December 19, 2021.
Andrew Kelly | Reuters
WalgreensBacked CityMD will pay $12.04 million to settle coronavirus-related fraud allegations brought by the Department of Justice, the department announced Friday.
From February 2020 to April 2022, CityMD, which operates more than 100 urgent care clinics in New York and New 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 health insurance.
The U.S. Attorney's Office for the District of New Jersey made the allegations under the False Claims Act, a law that incentivizes whistleblowers to file lawsuits related to potential fraud by providing them with a portion of the government's winnings in successful cases.
US Attorney Philip R. “Uninsured Americans who were at high risk of contracting COVID-19 were covered by emergency funding programs that made it possible for them to get the tests, vaccines and treatments they needed,” Selinger said in a statement on Friday. “The alleged misuse of these funds is something we cannot and will not tolerate.”
Steven Kitzinger, a CityMD patient, initially alleged the fraud occurred in 2020. As a reward for bringing the case to government attention, Kitzinger will receive more than $2 million from the settlement.
Kitzinger's attorney did not immediately respond to a request for comment sent outside regular business hours.
CityMD cooperated with the government's investigation and hired an outside firm to help the government determine the amount of loss related to the outcome of the alleged fraud, according to the Department of Justice.
CityMD said it denies the allegations but decided to settle to avoid the costs of protracted litigation.
“The latest settlement is neither a finding of liability nor an admission of wrongdoing, and CityMD denies these allegations. However, we settled this matter to avoid the cost and burden of protracted litigation,” a CityMD spokesperson said in a statement to CNBC on Saturday. . “CityMD is proud of the healthcare services we have provided to patients throughout the pandemic.”
