CityMD to Pay Over $12 Million to Settle Allegations of False Claims Related to COVID-19 Testing

Urgent Care Provider Accused of Billing Errors in Program for Uninsured

NEWARK, N.J. – CityMD, a prominent urgent care provider operating approximately 177 clinics across New Jersey and New York, has agreed to a $12.04 million settlement with the federal government. The settlement resolves allegations of falsely billing the Health Resources & Services Administration (HRSA) for COVID-19 tests administered to insured individuals under a program intended for the uninsured.

From February 4, 2020, through April 5, 2022, CityMD allegedly submitted or caused the submission of claims for COVID-19 testing for individuals who actually had health insurance at the time of testing. The Justice Department claims that CityMD failed to properly verify insurance status before billing the HRSA’s COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program, which reimburses at Medicare rates.

According to the Justice Department, CityMD's oversight led to incorrect submissions, including instances where the urgent care provider had insurance cards on file. Additionally, CityMD is accused of causing outside laboratories to submit false claims by providing requisition forms that incorrectly marked patients as uninsured.

“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. 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,” said U.S. Attorney Philip R. Sellinger.

In response to the investigation, CityMD has cooperated with federal authorities and engaged a third party to help ascertain the extent of the overbilling, a move that the Justice Department recognized in the settlement. This cooperation forms part of the resolution which also involves a whistleblower's claim under the False Claims Act. Steven Kitzinger, a patient of CityMD, initiated the qui tam action and will receive approximately $2.04 million from the settlement.

The settlement underscores ongoing federal efforts to combat healthcare-related fraud, especially pertinent to pandemic-related services. This case was managed by 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 U.S. Department of Health and Human Services Office of Inspector General.

“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.”

The federal COVID-19 Fraud Enforcement Task Force continues to prioritize the detection and prosecution of fraudulent activities related to the pandemic. The public is encouraged to report any suspicions of fraud, waste, or abuse related to COVID-19 relief efforts through the Department of Justice’s National Center for Disaster Fraud Hotline or the Department of Health and Human Services.

This settlement resolves the allegations against CityMD; however, there has been no determination of liability.