A $6.6 million CityMD whistleblower settlement was reached in New York this month. The company’s urgent care centers admitted to overbilling Medicare.

CityMD operates approximately 88 urgent care centers, most of which are located in the New York City metro area.

In a press release, Geoffrey S. Berman, the U.S. Attorney for the Southern District of New York, said, “CityMD improperly billed Medicare at significant cost to taxpayers. This settlement holds CityMD accountable both through the significant monetary payment and the detailed admissions made by CityMD.”

CityMD has agreed to pay $6,606,251.40 in damages to the United States, according to the CityMD whistleblower settlement. In addition, CityMD admits, acknowledges and accepts responsibility for its conduct.

The company admits to billing Medicare for longer and more complicated procedures than were actually provided to patients. If CityMD had submitted accurate billing for the services rendered, the company would have received a lower reimbursement rate from Medicare.

For example, on June 6, 2012, CityMD allegedly billed Medicare using a medical code that should “be used for patients whose problems are moderate to highly severe, with physicians typically spending 45 minutes with the new patients.” The only diagnosis of the patient was a “cough,” which Medicare would not expect to require the length or complexity reflected in the billed services.

Before medical providers can seek reimbursement from Medicare, a physician must be enrolled with the Medicare program and the physician must reassign his or her Medicare benefits to the billing provider. This is known as being “credentialed” by the Medicare program.

According to the CityMD whistleblower settlement, CityMD employed several physicians who were not credentialed with the Medicare program. CityMD billed Medicare for services provided by non-credentialed physicians by falsely submitting National Provider Identification numbers of actual credentialed doctors who did not provide the services.

The fraudulent schemes for Medicare reimbursement allegedly took place from 2010 through Dec. 31, 2016.

Berman said CityMD fully cooperated with the investigation that resulted in the CityMD whistleblower settlement.

CityMD Whistleblower Settlement Plaintiff Name Sealed

The situation came to light when a private whistleblower filed a lawsuit under seal pursuant to the False Claims Act. The federal government joined as a plaintiff.

The False Claims Act is the oldest whistleblower law in the U.S. The False Claims Act was enacted during the Civil War to protect whistleblowers from paying for defense contractors’ overpriced merchandise. Many consumers associate the False Claims Act with the 1980s when whistleblowers reported that the defense department was buying exorbitantly priced wrenches and toilet seats.

Today, 80 percent of cases brought forth through the False Claims Act involve healthcare, such as in this CityMD whistleblower settlement.

The False Claims Act enables private citizens to file a lawsuit on behalf of the federal government. Called qui tam, Latin for “in the name of the king,” the law allows citizens to collect a percentage of the money recovered in the suit. No details regarding an amount the CityMD whistleblower will receive have become available.

The CityMD Whistleblower Settlement Lawsuit is Case No. 14 Civ. 9933 (KPF) in the U.S. District Court for the Southern District of New York.