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CityMD Pays $883K to Settle NY False Claims Allegations

By John Commins  
   June 05, 2018

For the second time in a month, the Manhattan-based urgent care chain will pay a fine to settle false claims allegations related to government-sponsored health insurance plans.

CityMD will pay New York State $883,000 to settle false claims allegations involving inappropriate facilities fees charged to the state's Empire Plan health insurance program for government workers and their families.

It's the second false claims payout in a month for the Manhattan-based urgent care franchise, which last month agreed to pay the federal government $6.6 million to settle allegations brought forward in a whistleblower lawsuit.

"My office will not tolerate healthcare providers who overbill government healthcare plans," New York Attorney General Barbara D. Underwood said of the latest settlement, in a media release issued Tuesday.

"Today's settlement makes clear that we will hold accountable any entity responsible for false payment claims to the Empire Plan or other government health plans," she said. 

In a statement released Tuesday, CityMD said it was "pleased to have reached a satisfactory resolution to this matter, which involved past insurance billing and coding. This matter was unrelated to CityMD's patient care, which has consistently been of the highest quality."

New York State prosecutors found that:

  • From December 2010 to September 2013, CityMD knowingly overbilled the Empire Plan for facility fees to which they were not entitled.
     
  • Because CityMD had entered into Empire Plan contracts with United HealthCare, the urgent care chain's affiliates were prohibited from billing for facility fees – a detail that was explicitly made clear in the contracts.
     
  • CityMD ignored United HealthCare repeated warnings that facility fees were not permitted under the Empire Plan. Instead, CityMD claimed that facility fees that were separate from, and in addition to, the fees claimed for professional services.
     
  • CityMD admitted that despite the explicit prohibition written into the contract and UnitedHealthCare's warnings, it continued to bill for facility fees.
     
  • CityMD also admitted that it violated the New York False Claims Act and paid $706,400 to the state—including the $37,300 that was overbilled and not yet repaid, and over $669,000 in additional damages, fees, and costs. 

The settlements come amid CityMD's aggressive expansion in the New York City area. Earlier this year, CityMD acquired STAT Health, an urgent care provider with 12 clinics on Long Island, and FirstMed Immediate Medical Care, an urgent care center in Queens.

CityMD Responds

CityMD issued the following statement: "CityMD is pleased to have reached a satisfactory resolution to this matter, which involved past insurance billing and coding. This matter was unrelated to CityMD's patient care, which has consistently been of the highest quality."

"Throughout CityMD's history, and especially over the past year, we have made substantial investments in strengthening our compliance program, which has included the enhancement and implementation of detailed compliance policies and procedures and the appointment of a new, full-time chief compliance officer."

"We earn the trust of the communities we serve by providing an exceptional experience through high-quality medical care and convenient access, and that includes ensuring everyone at CityMD understands that they are an integral part of our business and adheres to best-in-class compliance practices."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


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