CityMD to Pay $12.04 Million Settlement for Alleged Covid Fraud, Walgreens-Backed Urgent Care Provider

CityMD, backed by Walgreens, has agreed to pay $12.04 million to settle allegations of Covid fraud, as announced by the Department of Justice on Friday. Between February 2020 and April 2022, the urgent care provider allegedly obtained fraudulent government reimbursements for Covid tests. It is claimed that they did this by submitting false claims to a Covid program specifically designated for uninsured patients, even when their patients had health insurance.

Legal Action Under the False Claims Act

The U.S. Attorney's Office for the District of New Jersey brought the allegations under the False Claims Act. This law incentivizes whistleblowers to file lawsuits related to potential fraud by providing them a portion of the government's winnings in successful cases.

Stephen Kitzinger, a CityMD patient, initially alleged the fraud in 2020. As a reward for bringing the case to the government's attention, Kitzinger will receive over $2 million of the settlement. CityMD, which operates over 100 walk-in urgent care practices in New York and New Jersey, cooperated with the government's investigation and hired a third-party firm to help the government determine the amount lost in connection with the alleged fraud, according to the DOJ.

Response from U.S. Attorney and Walgreens

In response to the settlement, U.S. Attorney Philip R. Sellinger stated, "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." Walgreens did not immediately respond to a request for comment sent outside of regular business hours.