DOJ settles CityMD Covid fraud allegations for $12 million

Walgreens-backed CityMD will pay $12.04 million to settle Covid fraud allegations brought by the Department of Justice, the department announced on Friday.

From February 2020 to April 2022, the urgent care provider 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 brought the allegations under the False Claims Act, a law that 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 how much was lost in connection as a result of the alleged fraud, according to the DOJ.

“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,” U.S. Attorney Philip R. Sellinger said in a Friday statement. “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.