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.
• For two years of the pandemic, CityMD 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.
• A CityMD patient initially brought the fraud allegations to the government's attention and as a result, will receive over $2 million of the DOJ's winnings from the case.

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