St. Margaret’s Center Pays $1.3 Million Under the False Claims Act

Nursing Home That Provides Services to Chronically Ill and Disabled Children Admits that Care Did Not Consistently Meet Federal and State Standards ALBANY, NEW YORK – The Center for Disability Services Holding Corporation, d/b/a St. Margaret’s Center (SMC), a skilled nursing facility located in Albany, New York, has agreed to pay $1,300,000 to resolve allegations that it violated the False Claims Act by billing for care that was worthless and falsely attesting that it had implemented a compliance program that promoted quality care. “St. Margaret’s Center receives millions of public healthcare dollars to care for very sick children,” said First Assistant United States Attorney John A. Sarcone III. “Those children deserve quality care, and I expect all nursing homes will fulfill their obligations to vulnerable residents and the taxpayers who fund them. Thank you to the New York State Office of the Attorney General’s Medicaid Fraud Control Unit for their collaboration on this case.” This settlement resolves allegations that between January 1, 2018, and December 31, 2023, SMC provided care that was grossly substandard and therefore worthless. During this time, New York State surveys, or inspections, revealed that SMC did not consistently provide sufficient nursing staff, ensure that residents were free of significant medication errors, or provide respiratory and tracheostomy care and suctioning. During one such survey the New York State Department of Health (NYSDOH) determined that SMC failed to adequately supervise three residents, jeopardizing their health or safety. NYSDOH placed SMC into “immediate jeopardy” status for over a month in 2022. Based on NYSDOH’s findings, the Centers for Medicare and Medicaid Services placed SMC on its Special Focus Facility list which identifies nursing homes throughout the United States that have a history of serious quality issues. As a condition of receiving federal and state Medicaid dollars, SMC annually certified that it adopted and implemented an effective compliance program that addressed quality of care. SMC admitted that its compliance program failed to meet the statutory compliance program requirements. For example, SMC’s compliance officer admitted under oath that they had “no idea” how to identify potential compliance risks associated with caring for medically fragile infants and children and was unaware that SMC had been placed in “immediate jeopardy” status by NYSDOH. SMC’s compliance program did not include quality of care as a potential risk area until March 2023, after the government investigation in this matter had commenced. Contemporaneously with the settlement announced today, SMC agreed to enter into a quality-of-care Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of Inspector General (HHS-OIG), which will remain in effect for five years and address quality of care and resident safety within SMC. The settlement resolves a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by two former SMC employees. The Act allows private persons to file civil actions on behalf of the government and share in any recovery. Under the settlement, the whistleblowers will receive approximately $247,000 of the settlement proceeds.