Here’s a few more inches added to Walgreens’ Mound of Misery. New York State’s Office of the Attorney General found that CityMD, now part of Walgreens’ VillageMD, improperly billed patients for Covid-19 tests. The $14 million total consisted of canceling $7 million in outstanding testing bills for over 87,000 patients plus refunds of about $7 million to over 215,000 patients who already paid. The CityMD tests were performed between March 2020 and November 2022. Many of the patients received billing up to two years after date of service, with added billing for late charges. In addition, CityMD will pay $95,000 in penalties to the State of New York for the improper billing with an additional fine of $5,000 per incident for any further billing.
Federal and state laws during the Covid-19 public health emergency prohibited providers and health plans from charging co-pays and deductibles for medically necessary Covid-19 testing and related services. CityMD’s website and staff stated that there would be no out-of-pocket costs for testing. There was also no posted cash price for services, violating NYS law. CityMD also refused to correct bills for individuals with previously issued billing. NYSOAG press release
This follows a $12 million June 2024 civil settlement with the US Department of Justice in the District of New Jersey on false payment claims for Covid-19 testing. The $12.04 million settlement under the False Claims Act resolves CityMD’s claims submitted from 4 February 2020 through 5 April 2022 to the Health Resources & Services Administration (HRSA)’s Uninsured Program that covered testing, treatment, and vaccination costs, reimbursing providers at generally Medicare rates. CityMD did not adequately verify that these individuals had health insurance coverage before submitting their claims to the Uninsured Program, including but not limited to individuals for whom CityMD had health insurance cards on file. This then caused downstream filings by labs claiming Uninsured Program payments based on CityMD information. The settlement includes a $2 million whistleblower payment under the False Claims Act to Steven Kitzinger, a patient of CityMD, who informed the clinic that he was fully insured but was told that CityMD would delete his insurance information. He separately sued CityMD. This will at least cover his legal costs ;-) CityMD was credited by the DOJ for their voluntary disclosure, cooperation, and remediation. Healthcare Dive, US Attorney’s Office NJ release
To be fair, both incidents of improper and fraudulent billing occurred while CityMD was owned by Summit Medical, before Summit’s acquisition by VillageMD, with a Walgreens investment, announced in the palmy days of November 2022 and closing 3 January 2023. But it will be Walgreens doing the payouts where applicable.
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