Albany, NY (WRGB) — A pediatric nursing facility in Albany has agreed to pay $1.3 million to settle allegations it violated the federal False Claims Act by billing Medicaid for substandard care and falsely certifying it maintained an effective compliance program.
First Assistant U.S. Attorney John A. Sarcone III announced that the Center for Disability Services Holding Corporation, which operates St. Margaret’s Center, admitted that care provided at the facility did not consistently meet federal and state standards.
Sarcone said in a statement:
St. Margaret’s Center receives millions of public healthcare dollars to care for very sick children. 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.
According to federal officials, between January 2018 and December 2023, state inspections found the facility provided grossly substandard care. Investigators reported St. Margaret’s did not consistently maintain sufficient nursing staff, prevent significant medication errors, or properly provide respiratory and tracheostomy care.
During a 2022 inspection, the New York State Department of Health determined the facility failed to adequately supervise three residents, placing their health and safety at risk. The department placed the facility in “immediate jeopardy” status for more than a month. Based on those findings, the Centers for Medicare and Medicaid Services later added St. Margaret’s to its Special Focus Facility list, which identifies nursing homes nationwide with a history of serious quality concerns.
As part of receiving Medicaid funding, St. Margaret’s annually certified that it had implemented a compliance program addressing quality of care. Officials said the facility admitted its compliance program failed to meet legal requirements. Under oath, the facility’s compliance officer said they were unaware of key compliance risks involving medically fragile children and did not know the facility had been placed in immediate jeopardy status. Quality-of-care risks were not added to the compliance program until March 2023, after the investigation began.
In a statement Attorney General Letitia James said,
New York nursing home residents, especially children and their families, always deserve high-quality care and attention. For years, St. Margaret’s failed to follow the law and endangered vulnerable children with poor staffing and care. Our laws set clear standards to protect the health and dignity of nursing home residents, including youth, and I will not hesitate to take action when nursing homes violate these laws.
As part of the settlement, St. Margaret’s agreed to enter into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General to improve oversight of care and resident safety.
The settlement resolves a whistleblower lawsuit filed by two former employees under the False Claims Act. The whistleblowers will receive approximately $247,000 from the settlement. The case is filed in U.S. District Court for the Northern District of New York.
The investigation was conducted jointly by the U.S. Attorney’s Office for the Northern District of New York and the New York Attorney General’s Medicaid Fraud Control Unit.