St. Margaret’s Center, a skilled nursing facility in Albany, New York, has agreed to pay $1.3 million to settle allegations that it violated the False Claims Act by billing for care deemed worthless and falsely claiming to have implemented an effective compliance program.
“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.”
The settlement addresses claims that from January 1, 2018, through December 31, 2023, St. Margaret’s Center provided grossly substandard care. Inspections conducted by New York State revealed issues such as insufficient nursing staff, significant medication errors among residents, and inadequate respiratory and tracheostomy care. In one inspection, the New York State Department of Health (NYSDOH) found that three residents were not properly supervised, putting their health or safety at risk. As a result of these findings, NYSDOH placed St. Margaret’s Center in “immediate jeopardy” status for over a month in 2022.
Following these events, the Centers for Medicare and Medicaid Services included St. Margaret’s Center on its Special Focus Facility list due to its history of serious quality problems.
As part of receiving federal and state Medicaid funding, St. Margaret’s Center was required each year to certify that it had adopted an effective compliance program addressing quality of care standards. The facility admitted that its compliance program did not meet statutory requirements during the relevant period. For example, under oath SMC's compliance officer stated they had “no idea” how to identify potential compliance risks related to caring for medically fragile infants and children and was unaware that SMC had been placed in “immediate jeopardy” status by NYSDOH.
Quality of care was not included as a risk area in SMC's compliance program until March 2023—after government investigations began.
Alongside the settlement agreement announced today, St. Margaret’s Center has also entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of Inspector General aimed at improving quality of care and resident safety at the facility.
The resolution settles a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by two former employees of St. Margaret’s Center; these individuals will receive approximately $247,000 from the settlement proceeds as allowed under law.
The case was investigated jointly by the U.S Attorney's Office for the Northern District of New York and New York Attorney General's Medicaid Fraud Control Unit; Assistant U.S Attorney Christopher Moran represented the United States.
