The Center for Disability Services Holding Corporation, operating as St. Margaret’s Center (SMC), has agreed to pay $1.3 million to resolve allegations of violating the False Claims Act. The skilled nursing facility, located in Albany, New York, was accused of billing for care that was considered worthless and falsely certifying that it had implemented a compliance program promoting 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.”
Between January 1, 2018, and December 31, 2023, SMC allegedly provided grossly substandard care according to findings from New York State surveys. These inspections revealed issues such as insufficient nursing staff, significant medication errors, and inadequate respiratory and tracheostomy care. In one instance, the New York State Department of Health (NYSDOH) found that SMC failed to properly supervise three residents, putting their health or safety at risk. As a result of these findings in 2022, NYSDOH placed SMC in “immediate jeopardy” status for over a month.
Following these incidents, the Centers for Medicare and Medicaid Services added SMC to its Special Focus Facility list—a designation given to nursing homes with serious quality problems across the country.
As part of receiving federal and state Medicaid funding, SMC annually certified that it had an effective compliance program addressing quality of care requirements. However, SMC admitted its compliance program did not meet statutory standards during this period. The facility’s compliance officer testified under oath that they were unaware how to identify risks related to caring for medically fragile infants and children or that SMC had been placed in “immediate jeopardy” by NYSDOH. Quality of care was not included as a risk area in the compliance program until March 2023 after government investigation began.
Alongside today’s settlement announcement, SMC has entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). This agreement aims to address ongoing concerns about resident safety and quality at the facility.
The settlement also resolves a whistleblower lawsuit filed by two former employees under qui tam provisions of the False Claims Act. Under these provisions private individuals can file lawsuits on behalf of the government; those who bring successful cases may receive part of any recovered funds—in this case approximately $247,000 from the settlement proceeds.
The United States Attorney’s Office for the Northern District of New York investigated alongside New York Attorney General’s Medicaid Fraud Control Unit; Assistant U.S. Attorney Christopher Moran represented federal interests in court.
