Facility Settles For $1.3 Million After Accusations of Inadequate Care

A nursing facility that cares for chronically ill and medically fragile children in New York has agreed to pay $1.3 million to settle serious federal allegations about the quality of care provided.

According to the U.S. Attorney’s Office for the Northern District of New York, St. Margaret’s Center in Albany, will pay $1.3 million under the False Claims Act.

Federal officials claim that between January 1, 2018 and December 31, 2023, the facility billed Medicaid for care that was so substandard it was considered “worthless” under the law. Authorities say the center also lied about implementing "a compliance program designed to ensure quality care."

St. Margaret’s Center, operating under the Center for Disability Services Corporation, provides skilled nursing services for medically fragile infants and children.

What Investigators Found

State inspections conducted from 2018 to 2023 found repeated problems, including:

• Insufficient nursing staff
• Significant medication errors
• Failures involving respiratory and tracheostomy care and suctioning
• Inadequate supervision of residents that "jeopardized their health or safety"

During a 2022 inspection, the New York State Department of Health placed the facility in “immediate jeopardy” status for more than a month. That designation is used when deficiencies are considered severe enough to put residents at risk of serious harm.

“New York nursing home residents, especially children and their families, always deserve high-quality care and attention,” said Attorney General Letitia James. “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.”

The Centers for Medicare and Medicaid Services had also placed the facility on its Special Focus Facility list, which is a federal designation for nursing homes with a history of serious quality issues.

Compliance Program Concerns

As part of receiving Medicaid funding, the facility was required to certify each year that it had implemented an effective compliance program addressing quality of care, which as mentioned above, the facility reportedly falsified.

According to federal authorities, the center admitted its compliance program did not meet required standards. In sworn testimony, the facility’s compliance officer reportedly stated they had “no idea” how to identify compliance risks related to caring for medically fragile infants and children and were unaware the center had been placed in “immediate jeopardy” status.

Officials say quality of care was not formally included as a risk area in the compliance program until March 2023, after the government investigation had already begun.

Whistleblowers Filed Lawsuit

The settlement resolves a whistleblower lawsuit filed by two former employees under the qui tam provisions of the False Claims Act. That law allows private individuals to sue on behalf of the government and share in any financial recovery.

Under the settlement announced today, St. Margaret’s admits wrongdoing and will pay $1,300,000 to Medicaid, of which $707,200 will go directly to New York state. The remaining $592,800 will be paid to the federal government. The HHS-OIG will monitor St. Margaret’s Center for five years, overseeing the care and conditions of the facility.

Attorney James emphasized that nursing homes receiving public healthcare dollars are expected to meet both state and federal standards.