ALBANY, N.Y. — St. Margaret’s Center, a skilled nursing facility in Albany that cares for chronically ill and disabled children, has agreed to pay $1.3 million to resolve allegations that it billed Medicaid for grossly substandard care and falsely certified compliance with federal and state requirements, authorities announced Friday.
The settlement, announced by the U.S. Attorney’s Office for the Northern District of New York, resolves claims under the False Claims Act that the facility provided care between Jan. 1, 2018, and Dec. 31, 2023, that was “worthless” because it failed to meet required standards.
St. Margaret’s Center is operated by the Center for Disability Services Holding Corporation and receives millions of dollars annually in public health care funding.
Federal and state investigators alleged that state inspections during the relevant period found persistent deficiencies, including inadequate nursing staff, significant medication errors, and failures to properly provide respiratory and tracheostomy care and suctioning for medically fragile residents.
During one inspection, the New York State Department of Health determined the facility failed to adequately supervise three residents, placing their health or safety at risk. In 2022, regulators placed the facility in “immediate jeopardy” status for more than a month, a designation used when noncompliance poses serious harm or risk to residents.
Based on those findings, the Centers for Medicare and Medicaid Services added St. Margaret’s Center to its Special Focus Facility list, which identifies nursing homes nationwide with a history of serious quality issues.
As a condition of receiving Medicaid funds, the facility was required to certify annually that it had implemented an effective compliance program addressing quality of care. Authorities alleged that the program did not meet statutory requirements.
According to the government, the facility’s compliance officer admitted under oath that they did not know how to identify compliance risks related to caring for medically fragile infants and children and was unaware the facility had been placed in immediate jeopardy status. The government also alleged that quality of care was not formally included as a compliance risk area until March 2023, after the federal investigation had begun.
In addition to the monetary settlement, St. Margaret’s Center agreed to enter into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General. The agreement requires enhanced oversight and reforms aimed at improving quality of care and resident safety.
The settlement resolves a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by two former employees. Under the statute, private individuals may sue on behalf of the government and share in any recovery. The whistleblowers will receive approximately $247,000 from the settlement proceeds.
The settlement resolves civil allegations only and does not constitute a determination of liability.
