Federal settlement resolves allegations involving improper Medicare payments at Ohio treatment facilities.
Oglethorpe Inc., a Florida-based company that runs psychiatric hospitals, agreed to pay $32 million to settle claims related to Medicare overpayments at several of its Ohio mental health treatment centers. Federal officials said the company and several of its top executives failed to repay money connected to patients who allegedly did not qualify for inpatient psychiatric treatment under Medicare rules.
The settlement also includes company founder Robert Cohen, chief executive officer John Picciano, and chief operating officer James O’Shea. According to the Department of Justice (DOJ), the alleged conduct took place from 2021 through this year and involved two psychiatric hospitals and one substance abuse treatment center in Ohio.
Federal investigators said company consultants had already identified the overpayments internally, but the money was not returned to Medicare as required. The facilities named in the case were Ridgeview Behavioral Hospital, Georgetown Behavioral Hospital, and The Woods at Parkside. Authorities claimed some patients admitted to those facilities did not meet the standards needed for inpatient psychiatric care, meaning Medicare should not have paid the claims.
The agreement resolves allegations brought under the False Claims Act, which is a federal law often used in fraud cases, like this one, involving government programs. The law allows the government to seek repayment and penalties when companies are accused of improperly receiving taxpayer funds. In this case, officials claimed Oglethorpe knowingly kept money it should have returned.
The agreement comes after Oglethorpe previously entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General back in 2021. That earlier agreement followed another False Claims Act settlement involving that the company was involved in. CIAs are designed to place healthcare providers under stricter oversight after being involved in fraud-related cases.
According to federal officials, Oglethorpe violated the terms of that agreement, leading to further penalties tied to the new settlement. As part of the latest resolution, the company and the named executives agreed to enter a voluntary exclusion arrangement with federal health authorities. Beginning in July 2026, they will be banned from Medicare, Medicaid, and all federal healthcare programs for ten years.
The case started after four former employees filed a whistleblower lawsuit against the company, including a registered nurse, a former chief fiscal officer, a former regional operations director, and a former financial operations director. Under federal whistleblower laws, private individuals can sue on behalf of the government if they believe false claims were submitted for public funds.
Federal agents said the settlement is part of larger efforts to crack down on fraud involving federal programs. Investigators revealed that healthcare fraud enforcement remains a major focus as agencies continue reviewing billing practices connected to hospitals, treatment centers, and other medical providers that receive government funds.
The settlement does not include an admission of guilt by the company or its executives, and officials stated that the claimsremain allegations only and there has been no formal court finding of liability.
Sources:
Oglethorpe Inc. and Top Executives Agree to Pay $32M to Resolve False Claims Act Allegations
Join the conversation!