Oglethorpe Inc, an operator of psychiatric hospitals headquartered in Tampa, Florida, along with its founder and principal owner, Robert Cohen, CEO John Picciano, and chief operating officer James O’Shea, have agreed to pay $32 million to resolve allegations that they violated the False Claims Act by knowingly failing to return overpayments received from the Medicare program for the admission of beneficiaries to three of Oglethorpe’s Ohio facilities.

The settlement resolved allegations that, from 2021 to the present, Oglethorpe and its executives knowingly failed to return to Medicare overpayments identified by Oglethorpe’s own consultants, a statement by the U.S. justice department said.

The overpayments related to beneficiaries who had been admitted to two hospitals (Ridgeview Behavioural Hospital and Georgetown Behavioural Hospital) and a substance abuse clinic (The Woods at Parkside), even though they did not qualify for inpatient psychiatric care.

In 2021, Oglethorpe entered a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General following an earlier False Claims Act settlement with the Department of Justice.

As a result of violating that Corporate Integrity Agreement, the defendants agreed to enter into a voluntary exclusion agreement with HHS-OIG under which they will be excluded from Medicare, Medicaid, and all federal health care programmes for a period of 10 years beginning in July 2026.

The civil settlement resolved a lawsuit filed by four former Oglethorpe employees (Whitney Treloar, a registered nurse; Darren Caruso, former chief fiscal officer; Jeanette Skinner, former regional director of operations; and Joel Snook, the former director of financial operations).

The suit was filed under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that a defendant has submitted false claims for government funds and to receive a share of the recovery.

“Healthcare fraud has negative impacts for taxpayers and patients alike,” said assistant attorney general Brett Shumate of the Justice Department’s Civil Division. “This settlement reflects the department’s commitment to protecting taxpayer money and ensuring that Medicare payments are consistent with the coverage and payment rules for those services.”