Oglethorpe agrees $32 million False Claims Act settlement over Medicare overpayments

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Oglethorpe $32M Medicare settlement

Highlights

Oglethorpe and its executives agreed to a $32 million False Claims Act settlement to resolve allegations of retaining Medicare overpayments from 2021 to present.
Oglethorpe will be excluded from Medicare, Medicaid, and all federal healthcare programs for 10 years starting July 2026 due to violation of a Corporate Integrity Agreement.
The settlement resolves a whistleblower suit and reinforces increased federal enforcement targeting healthcare operators for noncompliance with Medicare payment rules and repayment obligations.

Settlement terms and alleged conduct

As reported by the U.S. Department of Justice, the settlement resolves allegations that Oglethorpe knowingly failed to return Medicare overpayments linked to beneficiaries admitted to three Ohio facilities who did not qualify for inpatient psychiatric care. The company, based in Tampa, Florida, reached the agreement alongside founder and principal owner Robert Cohen, CEO John Picciano and Chief Operating Officer James O'Shea.

Authorities say the conduct runs from 2021 through the present and involves two hospitals, Ridgeview Behavioral Hospital and Georgetown Behavioral Hospital, and a substance abuse clinic, The Woods at Parkside. The Justice Department says Oglethorpe's own consultants had identified the overpayments, but the company and its executives did not return them to Medicare.

The civil settlement also concludes a whistleblower lawsuit filed by four former employees under the False Claims Act's qui tam provisions. The share of the recovery for the whistleblowers has not yet been determined, and the government says the settlement resolves allegations only, with no determination of liability.

Compliance fallout and federal enforcement impact

Oglethorpe had entered a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General in 2021 after an earlier False Claims Act settlement with the Justice Department. Because officials say that agreement was violated, the defendants also agreed to a voluntary exclusion arrangement that bars them from Medicare, Medicaid and all federal healthcare programs for 10 years starting in July 2026.

Justice Department and HHS-OIG officials say the case underscores the government's push to protect taxpayer funds and enforce Medicare payment rules. The matter also fits into a wider federal anti-fraud campaign that the administration says is being reinforced this year through the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

The case is part of continued scrutiny of healthcare operators that receive federal reimbursement and later face questions over eligibility, documentation and repayment obligations. For providers in behavioral health and related services, the settlement highlights the financial and operational risks that can follow repeated compliance failures, including large cash penalties and long-term exclusion from government-funded programs.

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