A Tampa-based psychiatric hospital management company has agreed to pay $32 million to settle allegations that it failed to return Medicare overpayments tied to patient admissions at three Ohio treatment centers, federal prosecutors announced Wednesday. The civil settlement also includes a 10-year exclusion from Medicare, Medicaid and other federal health care programs starting in July, a penalty that could severely curb the company’s ability to bill federal insurers. The case grew out of a whistleblower lawsuit filed by four former employees.
According to a press release from the U.S. Department of Justice, Oglethorpe Inc. and three senior executives, founder Robert Cohen, CEO John Picciano and COO James O’Shea, agreed to the $32 million payout to resolve alleged False Claims Act violations for knowingly holding onto identified overpayments. Federal officials say the questioned claims, stretching from 2021 to the present, stem from inpatient admissions that did not meet Medicare’s coverage rules. The deal resolves a qui tam lawsuit filed in the Middle District of Florida, and the government notes that the share owed to the whistleblowers has not yet been set.
Allegations and facilities
Federal filings identify Ridgeview Behavioral Hospital, The Woods at Parkside and Georgetown Behavioral Hospital as the facilities at the center of the dispute. As reported by the Business Observer, the government contends that admissions at those sites were not medically necessary, and local coverage has noted that the Georgetown facility abruptly closed in March 2024. The lawsuit, brought under the False Claims Act by four former staffers, accuses the company of knowingly keeping Medicare overpayments instead of returning them.
What prosecutors said
U.S. Attorney Gregory W. Kehoe said his office is “determined to protect the public fisc,” while Assistant Attorney General Brett A. Shumate stated that the department will pursue providers who “defy Medicare’s regulations for personal gain,” according to the DOJ release. Investigators say Oglethorpe’s own consultants flagged the overpayments, yet the company did not send the money back. The Justice Department stressed that the matter has been resolved on a civil basis and that “there has been no determination of liability.”
Past enforcement and oversight
Oglethorpe previously settled a separate False Claims Act case in 2021 and entered into a Corporate Integrity Agreement with the HHS Office of Inspector General, a compliance program involving monitoring and reviews tied to a $10.25 million deal. The HHS-OIG records for Oglethorpe describe that 2021 agreement and its oversight requirements. On its own website, the company says it operates nine treatment centers in four states, a reminder that a Tampa-based operator is running facilities well beyond Florida’s borders.
Local impact and next steps
The settlement includes a voluntary 10-year exclusion from federal health programs beginning in July 2026, a sanction regulators say follows Oglethorpe’s breach of its earlier integrity agreement and will cut the company off from Medicare and Medicaid billing. A ban of that length can trigger patient transfers, staffing shakeups and reworked care arrangements at the affected hospitals and clinics. Local coverage around Georgetown has already highlighted how the sudden loss of a behavioral health provider created a “void of needed care,” a glimpse of what communities can face when inpatient options vanish.
What happens now
Federal officials say the agreement recoups funds that were allegedly kept in violation of Medicare rules and enforces compliance expectations, while underscoring that the outcome is a civil settlement rather than a criminal conviction. The whistleblowers in the qui tam case will seek a percentage of the recovery under the False Claims Act, and regulators plan to oversee the company’s transition after the settlement and any follow-up compliance steps required by HHS-OIG.
