Attorney General James Secures $1.3 Million From Albany Pediatric Nursing Home for Years of Resident Neglect

NEW YORK – New York Attorney General Letitia James today secured $1.3 million from the Center for Disability Services Holding Corporation d/b/a St. Margaret’s Center (St. Margaret’s), a not-for-profit pediatric skilled nursing facility in Albany, after an investigation revealed years of resident neglect and repeated failures to comply with federal and state nursing home laws. St. Margaret’s provides skilled nursing and rehabilitation services to chronically ill and disabled children and other residents insured by Medicaid. An investigation by the Office of the Attorney General (OAG) and the United States Attorney’s Office for the Northern District of New York (NDNY) revealed that from January 1, 2018 through December 31, 2023, St. Margaret’s fraudulently certified it was meeting state and federal nursing home standards while failing to provide adequate care to the children and other residents living there. The facility was consistently understaffed and neglected its young residents, jeopardizing their health and safety. Under a settlement with OAG and NDNY, St. Margaret’s will pay $1.3 million to Medicaid and be monitored by the United States Department of Health and Human Services Office of the Inspector General (HHS-OIG) for five years.

“New York nursing home residents, especially children and their families, always deserve high-quality care and attention,” said Attorney General James. “For years, St. Margaret’s failed to follow the law and endangered vulnerable children with poor staffing and care. Our laws set clear standards to protect the health and dignity of nursing home residents, including youth, and I will not hesitate to take action when nursing homes violate these laws.”

Under New York law, owners of nursing homes have a “special obligation” to ensure the highest possible quality of life for residents, and to have enough staff to provide adequate care to all residents. Federal New York state laws also require Medicaid providers like St. Margaret’s to have an effective compliance program to ensure they are providing care as the laws require.

The investigation revealed that St. Margaret’s consistently failed to meet federal and state standards of care, endangering its vulnerable residents, including children. St. Margaret’s was not adequately staffed, and one inspection conducted by the New York Department of Health (DOH) found that the facility had failed to supervise three children, immediately jeopardizing their health and safety. In other instances, St. Margaret’s residents did not receive appropriate respiratory care and suffered from medication errors. For example, St. Margaret’s twice failed to administer a resident’s anti-seizure medication. 

Based in part on DOH’s findings, the Centers for Medicare and Medicaid Services (CMS) temporarily placed St. Margaret’s into its Special Focus Facility program, signifying it was among the poorest performing nursing homes in the country.

St. Margaret’s also failed to maintain an effective compliance program to ensure it was following the law and meeting its legal obligations to provide high-quality care. As a result, St. Margaret’s consistently failed to meet federal and state standards for care, yet it submitted false claims to Medicaid for payment certifying compliance with these standards.

Under the settlement announced today, St. Margaret’s admits wrongdoing and will pay $1,300,000 to Medicaid, of which $707,200 will go directly to New York state. The remaining $592,800 will be paid to the federal government. The HHS-OIG will monitor St. Margaret’s Center for five years, overseeing the care and conditions of the facility.

The OAG and NDNY began this investigation after whistleblowers filed a complaint under the qui tam provisions of the New York False Claims Act and the federal False Claims Act in the U.S. District Court for the Northern District of New York. The New York False Claims Act allows individuals to file actions on behalf of the government and share in any recovery.

This is the fifth nursing home that Attorney General James has held accountable for resident mistreatment and neglect. Attorney General James has been investigating nursing homes throughout New York based on concerns of patient neglect and other conduct that endangers the health and safety of residents and employees, both before, during, and after the COVID-19 pandemic.

In August 2025, Attorney General James secured $12 million and major reforms from the Van Duyn nursing home. In November 2024, Attorney General James secured $45 million from four nursing homes affiliated with Centers for Care, LLC, including similar reforms to those made in Van Duyn. In March 2024, Attorney General James secured $8.6 million and significant reforms to the Fulton Commons nursing home on Long Island. In February and December 2023, Attorney General James and NDNY secured more than $7.8 million from the Saratoga Center for Rehabilitation and Skilled Nursing Care, a former nursing home in Ballston Spa, and its owners, unlicensed operators, and landlord for years of fraud and resident neglect. In December 2022, Attorney General James sued Cold Spring Hills Center for Nursing and Rehabilitation for diverting millions in government funding from resident care, causing widespread resident neglect and abuse, and in March 2024, the court found evidence of wrongdoing and appointed an independent health care monitor. In November 2022, Attorney General James filed a lawsuit against The Villages of Orleans Health and Rehabilitation Center, a nursing home in Albion, New York, for years of financial fraud that resulted in significant resident neglect and harm.

Attorney General James encourages anyone with information or concerns about alarming nursing home conditions, or resident abuse or neglect to file a confidential complaint online or call OAG’s Medicaid Fraud Control Unit (MFCU) hotline at (833) 249-8499.

The MFCU investigation was conducted by Detective Katelyn Matousek and Detective Supervisor John Benshoff, under the supervision of Deputy Chief, Commanding Officer Ronald Lynch, with Principal Auditor-Investigator Nathaniel J. Wood, under the supervision of Regional Chief Auditor Sarah Finning and Chief Auditor Dejan Budimir, and with assistance from Medical Analyst Stephanie Keyser, R.N.

The settlement was handled for MFCU by Senior Counsel of the Civil Enforcement Division Emily Auletta, under the supervision of Deputy Chief of Civil Enforcement Diana Elkind. The MFCU Albany Regional Office is led by Albany Regional Director Rachel Dunn and the Civil Enforcement Division is led by Chief Alee N. Scott. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. MFCU is part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.

New York MFCU’s total funding for federal fiscal year (FY) 2026 is $70,793,651. Of that total, 75 percent, or $53,095,240, is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent, totaling $17,698,411 for FY 2026, is funded by New York State.