Psychiatric Chain Locked Up Patients Who Didn't Need It — Then Kept $32M Medicare Knew Was Owed Back

A Psychiatric Chain Billed Medicare for Patients Who Didn't Need to Be Admitted — and Kept the Money After Its Own Consultants Said Give It Back

On May 27, 2026, the U.S. Department of Justice announced that Oglethorpe Inc., a Tampa, Florida operator of psychiatric hospitals, along with founder and principal owner Robert Cohen, CEO John Picciano, and COO James O'Shea, agreed to pay $32 million to settle False Claims Act allegations. The core of the case is not just bad billing — it's that they kept money they had already been told was not theirs.

The Patients Who Shouldn't Have Been Admitted

The government alleged that Medicare beneficiaries were admitted to two of Oglethorpe's Ohio psychiatric hospitals — Ridgeview Behavioral Hospital and Georgetown Behavioral Hospital — and a substance abuse clinic, The Woods at Parkside, even though they did not require inpatient psychiatric care. Inpatient psychiatric admission is among the most expensive and most restrictive forms of care; billing Medicare for it when it isn't medically necessary inflates reimbursement while confining people who shouldn't be confined.

They Were Told. They Kept It Anyway.

The damning detail: the overpayments at issue were ones that Oglethorpe's own consultants had identified. Under federal law, a provider that learns of a Medicare overpayment must return it within a set window. The DOJ alleged Oglethorpe knowingly failed to do so — turning an accounting finding into a deliberate retention of taxpayer money.

The Penalty

Beyond the $32 million, the named executives — Cohen, Picciano, and O'Shea — agreed to be excluded from Medicare, Medicaid, and all federal health care programs for 10 years, beginning July 2026. Individual exclusion is a significant escalation: it targets the people who ran the scheme, not just the corporate entity.