Stamford Doctor Steven Murphy’s $866,539 False Claims Act Settlement, How Suspended Medicare and Medicaid Payments Cover It and What the Three-Year Healthcare Exclusion Means

Stamford physician Steven Murphy, M.D., and his two medical practices agreed to pay $866,539 to resolve federal and Connecticut allegations involving COVID-19 reimbursement claims and improper Medicare and Medicaid billing for laboratory tests.

The settlement covers alleged conduct from September 2019 through April 2022. Murphy, Murphy Medical Associates LLC and Diagnostic and Medical Specialists of Greenwich LLC also agreed to a three-year exclusion from federal healthcare programs and Connecticut’s Medical Assistance Program.

The money is not a new cash payment. According to reporting on the settlement document, Medicare and Medicaid payments already withheld from the practices will satisfy the settlement (explained in the payment section below).

Patients cannot file claims for a share of this $866,539. It is a government enforcement resolution, not a consumer class action or a malpractice fund. The government releases announce no patient claim form, administrator or deadline.

Quick Facts: Steven Murphy’s $866,539 Healthcare Fraud Settlement

Detail	Information
Settlement amount in government announcements	$866,539
Exact amount in reporting on the settlement document	$866,539.34
Physician	Steven Murphy, M.D.
Businesses	Murphy Medical Associates LLC and Diagnostic and Medical Specialists of Greenwich LLC
Location	Stamford, Connecticut
Government parties	United States (U.S. Attorney’s Office, District of Connecticut) and State of Connecticut (Attorney General William Tong)
Federal program involved	HRSA COVID-19 Uninsured Program, plus Medicare
State program involved	Connecticut Medicaid
Alleged conduct period	September 2019 through April 2022
Federal government’s announced share	$583,310
Connecticut’s announced share	$283,229
Suspended Connecticut payments (per reporting)	$859,565.34 held by Connecticut’s Department of Social Services
Suspended Medicare payments (per reporting)	$6,974.00 held by CMS
Healthcare program exclusion	Three years
Public patient claim form or deadline	None
Official announcement date	October 16, 2026

How Is Steven Murphy’s $866,539 Settlement Being Paid?

The governments announced that Murphy and his practices will pay $866,539. According to reporting on the settlement document, that obligation is satisfied with money the government was already holding back from the practices.

• Step 1, earlier suspensions. Connecticut’s Department of Social Services suspended payments to the practices in April 2021. CMS suspended Medicare payments in November 2022. Suspended money is not released to the provider while payment questions are unresolved.
• Step 2, the balances held. The reported balances were $859,565.34 held by Connecticut as of September 1, 2026, and $6,974.00 held by CMS as of August 27, 2026. Together they equal $866,539.34, matching the reported exact settlement amount.
• Step 3, how the money is applied. Under the reported arrangement, the practices give up their rights to those withheld amounts and the governments apply them to the settlement. The practices do not receive the money and then repay it, and no new cash installment is reported.
• Step 4, how it is split. The official releases allocate $583,310 to the federal government and 283,229toConnecticut.TheConnecticut-heldbalance(859,565.34) is larger than Connecticut’s announced share, and the reports do not explain how the held funds are divided between the two governments. Medicaid is jointly funded by the state and federal governments, which may explain it, but the sources reviewed do not say so.

Verification note: The U.S. Department of Justice and the Connecticut Attorney General confirm the $866,539 total, the split between governments, the alleged conduct and the three-year exclusion. The exact cents and the suspended balances come from reporting on the signed settlement agreement. I could not find a publicly accessible copy of that agreement, a court, or a docket number in the official releases.

What Laws Allow Medicare and Medicaid to Suspend Payments to a Provider?

Medicare can suspend payments when there is reliable evidence of overpayment or fraud (42 C.F.R. § 405.371). State Medicaid programs must generally suspend payments upon a “credible allegation of fraud” unless a good-cause exception applies (42 C.F.R. § 455.23). Connecticut’s April 2021 suspension fits that type of action, although the releases do not publish the suspension orders.

Providers must also report and return identified overpayments within 60 days under 42 U.S.C. § 1320a-7k(d), and keeping an overpayment can itself create False Claims Act liability.

What Did the Government Allege About Steven Murphy’s COVID-19 Uninsured Program Claims?

The government alleged that Murphy and his practices sought reimbursement from the HRSA COVID-19 Uninsured Program for patients who were not eligible because they already had health insurance. Congress created the program during the pandemic to help providers recover the costs of COVID-19 testing, treatment and vaccine administration for uninsured people. Providers had to confirm a patient was uninsured on the date of service and attest to that before submitting claims.

According to the Justice Department, Murphy’s practices had insurance cards and other documents in their files showing that some patients had private or government coverage. The government alleged the practices still billed the uninsured program for them, and that patient insurance information was changed in the electronic medical records to “Covid19 HRSA Uninsured” before claims were submitted and paid.

These are allegations resolved by a civil settlement, not a trial verdict.

What Did the Government Allege About Murphy’s Medicare and Medicaid Blood-Test Billing?

The second part concerned blood tests performed by Murphy’s in-house laboratory, which tested patients with possible COVID-19 exposure and also non-COVID patients such as those at annual physicals. The lab used panels made up of several individual tests. The government alleged the practices billed Medicare and Medicaid separately for each test in a panel, rather than one consolidated price, and that some individually billed tests were never performed.

Why Did Missing Laboratory Reagents Matter in the Murphy Case?

Reagents are the substances a lab needs to run particular diagnostic tests. The government alleged Murphy’s lab sometimes lacked reagents needed for every test in its standard panels, but still billed Medicare or Medicaid for tests that could not have been completed without them. The allegation was not simply about how panels were billed; it was that some separately billed tests were not performed.

Which Laws Did Steven Murphy Allegedly Violate?

The settlement resolves allegations under the federal and Connecticut False Claims Acts.

Federal False Claims Act (31 U.S.C. §§ 3729–3733). Section 3729(a)(1)(A) covers knowingly presenting a false or fraudulent claim, and (a)(1)(B) covers knowingly making a false record or statement material to a claim. Section 3729(a)(1)(G) covers knowingly keeping money owed to the government (a “reverse false claim”). Violators face treble damages plus per-claim civil penalties, which are adjusted for inflation. “Knowingly” includes deliberate ignorance and reckless disregard, not only actual knowledge.

Connecticut False Claims Act (Conn. Gen. Stat. § 4-274 et seq.). This is Connecticut’s parallel law for fraud involving state funds, including Medicaid.

Whistleblower provisions (31 U.S.C. § 3730). Private individuals can bring qui tam cases on the government’s behalf and may receive a share of the recovery (generally 15% to 30% in cases the government joins). The public announcements about Murphy do not identify a whistleblower or a relator award, so none should be assumed.

Statute of limitations (31 U.S.C. § 3731(b)). False Claims Act cases generally must be filed within six years of the violation, or within three years of when the government knew or should have known, up to ten years total.

Criminal healthcare fraud (18 U.S.C. § 1347). This is a separate criminal statute. The announcements describe a civil settlement and do not announce a conviction.

A civil settlement does not mean a conviction or a jury finding that every allegation was proven.

What Does the Three-Year Healthcare Exclusion Mean for Steven Murphy and His Practices?

Murphy and his two practices agreed to exclusion from all federal healthcare programs for three years. Connecticut’s Attorney General separately confirmed exclusion from the Connecticut Medical Assistance Program.

The exclusion system is run by the HHS Office of Inspector General under 42 U.S.C. § 1320a-7 and its regulations (including 42 C.F.R. § 1001.1901). An excluded person or entity generally cannot receive payment from federal healthcare programs for items or services it furnishes, orders or prescribes, and the exclusion affects other healthcare organizations that might employ or contract with them. Employing or contracting with an excluded person can expose an organization to civil monetary penalties under 42 U.S.C. § 1320a-7a(a)(8), which is why providers routinely screen the OIG’s List of Excluded Individuals/Entities (LEIE).

For patients, this means Medicare and Medicaid will not pay for services furnished by the excluded providers. A Medicare or Medicaid patient who wants coverage should confirm with the practice and their plan what services remain payable.

The exclusion is not a medical license suspension or revocation. Licensing is handled separately by Connecticut’s Medical Examining Board and Department of Public Health (see Conn. Gen. Stat. § 20-13c for grounds for discipline). The announcements reviewed do not say Connecticut has suspended or revoked Murphy’s license. They also do not give the exact start and end dates of the exclusion, so check the OIG exclusion records.

For how civil claims differ from professional discipline, see Doctor Commits Malpractice, License Suspended, Insurance Skyrockets, Career Destroyed—What Actually Happens.

Can Steven Murphy’s Patients Claim Part of the $866,539 Settlement?

No. The money resolves claims brought by the federal and state governments, and there is no patient claim form, settlement administrator or deadline. Patients are not accused of wrongdoing merely because their care appears in the billing allegations, and the settlement does not establish that any patient was harmed or is owed a refund.

What Should Patients Do If They Have a Concern About a Medicare or Medicaid Bill?

1. Review your Medicare Summary Notices, Medicaid explanations of benefits and medical bills and compare each service with the care you remember.
2. If a test or service looks wrong, contact the provider or health plan through official contact information and ask for an explanation.
3. Keep copies of bills, records and responses, and if a charge stays unexplained, contact Medicare or your state Medicaid agency.

The settlement does not require patients to do anything. For a similar government action over alleged false Medicare billing that created no patient fund, see Appleton Medical Clinic Medicare Fraud Settlement, What Wisconsin Patients Need to Know.

How Does the Stamford Settlement Compare With Other False Claims Act Cases?

A government healthcare-fraud settlement can include repayment to the government, a whistleblower share where one is due, and consequences such as program exclusion. Which components apply depends on the specific agreement.

For another federal False Claims Act resolution involving alleged COVID-19 reimbursement billing, see Heal 360 COVID Testing Settlement, Clinics and Owner Agree to Pay $20 Million Over Alleged Billing Fraud.

For a pending Medicare billing lawsuit, see Bay City Doctor Michael Neret Sued Over Nearly $500,000 in Medicare Billing, What the Federal False Claims Act Lawsuit Alleges. That case is separate from the Stamford settlement and has its own procedural status.

Key Dates in Steven Murphy’s Healthcare Fraud Settlement

Date	Event
September 2019 – April 2022	Period of alleged billing conduct resolved by the settlement
May 2020	Connecticut Attorney General’s Office began investigating Murphy’s billing
April 2021	Connecticut Department of Social Services reportedly suspended payments to the practices
November 2022	CMS reportedly suspended Medicare payments to the practices
August 27, 2026	Date of the reported CMS suspended balance ($6,974.00)
September 1, 2026	Date of the reported Connecticut suspended balance ($859,565.34)
October 16, 2026	DOJ and Connecticut Attorney General announced the $866,539 settlement
October 20, 2026	Reporting described the suspended-payment arrangement

Frequently Asked Questions About Steven Murphy’s $866,539 Settlement

Is Steven Murphy paying $866,539 in cash?

The announcements say Murphy and his practices will pay $866,539. The settlement document, as reported, says the obligation is satisfied by applying Medicare and Medicaid payments already withheld, which total $866,539.34.

Why were Murphy’s Medicare and Medicaid payments suspended before the settlement?

Connecticut reportedly suspended Medicaid payments in April 2021 and CMS suspended Medicare payments in November 2022. The official releases do not publish the suspension orders.

Does the settlement mean patients can file claims?

No. This is a government False Claims Act settlement, not a consumer compensation program.

How much will Connecticut receive from the settlement?

Connecticut will receive $283,229 and the federal government $583,310, which total $866,539.

Is Steven Murphy banned from Medicare and Medicaid?

Murphy and his practices agreed to a three-year exclusion from all federal healthcare programs, and Connecticut confirmed exclusion from its Medical Assistance Program. This is separate from a medical license suspension.

Was Steven Murphy convicted of criminal healthcare fraud?

No. The announcements describe a civil settlement of federal and state allegations, not a criminal conviction.

How can someone report suspected Medicare or Medicaid fraud?

The Justice Department says suspected federal healthcare fraud can be reported to HHS at 1-800-HHS-TIPS (1-800-447-8477). Connecticut accepts reports through the Attorney General’s Government Fraud Section at 860-808-5040 or [email protected].

Official Sources and Documents

1. U.S. Department of Justice, District of Connecticut, October 16, 2026: “Connecticut Physician and His Practices Pay More Than $860K to Settle False Claims Act Allegations.” Read the official DOJ announcement
2. Connecticut Office of the Attorney General, October 16, 2026: “Attorney General Tong Announces False Claims Act Settlement with Fairfield County Doctor and His Practices.” Read the official Connecticut release
3. U.S. Department of Health and Human Services Office of Inspector General: Exclusions from federal healthcare programs and the List of Excluded Individuals/Entities. Read the official OIG exclusions guidance

Disclaimer: This article is for general information only and is not legal advice. The allegations were resolved through a civil settlement and should not be described as a criminal conviction or a jury finding. AllAboutLawyer.com is a legal information website, not a law firm.

Researched and written by Israr Ahmad, legal content researcher and founder of AllAboutLawyer.com. All facts verified against the official U.S. Department of Justice and Connecticut Attorney General releases of October 16, 2026, as of October 20, 2026 (suspended-payment balances per reporting on the settlement document). Last Updated: October 20, 2026.