MONTPELIER – Health Care and Rehabilitation Services of Southeastern Vermont has reached a nearly $400,000 settlement with the Attorney General’s Office to resolve allegations of Medicaid fraud.
HCRS, a Springfield, Vt.-based nonprofit organization that serves residents in Windsor and Windham counties, contends that any misconduct alleged by the state was not willful, but the result of lapses during the COVID-19 pandemic.
An investigation conducted by the Attorney General’s Medicaid Fraud and Residential Abuse Unit, following a referral from the Department of Aging and Independent Living, alleges that “over a three-year period, HCRS misused and retained Medicaid funds that should have been returned to the State,” according to a news release issued by the Attorney General’s Office on Wednesday.
The state alleges that between July 2021 and June 2024, HCRS improperly retained funds that were distributed by the Vermont Medicaid Program, which were not used for their original budgeted purpose, and should have been returned to the state’s Equity/Public Safety Fund to be reallocated as needed to Medicaid beneficiaries.
“Specifically, in certain cases, when HCRS knew or should have known that a client’s HCRS services were terminating or when a client’s budget was reduced within one year of receiving new funding, HCRS improperly retained the client’s unused budget rather than returning funds to the Equity/Public Safety Fund,” according to the settlement.
On numerous occasions, the Attorney General’s Office found, HCRS both failed to maintain adequate documentation regarding medically necessary services after making significant changes to a client’s budget or services and failed to provide adverse benefit notifications and suspension notices when required.
“In addition, HCRS did not document that it informed clients and relevant caregivers when an individual’s budget or services changed significantly,” the settlement states.
HCRS did not dispute the state’s allegations. However, according to the settlement, “HCRS believes there are additional facts that would show the lack of requisite intent or would demonstrate that any misconduct was the result of a mistake or error.”
“Therefore, HCRS denies liability in general and specifically denies that it violated its Provider Enrollment Agreements, Government Healthcare Program Requirements or any other state or federal law,” the settlement states.
To avoid the delay, expense, inconvenience and uncertainty of litigation, HCRS agreed to the settlement this month.
In a statement emailed to the Valley News on Thursday, HCRS stressed that the nonprofit remains “deeply committed to supporting our clients with responsive and compassionate care, and to doing that work with integrity and accountability.”
HCRS provides a variety of services, including emergency mental health care, outpatient substance use programs and support for children and adults with developmental disabilities. Among its Upper Valley locations are Hartford Children’s Services in White River Junction, Windsor Developmental Services in Windsor and Woodstock Therapeutic Community Residence in Woodstock.
The allegations of the Attorney General’s office concerned Medicaid funding and practices within HCRS’ Developmental Services program, according to Alice Bradeen, communications and fundraising director for HCRS.
“The issues identified date back to the COVID-19 pandemic, an extraordinarily challenging period when service delivery changed rapidly and there was considerable complexity and uncertainty surrounding requirements for some client services,” Bradeen explained in the nonprofit’s statement to the Valley News on Thursday.
When concerns about billing and practices were brought to HCRS’ attention, Bradeen said that the nonprofit immediately began working cooperatively with the Attorney General’s Office and state regulators to understand the issues and determine what funds should appropriately be returned.
“Additionally, HCRS took immediate action to improve compliance, reporting, and quality across multiple areas,” she added.
The settlement requires HCRS to pay $391,816 to the State and undertake specific compliance measures going forward, which include: accurately maintaining client service and support plans, keeping timely needs assessments and periodic reviews, ensuring that all services and supports billed to Vermont Medicaid are medically necessary, and promptly sending notifications of adverse benefit determinations to affected Medicaid beneficiaries.
“When health care agencies entrusted with Vermont Medicaid funds abuse the system, the consequences ultimately come at the expense of patients and taxpayers,” Attorney General Charity R. Clark stated in the Wednesday news release. “I am grateful to the parties for entering into an agreement that accounts for the harms of their actions and ensures this does not happen again.”
Reports of suspected Medicaid fraud can be submitted by using MFRAU’s online reporting form.
