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Vermont mental health agency agrees to $170,000 penalty for seeking payments for ineligible employee

Valley News Staff Writer
Published: 6/29/2021 9:47:06 PM
Modified: 6/29/2021 9:47:07 PM

SPRINGFIELD, Vt. — The nonprofit community mental health agency serving southeastern Vermont has agreed to pay $170,000 for improperly submitting insurance claims for services provided by an ineligible employee, the Vermont Attorney General’s Office said Tuesday.

The settlement payment from Health Care & Rehabilitation Services to the state of Vermont and the U.S. government includes more than $101,000 in restitution to Vermont Medicaid.

“HCRS provides important care and services to some of the State’s most vulnerable Vermonters,” Attorney General TJ Donovan said in a Tuesday news release. “Performing required background checks and complying with state and federal law is vital.”

HCRS is based in Springfield and serves Windsor and Windham counties. For nearly a decade, from Dec. 24, 2009, to May 15, 2019, it employed a social worker and billed federal insurance programs Medicare, Medicaid and Tricare for their services even though the social worker was on the Office of the Inspector General and U.S. Department of Health and Human Services’ exclusion list, the settlement agreement says.

HCRS, which disclosed the violation to regulators in 2019, is required to ensure that its employees are not on that exclusion list. Billing Medicaid for this person’s services violated the Vermont False Claims Act, as well as the federal False Claims Act.

The employee at issue, who had been an HCRS employee for many years, was excluded for reasons unrelated to employment at the community mental health agency, according to a Tuesday news release from HCRS. The worker was not named in documents released Tuesday by HCRS or the Attorney General’s Office.

“We immediately took steps to notify the authorities as soon as we became aware of the employment issue with this staff member,” HCRS CEO George Karabakakis said in the release. “As a community mental health agency, we regret our error and recognize the importance of ensuring all employment guidelines are followed; we have since strengthened our procedures to prevent a reoccurrence.”

The organization, which provides mental health and substance use treatment, has already repaid the bulk of the settlement costs and has $57,000 remaining, which is due in 30 days, according to the settlement agreement.

Nora Doyle-Burr can be reached at or 603-727-3213.

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