Health Care & Rehabilitation Services of Southeastern Vermont: Nearly a Decade of Claims for an Excluded Employee

In the Health Care & Rehabilitation Services of Southeastern Vermont fraud case, HCRS agreed to pay $170,038 to resolve allegations that it submitted Medicare, Medicaid, and TRICARE claims for an excluded employee’s services. We see a stark contrast: nearly a decade of alleged excluded-employee claims, followed by a settlement that credited the provider for coming forward. For someone who knows the employee roster, the screening process, or the billing, that connection is the heart of the case.

The U.S. Attorney’s Office for the District of Vermont announced the resolution on June 29, 2021. HCRS provides mental health, substance abuse, and developmental services to Vermonters. The investigation concerned whether it failed to screen employees and submitted government claims for work by someone barred from receiving payments from federally funded healthcare programs.

What HCRS Was Accused of Claiming

The government alleged that HCRS employed an excluded individual for nearly ten years and submitted claims on that person’s behalf to the public programs. The employee was on the exclusion list maintained by the Office of Inspector General of the Department of Health and Human Services. HCRS was the organization submitting the claims.

A payroll record identifies the employee, while the claim may carry the organization’s billing identity. Connecting the work to the claim brings an employment decision into the payment story.

The federal office investigated the HCRS claims under the False Claims Act. Vermont’s Attorney General’s Office, through its Medicaid Fraud and Residential Abuse Unit, also concluded that HCRS violated the Vermont False Claims Act. The offices worked together on the resolution, which covered payment to both the United States and Vermont.

Why an Excluded Employee Can Affect the Provider’s Claims

An excluded employee’s work can affect payment even when that employee never submits a personal bill. The OIG’s 2013 advisory bulletin explains that the payment prohibition follows the items or services furnished by an excluded person. It applies even when a provider that is itself eligible receives the payment.

The bulletin gives a concrete example: a hospital cannot receive federal program payment for an excluded nurse’s services to program beneficiaries, even when the nursing work is included in the hospital’s broader payment. Folding the work into a larger bill does not remove the excluded worker from it. The bulletin applies the same principle across itemized claims, cost reports, payments per enrolled patient, and bundled payments.

The reach extends beyond the person treating the patient. OIG describes treatment-plan review, billing, accounting, staff training, and human resources work that federal health care programs pay for, directly or indirectly. Administrative work can sit inside the cost of delivering care without appearing as a separate service on a patient’s bill. That makes the employee’s actual duties and the way those duties are funded part of the inquiry.

The bulletin specifically notes that an excluded practitioner can still hold a valid license. A credentials file and an exclusion check therefore tell different parts of the staffing story.

This is why we look beyond the name at the top of a claim. An organization can be the billing provider while an excluded employee supplies work behind the payment. In HCRS’s case, the government’s allegation connected those two sides of the business over a prolonged period.

Screening Prospective and Current Employees

The HCRS announcement described a commitment to change how the provider screened both prospective and current employees.

The historical OIG bulletin recommended checking its List of Excluded Individuals and Entities before employment or contracting and periodically afterward. Because OIG updated the list monthly, it recommended monthly screening to reduce payment exposure.

The bulletin also addressed outsourced screening. A provider could use a contractor to run checks, and OIG recommended that the provider validate the contractor’s screening through documentation. Inside a provider, that means the screening arrangement and its results matter together. We want to understand who handled the check and what the organization learned from it.

Cooperation Credit After Nearly a Decade of Alleged Claims

HCRS received a cooperation credit for self-disclosing the issue, assisting the investigation, and voluntarily adopting measures to address improper employment and claim submission. The settlement covered payment to the United States and Vermont. The government praised the response to a problem it alleged had affected claims for nearly ten years.

We give the response weight without losing sight of the claims that prompted it. For an insider, what happened after discovery can be as revealing as the screening the government alleged was missing. Employment decisions, information reaching management, and claims submitted afterward tell a connected story. We examine those decisions with the person who saw them, including the changes the organization actually made.

A Clinical Director Behind the Reimbursement

A similar payment connection appeared in the case against Geriatric & Adult Psychiatry and its owner. In February 2022, the U.S. Attorney’s Office for the District of Connecticut announced that they agreed to pay $310,874 over allegations that the practice employed an excluded clinician as its clinical director and used federal program reimbursements to fund the clinician’s salary and benefits.

The alleged role explains why the case belongs beside HCRS. An excluded person working within a practice can be connected to government reimbursement through the organization’s operations and payroll. The clinical director’s salary and benefits supplied that connection in the Connecticut case. Each case turns on the work inside the provider and the public money supporting it.

What Evidence Is Needed to Prove Fraud?

Proof in an excluded-employee case means tying the worker, the work, and the claims together, and that is the work we do with you. We also examine what the organization knew and how it responded. The HCRS allegations show why a staffing record and a billing record may need to be read together.

Identity is part of that connection. The OIG bulletin described both name searches and verification of potential matches, along with documentation of the screening performed. A screening result becomes useful in a case when it connects to the actual employee, the work period, and the organization submitting the claims.

A personnel specialist may understand the employee’s duties and the screening history. A billing employee may know how the work reached a Medicare, Medicaid, or TRICARE claim. A compliance employee may know when the organization learned of the problem and what changed afterward. We work with that firsthand knowledge to connect the employee’s role, the claim, and the decisions behind it.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know the Staff Behind the Claims

If you saw an excluded worker’s services reach government claims, talk with our whistleblower experts about what happened inside the provider. We build the case with you, bring in behavioral health fraud whistleblower lawyers who understand excluded-employee claims, and stay beside you as the case moves forward. Speak to one of our Whistleblower Experts about building your strongest excluded-employee whistleblower case.