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The home for VPR's coverage of health and health industry issues affecting the state of Vermont.

Vermont AG Investigation Of Brattleboro Retreat Finds 'No Criminal Misconduct'

A Brattleboro Retreat sign.
Toby Talbot
Associated Press File
In a press release issued Monday, Vermont Attorney General TJ Donovan said his office found some billing deficiencies at the Brattleboro Retreat, but they "did not result in net financial harm to the Vermont Medicaid program."

The Vermont Attorney General's Office announced Monday that it found "no criminal misconduct" following a five-year investigation of the Brattleboro Retreat, a mental health treatment facility in southern Vermont.

A press release issued Monday detailed the investigation's findings. Attorney General TJ Donovan said that the state’s Medicaid Fraud Unit launched the investigation which looked into alleged billing discrepancies in the federal Medicaid program.

Former Vermont Attorney General Bill Sorrell first launched an investigation in 2013 after a former Retreat employee alleged Medicaid fraud at the southern Vermont psychiatric hospital. Two years later, State Auditor Doug Hoffer recommended that the AG widen the scope.

Donovan said that while there are Medicaid billing problems to correct, there was no financial harm done to the state’s Medicaid program.

“The Retreat certainly had its issues, but we found no criminal conduct, in terms of our review, to bring a criminal charge,” Donovan told VPR Monday.

"The Retreat certainly had its issues, but we found no criminal conduct, in terms of our review, to bring a criminal charge." — Vermont Attorney General TJ Donovan

Donovan said the state worked closely with the Retreat throughout the investigation, and he said the hospital agreed to have a third party oversee its Medicaid billing.

“It was a question of, do we solve the problem or do we continue to litigate, perhaps in a civil forum?” Donovan said to VPR. “And this is about solving a problem, and making sure that we continued the access to quality mental health and substance abuse care in our state, which we sorely need, but also building in that accountability, so if they do have a mistake, there’s accountability. But we’re going to solve a problem, and I think this is the best outcome.”

Monday's press release also noted the state will enter into a memorandum of understanding with the Brattleboro Retreat to correct the billing issues.

"This agreement holds the Retreat accountable and is an example of problem solving for a good result for all parties,” Donovan stated in the release. "We look forward to continuing to work with the Retreat."

Since Tropical Storm Irene flooded the Vermont State Hospital in Waterbury, the Retreat has taken in more acute patients. Retreat CEO Louis Josephson said that means the hospital has seen a significant increase in the number of patients receiving federal assistance to cover their medical bills.

“It’s our life’s blood. Medicaid … is our number one sort of payer, in terms of the volume of what we do here,” Josephson said. “We’ve made ourselves appropriately a responsive Vermont organization; we’re the only kind of dedicated psychiatric facility of its kind in the state. But over time, that has meant much more of our business has been in Medicaid in the last decade than it had ever been at any time in our past.”

According to Brattleboro Retreat CEO Louis Josephson, about 70 percent of all inpatient billing goes through Medicaid, which is about a third higher than it's been over the last 10 years or so.

According to Josephson, about 70 percent of all inpatient billing goes through Medicaid, which is about a third higher than it’s been over the last 10 years or so. And Josephson said software systems that don’t speak to each other, and complicated billing and psychiatric care programs, sometimes make it hard to accurately complete federal Medicaid forms.

He said the state recognized the challenges the hospital faced, and Josephson said the agreement to have a third party oversee the billing means the hospital will work with the state before major issues arise.

“If there is concern from the state’s side, they can come in and say, ‘Hey. You know, look at what the report found. We feel like you need to put more resources or more attention,’ or whatever they might feel would be necessary,” Josephson said. “So we can have those discussions in a collaborative way with the state and make sure we’re staying on track, staying towards improving our billing practices.”

Thomas Joseph, who worked at the Brattleboro Retreat for about three years, is the former employee who first raised questions about the Retreat's Medicaid billing system. Joseph tried to have his case heard in the U.S. District Court of Vermont but a judge dismissed the suit in 2014.

Joseph said he wasn’t surprised that the attorney general also failed to prosecute the Retreat, even though he said his evidence is strong.

“Not only was the repeated double billing, for many years, evidence of malfeasance, the simple fact that the signatories to hospital cost reports are guilty of felonies if in fact what they submitted is not correct,” Joseph told VPR. “So there’s a multitude of things to point to whereby you can demonstrate criminal behavior.”

Joseph said he wasn’t sure what his next step might be now that the attorney general failed to uncover criminal behavior at the Brattleboro Retreat.

Disclosure: The Brattleboro Retreat is a VPR underwriter.

Correction 7/18/2018 10:10 a.m. This post originally stated Joseph's case was brought to both federal and state district courts. The post has been updated to reflect that it was just heard in the U.S. District Court of Vermont.

Update 6:18 p.m. This post was updated to include further reporting and comments from Donovan, Josephson and Joseph.

Correction 11:58 a.m. Per Donovan, the investigation launched in 2013. Previously the post referred to a "more than two-year investigation" but it has been updated with the more concrete timeline.

Howard Weiss-Tisman is Vermont Public’s southern Vermont reporter, but sometimes the story takes him to other parts of the state.
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