Vermont AG Settles with UCS - Healthcare Provider Settlement

JD Supra Healthcare

Filed March 12th, 2026

Detected March 31st, 2026

Summary

The Vermont Attorney General's Medicaid Fraud and Residential Abuse Unit settled with United Counseling Service of Bennington County for $483,464 over allegations of service failures and safety risks to Medicaid recipients. The settlement requires extensive organizational reforms including a development services oversight monitor and a new director of quality position. This highlights state AG focus on False Claims Act liability and public safety risk management for healthcare organizations serving vulnerable populations.

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What changed

On March 12, 2026, Vermont AG Charity Clark announced a settlement with United Counseling Service (UCS), a Medicaid service provider, resolving allegations of substandard care and preventable risk to vulnerable adults. The state alleged that UCS's Medicaid claims constituted false certification under Vermont's False Claims Act. UCS agreed to pay $483,464 and implement comprehensive organizational reforms, including engaging a development services oversight monitor and creating a Development Services Division director of quality position.

Healthcare organizations providing services to vulnerable individuals, particularly those billing Medicaid, should immediately review their oversight, risk assessment, and care delivery frameworks. Organizations should ensure compliance systems are well-documented and effectively implemented. The settlement agreement is AG-MFRAU No. 2023-08131.

What to do next

Conduct internal audit of care monitoring and oversight systems to identify potential service failures
Implement or enhance quality assurance frameworks with documented protocols for client placement and service delivery
Ensure Medicaid billing practices align with state False Claims Act requirements and reflect actual services provided

Penalties

$483,464 settlement payment to Vermont

Source document (simplified)

March 31, 2026

Vermont AG Settles With United Counseling Services Emphasizing Public Safety and Organizational Reforms

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On March 12, 2026, Vermont Attorney General (AG) Charity Clark announced a settlement with United Counseling Service of Bennington County, Inc. (UCS), an organization contracted with Vermont’s Medicaid program to provide services to vulnerable adults in Vermont. The settlement agreement resolves Vermont’s allegations related to service failures that resulted in alleged safety risks to Medicaid recipients and the public, and requires UCS to pay the state $483,464 and implement various “dramatic organizational reforms” to improve oversight and monitoring.

UCS is a Vermont Medicaid service provider that contracted with the Department of Disabilities, Aging and Independent Living Developmental Disabilities Services Division (DAIL-DDSD) to provide services to vulnerable adults in the Vermont area. Following a May 2023 complaint from the DAIL-DDSD about concerns with UCS’s care, monitoring, and oversight, the Vermont AG’s Office’s Medicaid Fraud and Residential Abuse Unit (MFRAU) began an investigation into UCS.

In the settlement agreement, Vermont alleges multiple instances of substandard care and preventable risk involving adults who were clients of UCS, and alleges that UCS’s claims and receipt of Medicaid payment for these clients constituted false certification under Vermont’s False Claims Act. The settlement agreement makes clear that UCS does not dispute the state’s allegations regarding the covered conduct, but if litigated, UCS would deny any and all liability. The parties agree to extensive monitoring and governance reforms, including UCS engaging a development services oversight monitor to conduct regular oversight reviews and creating a Development Services Division director of quality, responsible for ensuring consistency in client placement and receipt of services as well as overseeing employee training and support. Both of these roles have detailed responsibilities outlined in attachments to the settlement agreement.

This settlement highlights not only the continued focus state AGs are placing on the False Claims Act in connection with the submission of claims for payment, but also their concern with how health care organizations assess and manage public safety risk and how they conduct internal operations to ensure the safe and successful delivery of care. Organizations providing care, particularly to vulnerable individuals, should regularly and proactively evaluate their oversight, risk assessment, and delivery of care frameworks to ensure they are aligned with state and federal requirements, well-documented, and effectively implemented throughout the organization’s operations.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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