United States and State of Vermont Resolve Matter with Accountant Raymond Kushi and Accounting Firm Kushi and Myers, PC

The Office of the United States Attorney for the District of Vermont and the office of the Vermont Attorney General announced the resolution of their investigations of accountant Raymond Kushi and accounting firm Kushi and Myers, PC for submitting or causing to be submitted false claims for payment to Medicaid as part of the rate setting process for the Bennington School, Inc. Under the terms of the agreement, Mr. Kushi and Kushi and Myers, PC paid $105,000 to resolve the matter. Of the $105,000 settlement, the State of Vermont will receive approximately $51,618 and the United States will receive approximately $53,382.

Until 2013, BSI, a for-profit, closely-held corporation, operated a residential program in Bennington, Vermont that offered therapeutic and educational services for socially and emotionally challenged boys and girls. The State of Vermont placed many students at BSI, and was responsible for their tuition and other expenses. The funding for these placements came from the Vermont Medicaid program (approximately 60% federal funding and 40% state funding) and from several Vermont state agencies, including the Agency of Education, the Department of Mental Health, and the Department for Children and Families. This funding was based on a per diem rate for each student, determined on an annual basis by the Division of Rate Setting (DRS), within the Vermont Agency of Human Services. The formula for the rate calculated by DRS for Medicaid and Education payments to BSI was based upon the school’s reported allowable expenses. From at least 2002 through 2011, Raymond Kushi and Kushi and Myers, PC submitted the rate setting materials, including the school’s reported allowable expenses, to DRS for purposes of BSI obtaining Medicaid funding. The Government’s investigation showed that not all of BSI’s claimed allowable expenses contained in the materials submitted by Raymond Kushi and Kushi and Myers, PC were in fact legitimate and allowable for the rate calculation. In 2013, in connection with the global resolution of the criminal and civil investigation of BSI, four former officers of BSI paid a total of $4.3 million to resolve potential civil health care fraud liability.

The current settlement resolves allegations that Raymond Kushi and Kushi and Myers, PC shared responsibility for the false information provided, resulting in an inflated Medicaid reimbursement rate and Medicaid overpayment to BSI from at least 2002 through 2011.

Pursuant to the terms of the settlement agreement, the agreement and payment are neither an admission of liability by Raymond Kushi or Kushi and Myers, PC, nor a concession by the United States or the State of Vermont that their claims were not well founded. The United States and the State of Vermont acknowledge that the scheme at issue here did not impact the quality of services offered to students at BSI.

This matter, in connection with the larger BSI case, was investigated by the United States Attorney’s Office, the Medicaid Fraud and Abuse Unit of the Vermont Attorney General’s Office, the Office of Inspector General of the U.S. Department of Health and Human Services, the Internal Revenue Service, and the Federal Bureau of Investigation.

Raymond Kushi and Kushi and Myers, PC were represented by Warren Hutchison, Esq., of LeclairRyan of Boston, Massachusetts. The United States was represented by Assistant U.S. Attorney Nikolas P. Kerest. The State of Vermont was represented by Assistant Attorney General Steven Monde.