Vermont has become the subject of a federal investigation into potential Medicaid fraud, waste and abuse, according to a letter state officials received from Congress on March 3.
The House Committee on Energy and Commerce requested detailed information about Vermont’s Medicaid program and gave the state until March 17 to respond, according to the congressional correspondence. The committee sent similar requests to nine other states, including Maine and Massachusetts.
The investigation stems from concerns raised by a federal probe into Minnesota’s Medicaid program, which uncovered suspected fraud, waste and abuse in how healthcare providers bill the program that serves low-income residents.
“The Committee is concerned that your state’s Medicaid programs may be similarly vulnerable to (fraud, waste and abuse) that harms Medicaid enrollees, legitimate providers, and taxpayers,” the letter states.
Vermont’s heavy reliance on federal Medicaid funding has drawn congressional attention. The state’s Medicaid program spent $2.3 billion in 2024, with $1.45 billion coming from federal sources, according to the committee letter. More than 156,900 Vermonters depend on the program for healthcare coverage.
The Department of Vermont Health Access, which administers Vermont Medicaid, requested a $33 million budget adjustment from the federal government in January to cover this year’s Medicaid costs, according to state records.
Congressional investigators cited Vermont’s Medicaid dependence as making the state “high risk” for fraud, waste and abuse. The letter references several cases that Vermont’s Medicaid Fraud and Residential Abuse Unit has pursued through the Attorney General’s Office.
One case involved Burlington mental health provider Eden Valley, which paid a $200,000 settlement for submitting more than 150 false records across 50 Medicaid claims, according to the congressional letter. Another case detailed felony Medicaid fraud charges against a Lamoille County couple for submitting thousands of dollars worth of false timesheets for unauthorized caretaking services.
The committee highlighted that home health, community care and mental health services are particularly vulnerable to Medicaid fraud. Congressional investigators specifically pointed to Applied Behavioral Analysis therapy for autism patients as an area of concern.
Vermont Medicaid implemented controversial changes to ABA therapy billing at the end of 2025, citing fraud, waste and abuse concerns. State officials said at the time they wanted to be “proactive” against federal scrutiny that could jeopardize broader Medicaid services.
The congressional committee has requested that Vermont’s Agency of Human Services provide additional information about how the state investigates and prevents Medicaid fraud.
Agency spokesperson Ted Fisher said in a statement that Vermont is working with the Department of Vermont Health Access to meet the March 17 deadline for responding to the committee’s request.
“Vermont takes program integrity seriously and maintains safeguards to ensure Medicaid resources are used appropriately,” Fisher wrote. “Vermont’s program integrity teams work closely with the Attorney General’s Medicaid Fraud and Residential Abuse Unit to investigate and address suspected fraud.”
The federal investigation comes as Vermont continues to grapple with rising healthcare costs and increasing demand for Medicaid services. The state’s Medicaid program serves roughly one in four Vermonters, making it a critical component of the state’s healthcare infrastructure.
The congressional probe reflects broader federal concerns about Medicaid program integrity across multiple states. Federal officials have increased scrutiny of state Medicaid programs in recent years as costs have risen and new billing practices have emerged in healthcare delivery.
Vermont officials have not indicated whether they expect the investigation to result in changes to the state’s Medicaid operations or potential financial penalties.
