Tesla Hubbard alleges she lost her job after raising the alarm, both internally and then with the state, on potential Medicaid fraud at the social services organization Northeast Kingdom Human Services, according to a civil suit Hubbard and her lawyers filed on March 11.
The suit alleges Northeast Kingdom Human Service enacted a “fraudulent billing scheme” to “double dip” on Medicaid claims, billing once for mobile crisis care and again when including clients in a broader monthly payment. It comes as the federal government is taking a closer look into Medicaid fraud in Vermont and across the country.
Northeast Kingdom Human Services is one of Vermont’s “designated agencies.” The organization, like its counterparts in counties across the state, contracts with the state Department of Mental Health and the Department of Disabilities, Aging and Independent Living to provide mental health, substance use disorder and developmental disability services.
Asked about the lawsuit, Northeast Kingdom Human Services answered questions through a public relations firm.
“NKHS is aware of the complaint and takes the allegations seriously. We have been proactive in our engagement with the appropriate oversight agencies and are working with legal counsel,” Nicole Junas, a spokesperson, wrote. Because the case is in active litigation, she said she was not able to comment further.
Hubbard was hired in May 2024 as an emergency services clinician at Northeast Kingdom Human Services, the lawsuit details, and later was promoted to manage its mental health urgent care, where she worked until the end of 2025.
The nonprofit’s programs are some of the most robust in the state, and its 24-hour walk-in mental health urgent care, called the Front Porch, has been hailed as a model for this type of care in Vermont. The agency also operates the region’s 24/7 mobile crisis care, which is like a 911 team that can meet with a patient during a mental health emergency.
Vermont Medicaid reimburses the agency for these mobile crisis services on a fee-for-service basis, according to the suit. But if patients receive similar care for emergency mental health issues when they are already at a health care location, the payment works differently. Instead, Medicaid reimburses the care in a single bundled payment, not on a per-service basis.
These bundled payments can be thought of “as a monthly subscription rather than an itemized bill,” said Al Dean, a lawyer representing Hubbard in the case.
Medicaid pays the designated agencies one bundled payment per eligible client per month, according to Dean.
“It doesn’t matter how many services that client receives that month. It doesn’t matter how many staff spent (time) with that client,” he said.
It means that the agency generally earns more when the mobile crisis team is deployed across the region to respond to a mental health emergency.
Because of this distinction based on where care is delivered, the Department of Mental Health “issued a clear directive” to Northeast Kingdom Human Services that they cannot bill for services at both settings during the same episode, according to the suit. The case alleges that one of the organization’s leaders gave staff the opposite instructions for billing Medicaid for these services.
Hubbard and her lawyers allege that Northeast Kingdom Human Services has incorrectly billed 59 services at the mobile crisis rate despite taking place at Front Porch urgent care.
Amelia Vath, a representative from the state Attorney General’s Office, said she could not confirm or deny the existence of an investigation into these fraud claims, but Dean alleges that one is taking place in response to concerns from the Department of Mental Health.
“This is a situation where (the Department of Mental Health) realized something was happening, reached out to our client, who is in the business of ensuring compliance, and she tried to fix it, and was unsuccessful,” he said.
The suit alleges that a representative from the department reached out to Hubbard in September 2025 to inquire about mobile crisis cases occurring at the Front Porch. Less than a week earlier, she said she had been put on a performance improvement plan. She and her lawyers allege that she was eventually terminated because she raised concerns with the billing practices. Her action should be protected by Vermont’s health care whistleblower protection law, the case claims.
The Department of Mental Health declined to comment on the case or confirm any of its details.
The suit comes as the state and federal government are taking a closer look at Medicaid fraud risks. Just two weeks ago, a Congressional committee targeted Vermont, among other states, in a federal investigation of Medicaid waste, fraud and abuse.
“This case is very consistent, in our view, with a broader national and statewide effort,” Dean said, though he clarified that the work to prepare the suit was ongoing before Medicaid fraud concerns became a headline. “The timing is really impeccable.”
Their suit also alleged gender-based discrimination, detailing a number of sexist remarks a supervisor allegedly directed toward Hubbard.
Dean hopes the case can bring about better protections for Medicaid beneficiaries and the Vermont taxpayers who, in part, fund the program.
“We are not trying to stonewall mental health services in Vermont and in the Northeast Kingdom,” he said. “The mental health services in our state are woefully underfunded and unavailable for people who are in need, and that’s really what makes the situation so unfortunate.”
