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Thursday, September 1, 2016

Green Mountain Care Board Approves Burlington Labs Takeover Plan

Posted By on Thu, Sep 1, 2016 at 10:50 AM

click to enlarge A Burlington Labs worker with samples - FILE: JAMES BUCK
  • File: James Buck
  • A Burlington Labs worker with samples
This story was updated at 1:30 p.m.

The Green Mountain Care Board gave a conditional permit Thursday to investors who want to buy the beleaguered Burlington Labs.

The new owners of the debt-ridden drug-testing company must come to a settlement with the Vermont Attorney General’s Office on alleged Medicaid overbilling. The AG must indicate it “does not oppose” the business transfer. A settlement is expected to run $6.5 million.

The move should enable the company to continue services essential for addiction recovery around Vermont. Further, the new company intends, for now, to maintain its employees. It employs 183 people in six states, including 137 in Vermont. And it has served 2,347 patients in the state this year.

The investor group behind the new company expressed gratitude for the decision. James Crook, lead investor for Burlington Labs Acquisition, issued this statement:

“We are thankful to the Green Mountain Care Board for addressing our application in a timely manner. The critical role Burlington Labs plays in the statewide fight against opiate addiction obviously resonated with the board. While we have more work to do before we finalize our investment, Burlington Labs Acquisition, LLC is one step closer to our collective goal.”


The certificate-of-need approval sheds little new light on the nature of the state’s Medicaid investigation.

Wednesday, Burlington Acquisitions informed health care regulators in a letter that it would drop plans to put Burlington Labs CEO Michael Casarico on the board of the new company.
click to enlarge Burlington Labs CEO Michael Casarico - FILE: JAMES BUCK
  • File: James Buck
  • Burlington Labs CEO Michael Casarico
But Casarico and other current owners of Burlington Labs will still have a 23 percent stake in the new company, according to the filings.

Crook did not immediately respond to a request for further comment on that.

Al Gobeille, chair of the Green Mountain Care Board, said board members were “comforted” by the investor group’s decision to pull Casarico off the new board and out of governance of the new business.

There’s been no finding of wrongdoing, Gobeille emphasized. But he said he understands why the public would have questions.

“We don’t know what happened and so you don’t want Vermonters to think that somehow, somebody’s trying to take their money and then they are just going to continue on,” Gobeille said. “The question is, ‘What happened; was there any wrongdoing?’ And if so, we’re not talking about 10 bucks, we’re talking about millions of dollars. Vermonters should be pretty concerned about that. I was. It’s tough when the AG is doing something and you don’t know what they are finding. We just have to defer to them.”

The board voted 5-0 to approve the certificate of need.

The decision acknowledged that the company is teetering on insolvency, stating: “Clearly, Burlington Labs cannot continue to operate if it remains on the same financial path that it is currently on.”

The investors have already promised to pay off any settlement with the state, and the approval Thursday left the details to be worked out by the Office of the Attorney General. The decision stated:

“This Board will not independently assess the merits or interfere with the outcome of the state’s Medicaid investigation, nor would it be appropriate for
it to do so. Given the applicant’s assurances that the matter will be settled and that it will reimburse the state for any damages incurred, we anticipate that our conditional approval will not impede this transaction.”

Here’s the full decision:

Burlington Labs Emergency CON


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Molly Walsh

Molly Walsh

Bio:
Molly Walsh is a Seven Days staff writer.

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