A company which provided housing and assistance to intellectually disabled youth in Connecticut through 2014 will pay a $1.5 million settlement to the state and federal government over alleged Medicaid fraud.

REM Connecticut Community Services Inc. arrived at the settlement due to allegations that it received overpayments from Connecticut’s Medicaid program.

According to a press release from the U.S. Department of Justice, REM submitted cost reports to the state over seven years, from 2007 to 2014, which included expenses the company wanted the state to reimburse related to its contracts with the Departments of Developmental Services and Children and Families. The government argued that some of the expenses which REM listed as reimbursable were not allowable under the state’s standards, so the money REM received from those reimbursements was an overpayment. REM has denied the allegations.

“Providers who bill government health insurance programs, such as Medicaid, must scrupulously follow the rules and regulations, and the failure to do so will have serious consequences,” U.S. Attorney Deirdre M. Daly said in the press release.

Developmental Services Commissioner Morna Murray, said in a separate press release “While we support our private provider network and value their services, DDS will remain vigilant that reimbursable costs meet our state cost standards and thus fulfill our obligation, on multiple levels, to serve the best interests of individuals with disabilities.”

REM’s $1.5 million settlement is divided into two parts. First, the government will retain $1,189,025 which the state had withheld because of REM’s questionable billing practices. Additionally, REM will pay the remaining $310,975 to the federal and state government collectively when the settlement agreement is executed.

REM was located in Middletown through 2014, when it left Connecticut.