  Rutile ($R$) phase VO$_2$ is a quintessential example of a strongly
correlated bad-metal, which undergoes a metal-insulator transition (MIT)
concomitant with a structural transition to a V-V dimerized monoclinic phase
below T$_{MIT} \sim 340K$. It has been experimentally shown that one can
control this transition by doping VO$_2$. In particular, doping with oxygen
vacancies ($V_O$) has been shown to completely suppress this MIT {\em without}
any structural transition. We explain this suppression by elucidating the
influence of oxygen-vacancies on the electronic-structure of the metallic $R$
phase VO$_2$, explicitly treating strong electron-electron correlations using
dynamical mean-field theory (DMFT) as well as diffusion Monte Carlo (DMC)
flavor of quantum Monte Carlo (QMC) techniques. We show that $V_O$'s tend to
change the V-3$d$ filling away from its nominal half-filled value, with the
$e_{g}^{\pi}$ orbitals competing with the otherwise dominant $a_{1g}$ orbital.
Loss of this near orbital polarization of the $a_{1g}$ orbital is associated
with a weakening of electron correlations, especially along the V-V
dimerization direction. This removes a charge-density wave (CDW) instability
along this direction above a critical doping concentration, which further
suppresses the metal-insulator transition. Our study also suggests that the MIT
is predominantly driven by a correlation-induced CDW instability along the V-V
dimerization direction.
