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.
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