Rousseau Management: The Facility’s Role in the RehabCare Therapy Settlement

In the Rousseau Horizons Amenity Manor fraud case, Rousseau Management agreed to pay $300,000 to resolve allegations of inflated Medicare therapy billing. The government alleged that the operator failed to prevent its therapy subcontractor from driving treatment toward higher reimbursement, then submitted or caused the submission of the resulting claims. The case reaches across a relationship a therapist, administrator or biller would recognize: one company supplies the therapy, and another sends Medicare the bill.

Rousseau’s Role in the Medicare Claims

Rousseau Management, Inc. was the settling operator. At the time of the Department of Justice’s April 30, 2015 announcement, it owned Horizons Living and Rehab Center in Brunswick, Maine, and had previously provided administrative management services to Amenity Manor in Topsham. RehabCare Group East, Inc., part of Kindred Healthcare, supplied the contracted therapy.

The government alleged that Rousseau submitted, or caused the facilities to submit, claims for unreasonable, unnecessary or unskilled rehabilitation therapy, including therapy never provided.

Therapy Ramping During Assessment Periods

Before October 1, 2011, RehabCare allegedly provided high levels of unnecessary therapy during the assessment periods used to set Medicare reimbursement, then supplied less therapy outside those periods. The government alleged that Rousseau failed to take sufficient steps to stop that pattern at Horizons and Amenity Manor.

Under the historical RUG payment system, therapy minutes helped determine the reimbursement category. The alleged ramping made an unusually intensive stretch of treatment support the highest payment level even though the resident received less therapy during the periods the facilities did not have to report. The calendar was doing work that the patient’s needs should have done.

A separate whistleblower complaint against Select Medical shows how an assessment date could become a payment tool. The whistleblower alleged:

An assessment date and a treatment log tell the story together. Moving the measurement period can change which treatment appears in the assessment without changing why the resident needed care.

Maximum Payment, Minimum Minutes

The Rousseau settlement also addressed alleged practices that continued after the assessment rules changed. The government said RehabCare presumptively placed patients in the highest reimbursement category unless they could not tolerate that much therapy. An individualized evaluation of clinical need was supposed to determine treatment. In the alleged arrangement, the highest-paying category became the starting point.

The government also alleged that RehabCare planned just enough therapy minutes to reach the highest payment threshold while discouraging treatment beyond it. Under that alleged policy, more minutes were valuable until the payment category changed. After that, the scheduling policy discouraged more care, even though Medicare required treatment to follow clinical need. Residents whose treatment followed a payment target and taxpayers funding Medicare bore the cost of the alleged priorities.

RehabCare also allegedly shifted planned minutes between therapy disciplines to achieve targeted reimbursement levels. For someone working on those schedules, the important question is what drove the change: the resident’s treatment plan or a category the company wanted to bill.

Evaluation and Palliative Care Counted as Therapy

The government alleged that RehabCare reported initial evaluation time as therapy time and unskilled palliative care as skilled therapy. Medicare prohibited counting initial evaluation time as therapy. The government accused Rousseau of failing to prevent those practices. Both allegations concern what kind of service Medicare was told it was buying.

The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, distinguishes upcoding, claiming a more expensive procedure than the one performed, from billing for services never provided. That distinction helps explain the different allegations here: a service could occur and still be described as something more valuable on the claim. The Rousseau settlement also covered allegations of therapy that never occurred at all.

For an insider, those are different records questions. Evaluation notes and care plans can explain what a therapist was doing. Treatment logs, schedules and time records can connect the claimed service to who was there to deliver it.

Why the Therapy Payment Era Matters

These allegations concerned Medicare’s older payment system, in which therapy-minute categories helped set the facility’s rate. The Centers for Medicare & Medicaid Services changed assessment windows and therapy reassessment rules effective October 1, 2011.

The same division appeared in the Ross Manor settlement. That Bangor, Maine facility also used RehabCare, and the government alleged assessment-period ramping followed by practices that targeted payment thresholds, including additional therapy on the final measurement day.

Medicare’s Patient Driven Payment Model replaced RUG-IV on October 1, 2019. Under the CMS assessment manual, diagnoses, function and other clinical characteristics now help determine the payment category.

What Evidence Is Needed to Prove Fraud?

For this kind of therapy billing case, the useful evidence connects the resident’s clinical needs, the treatment delivered, the assessment and the Medicare claim. It also connects the contractor’s decisions to the facility’s billing. A healthcare insider may see a scheduling instruction that looks very different when placed beside the treatment notes and the category billed.

We compare therapy evaluations and treatment logs with assessment dates and versions of the Minimum Data Set. That comparison can show whether reported minutes followed the resident’s needs or a reimbursement target. Discipline-level schedules can show how planned minutes moved between types of therapy.

The therapy agreement and the facility’s claims connect the contractor’s role to what reached Medicare. Our work with the insider is to connect those parts: the care, the decision and the payment representation.

The Facility and Contractor Settled Separately

Rousseau’s settlement was small beside the contractor’s separate national resolution. On January 12, 2016, the Department of Justice announced a $125 million settlement with Kindred and RehabCare over alleged therapy inflation. That case reached the supplier that allegedly caused nursing facilities to submit claims, while separate customer agreements reached operators accused of failing to prevent the practices.

The treatment decisions and the billed claims can connect a therapy supplier and a health care operator in the same payment story.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw What Drove the Therapy Schedule

If a payment target determined the care on your unit, speak with one of our whistleblower experts about the instructions and billing you saw. We work beside you to build the case across the facility and contractor, bring in skilled nursing facility fraud whistleblower lawyers who understand therapy billing, and stay with you through the pursuit of a recovery.