Ross Manor First Atlantic Rosscare: Therapy That Followed the Billing Calendar

In the Ross Manor First Atlantic Rosscare fraud case, the nursing home agreed to pay $1.2 million over alleged Medicare therapy ramping and unnecessary rehabilitation. The government described treatment that followed the billing calendar: high therapy levels when Medicare measured them, less therapy outside those periods, and later a surge of treatment on the final measurement day. For someone who scheduled the sessions or signed the therapy notes, that calendar is the heart of the case.

Ross Manor, Its Owners, and Its Therapy Contractor

Ross Manor was the skilled nursing facility in Bangor, Maine. The Justice Department identified First Atlantic Corporation and Rosscare Nursing Homes, Inc. as its owners, and RehabCare Group East, Inc., part of Kindred Healthcare, Inc., as its contracted therapy provider. The government alleged that Ross Manor caused inflated Medicare claims by failing to prevent unreasonable or unnecessary therapy furnished through RehabCare.

Under Medicare’s skilled nursing facility consolidated billing system, the Part A payment bundles therapy into the facility’s claim. Medicare pays the nursing facility, and the facility’s contract governs payment to the outside supplier. The therapist’s employer and the business submitting the Medicare claim can therefore be different companies.

The Ross Manor allegations reached the facility’s oversight of that healthcare billing arrangement. Contracting out the treatment had left Ross Manor with Medicare claims built on what its contractor provided and reported.

Therapy Ramping Before October 2011

Before October 1, 2011, Ross Manor allegedly failed to prevent RehabCare from concentrating high levels of unreasonable or unnecessary therapy in assessment reference periods. Those were the periods whose reported therapy supported the payment category. The government said Ross Manor billed at the highest reimbursement level even though the same patients received less therapy outside those periods, when the facility did not have to report their therapy amounts to Medicare.

The Assessment Rules Changed, and the Allegations Continued

On October 1, 2011, Medicare changed the assessment windows and reassessment rules under RUG-IV, its therapy-based payment classification system. The payment rule required change-of-therapy assessments on seven-day observation cycles when the existing classification no longer fit. More frequent measurement still left a financial reason to reach the higher category.

The Ross Manor announcement described three practices the facility allegedly failed to prevent even after that change.

RehabCare allegedly started patients at the highest reimbursement level unless they could not tolerate that amount of therapy. The starting point should have been an individual evaluation of what each patient needed. In the government’s account, the highest-paying category came first and the patient’s ability to endure the treatment came afterward. The alleged scheme subjected residents to unnecessary treatment and sent Medicare the inflated claims.

The contractor also allegedly planned the minimum therapy minutes needed to bill at the highest level while discouraging treatment beyond that threshold. This was a target with pressure from both directions: reach enough minutes for the higher payment, then stop adding minutes even though clinical need was supposed to determine the amount of care.

Finally, the government alleged significantly higher therapy on the last day of the measurement period to reach the next reimbursement threshold. The cutoff created an incentive to squeeze more treatment into the day that could change the bill.

The Patient Driven Payment Model replaced RUG-IV for Medicare skilled nursing facility payment on October 1, 2019, shifting classification toward patient characteristics and clinical needs. Under that model, an unsupported patient characteristic can change the payment group. If you know assessments were changed to increase payment, our whistleblower experts can examine that connection with you.

What Evidence Is Needed to Prove Fraud?

In a health care fraud case involving alleged therapy ramping, the evidence connects the resident’s clinical needs, the therapy planned and delivered, the assessment dates, and the resulting Medicare claim. We examine those connections with the insider who knows how the records were made and who controlled the decisions.

The Minimum Data Set assessment feeds the payment code used on the facility’s bill. The MDS coordinator who handles that assessment may see its revisions. A therapist may know why planned minutes changed, while a billing employee may see which classification reached the claim. We work with insiders to connect those views of the same resident’s care.

The distinction between evaluation and treatment also matters when reviewing therapy records. In the separate Kindred/RehabCare complaint, the government alleged that therapists were directed to report evaluation time beyond a fixed allowance as treatment. That allegation shows why a total-minute entry needs the clinical account beneath it.

The Same Targets in Other Therapy Cases

The government alleged similar assessment-driven scheduling in its case against Life Care Centers of America. Its complaint quoted a rehabilitation manager’s instruction to staff:

The instruction allegedly protected minutes already chosen to reach a billing category. For a therapist whose judgment pointed toward less treatment, the plan had become a constraint on clinical judgment.

The government’s separate Kindred/RehabCare complaint described scheduling software with the same assessment-period focus. It quoted instructions saying that the Auto Planner moved missed minutes to the following day only for Medicare Part A residents in an assessment reference period. A quoted executive message explained the financial reason to avoid going beyond the threshold:

The payment category rewarded reaching the threshold. Therapist time above it still cost money. These allegations explain the business pressure behind a treatment plan that lands exactly on a reimbursement target.

The Ross Manor Settlement and the Contractor’s Separate Resolution

The Justice Department announced Ross Manor’s agreement to pay the United States on March 30, 2015. The resolution covered the alleged inflated rehabilitation claims, including the facility’s failure to prevent the contractor’s practices before and after the assessment-rule change.

In January 2016, the department announced a separate $125 million Kindred/RehabCare therapy settlement. That contractor settlement addressed systemic therapy inflation. The government pursued both the supplier whose therapy drove the claims and nursing facilities that allegedly failed to prevent the practices.

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

You Know Why the Minutes Changed

If you saw therapy plans rewritten to hit a payment category, speak with our whistleblower experts about the treatment decisions and billing records you know. We build your strongest Medicare whistleblower case with you and bring in Medicare billing whistleblower lawyers who understand nursing facility assessments and contract therapy. We stay beside you as your knowledge of the clinical work becomes the evidence behind the case.