U.S. Attorney's Office
District of Massachusetts
(617) 748-3100
March 30, 2015

Maine Nursing Home to Pay $1.2 Million to Resolve Allegations Concerning Rehabilitation Therapy

BOSTON—A Maine skilled nursing facility, Ross Manor, entered into an agreement with the United States to pay $1.2 million to resolve allegations concerning inflated Medicare claims for rehabilitation therapy.

Ross Manor, which is located in Bangor, Maine, and owned by First Atlantic Corporation and Rosscare Nursing Homes, Inc., entered into an agreement concerning claims for therapy purportedly provided by its subcontractor, RehabCare Group East, Inc. (RehabCare), a part of Kindred Healthcare, Inc. This settlement resolves allegations that Ross Manor caused the submission of claims to Medicare that sought inflated amounts of reimbursement based on the provision of unreasonable or unnecessary rehabilitation therapy.

The United States alleges that, prior to Oct. 1, 2011, Ross Manor failed to take sufficient steps to prevent RehabCare from engaging in a pattern and practice of providing high levels of therapy that were not reasonable or necessary during so-called “assessment reference periods,” thereby causing Ross Manor to bill for its Medicare patients’ care at the highest reimbursement level, even though RehabCare was providing less therapy to those same patients outside the assessment reference periods, when Ross Manor was not required to report to Medicare the amount of therapy its Medicare patients were receiving.

“This settlement is the latest in a series of resolutions involving Medicare billing for rehabilitation therapy at skilled nursing facilities,” said United States Attorney Carmen M. Ortiz. “We will continue our work to ensure that the provision of care in skilled nursing facilities is based on patients’ clinical needs and not tied to the financial targets of the companies providing their care.”

This settlement further resolves allegations that, even after Oct. 1, 2011, Ross Manor failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: (1) presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy, rather than using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs; (2) planning the minimum number of therapy minutes required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; and (3) providing significantly higher amounts of therapy on the final day of a period that determines reimbursement in order to reach the next highest threshold level.

This matter was investigated by the Department of Health and Human Services, Office of the Inspector General, and the Federal Bureau of Investigation. The case was handled by Assistant U.S. Attorneys Gregg Shapiro and Patrick Callahan of Ortiz’s Affirmative Civil Enforcement Unit and Department of Justice Trial Attorneys Christelle Klovers and Rohith Srinivas.

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