Fraudulent claims

A 2021 LAist investigation for a nursing home chain has finally reached a settlement of $7 million over allegations of falsely billing the government for Medicare during a COVID waiver program. To free up some hospital beds during the pandemic, the federal government waived the requirement for nursing home residents to have been hospitalized for at least three days to qualify for skilled care reimbursements through Medicare. These payments are higher than the standard nursing home care that involves assistance for daily living activities.

ReNew Health has previously owned, operated, or provided administrative services to over 24 facilities throughout California. The Department of Justice and the State of California alleged the chain submitted the fraudulent Medicare claims. The chain allegedly claimed residents needed skilled nursing care for acute injuries or illness when they did not need that type of care. Also, the chain reportedly submitted claims for residents being exposed to COVID.

In October 2020, whistleblowers filed a lawsuit against ReNew Health Group, which sparked federal and state investigations. Details of the case were not made public until last month when a settlement was finally reached. In part of the settlement agreement, ReNew Health will pay $6,841,727 to the federal government and $242,273 to California, plus interest.

Ray Sarola, attorney at Cohen Milstein Sellers & Toll, who represents the whistleblowers, said, “The government has done an exceptional job in using its enforcement powers to recover money and programs that were instituted during the COVID pandemic,” and “But cases like this show that whistleblowers are also a very important and critical part of that process.

Previously, in 2021, a LAist investigation had documented the chain’s history of poor patient care and found that the chain was still operating even after the state of California had said the chain was unfit to do so. Additionally, denial letters were sent to ReNew owner Crystal Solorzano, citing many severe issues at her facilities, including a fraudulent college transcript.

California lawmakers then referenced LAist’s report during an oversight hearing on nursing homes. Legislation was passed in 2022 to address the licensing loophole, which allows owners to operate facilities without first obtaining licenses. This law took effect last year.