California-Based Nursing Home Chain and Two Executives to Pay $7M to Settle Alleged False Claims for Nursing Home Residents Who Merely Had Been Near Other People With COVID-19

The United States and the State of California have reached a $7,084,000 civil settlement with ReNew Health Group LLC, ReNew Health Consulting Services LLC and two corporate executives for knowingly submitting false Medicare Part A claims for nursing home residents.

During the COVID-19 pandemic, in order to conserve hospital beds, the Centers for Medicare and Medicaid Services waived the requirement that a person must have had a hospital stay of at least three days (signaling an acute illness or injury) before reimbursing for skilled care in a nursing home. The United States and the State of California alleged that the defendants knowingly misused this waiver by routinely submitting claims for nursing home residents when they did not have COVID-19 or any other acute illness or injury, but merely had been near other people who had COVID-19. Under the settlement, the defendants will pay $6,841,727 to the United States and $242,273 to the State of California, plus interest.

“The Justice Department is committed to protecting the integrity of taxpayer-funded programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable those who sought to defraud such programs during the COVID-19 pandemic, including those who knowingly misused emergency waivers for personal gain.”

“False claims are anathema to the Medicare system, especially during a public health crisis,” said U.S. Attorney Martin Estrada for the Central District of California. “This settlement agreement highlights my office’s determination to ensure our nation’s health care programs help those who actually need them.”

This investigation was prompted by a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the government to redress false claims for government funds and to receive a share of any recovery. The settlement agreement in this case provides for the whistleblower, Bay Area Whistleblower Partners, to receive $1,204,280, plus interest, as its share of the settlement. The case is captioned United States and State of California ex rel. Bay Area Whistleblower Partners v. ReNew Health Group LLC et al., No. 2:20-cv-09472 (C.D. Cal.).

Senior Trial Counsel Albert P. Mayer of the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Karen Y. Paik for the Central District of California are handling the matter, with assistance from the Department of Health and Human Services’ Office of Inspector General and the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse.

The claims settled by the United States and the State of California are only allegations. There was no determination of liability.