Nursing Home Chain ReNew Health To Pay $7 Million In Medicare Fraud Case

A Monrovia-based nursing home chain that was the subject of a 2021 LAist investigation has reached a $7 million settlement over allegations that it falsely billed the government for Medicare during a COVID waiver program.

The Department of Justice and the state of California alleged the chain routinely submitted Medicare claims for residents, saying they needed skilled nursing care for an acute injury or illness even when they didn’t need that level of care. They claimed the company would submit claims for residents for simply being exposed to COVID.

As part of the settlement agreement , ReNew Health will pay $6,841,727 to the federal government and $242,273 to the state of California, plus interest.

The backstory

In order to free up hospital beds during the COVID pandemic, the federal government waived a requirement that nursing home residents needed to have been hospitalized for at least three days in order to qualify for skilled care reimbursements through Medicare. Those payments are often much higher than standard nursing home care, which involves help with daily living activities like bathing or eating.

The federal and state investigation into ReNew Health Group started after whistleblowers filed a lawsuit under the False Claims Act in October 2020. The case was under seal until a settlement was reached last month.

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

ReNew’s response

Dan Kramer, a spokesperson for ReNew, said the settlement resolved claims “with no finding of wrongdoing.”

“The settlement, like those many other health systems and hospitals have reached with the government, is completely unrelated to patient care or the quality and appropriateness of the care or services provided to patients, instead involving an administrative issue during the COVID era when overlapping and often conflicting rules and regulations sometimes changed weekly or daily.

ReNEW has consistently prioritized the highest regulatory and ethical standards in all our business processes."

He said the settlement will not affect ReNew’s patients, caregivers or services.

A troubled history

ReNew Health has owned, operated or provided administrative services to over two dozen facilities across the state, many of them in Southern California. An LAist investigation in 2021 documented the chain’s troubled history of patient care and found it was operating facilities even after the state deemed the owner of the chain unfit to do so.

The California Department of Public Health's denial letters to ReNew owner Crystal Solorzano cited a long list of serious issues at her facilities and said she submitted a fraudulent college transcript. The complaint in the federal and state case includes details about Solorzano that LAist previously reported.

State lawmakers cited LAist’s reporting in an oversight hearing into nursing homes, and passed legislation in 2022 to address the licensing loophole where owners can operate facilities without first obtaining licenses. The law went into effect last year.