SNF COVID Waiver Fraud: A Waived Hospital Stay Did Not Waive Skilled Need

SNF COVID waiver fraud uses the pandemic’s coverage waivers to bill Medicare for residents who do not need daily skilled care. The government alleged that California nursing home operator ReNew Health Group treated COVID exposure and routine vital-sign checks as skilled need for long-term residents. For a nurse, admissions manager or healthcare billing specialist, the question reaches the decision behind the claim: did the resident’s condition justify skilled care, or did available Medicare days drive the decision to bill?

What Are the Medicare Billing Guidelines for Skilled Nursing Facility Care?

Medicare Part A covers a qualifying skilled-care episode. Ordinarily, that requires at least three consecutive, medically necessary inpatient hospital days, followed by needed skilled nursing or rehabilitation in the facility. The admission day counts toward the hospital stay. The discharge day and time spent in observation do not. Skilled care ordinarily must begin within 30 days after hospital discharge.

The Medicare coverage rules also require daily skilled services. The resident’s condition must call for professional nursing or rehabilitation skills. Documented complications can make an otherwise routine service skilled. Skilled services can also maintain a resident’s capabilities or prevent deterioration.

A dually certified facility can provide a short Medicare skilled episode and a long Medicaid-funded residence in the same operation. The resident’s continued presence in the building tells the billing office much less than the clinical record does. The resident’s needs, and the care actually provided, support the covered episode.

What the COVID Waivers Changed

The COVID emergency brought separate relief for the qualifying hospital stay and for benefit-period renewal. Daily skilled need remained part of Medicare coverage.

The Centers for Medicare & Medicaid Services’ emergency guidance describes flexibilities authorized retroactively to March 1, 2020. The qualifying-stay waiver removed the prior hospital-stay condition in qualifying circumstances. It changed how a resident could enter covered SNF care.

Benefit-period relief addressed a different limit. Medicare ordinarily covers up to 100 SNF days per benefit period, with skilled-care requirements continuing throughout. A benefit period ordinarily ends after at least 60 consecutive days outside the relevant inpatient or skilled-care status. CMS separately allowed benefit-period renewal under emergency conditions, requiring continued skilled care to be related in some way to the public health emergency.

Those are different decisions for the admissions and billing teams: whether a qualifying hospitalization was required, whether benefit days were available, and whether the resident needed skilled care.

The COVID blanket waiver ended May 11, 2023. For new stays from May 12, the qualifying hospital-stay requirement returned, with separate exceptions such as approved accountable care organization waivers.

Which Is an Example of Billing Fraud?

The ReNew settlement over the three-day hospital waiver concerns a nursing home operator that allegedly ignored the skilled-care requirement. The government alleged that ReNew billed Medicare Part A, and related Medicaid coinsurance, for long-term residents who had been near someone with COVID but had no COVID, indicative symptoms or another acute illness. COVID exposure monitoring with no skilled need, including frequent vital-sign checks, was the alleged basis for SNF waiver billing.

The whistleblower’s complaint gives a concrete example from the Redwood facility. It alleges that a kitchen employee tested positive in July 2020 and went on leave. ReNew then billed Medicare Part A for nine residents who had neither tested positive nor exhibited another condition warranting skilled care. Employees objected that the residents did not qualify, according to the complaint.

A billing consultant’s concern, reproduced in that complaint, captures the reversal:

Taxpayers were allegedly being billed for the availability of coverage, dressed up as a need for care.

What ReNew Agreed to Pay

The Justice Department announced a $7,084,000 settlement on April 26, 2024 over the alleged waiver billing. The complaint describes a practice reaching approximately 27 California facilities.

The settlement allocated money to the United States and California, reflecting the Medicare claims and Medicaid coinsurance involved.

DOJ announced a whistleblower award of about $1.2 million.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We work with insiders to connect the care decision, the claim and the people who directed the billing.

What Evidence Is Needed to Prove Fraud?

We build the case with you by connecting the resident’s actual condition to the skilled-care designation, the claim and the people who controlled it. Exposure records and nursing notes describe what staff observed. Orders and certifications describe the care the facility said was needed. Claims and payment records show what the facility sought and received.

ReNew’s complaint alleges that the company kept an Excel log of residents added to the Medicare Part A census under the waivers despite lacking qualifying medical conditions. Approximately 900 residents appeared on the log when the complaint was filed. The complaint also alleges that marketing and admissions bonuses depended on the number of residents billed to Part A. Those records put the clinical justification beside the financial incentive.

A nurse may know what the resident needed. A business office manager may know why coverage began. An assessment coordinator may know which clinical inputs reached the bill. We connect those perspectives to the same resident and service dates, so the business decision can be examined alongside the care.

What Are the Documentation Requirements for Skilled Nursing Facilities?

SNF documentation must support the resident’s condition, skilled services and assessment inputs, with the applicable orders and certifications. The Minimum Data Set assessment connects care planning to payment classification. The resulting HIPPS payment code reaches the bill, alongside the covered days claimed.

Under the Patient Driven Payment Model, diagnoses, function, nursing characteristics and ancillary needs affect payment classification. Those assessment inputs connect the clinical chart to what Medicare pays.

For waiver billing, the comparison runs from nursing observations through orders, certifications and assessment versions to the paid claim. Hospital records address the qualifying stay. Benefit-day records address available coverage. The clinical record addresses the skilled need that must support the episode.

What Is a Red Flag for Health Care Fraud?

A meaningful red flag is a direction to put residents on Medicare Part A because they have available coverage, despite clinical records that do not support skilled need. ReNew’s complaint describes the response when business office managers questioned that direction:

The alleged answer to a billing objection was a management instruction to keep billing.

Research in another post-acute setting gives a useful comparison. The National Bureau of Economic Research’s 2026 working paper Medicare Home Health Fraud: How Much, Where, and Who? examined Medicare home health claims and found that agencies it classified as fraudulent were more likely to show unusually uniform patterns of care and serve healthier-than-average patients.

The finding concerns home health. For an SNF insider, it suggests a question worth pursuing with us: what explains the same skilled-care billing decision across residents with different clinical needs?

Hospital Cycling Shows Another Way to Manipulate Coverage

The 2016 settlement involving AJIT Healthcare, which operated Westlake Convalescent Hospital, shows how the hospital-stay condition itself could become part of an alleged scheme. The Justice Department’s settlement announcement described allegations that residents were cycled through Temple Community Hospital to renew Medicare SNF eligibility even when inpatient hospitalization was unnecessary.

That scheme allegedly manufactured the hospital stay needed for subsequent SNF billing. ReNew’s alleged scheme used emergency relief from that prerequisite and then treated exposure monitoring as skilled need. In both, the connection between the resident’s condition and the decision to bill is where an insider’s knowledge matters.

When the Waiver Became the Reason to Bill

If you saw exposure monitoring become a Medicare skilled stay without the clinical need to support it, speak with our whistleblower experts about who made that decision. We build the case with you around the care, the certifications and the money, and bring in Medicare fraud whistleblower lawyers who understand SNF coverage. We stay beside you as your inside knowledge becomes the foundation of the case.