In what’s apparently the first False Claims Act (FCA) settlement over alleged misuse of COVID-19 waivers, ReNew Health Group and ReNew Health Consulting Services, a nursing facility and skilled nursing facility (SNF) company, and two of its executives have agreed to pay $7.084 million, the U.S. Department of Justice (DOJ) said April 26.[1] According to the settlement, ReNew billed Medicare nursing home residents under the Part A SNF benefit based on their exposure to COVID-19 from March 1, 2020, to June 31, 2022, and justified it with waivers—including the waiver of the three-day qualifying inpatient hospital stay—although they allegedly didn’t require skilled care.[2] For example, when a kitchen worker at one California nursing facility got COVID-19, nine residents were shifted to the SNF even though they didn’t test positive, the whistleblowers alleged in the complaint that set the case in motion.[3]

This appears to be the first false claims settlement for alleged misuse of COVID-19 waivers as opposed to abuse of COVID-19 relief funds more broadly, said attorney Ray Sarola, with Cohen Milstein Sellers & Toll PLLC, which represented Bay Area Whistleblower Partners.

. . .

Two Waivers Are at Heart of ReNew Allegations

The allegations in the FCA complaint began with the COVID-19 public health emergency and its waivers for SNFs with patients affected by COVID-19. The SNF waivers, which expired May 11, 2023, at the end of the public health emergency (PHE), were designed to make it easier for people to be admitted to SNFs and free up space in hospitals for COVID-19 patients. According to CMS, one of the waivers provided “temporary emergency coverage of SNF services without a qualifying hospital stay.” Another waiver authorized “a onetime renewed SNF coverage without first having to start and complete a 60-day ‘wellness period’ (that is, the 60-day period of non-inpatient status that is normally required in order to end the current benefit period and renew SNF benefits).”[4]

CMS noted the waivers don’t apply if ongoing SNF care is unrelated to the PHE and providers are still required to abide by all other SNF requirements.

According to the complaint, ReNew allegedly responded to the waivers “by treating them as a blank check to bill Medicare for nearly every resident at its facilities.” Within a week of CMS announcing the waivers, Renew started its alleged scheme to bill Part A for skilled nursing or therapy services for residents who didn’t need them.

Medicare has specific requirements for Part A SNF coverage. Patients must require skilled nursing care or rehabilitation every day to address conditions that were treated in an acute-care hospital during a qualifying stay or at a SNF after treatment for the condition at the hospital. Medicare only covers services that are reasonable and necessary, and the waivers didn’t change fundamental medical necessity requirements. As CMS said in a waiver FAQ, “A COVID-19 diagnosis would not in and of itself serve to qualify a Medicare beneficiary for coverage under the Medicare Part A SNF benefit. That’s because coverage isn’t based on particular diagnoses or medical conditions, but rather on whether the beneficiary meets the statutorily prescribed SNF level of care definition of needing and receiving skilled services on a daily basis which, as a practical matter, can only be provided in a SNF on an inpatient basis.”

‘I’m Praying the Waiver Ends’

Discussions about the waivers started with ReNew’s regional director of operations at the time. He allegedly was told the purpose of the waivers was to ensure Medicare coverage for people who require skilled care but whose treatment is affected by the pandemic. He and others at ReNew were informed by their Medicare billing consultant that the waivers applied “under certain circumstances” and that residents still were required “to meet the qualifications to be skilled under Part A first and foremost. Just having Part A is not an acceptable reason…” But the director of operations allegedly still requested a list of all Medicare-eligible residents at ReNew facilities.

By the end of March, top management had weekly “COVID calls” to talk about the “desire to ‘skill’ all residents,” the complaint alleged. Most ReNew facilities, especially in Southern California, had started billing virtually all residents to Part A.

For example, a utilization review nurse consultant for ReNew said that under the waivers, its Orinda facility would expand the Part SNF benefit to include “observation” of 25 residents who might have been exposed to COVID-19, but there’s allegedly no provision for observation in the waivers. “By the end of April, all ReNew facilities were engaging in this practice,” the complaint alleged.

Apparently, this didn’t sit well with everybody. When ReNew’s facility in Silicon Valley added 38 residents to the SNF benefit, the senior vice president of revenue management said, “I’m praying the waiver ends,” according to the complaint.

The billing consultant again raised concerns about the company’s alleged “misuse” of COVID-19 waivers in July. “I am continuing to express my concern about picking up the patients who are not positive nor showing symptoms of covid just because a staff person at one facility is positive,” the consultant allegedly wrote. “I am not sure that being potentially ‘exposed’ to covid is a condition that requires a skilled level of care. Also just because a resident has days available doesn’t precipitate the start of a benefit period. I am also concerned that it seems the residents who have days available are receiving ‘skilled care’ because they have days available.”

  • Last of three pacts rolls in prior two settlements in case
  • Up to 9,385 workers will be paid from $6.6 million fund

A beauty products supplier and three staffing agencies will pay more than $11 million to end a decade-old lawsuit alleging a practice of racial preferences disfavoring Black workers for temporary assignments.

The third of three separate settlement agreements was preliminarily approved by the US District Court for the Northern District of Illinois on Monday. Under that pact, Vee Pak, Inc., Vee Pak, LLC—which does business as Voyant Beauty, and Staffing Network Holdings LLC will pay roughly $6.4 million into a settlement fund, and up to $4.5 million in attorneys’ fees and costs. That settlement fund will be combined with prior settlements reached with Personnel Staffing Group LLC for $135,000 and with Alternative Staffing Inc. for $93,000 to build a $6.6 million overall fund, according to the memorandum of law seeking preliminary settlement approval.

Attorneys for the workers “estimate that there may be as many as 9,385 total individuals in the” subclasses certified in connection with the three settlements, the memo said. The $6.6 million settlement fund will also be used to pay $10,000 or $15,000 service awards to workers who served as class representatives, the costs of the claims administration process, and “the employer’s share of payroll taxes,” according to the memo.

The subclasses include all Black laborers who sought work assignments between January 2011 and Oct. 21, 2013, or Dec. 31, 2015, and weren’t assigned on one or more occasions to work at Vee Pak, the memo said.

. . .

Cohen Milstein Sellers & Toll PLLC, National Legal Advocacy Network, and Hughes Socol Piers Resnick Dym Ltd. represent the workers. Goldstine, Skrodzki, Russian, Nemec & Hoff Ltd. and McDermott Will & Emery LLP represent Vee Pak. Korey Richardson LLP represents Staffing Network.

The Spring 2024 issue of the Shareholder Advocate, our quarterly securities litigation and investor protection newsletter, features:

  • Carol Gilden and Jan Messerschmidt on the Pluralsight litigation settlement
  • Carol Gilden and Molly Bowen on the shareholder derivative lawsuit aiming to hold Abbott accountable for baby formula contamination
  • Aaron Marks on antitrust litigation as a tool for multi-employer health funds to recover damages for inflated prescription prices
  • Molly Bowen and Richard Lorant on how books and records demands can inform shareholder derivative actions
  • Jay Chaudhuri on implications of the SEC’s pay-to-play rule for this election season
  • A profile of Jaclyn Weiner

Read the Spring 2024 issue of the Shareholder Advocate.

Attorneys representing the families of 10 men killed during Colombia’s civil war told a Florida federal jury Tuesday that the Chiquita banana company is liable for their deaths, saying it knowingly funded a right-wing narcoterrorist group that committed atrocities against its workers as the fruit corporation expanded its business.

. . .

The trial is expected to last at least four weeks.

The plaintiffs are represented by John Scarola, Victoria Mesa-Estrada and Mariano Garcia of Searcy Denney Scarola Barnhart & Shipley PA, James K. Green of James K. Green PA, Rick Herz, Maryum Jordan, Marissa Vahlsing and Marco Simons of EarthRights International, William J. Wichmann of the Law Offices of William J. Wichmann PA, William R. Scherer of Conrad & Scherer LLP, Leslie M. Kroeger and Agnieszka Fryszman of Cohen Milstein Sellers & Toll PLLC, Jonathan C. Reiter of the Jonathan C. Reiter Law Firm PLLC, Terrence Collingsworth of International Rights Advocates and Gabriela Paola Valentin Diaz.

“The changes SafeRent has agreed to make are key to ensuring the original intention of the nation’s voucher programs, helping to erase historic discrimination in the housing markets,” said Brian Corman, a partner at Cohen Milstein who leads the firm’s fair housing litigation efforts and helped negotiate the settlement.

What You Need to Know

  • A lawsuit against SafeRent Solutions reached a settlement Thursday, pending final approval.
  • The settlement came after a federal judge allowed a $2.28 million settlement on behalf of Massachusetts housing voucher recipients to move forward.
  • The lawsuit claimed that SafeRent’s algorithmic tenant screening program disproportionately harmed housing voucher recipients, including Black and Hispanic individuals, under federal and Massachusetts law.

Rental applicants in Massachusetts recently reached a $2.28 million settlement agreement against a tenant screening service, SafeRent Solutions, after alleging the company’s algorithmic screen program disproportionately harmed Blackand Hispanic rental applicants using federally funded housing choice vouchers.

U.S. District Judge Angel Kelley for the District of Massachusetts certified the two settlement classes and ordered SafeRent, formerly known as CoreLogic Rental Property Solutions, to provide names and other identifying information to send settlement notices, according to an order filed April 25.

A settlement approval hearing will be held in November and, if approved, will resolve the litigation against SafeRent which claimed that its algorithm assigns disproportionately lower scores to Black and Hispanic rental applicants compared with white rental applicants.

Cohen Milstein Sellers & Toll, Greater Boston Legal Services and the National Consumer Law Center represent the plaintiffs and will act as settlement class counsel. The plaintiffs brought the complaint against SafeRent under the Fair Housing Act and Massachusetts discrimination laws in May 2022, and the judge denied the defendant’s motion to dismiss in July 2023.

“Federal and state housing voucher programs were established to give recipients, who are disproportionately Black and Hispanic renters, more choice in where they live,” said Brian Corman, a partner at Cohen Milstein who leads the firm’s fair housing litigation efforts and helped negotiate the settlement. “The changes SafeRent has agreed to make are key to ensuring the original intention of the nation’s voucher programs, helping to erase historic discrimination in the housing markets.”

Christine E. Webber, co-chair of Cohen Milstein’s civil rights and employment practice, said in a statement that the court’s decision is a case of first impression for the home rental and property management industries.

“Decision-making algorithms, such as the ones at issue here, are often opaque,” Webber said. “Vendors who develop these algorithms are not willing to disclose all the data they consider or how the data is weighted in score modeling. This is gravely concerning to fair housing, employment, and civil rights advocates as potentially discriminatory bias can be easily coded into automated decision-making platforms. The ability to hold such vendors accountable is essential for full enforcement of the civil rights laws.”

Joining Webber and Corman in representing the plaintiffs were Todd S. Kaplan, of Greater Boston Legal Services, and Ariel C. Nelson, Shennan A. Kavanagh and Stuart T. Rossman, of the National Consumer Law Center in Boston.

ReNew Health Group LLC has agreed to pay the federal government and California $7 million to settle whistleblower allegations that the healthcare provider misused a COVID-19 waiver intended to free up hospital beds by submitting fraudulent claims for nursing home residents, the U.S. Department of Justice announced Friday.

Under the deal, ReNew Health Group, ReNew Health Consulting Services LLC and two executives, Crystal Solorzano and Chaim Kolodny, will pay approximately $6.8 million to the United States and $242,273 to California to settle allegations that they violated the False Claims Act. The whistleblower, Bay Area Whistleblower Partners, will receive approximately $1.2 million after the government has received the settlement money, according to the announcement.

. . .

The plaintiff, represented by Cohen Milstein Sellers & Toll PLLC, Senior Justice Law Firm and Zimmerman Reed LLP, alleged that ReNew Health was misusing a waiver program implemented by the Centers for Medicare & Medicaid Services in response to the COVID-19 pandemic.

Specifically, to increase the availability of hospital beds, the CMS waived the requirement that a person must have stayed in the hospital for three days before receiving skilled care in a nursing home.

. . .

The whistleblowers’ co-lead counsel, Ray Sarola of Cohen Milstein, echoed that sentiment and said it was unfortunate that some companies tried to manipulate COVID-19 programs for their own profit.

“We are proud to represent whistleblowers who helped protect our healthcare system so that the government’s resources are available for those patients who need them,” Sarola added.

The whistleblowers are represented by Raymond M. Sarola and Gary L. Azorsky of Cohen Milstein Sellers & Toll PLLC, David Brevda of Senior Justice Law Firm, and Chuck Toomajian of Zimmerman Reed LLP.

Real-estate industry has now agreed to pay nearly $1 billion to settle anticompetitive allegations

A real-estate brokerage firm that is part of Warren Buffett’s conglomerate has reached a settlement in the landmark antitrust case against the industry, though the amount was a fraction of what the plaintiffs have aimed to recover.

HomeServices of America reached a nationwide $250 million settlement, the company said Friday. That figure is higher than what any other individual brokerage has agreed to pay to settle claims that the real-estate industry used a commission structure that kept fees for agents artificially high.

Since the residential broker is a subsidiary of Buffett’s Berkshire Hathaway, the plaintiffs hoped to collect a payout many times that amount. They had tried in court filings to tie the brokerage to its parent company, Berkshire Hathaway Energy. 

. . .

Benjamin Brown, a plaintiff attorney at Cohen Milstein, said plaintiffs can continue to pursue claims against Berkshire Hathaway Energy. “We don’t accept that none of the Berkshire Hathaway entities have liability here,” Brown said.

HomeServices was the last remaining defendant in the antitrust case against the National Association of Realtors trade organization and four major brokerage firms. With this latest settlement, real-estate firms and NAR have agreed to pay more than $940 million to resolve the antitrust claims.

In October, plaintiffs won a $1.8 billion verdict in Missouri after alleging that NAR and residential brokerages used a commission structure that kept fees for Missouri agents artificially high. A judge could have tripled that amount to more than $5 billion.

A real estate company owned by Warren Buffett’s Berkshire Hathaway has agreed to pay $250 million to settle lawsuits nationwide claiming that longstanding practices by real estate brokerages forced U.S. homeowners to pay artificially inflated broker commissions when they sold their homes.

HomeServices of America said Friday that the proposed settlement would shield its 51 brands, nearly 70,000 real estate agents and over 300 franchisees from similar litigation.

The real estate company had been a major holdout after several other big brokerage operators, including Keller Williams Realty, Re/Max, Compass and Anywhere Real Estate, agreed to settle. Last month, the National Association of Realtors agreed to pay $418 million.

. . .

Including HomeServices’ proposed payout, the real estate industry has now agreed to pay more than $943 million to make the lawsuits go away.

“This is another significant settlement for American home sellers who have been saddled with paying billions in unnecessary commission costs,” Benjamin Brown, managing partner at one of the law firms that represented plaintiffs in a case filed in Illinois, said in a statement.

General Motors LLC was hit with a new proposed class action alleging it concealed two transmission defects that caused shuddering and poor shift quality in 18 Chevrolet and GMC models.

The complaint filed Wednesday in the US District Court for the Eastern District of Michigan alleges GM knew about the defects in 2014, but actively concealed information about them so customers wouldn’t learn about the problems until their warranty periods elapsed.

. . .

The plaintiffs say that as a result of GM’s active concealment, they didn’t know about the alleged defects until Speerly’s class certification motion. The complaint cited the order’s rebuke of GM’s attempts to keep seal documents that could show the company’s knowledge of the defects.

GM “repeatedly argued in its motions to seal that hundreds of pages of reports produced by GM covering engineering investigations of the transmission problems and compilations of warranty service data were its ‘confidential information,’” Judge David M. Lawson said in the Speerly class certification order. GM’s “determined efforts to maintain the ‘confidentiality’ of the information defies any suggestion that any of the relevant information previously was disclosed by GM or its dealers to any buyers of class vehicles,” Lawson added.

The plaintiffs in this case say GM still hasn’t fully admitted what it knew about the defects and when.

. . .

The plaintiffs are represented by Cohen Milstein Sellers & Toll PLLC, Gordon & Partners PA, Berger Montague PC, Capstone Law APC, The Miller Law Firm PC, Kessler Topaz Meltzer & Check LLP, Keller Rohrback LLP, and Pitt McGehee Palmer and Rivers PC.

Trump argued that allowing the civil case to proceed while his still-paused criminal trial is pending could force him to reveal potential defenses and incriminate himself.

A federal judge on Thursday denied former President Donald Trump’s motion to pause proceedings in a civil personal injury suit brought by Democratic lawmakers over the Jan. 6, 2021, Capitol riot, rejecting his argument it should only resume after his related criminal case has concluded.

U.S. District Judge Amit Mehta acknowledged that some of Trump’s concerns that by defending this case first he could reveal his defense strategy in the criminal matter as valid, but do not show a pressing need for such an indefinite stay.

The Barack Obama appointee wrote in his opinion that Trump’s assertion that there is “substantial overlap” between the lawmakers’ allegations and special counsel Jack Smith’s allegations in his still-paused election subversion case is “true in a sense.”

“But defendant overstates the significance of that factual overlap in the present posture of these matters,” Mehta said.

. . .

Trump’s criminal case has been paused since December, as his presidential immunity claim has made its way through the D.C. Circuit and is now before the Supreme Court, who is set to hear arguments on the issue on April 25.

If the high court rejects his argument, a trial would likely resume sometime in the fall and could potentially run up to and through the November election.

Mehta, citing the D.C. Circuit’s decision in Blassingame v. Trump that opened the former president up to civil litigation for his nonofficial acts surrounding Jan. 6, found little concern of a Fifth Amendment violation.

He said that the sole purpose of discovery in the civil case will be to determine whether Trump’s actions “can reasonably be understood as the official actions of an officeholder rather than the unofficial actions of an office-seeker.”

The case will merely center on the question of immunity and would not require Trump — who would not be required to attend in person like his current criminal case in Manhattan — to admit to any of the conduct he’s accused of in Smith’s case.

The plaintiffs, congressional Democrats like Eric Swalwell, Bennie Thompson, Karen Bass, Pramila Jayapal, Maxine Waters and more, have also conceded they are not asking for Trump to be deposed and testify under oath.