This isn't entirely true. In fact, most of it isn't. It's usually not one specific thing that kills someone. It's usually a cascade of problems stemming from something else. If someone comes in with respiratory issues, tests positive for COVID, has a cytokine storm, develops ARDS, sepsis, and finally Multi Organ Dysfunction Syndrome, then dies...what actually killed them? Was it the sepsis? Was it hypoxia? Lactic acidosis? And what caused all that? How would you know?
Hospitals code diagnoses as they arise. Cause of death is subjective to some degree. If they test positive for COVID, and the person dies from a cascade of problems that probably were a result of COVID, then why shouldn't they get paid? Can you prove COVID didn't kill them?
I'm as quick to criticize hospital administrators as anyone. I work for them so I know what kind of crap they can pull. But fraud probably isn't one of them.