Can my parents who contracted COVID be readmitted to the hospital after being released from rehab?

PugLover, any updates on your in-laws?

My mother who is still alive was first admitted to the rehab section of Skilled Nursing after no longer being able to reside in Assisted Living. She was put under palliative care. Then sent to SN. Eventually removed from palliative care and some actual rehab was done. Then another hospital visit and released again to SN on palliative care. Removed again from palliative care. She is basically in SN. They long ago stopped rehab.

I met her at the dentist this week and was shocked to see how badly her legs had atrophied. It would have been nice if all along they might have done some basic PT but I know it doesn't work that way.

As has been suggested they should be able to be on hospice or palliative care where they are unless that facility is strictly a rehab facility. If so they should be admitted to SN. Hospitals don't take patients for the long term if an end might not be imminent.

Pug, where does the discharge planner propose to release them to?

Have you consulted a hospice program?

They will likely be put in a SNF (skilled nursing) or in a nursing home. They do not require acute medical care that hospitals provide if they are dying and there is acceptance that further treatment is either futile or unwarranted. They may be able to qualify for in facility hospice if your area has that. It is time now for the POA or the next of kin managing their care to discuss with the rehab center the options for placement. Rehab is inappropriate placement for someone who is dying and who cannot participate in rehabilitation, and won't be covered by medicare for such care.
I am sorry for this great loss and wish the family the best.