Catch of the Week: Final Merida Hospice Fraudster Sentenced in $150 Million Scheme
Jose Garza, the former operations manager of Merida Group, a Texas-based hospice, and home health chain, just landed a 27-month prison sentence for his role in a $150 million hospice fraud scheme. Garza is the latest to receive a sentence in connection with the decade-long Merida Group scheme, which saw people with long-term illnesses falsely told they would die soon, while executives at the company pocketed millions in stolen Medicare money.
Under Medicare regulations, beneficiaries are only eligible for hospice care if their hospice doctor and primary care physician certify they have six months or fewer to live. According to the government, the Merida Group – owner Rodney Mesquias, CEO Henry McInnis, and Garza – ran a common hospice fraud scheme: enrolling thousands of beneficiaries in hospice programs who do not meet this basic eligibility requirement.
Merida Group’s Hospice Fraud
According to evidence presented at trial, Garza, Mesquias, and McInnis marketed their hospice programs as providing medical benefits “you don’t have to die to use.” According to testimony at trial, the company sent marketers to group homes, nursing homes, and housing projects, telling Medicare beneficiaries – some of whom were still living active lives – that they had months to live. They also aggressively targeted patients with long-term incurable diseases, such as Alzheimer’s and dementia, and those with limited mental capacity, by falsely telling them they had less than six months to live in order to enroll them in their hospice programs.
To secure enrollments, the conspirators bribed physicians with illegal kickbacks, denominated as fees for medical directorships, to falsely certify unqualified patients for services. They also instructed employees to falsify medical records to make it appear non-terminal patients were terminally ill.
Witnesses testified that from 2009 to 2018, the vast majority of hospice and home health patients at the Merida Group did not qualify for services at all. Despite this, the defendants kept patients on hospice for years in order to increase revenue. Mesquias also fired employees who refused to go along with the fraud, and directed them not to “[expletive] with his patients, or [expletive] with his money” by discharging patients. According to trial testimony, one defendant told a cooperating witness that, with respect to hospice patients, “the way you make money is by keeping them alive as long as possible.”
Fraudulent enrollment in the Merida hospice was not simply a financial crime. Enrollment in hospice terminates Medicare coverage for other healthcare services. Therefore, when ineligible individuals are improperly enrolled in hospice, those beneficiaries are prevented from receiving curative care for their non-terminal conditions.
Garza, the final individual sentenced, received the lowest prison sentence at 27 months with an order to pay $4.7 million in restitution. Mesquias and McInnis were previously sentenced and will spend 20 years and 15 years, respectively, behind bars for their crimes, with Mesquias ordered to pay restitution of $150 million. A fourth defendant, Francisco Peña, who was the mayor of Rio Bravo, Texas and served as medical director for the company, passed away while in detention.
Whistleblowers are Key to Government Efforts Regarding Hospice Fraud
Home healthcare and hospice services are noted for their high rate of fraudulent healthcare claims, such as enrolling ineligible beneficiaries, billing for medically unnecessary services, and billing for services that were not provided or not ordered by a doctor. Falsification of forms is also common in hospice fraud. Whistleblowers often have insight into schemes that help the government put a stop to this kind of healthcare fraud.
In a statement relating to the case, DOJ emphasized that the sentencing “demonstrates the department’s continued commitment to pursuing individuals, at all levels of corporate management, who engage in criminal schemes that prioritize profits over patient care.”
Whistleblowers with information about fraud in home health and hospice may have a case under the False Claims Act and may be eligible to receive a whistleblower reward.
If you think you might have a case, contact our whistleblower lawyer team to learn more.
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- Medicare Whistleblowers: The Most Common Questions Answered About Reporting Medicare Fraud
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