Merida Group Owner Rodney Mesquais and CEO Henry McInnis have been found guilty of health care fraud upwards of $152 million, receiving prison sentences of 20 and 15 years, respectively.
Texas-based Merida Group ran a network of home health and hospice centers in the state. Mesquais and McInnis were engaged in a scheme to falsely certify patients who were not eligible to receive home health and hospice services, with roughly 70% to 85% of patients ineligible for the hospice care they received. These patients were often referred to hospice against the advice of their primary care physicians.
Combined charges against both included six counts of health care fraud, one count each of conspiracy to commit health care fraud and conspiracy to launder money. Mesquais faced an additional charge of conspiracy to pay kickbacks. After a 12-day trial, a federal court jury has convicted both on all counts.
U.S. District Court Judges Judith Jones, Catharina Haynes and Gregg Costa cited “overwhelming evidence” in its decision that the two Merida Group executives abused Medicare’s reimburse-first-verify-later system between 2009 and 2018. The defendants submitted more than 47,000 claims for upwards of 9,000 patients during that time frame.
Of the $152 million billed to Medicare, Mesquais and McInnis received $124 million.
“The scale of the scheme matched its cruelty,” the court indicated in its report. “The medical directors routinely lied about having seen patients face-to-face as Medicare requires, exaggerated how sick the patients were and made up diagnoses so that the patients would appear eligible for hospice, and fabricated medical records to cover their tracks.”
According to the report, Mesquias was the “driving force” behind the false certifications and doctored medical records, establishing a rule of admitting every patient to hospice and not discharging them.
Judges reported that the Merida Group executives used a “carrot-and-stick approach” to control other involved parties. “Carrots” included financial incentives offered to employees such as raises and bonuses to participate in the fraud. The “sticks” involved harsh reprimands and intimidation tactics against staff who pushed back.
“Defendants intimidated their employees into submission,” said judges in the report. “When employees pushed back against his excesses, Mesquias warned them not to ‘f*** with his money.’ McInnis was the enforcer. He ‘cuss[ed] out’ skeptical nurses and ‘yell[ed] at the staff’ if patients were not certified. For those who failed to go along, consequences were severe.”
One medical director was fired for refusing to refer patients to hospice. Nurses who raised questions were also fired or threatened with termination.
Four others at Merida Group have been charged and convicted for their involvement in the scheme. Operations manager Jose Garza in 2021 was handed a 27-month prison sentence for the recruitment of patients at several Merida locations. Three others who pleaded guilty to the charges included medical directors Jesus Virlar, Eduardo Carrillo and Francisco Peña.
Peña faced trial as well and was convicted on all counts, but died before sentencing. Peña last year was convicted of one count of health care fraud, obstruction of health care investigations and one count of making false statements to the FBI.
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