Federal jury hears testimony in Medicare fraud case

MGN Online

A former administrator at Merida Healthcare Group testified Thursday morning against his former colleagues in a federal courtroom in Brownsville.

According to a federal indictment, the company is accused of billing Medicare more than $153 million for unqualified hospice beneficiaries, resulting in nearly $120 million in profits beginning in 2009.

Testifying Thursday, former Merida administrator Jose Garza implicated Rodney Mesquias, the owner of Merida, as the ringleader in the alleged conspiracy to commit Medicare fraud.

Henry McInnis, 47, Jose Garza, 40, both of Harlingen; Rodney Mesquias, 47, of San Antonio; and Francisco Pena, 82, of Laredo, were implicated in the indictment handed down by a grand jury on Jan. 10, 2018.

According to court documents, Mesquias and McInnis are accused of using these profits to fund a lavish lifestyle including the purchase of multiple luxury vehicles, San Antonio Spurs tickets, expensive jewelry, designer clothing, exclusive real estate, and exotic vacations.

Garza, who was in charge of Merida’s Harlingen and Corpus Christi offices, previously pleaded guilty to conspiracy to commit healthcare fraud in exchange for a lesser sentence.

The former administrator told jurors that he answered to Mesquias, the owner of the company, and that McInnis was also responsible for directing employees to admit every single patient who applied for hospice benefits to the program.

According to his testimony, patients who did not need hospice care were marketed benefits including medication, incontinence equipment, and wheelchairs. He further said that employees were reprimanded for not approving patients for the program. This was done regardless of eligibility in order to increase Merida’s profits, he told the court.

Garza testified that many of Merida’s patients were elderly and that some had conditions including Alzheimer’s disease, often leaving them uninformed about their health issues and vulnerable to exploitation.

Prompted by attorneys, Garza recalled that he received several complaints during staff meetings from chaplains concerned that patients they had visited to give rites did not appear to be sick or dying.

Additionally, he recalled an incident in which Mesquias ordered him to pick up a motorized wheelchair from a local pawn shop to give to a patient who was going to revoke his hospice benefits. Patients under Medicare are only eligible for manual wheelchairs, he testified.

Garza and three former executives were charged in January 2018 on an 11-count indictment. Charges included conspiracy to commit healthcare fraud, conspiracy to commit money laundering, aiding and abetting, obstruction of justice and conspiracy to pay and receive kickbacks.

The allegations listed in the indictment included that profits were laundered by using nominees to conceal the identities of the owners of Merida Group’s various entities and that Mesquias and McInnis obstructed justice by instructing employees to provide false records to a grand jury.

The indictment also stated that Pena, a licensed physician who served as mayor of Rio Grande City, lied to the FBI about collecting $5,000 in kickbacks for illegally referring patients for hospice benefits.

Mesquias and Merida Healthcare Group were previously implicated in three lawsuits in which employees alleged mistreatment and discrimination.

One lawsuit filed in 2017 alleged that BRM Home Health, PLLC in Waco was suddenly closed and the parent company Merida fired nine employees, in violation of the Worker Adjustment and Retraining Notification Act (WARN Act), which requires 60-day notice.

Another suit filed in 2018 alleged that a nurse in San Antonio never received overtime pay. A 2015 lawsuit alleged that Merida discriminated against an African-American male chaplain by hiring him in a full time position and denying him full-time hours and benefits while providing both to chaplains of other races.

Garza faces up to 10 years in prison. Thursday’s trial will continue into the first week of November.