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Merida Group director sentenced to 50 months in prison for USD 152M fraud

A federal judge has sentenced Jesus Virlar-Cadena, formerly a medical director for the Texas-based hospice company Merida Group, to 50 months in prison for his role in a $152 million scheme.

The court also ordered Virlar-Cadena to pay $9 million in restitution and $9 million in forfeiture. The Texas Medical Board suspended his medical license in 2019, when he pleaded guilty to the fraud charges.

Several co-conspirators were also convicted, including the company’s owner, Rodney Mesquias, and CEO Henry McInnis.

“Evidence at the trial showed that the Merida Group marketed their hospice programs through a group of companies,” the U.S. Justice Department indicated in a statement. “They enrolled patients with long-term incurable diseases such as Alzheimers and dementia as well as patients with limited mental capacity who lived at group homes, nursing homes and in housing projects.”

One patient testified at trial that Merida clinicians gave her a six-month terminal prognosis for an illness she did not have, leading her to contemplate suicide. She lost her appetite, isolated herself and stopped sleeping because she feared she would never wake up, court documents show.

All told, Merida personnel submitted 47,000 claims for more than 9,000 patients, totalling $152 million. Of that amount, Merida actually received $124 million. The company operated dozens of locations across Texas.

Roughly 70% to 85% of Merida’s patients were ineligible for the hospice care they received, according to prosecutors. These patients were often referred to hospice against the advice of their primary care physicians.

Mesquais, McInnis and their accomplices were also accused of threatening or terminating employees who refused to participate in these activities.

The Justice Department accused Virlar-Cadena of personally certifying more than $18 million in fraudulent hospice claims.

“In order to bill Medicare for these services, the Merida Group hired Virlar and other medical directors but made payment of their medical director fees contingent upon an agreement to certify unqualified patients for hospice,” the Justice Department indicated. “In addition to regular medical director payments, Virlar received luxury trips, bottle service at exclusive nightclubs and other perks in exchange for his certification of unnecessary hospice patients.” Hospice News

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