Merida Group CEO gets 15 years for $150m healthcare fraud

February 3, 2021

By a Biometrica staffer

The CEO of the Texas-based Merida Group of hospice and home health entities was sentenced to 15 years in prison, on Feb. 3, for falsely telling thousands of patients with long-term incurable diseases they had less than six months to live. The patients were told this in order to enroll them in hospice programs for which they were otherwise unqualified, thereby increasing revenue to the company.

Henry McInnis, 50, of Harlingen, Texas was convicted by a federal jury in Brownsville, Texas, in November 2019 of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering, obstruction of justice, as well as six counts of health care fraud.

McInnis’s co-conspirator, Rodney Mesquias, 50, the owner of the Merida Group hospice and home health entities, was also convicted following the November 2019 trial. He was sentenced to 20 years in prison in December 2020. The sentence, from a federal judge also included paying $120 million in restitution. Two other co-conspirators have pleaded guilty and are awaiting sentencing.

From 2009 to 2018, McInnis, Mesquias and others orchestrated a scheme that involved the submission of over $150 million in false and fraudulent claims for hospice and other health care services. McInnis served as the top corporate officer and administrator and oversaw the day-to-day operations of the group, a large health care company that operated dozens of locations throughout Texas.

The Merida Group targeted patients with long-term incurable diseases, such as Alzheimer’s and dementia, according to a press release from the Department of Justice. In the course of the trial, investigators revealed that the defendants enrolled patients by falsely telling them they had less
than six months to live and sending chaplains to lie to them and discuss last rites when this was not the case.

McInnis had no medical training and worked previously as an electrician. However, he acted as the de facto director of nursing for the Merida Group. Witnesses at trial testified McInnis directed employees to admit unqualified patients to hospice and home health, keep unqualified patients on services for long periods of time, and fired and reprimanded employees who refused to participate in the scheme.

McInnis also oversaw and enforced a company-wide practice of falsifying medical records to conceal the scheme. Multiple witnesses testified that McInnis ordered employees to alter medical records to make it appear patients were terminally ill. In reality, some were employed or even participating in sporting events. The jury also heard that McInnis explained the purpose of the falsified records was to allow the Merida Group to pass insurance company audits.

As CEO, McInnis also adopted a policy that paid illegal kickbacks. They directed bribes to physicians under the guise of medical director fees to certify unqualified patients for hospice and home health. In some cases, they improperly offered payoffs to marketers in exchange for
recruitment of patients who could be placed on extremely expensive hospice services. 

“McInnis preyed upon some of the most vulnerable members of our society, including many who suffered from diminished mental capacity. Today’s significant sentence 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,” said General Nicholas L. McQuaid, Acting Attorney of the Justice Department’s Criminal Division.

“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone. It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs,” said Christopher Combs, Special Agent in Charge, of the FBI’s San Antonio Field Office.

The investigation that led to the convictions was conducted by the Department of Health and Human Services — Office of Inspector General, the FBI, and the Texas Health and Human Services Commission. The Fraud Section leads the Health Care Fraud Strike Force.

Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.

The National Health Care Anti-Fraud Association (NHCAA) estimates that the financial losses due to health care fraud are in the tens of billions of dollars each year. A conservative estimate is 3% of total health care expenditures, while some government and law enforcement agencies place the loss as high as 10% of our annual health outlay, which could mean more than $300 billion.