The settlement resolves allegations that the hospital knowingly submitted false claims to Medicare for drugs that did not meet coverage requirements.
Louisville's Jewish Hospital & St. Mary's Healthcare Inc. will pay the federal government $10.1 million to settle whistleblower allegations that it knowingly submitted false claims to Medicare for drugs that did not meet coverage requirements, the Department of Justice.
The federal complaint also alleged that Jewish Hospital failed to get a treating physician's signature on prescription orders establishing medical necessity, failed to confirm that refills were reasonable and necessary, and failed to document that the medications were delivered.
The settlement also resolves allegations that Jewish Hospital submitted claims to Medicare that led to improper payments to Medicare beneficiaries in the form of free blood glucose testing supplies and waiver of co-payments and deductibles for insulin, all violations of the Anti-Kickback Statute, DOJ said.
Attempts Wednesday to contact Jewish Hospital & St. Mary's Healthcare, Inc. for comment were not successful.
"Healthcare providers will be held accountable when then knowingly submit false claims for prescription drugs that do not meet requirements to establish medical necessity," said Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division.
The settlement resolves allegations originally brought in a whistleblower lawsuit filed by Robert Stone, a pharmacist, who will receive $1.85 million of the settlement.
DOJ last month resolved related civil complaints against Sanford Health, which agreed to pay $20.2 million.
A South Dakota neurosurgeon has been named in a federal whistleblower complaint alleging that he paid himself hundreds of thousands of dollars in kickbacks by using medical devices distributed by two companies that he owns, theDepartment of Justice said.
The government’s complaint alleging violations of the False Claims Act and the Anti-kickback statute, claiming that Wilson Asfora, MD, of Sioux Falls, and his two companies – Medical Designs LLC, and Sicage LLC Medical Designs.
"Despite receiving numerous warnings that he was performing medically unnecessary procedures with the devices in which he had a financial interest, Asfora allegedly continued to perform such procedures while personally profiting from his use of devices sold by Medical Designs and Sicage," DOJ said
"The Department of Justice will seek to hold accountable physicians and medical device companies that receive or pay illegal kickbacks in any form," said Assistant Attorney General Jody Hunt of DOJ's Civil Division. "Improper inducements have no place in our federal healthcare system where medical decisions should be based on the healthcare needs of patients and not on a physician’s personal financial interest."
DOJ filed its complaint in a whistleblower lawsuit pending in the U.S. District Court for the District of South Dakota.
After months of feedback from payers and providers unhappy with a proposal to mandate price transparency in healthcare, the Trump administration unveiled its final rule on the topic.
Declaring "a major victory" for patient choice and affordable healthcare, President Donald Trump on Friday unveiled his administration's final rule on hospital price transparency.
"I don't know if the hospitals are going to like me too much anymore with this, but that's OK," Trump said at a White House event to announce the rule.
"We're stopping American patients from just getting, pure and simple, two very simple words: ripped off. Because they've been ripped off for years, for a lot of years," he said.
The final rule—which takes effect on January 1, 2021, one year later than initially proposed—requires hospitals to provide patients with easily accessible information about standard changes for items and services offered.
This includes making all standard charges available in a single data file that can be read by other computer systems, as well as making "shoppable services" information available on their websites in a consumer-friendly manner.
Additionally, hospitals must make information about shoppable services, which can be scheduled by patients in advance, available in a "prominent location online" and describe the information in plain language.
The Centers for Medicare & Medicaid Services also issued a separate proposed rule that would impose price transparency requirements on health insurers.
"I'm sure they'll be thrilled," Trump said of insurers. "This will allow you to see your out-of-pocket costs and other vital price information before you go in for treatment, so you're going to know what it's going to be and you're going to be able to have lots of choices, both in terms of doctors, hospitals, and price."
The final rule provides CMS with additional enforcement and auditing capabilities, including the ability to issue monetary fines of $300 per day for hospitals that don't comply.
Health and Human Services Secretary Alex Azar applauded the president for implementing "revolutionary change" to the healthcare system.
"Today's transparency announcement may be a more significant change to American healthcare markets than any other single thing we've done, by shining light on the costs of our shadowy system and finally putting the American patient in control," Azar said.
Hospitals Say They'll Sue
Not surprisingly, payer and provider stakeholders responded to the new final rule with a chorus of boos and promises of litigation.
In a joint statement, the American Hospital Association, Association of American Medical Colleges, Children's Hospital Association, and Federation of American Hospitals called the proposed rule "a setback in efforts to provide patients with the most relevant information they need to make informed decisions about their care."
"Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery," the hospital groups said.
"Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration's authority," the hospitals said.
Beth Feldpush, senior vice president of policy and advocacy at America's Essential Hospitals, said the final rule "would unfairly advantage health plans in negotiations with providers and threaten essential hospitals' ability to participate in networks and maintain access to services."
"Information without context—for example, how and why the cost of patient care varies among hospitals—is of little practical use to consumers," she said. "Essential hospitals typically have higher costs due to their commitment to complex services vital to communities, such as trauma and behavioral health care."
In addition, Feldpush said the final rule would create an administrative nightmare for hospitals that would hurt patient care and drive up costs.
"These policies undermine hospital'’ ability to negotiate equitable payments while giving consumers little actionable information with which to make informed care decisions," she said.
On the payer side, Matt Eyles, president and CEO of America's Health Insurance Plans, said price transparency "should aid and support patient decision-making, should not undermine competitive negotiations that lower patients' health care costs, and should put downward pressure on premiums for consumers and employers."
"Neither of these rules—together or separately—satisfies these principles," he said.
Study calls for universal pre-surgery frailty screenings, even for procedures determined to be of low or moderate risk.
When it comes to frail patients, there's no such thing as low-risk surgery.
A Vanderbilt University Medical Center-led study has determined that even a laparoscopic gallbladder removal can prove to be a high-risk and even fatal procedure for frail patients.
"It's been established that frailty is a strong predictor of complications and death related to surgery, but what we learned in this study is that frail patients have alarmingly high rates of postoperative death, no matter how minor the surgical procedure," lead author Myrick "Ricky" Shinall Jr., MD, said in a media release. "Our data indicate that there are no 'low-risk' procedures among frail patients."
"A laparoscopic cholecystectomy is one of the most common operations I do as a general surgeon, and this has really given me pause to think that for frail to very frail patients — about 10% of our sample — this is a big deal," said Shinall, an assistant professor and general surgeon at Vanderbilt University Medical Center.
The study, published this week in JAMA Surgery, looked at 432,828 patients who underwent a non-cardiac surgical procedure, and found that patients who were frail or very frail had up to 43% higher mortality rates after surgeries with low and moderate operative stress, such as minimally invasive gallbladder removal.
Patient frailty is measured before surgery by a Risk Analysis Index that assesses symptoms such as unintentional weight loss, shortness of breath, weakness, and difficulties with daily activities like walking, eating or bathing.
The study looked at patient medical records over four-years from the VA Surgical Quality Improvement Program database, a representative sample of all surgeries conducted across the country in the Veterans Health Administration. The data included patient information for a minimum of one year following surgery, and the patients' postoperative mortality was noted at 30, 90 and 180 days.
Shinall and his colleagues created an Operative Stress Score and put patients into five categories of physiologic stress, ranging from the lowest (OSS1) to the highest (OSS5). Of the study's patient sample, 8.5% were classified as frail, and 2.1% were very frail.
The 30-day mortality rates for frail patients undergoing the lowest stress operations and moderate stress operations were 1.55% and 5.13%, both exceeding the 1% mortality rate often used to define high-risk surgery.
For very frail patients, 30-day mortality rates after the lowest and moderate-stress procedures was 10.34% and 18.74%.
For frail and very frail patients, mortality continued to rise at 90 days and 180 days after surgery, reaching 43% for very frail patients 180 days after moderate-stress operations.
With such a high risk, the study calls for universal pre-surgery frailty screenings, even for procedures determined to be of low or moderate risk, with patients and their families made aware of the heightened risk.
"The greatest volume of surgeries performed at hospitals are those that cause moderate operative stress, and it is expected that all procedures at ambulatory surgical centers are considered to be those with a low mortality risk, but clinicians spend little time considering whether or not their patients can actually endure the stress of surgery," Shinall said.
"It is worth pausing to assess every patient to determine whether they are frail, and if they are, taking steps to mitigate the factors contributing to their frailty before a procedure is ever scheduled or re-evaluating whether they should even undergo a procedure at all," he said.
The joint venture will use telemedicine, in-home providers, and care management oversight to provide 'all essential elements of inpatient care in the home.'
Highmark Health and Contessa are partnering to provide patients with "hospital-quality care in the comfort and convenience of their homes," the two companies said in a joint press release.
The joint venture, Home Recovery Care LLC, will use telemedicine, in-home providers, and care management oversight that the two companies claim will provide "all essential elements of inpatient care in the home."
The model is available now for some Highmark commercial plans in western Pennsylvania, and will be made available to all plan members and Medicare Advantage members in that region starting on January 1, 2020. The model may soon expand into West Virginia and Delaware.
"Creating a value-based experience that enables patients and families to heal in the home is a priority for Highmark Health," said Monique Reese, senior vice president, Home and Community Care for Pittsburgh-based Highmark Health.
"Through the Home Recovery Care Model, Allegheny Health Network will provide high-quality in-home services such as home care, home infusion, and durable medical equipment," she said.
Under the Home Recovery Care model, patients are monitored for 30 days to ensure they are sticking with physician-devised care plans, and attending follow-up appointments with primary care physicians and other specialists.
"This new collaboration with Contessa enables us to deliver on Highmark Health's mission to create a remarkable customer experience," said Highmark's Tony Farah, MD, chief medical and clinical transformation officer.
"We are laser focused on achieving the quadruple aim — to transform health care through proactively improving clinical outcomes and driving better patient and clinician experiences, thereby lowering total cost of care," he said.
Study finds large discrepancies in the severity of illness among patients when they receive heart transplants.
Hospitals left to their own discretion may not be picking the sickest patients for heart transplants, a new study shows.
University of Chicago-led researchers looked at more than 29,000 adults on the national heart transplant registry from 2006 through 2015 and found large discrepancies in the severity of illness among patients when they receive heart transplants.
"These are all patients with end-stage heart failure who have exhausted most of their options. They all need transplants, but there aren't enough donor hearts to go around," said study led author William Parker, MD, a pulmonologist and ICU physician at the University of Chicago.
"But the system is set up such that transplant centers have a lot of control over determining which patients receive top priority for transplant, which makes it a very nuanced problem," he said.
Over the decade-long study period, the average "survival benefit" – which is scored as the percentage increase in chances of survival – for heart transplants ranged from 30% at low survival benefit hospitals to 55% at high survival benefit centers. One-quarter of the 113 transplant centers studied were low benefit centers, and one quarter were high benefit centers, the study found.
For heart transplant recipients, the overall survival rate was about 77% across all centers.
Parker said the findings suggest that the high survival hospitals prioritize sicker patients, giving hearts to patients with lower chances of survival without a transplant and boosting their survival benefit.
Conversely, the low survival hospitals are "playing it safe" and giving organs to less critically ill patients who receive a smaller benefit from the transplant.
"I don't think anybody's acting in bad faith. They're doing what they have to do to get their patients taken care of," Parker said. "But we found that centers that take risks on sicker candidates still manage to achieve good post-transplant outcomes, which leads to more lives saved."
Parker sees a connection between his study results, and federal regulations that until 2018 required hospitals to rank heart transplant candidates on a three-tier scale.
The rankings relied on the intensity of treatment they receive. Patients on high-dose inotropic medications, or those receiving mechanical heart support devices like intra-aortic balloon pumps, were deemed the highest priority.
In a study last year in the Journal of the American College of Cardiology, Parker and his colleagues showed that the rules incentivized hospitals to overtreat patients with more intensive therapies to boost their status for transplant.
"When I started to dig more into the data, it turned out that most patients on the list, over time, had become the top priority tier," he said. "Centers that had lots of nearby competitors were much more likely to overtreat their candidates to get them into the top priority tier."
Parker says his new study suggests that some hospitals during the study period cherry-picked transplant recipients, overtreated them to raise their profile on waiting lists, with the anticipation of an easier post-transplant recovery with higher survivability rates.
The Organ Procurement and Transplant Network in 2018 implemented a new six-tier model for assessing patients in need of a heart transplant.
In his new study, Parker re-coded transplant candidates according to the new six-tier system and found that – while providing more balance in the selection process – it still doesn't account for how hospitals will likely change their practices to adapt to the new system.
Parker said problem is stubborn because hospitals control which heart patients get transplants, relying on a system that matches treatments with severity of illness.
Other organ transplant programs rely on objective measures based on MELD lab tests, which remove much of the discretion in candidate selection that hospitals now have. Because of that, Parker does not anticipate big changes under the newer six-tier model.
"If the system was working perfectly, the variation among centers would be very small," Parker said. "But there are good reasons to believe that the new system won't actually allocate hearts to the sickest patients either because centers still would have a lot of influence on deciding the priority status of patients at their center and who actually gets transplanted."
Seema Verma says the feds will crackdown on 'shady recycling schemes (that) drive up taxpayer costs and pervert the system.'
The Centers for Medicare & Medicaid Services on Tuesday detailed a proposed rule that it says will ensure that state supplemental payments and financing arrangements for their Medicaid programs are transparent and in line with federal law.
CMS Administrator Seema Verma said the proposed Medicaid Fiscal Accountability Rule would crack down on impermissible financing arrangements to ensure that federal Medicaid dollars are spent in ways that support the direct needs of Medicaid beneficiaries.
"We have seen a proliferation of payment arrangements that mask or circumvent the rules where shady recycling schemes drive up taxpayer costs and pervert the system," Verma said Tuesday in a speech at the National Association of Medicaid Directors conference in Washington, D.C.
Citing recommendations for enhanced oversight from the Government Accountability Office and the Office of Inspector General, Verma said the proposed rule would create new requirements for states to report provider-level information on Medicaid supplemental payments.
"Today's rule proposal will shine a light on these practices, allowing CMS to better protect taxpayer dollars and ensure that Medicaid spending is directed toward high-value services that benefit patient needs," Verma said.
CMS says states are using various schemes to bypass federal Medicaid laws, including generating extra payments for private nursing homes that arrange with local governments to bypass tax and donation rules.
Another scheme uses a loophole to tax managed care facilities 25 times higher for Medicaid business than for similar business. That additional tax revenue is then spent by states to generate additional payments, with no commiserate increase in state spending.
As a result of these schemes, CMS says Medicaid supplemental payments have grown from 9.4% of all other Medicaid payments in 2010 to 17.5% in 2017.
"We’ve seen payments increasing dramatically over the years for governmental providers that are able to self-fund the state match, to levels that often far exceed even Medicare payments and have little connection to improving the health of Medicaid beneficiaries," Verma said.
"This rule will shine a light on these practices and help to set reasonable limits that even the playing field, addressing a source of government distortion and unfair competition in many markets. The government should not be placing its thumb on the scale," she said.
Increasingly, CMS says, states are relying upon "high-risk financing mechanisms" to fund their portion of Medicaid, including intergovernmental fund transfers, certified public expenditures, provider taxes, and provider donations, which puts more money into play, but provides no clear link to improved patient care.
"Now, I recognize that these schemes often have their roots in self-interested providers, egged on by opportunistic consultants seeking to leverage regulatory loopholes or hide behind a lack of transparency," Verma said.
"I know that most state leaders want to make sure every dollar is supporting value and improving care for Medicaid beneficiaries, and those of you that are doing the right thing have nothing to worry about," she said. "We have your back."
Provider Groups Raise Concerns
The nation's safety net hospitals panned the proposed rule, and urged CMS to withdraw it.
Beth Feldpush, senior vice president of policy and advocacy with America's Essential Hospitals, said the proposed rule "oversteps" the goal of transparency and accountability "with deeply damaging policies that would harm the health care safety net and erode state flexibility."
"This regulation would undermine the financial stability of state Medicaid programs by restricting the flexibility states have to meet their commitment to vulnerable patients and avoid spending cutbacks that threaten access to care," she said.
Feldpush said that flexibility allows states to respond to health crises that require expanded services, such as the opioid epidemic.
"Indeed, flexibility seemed to be a hallmark of the administration’s approach to Medicaid, but today’s proposal turns that perception on its head," she said. "It is less about transparency than it is an attack on the very flexibility states need to keep their Medicaid programs afloat and protect the safety net in the face of growing demands on program resources."
A spokesperson for the National Association of Medicaid Directors said they were still reviewing the proposal but would issue remarks during the 60-day public comment period that will follow the proposed rule's release.
Mark Parkinson, President and CEO of the American Health Care Association and National Center for Assisted Living, said that "provider taxes and supplemental payment arrangements both have become very important financing sources for long term care providers."
"We welcome discussions with CMS on balancing adequate Medicaid base rates with the potentially devastating effects of any changes in Medicaid financing," he said. "This includes the vital need to protect provider taxes and supplemental payments, which are often used to offset inadequate base rates."
The proposed rule would also provide new definitions for Medicaid "base" and "supplemental" payments, which would allow CMS to better monitor and enforce statutory requirements around the non-federal share of Medicaid spending and requirements for upper payment limits.
It would also clarify definitions and processes associated with provider ownership categories to close loopholes that have allowed states to attempt to inappropriately fund their share of Medicaid expenditures and to be more consistent with the statute.
To ensure payments align with state and federal Medicaid goals, states would also be required to sunset supplemental payments and tax waivers after no more than three years, with the option to request renewal.
The company 'aggressively recruited' dozens of surgeons with the potential to use a high volume of the company's products and hired them as paid 'consultants.'
Medical device maker Life Spine Inc., its founder and a senior executive will pay $6 million to settle allegations that the medical device maker paid millions of dollars in kickbacks to surgeons to use their implants, the Department of Justice said.
The settlement was based on financial disclosures by Life Spine, which determined the company's ability to pay, DOJ said.
The federal government in July intervened in a whistleblower lawsuit that was brought against Huntley, Illinois-based Life Spine which showed that, from 2012 through 2018, Geiber and Butler "aggressively recruited" dozens of surgeons with the potential to use a high volume of the company's products and hired them to serve as paid "consultants."
These paid consultants agreed to transfer their patents and patent applications to Life Spine in exchange for payments and promised support to bring the surgeons' new products to market, DOJ said.
Butler admitted that he tracked surgeons' use of Life Spine products to ensure that surgeons were generating sales revenues for the company and were fulfilling their "commitment" to use Life Spine products.
Life Spine admitted that it generated a report that compared surgeon consulting, royalty, and intellectual property payments to surgeon product usage levels, and then calculated an return on investment for each surgeon based on those figures. If a surgeon's usage was too low, Life Spine managers, including Butler, pressured the surgeon to use more Life Spine products.
The alleged kickbacks took the form of medical education agreements that paid surgeons to provide training and/or educational services; product development agreements that paid surgeons royalties for their positive input on new products; and intellectual property agreements that paid surgeons large up-front acquisition fees for their patents/patent applications.
The surgeons who were paid kickbacks generated half of Life Spine’s domestic sales of spinal products from 2012 through 2018. DOJ said the payments violated the Anti-Kickback Statute that ultimately resulted in false claims for payment from Medicare and Medicaid.
Life Spine said in a media release that it was "pleased" to announce the settlement.
"The company has made significant progress formalizing and strengthening its compliance program, a process that began before any discussions with the government," the company said
A Harvard study offers an alternative explanation for declines in hospital readmissions.
There's no arguing that 30-day readmissions for certain conditions targeted by a federal initiative to improve quality of care are on the decline.
The Centers for Medicare & Medicaid Services' Hospital Readmissions Reduction Program is getting a lot of credit for the decline. Since 2010, the program had dinged hospital Medicare reimbursement for a range of preventable readmissions for conditions such as pneumonia and heart failure.
However, in a study this month in Health Affairs, researchers at Harvard Medical School are offering an alternative explanation that the drop in readmissions is being driven by an overall decline in hospital admissions.
"The decline in readmission rates looked like the silver lining of pay-for-performance, but it seems to have lost its luster," said study lead author J. Michael McWilliams, the Warren Alpert Foundation Professor of Health Care Policy in the Blavatnik Institute at Harvard.
"Our study makes a strong case that what looked like achievements of the program may have been a byproduct of factors driving a broader decrease in hospitalizations across the board," McWilliams said.
McWilliams spoke with HealthLeaders about the study findings, and the use of readmissions as a quality metric. The following transcript has been edited for length and clarity.
HLM: What prompted this study?
McWilliams: This decline in admission rates had gone largely unnoticed in the literature on the HRRP. So that prompted us to do the study, particularly in the wake of other studies interpreting the decline of readmissions as a causal effect of the program. It seemed worth pointing out that there was this other broader trend going on nationwide.
HLM: So, the simplest explanation is the correct one?
McWilliams: Yeah. Occam's Razor. As a physician and health policy researcher, I'm not sure that's always true. It seems like things can get really complicated sometimes. But in this case, the falling rate of admissions is a pretty clear explanation for at least much of the decline in readmissions.
It's just because of this simple statistical relationship between the two. If there were fewer admissions per patient, and readmissions are largely independent events, simply other admissions that happened to fall within 30 days of another, then statistics tell us that as the number of admissions per patient falls, the probability that one admission falls close to another is lower.
HLM: Does this mean that efforts to reduce 30-day readmissions are a waste of time?
McWilliams: I don't think we can say it's a waste of time. We can certainly say that, whatever response has been elicited by the program, those efforts to reduce readmissions either have not been very effective, or it's possible that those efforts did prevent some readmissions, but at the same time, a lot of the efforts which involved outreach to patients may have also increased readmissions.
One interpretation–although this is speculative because it's very hard to sort out which are the prevented and which are the increased readmissions–might be that the quality of care may have gotten somewhat better. It's just not reflected in the measure.
HLM: What do your findings suggest about using readmissions as a quality metric?
McWilliams: Any utilization-based quality measure is really problematic because it begs the question, what's the right level of utilization? This is true of so-called preventable admissions as well as hospitalizations for ambulatory care-sensitive conditions. Obviously, the right amount of admissions and readmissions is not zero. So it's very hard to know if we provide optimal care what proportion of patients would be admitted or readmitted.
HLM: Based on your findings, should Medicare eliminate the financial penalties for 30-day readmissions?
McWilliams: For any given hospital, it's hard to know whether it's merited or not. There's been a lot of research in this area that has demonstrated that, while it's not clear that the program has reduced readmissions much if at all, what it has certainly done is transferred resources away from providers serving sicker and poor patients to the hospital serving the healthier, wealthier patients and in ways that are not merited, that are not due to differences in quality, but rather just due to differences in the populations that they serve.
We'd be better off without the program for that reason, and there is ongoing debate about whether the program should be scrapped altogether, whether it can be refined in a way that it could achieve its objective.
I tend to be quite skeptical of programs like this that fall in the category of pay for performance because they're just a lot of intractable problems with this approach to quality improvement of trying to bake it into the payment system.
HLM: What should be done with your study findings?
McWilliams: A good use would be to take a step back and reassess the merits of this program and other programs like it. This is not the first pay-for-performance program we've found to have minimal benefits and lots of unintended consequences. The research on the Value-based Payment Modifier, which was the precursor to the MIPS, is very similar, as is the Hospital Value-based Purchasing Program.
The best use of the findings is to take a step back and to really have a new conversation where we start thinking about ways to improve quality that is not by linking incentives to performance measures, but just thinking about what interventions and strategies help improve quality.
Sometimes we forget that the ultimate goal is quality improvement when we are so focused on measures and how they should fit into the payment system. Once we figure out how to improve quality, there'll be demand from patients for it and providers are interested in providing better quality care.
The schemers falsely told patients they had only six months to live in a ploy to collect hospice payments.
A federal jury in Texas has convicted a small-town mayor and two other healthcare executives for their role in a hospice fraud scheme that stole $154 million from Medicare by falsely telling patients with long-term incurable diseases such as Alzheimer's that they had only months to live.
After a three-week trial in San Antonio, the jury found Rodney Mesquias, 47, of San Antonio, Henry McInnis, 47, of Harlingen, and Francisco Pena, 82, of Laredo, guilty of multiple counts of healthcare fraud, money laundering, conspiracy and obstruction of justice, the Department of Justice said.
Sentencing was scheduled for June 2020.
Mesquias owned and controlled the Merida Group, which operated dozens of hospice sites across Texas. McInnis was CEO. Pena, a physician, was a medical director for the Merida Group and, at the time, the mayor of Rio Bravo, Texas.
Evidence presented at trial showed that from 2009 through 2018 the Merida Group enrolled patients with long-term incurable diseases, such as Alzheimer's and dementia, at group homes, nursing homes, and in housing projects after lying and telling them that they had less than six months to live, so that they could qualify for hospice services.
The schemers went so far as to send chaplains to lie to the patients and discuss last rites and preparation for their imminent death, DOJ said.
In actuality, the patients were not terminally ill and were in some instances walking, driving, working and even coaching athletic sporting events, trial evidence showed.
Nonetheless, the schemers kept the patients on services for multiple years to increase revenues and threatened and fired employees who refused to go along with the fraud.
When confronted about the kickbacks he accepted while in his mayoral office in Rio Bravo, Pena lied to the FBI, and schemers gave fictitious medical records to investigators to cover their tracks.
To launder the proceeds, the schemers created a company in the name of the girlfriend of a co-conspirator physician, and used the company to conceal and distribute of hundreds of thousands of dollars in kickbacks that were paid to the physician in exchange for referrals
The schemers used the ill-gained proceeds to buy exotic cars, expensive jewelry, real estate, high-end clothing, Las Vegas outings, and premium season tickets to San Antonio Spurs games.
The evidence also showed that Mesquias and McInnis spent tens of thousands of dollars wining and dining physicians at exclusive Las Vegas casinos such as Hakkasan and Omnia in exchange for medically unnecessary patient referrals.
"It's disgusting how these three made millions by lying about and manipulating people's end of life care," said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. "These men won't have season tickets or nice cars where they are headed."
