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San Antonio Hospice Medical Director Sentenced for $150M Hospice Fraud Scheme

A 52-year-old San Antonio man has been sentenced for his role in a scheme that involved the submission of over $150 million in false and fraudulent claims to Medicare for hospice and other health care services.

Jesus Virlar-Cadena pleaded guilty June 4, 2019.

U.S. District Judge Rolando Olvera has now ordered Virlar-Cadena to serve 50 months in federal prison to be immediately followed by one year of supervised release. The court also ordered Virlar-Cadena to pay $9 million in restitution and $9 million in forfeiture.

From 2009 to 2018, Virlar-Cadena served as the medical director of the Merida Group, a large health care company that operated dozens of locations throughout Texas. He was a physician but the Texas Medical Board later suspended his medical license.

A federal jury convicted co-conspirators Rodney Mesquias, 53, San Antonio, Henry McInnis, 52, Harlingen, and Francisco Pena in October 2019.  

Evidence at the trial showed that the Merida Group marketed their hospice programs through a group of companies. 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. In some instances, Merida Group marketers falsely told patients they had less than six months to live. They also sent chaplains to the patients based on the false pretense they were near death.

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. 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. In exchange for these illegal kickbacks, Virlar himself certified over $18 million in unnecessary hospice services as part of the over $150 million conspiracy.  

Mesquias and McInnis were previously sentenced to 20 and 15 years in prison, respectively. Pena is now deceased.

Virlar-Cadena was permitted to remain on bond pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Department of Health and Human Services – Office of Inspector General (OIG), FBI and Texas Health and Human Services Commission – Office of Inspector General investigated the case.

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