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Health care fraud in Texas

by | Apr 27, 2021 | Firm News

If you drive due south of Dallas for about seven hours, you will arrive in Harlingen, Texas. The fast-growing city sits a few miles from the border to the south and a few miles from the Gulf of Mexico to the east.

Harlingen is home to a 44-year-old Texan recently sentenced to 27 months in prison for one count of conspiracy to commit health care fraud.

Recruiting patients

Jose Garza was the operations manager for the Merida Group, a chain of hospices and home health agencies across Texas. Prosecutors said Garza’s role in the conspiracy was to run Merida’s day-to-day business, which included the recruitment of patients with serious medical issues at hospitals throughout the Rio Grande Valley.

He touted Merida’s hospice as one “that you don’t have to die to use.”

According to the FBI, the goal of Garza and his associates was “to falsely convince thousands of patients with long-term incurable diseases they had less than six months to live in order to enroll the patients in hospice programs for which they were otherwise unqualified.”

Common types of health care fraud

The FBI says the operation was a variation of an upcoding scheme, one of the four common types of health care fraud committed by medical providers:

  • Upcoding: this is when insurers, Medicare or Medicaid are billed for a more expensive service than what the patient received. The health care provider submits a bill in which the codes identifying services rendered are upgraded to increase revenue.
  • Double billing: a care provider submits multiple claims for a procedure or service that was performed only once.
  • Unbundling: Some billing codes include a bundle of procedures that are typically done together. Example: cleaning a cut, stitching it and applying a dressing. Unbundling occurs when three separate bills are submitted to increase revenue.
  • Phantom billing: billing for a visit, procedure or supplies that the patient never received.

Merida’s version

Witnesses testified that in the Merida upcoding scheme that ran from 2009 to 2018, “the vast majority” of Merida’s hospice and home health care patients didn’t qualify for the services. Doctors were apparently bribed to certify unqualified patients. Medical records were falsified to indicate that the patients were terminally ill and getting worse.

Three others were convicted by a federal jury, with the owner of the Merida Group receiving the harshest sentence: 20 years in prison. Merida’s CEO was sentenced to 15 years

Garza will also have to pay $4.7 million in restitution.

This case and many others indicate the seriousness with which law enforcement, prosecutors and the court system take white-collar crime and health care fraud in particular. In these situations, the guidance of a skilled legal professional can be invaluable not only to those who have been indicted, but to anyone under investigation.