Texas Man Sentenced To 20 Years For Hospice Fraud Scheme

A Texas corporate executive has been sentenced by a federal jury to 20 years in prison for running a scheme in which people with long-term illnesses were falsely told they would die soon, and then enrolled them in hospice programs.

In the scheme, thousands of patients with diseases like Alzheimer's and other types of dementia were told they had just six months to live. Going on palliative care meant that they were no longer able to have medical insurance cover curative medical services, the Justice Department said in a press release Thursday.

Rodney Mesquias, 48, and co-conspirator Henry McInnis, 48, were convicted last year of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering and conspiracy to obstruct justice, as well as six counts of health care fraud. Mesquias was also convicted on one count of conspiracy to pay and receive kickbacks. He must pay $120 million in restitution.

McInnis and two others who pleaded guilty are awaiting sentences.

The details of the scheme are grim.

Mesquias owned Merida Health Care Group, which had dozens of locations around Texas, and McInnis was CEO. Dr. Francisco Peña, a physician who was at the time the mayor of Rio Bravo, Texas, was a medical director for the company.

In many cases, the people were still walking, driving, even coaching sports, when they were told by Merida Group marketers that they will likely die within six months. In the U.S., people enrolled in Medicare can receive hospice care if their health care provider thinks they have less than 6 months to live.

According to testimony presented by prosecutors, the company sometimes sent chaplains to discuss last rites and prepare people for imminent death, while enrolling them at group homes, nursing homes, and housing projects. People were kept on hospice services for years – lining the pockets of Mesquias and his conspirators.

Peña told a witness that "the way you make money is by keeping [patients] alive as long as possible," according to prosecutors.

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

The scheme, which lasted from 2009 to 2018, also involved kickbacks to physicians for referring patients as qualified for hospice care – though patients were not, in fact, qualified for hospice care.

Peña, the medical director and former mayor, was convicted last year on counts of fraud and money laundering. He died last month at age 84 after contracting COVID-19 while in detention, the Laredo Morning Times reported.

Prosecutors say the men used the proceeds to buy luxury cars, jewelry, clothing, real estate, season tickets for the San Antonio Spurs, and bottle service at Las Vegas nightclubs.

"This victimization is intolerable, and our investigators and law enforcement partners will continue to work hard to bring such criminals to justice and to protect those relying on federal health care programs," said Special Agent in Charge Miranda Bennett of the U.S. Department of Health and Human Services Office of Inspector General's Dallas Region.

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