Skip to main content

Analysis

Texas Healthcare Execs Guilty in $150M Hospice Scam

By John Commins  
   November 07, 2019

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."

“These men won't have season tickets or nice cars where they are headed. ”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Mark Van Scyoc / Shutterstock.com


KEY TAKEAWAYS

The Merida Group enrolled patients with long-term, incurable diseases into hospice care after falsely telling them that they had less than six months to live.

The schemers sent chaplains to lie to the patients and discuss last rites and preparation for their imminent death.

In actuality, the patients were not terminally ill and were walking, driving, working and even coaching athletic sporting events.


Get the latest on healthcare leadership in your inbox.