Texas hospice executives guilty of $152 million Medicare scam, US appeals court hears

  • ‘Overwhelming’ evidence that decade-long fraud was intentional and widespread
  • Scammers recruited non-English speaking patients and told them they were dying when they weren’t

March 25 – The owner and CEO of a chain of hospices and home care in Texas defrauded Medicare out of $152 million by falsely certifying that all of their clients were either dying or too frail to surrender to a doctor, a federal appeals court held Thursday.

The 5th United States Circuit Court of Appeals affirmed the health care fraud and conspiracy convictions of Merida Group owner Rodney Mesquias and CEO Henry McInnis, along with their respective sentences of 20 and 15 years. The two men were also ordered to pay $120 million in restitution.

Mesquias and McInnis argued that their convictions were based on insufficient evidence, since the doctors had certified that the patients were eligible for home health services or hospice care. “But health care providers cannot immunize themselves from lawsuits by masking fraud with a doctor’s note,” Circuit Judge Gregg Costa wrote for the unanimous three-judge panel.

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“Overwhelming evidence” established that Mesquias and McInnis intentionally set out to defraud Medicare, the court said, pointing to testimony that the men handpicked these doctors, offered bribes, created “boxes of ersatz medical records to cover up their scheme, and reprimanded or fired employees who refused to participate.

They also recruited non-English speaking patients and used the language barrier to ‘encourage’ them to sign up for services, and told potential hospice patients ‘they had terminal illnesses so that they hadn’t,” Costa wrote. “These lies had a psychological impact” – and possibly physical, since Medicare will not cover curative treatments for hospice patients.

A Justice Department spokeswoman declined to comment on Thursday, saying the opinion “speaks for itself.”

Attorneys for Mesquias and McInnis did not immediately respond to requests for comment. The men are serving their sentences at the Federal Correctional Institution in Bastrop, Texas.

Mesquias and McInnis also challenged their sentences, which were based on the total amount they billed Medicare for more than 9,000 patients between 2009 and 2018. Since the lawsuit focused on six patients, the appellants argued that the loss should be limited to $20,000. billed for these patients.

But the defendants’ fraud “seeped into every corner of their operation,” Costa wrote, joined by Circuit Judges Edith Jones and Catharina Haynes. “Given this complete fraud, the District Court was not required to sift through thousands of questionable reliability claims to sort out the fraudulent from the non-fraudulent.”

The case is USA v. Rodney Mesquias; Henry McInnis, 5th US Circuit Court of Appeals, No. 20-40869.

For the United States: Joshua Handell and Jeremy Sanders, United States Department of Justice; Carmen Castillo Mitchell, Assistant United States Attorney for the Southern District of Texas

For Mesquias: Hector Canales and J. Antonio Canales of Canales & Simonson; Robert Guerra

For McInnis: Cooke Kelsey of Parker & Sanchez

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