Texas hospice execs guilty of $152 million Medicare scam, U.S. appeals court holds | #phishing | #scams

  • “Overwhelming” evidence that decade-long fraud was intentional and pervasive
  • Scammers recruited non-English-speaking patients and told them they were dying when they were not

March 25 – The owner and the CEO of a chain of Texas hospice and home-health centers defrauded Medicare out of $152 million by falsely certifying that all of their clients were either dying or too frail to go to a doctor’s office, a federal appeals court held Thursday.

The 5th U.S. Circuit Court of Appeals affirmed the health care fraud and conspiracy convictions of Merida Group owner Rodney Mesquias and CEO Henry McInnis, as well as their respective 20-year and 15-year sentences. Both men were also ordered to pay $120 million in restitution.

Mesquias and McInnis argued that their convictions were based on insufficient evidence, since physicians had certified that the patients were eligible for home-health services or hospice care. “But health care providers cannot immunize themselves from prosecution by cloaking 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 had hand-picked those doctors, offered kickbacks, created “boxes” of ersatz medical records to conceal their scheme, and berated or fired employees who refused to participate in it.

They also recruited non-English speaking patients and used the language barrier to “trick” them into signing up for services, and told potential hospice patients “they had terminal illnesses when they did not,” Costa wrote. “Those lies took a psychological toll” – and possibly a physical one, since Medicare will not cover curative treatments for patients in hospice care.

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 full amount they had billed Medicare for more than 9,000 patients between 2009 and 2018. Since the prosecution had focused on six patients, the appellants argued that the loss should be limited to the $20,000 billed for those patients.

But the defendants’ fraud “seeped through every nook of their operation,” Costa wrote, joined by Circuit Judges Edith Jones and Catharina Haynes. “Given this comprehensive fraud, the district court was not required to sift through thousands of claims of dubious reliability to sort the fraudulent from the nonfraudulent.”

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

For the USA: Joshua Handell and Jeremy Sanders, U.S. Justice Department; Carmen Castillo Mitchell, Assistant U.S. 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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