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'Unconscionable and Evil' Hospice Fraud Earns Exec 20 Years in Prison

Thousands of patients coerced into unneeded end-of-life care that cost Medicare millions

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After being convicted of crimes that were lambasted as “evil” and “abhorrent,” a longtime hospice official in Texas was sentenced last week to 20 years in prison.

Rodney Mesquias, 48, of San Antonio, systematically built the Merida Group into a “massive enterprise” spanning the state, prosecutors said. In fact, the business run by Mesquias and associates was an “utterly corrupt enterprise riddled with lies."

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Thousands of vulnerable patients, some suffering from dementia, were lied to and manipulated and told they had less than six months to live. They then were enrolled in hospice programs and Medicare was billed.

Some patients placed in hospice programs were active individuals and not suffering from a deadly illness. One, in fact, worked as a Walmart greeter.

"The grist for defendants’ multimillion-dollar fraud scheme were thousands of vulnerable Medicare beneficiaries — elderly, disabled, infirm, physically impaired and in many instances suffering mental decline,” prosecutors said. Patients and their families were “manipulated and lied to,” government lawyers said.

To advance the scheme, physicians were paid kickbacks for enrolling Medicare beneficiaries in hospice care. Nurses were told to falsely document patients’ conditions to support phony diagnoses. Medical records were falsified, making it appear patients were dying when they were not, and altered documents were given to a federal grand jury “to attempt to avoid indictment."

Las Vegas and Louis Vuitton

Authorities said Mesquias and his co-defendants spent the proceeds of their crimes on trips to Las Vegas, clothing from Louis Vuitton, luxury cars, including a Porsche, and tickets to premium sporting events.

At lavish parties in Las Vegas nightclubs, Mesquias treated doctors to “tens of thousands of dollars in alcohol and other perks in exchange for medically unnecessary patient referrals."

At sentencing, Mesquias was also ordered to pay $120 million in restitution to Medicare. His scheme operated for nearly a decade, from 2009 to 2018. At the heart of the case were 47,210 claims relating to 9,339 Medicare patients. Altogether, the billings exceeded $152.7 million.

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Multiple witnesses at Mesquias’ jury trial said that 70 to 85 percent of the Merida Group's home health and hospice patients did not qualify for services and should have been discharged, prosecutors said.

Court documents and a Department of Justice press release also said:

  • Mesquias and the Merida Group “aggressively enrolled patients” with long-term incurable diseases and limited mental capacity who lived in group homes, nursing homes and housing projects.
  • In some cases, Merida Group marketers falsely told patients they had less than six months to live and sent chaplains to lie to the patients. They discussed last rites and preparations for the patients’ “imminent death."
  • Some patients enrolled in hospice care were walking, driving, working and even coaching sporting events. “One hospice patient was rarely home because he was busy working as a greeter at Walmart,” a witness testified at Mesquias’ jury trial.
  • Mesquias fired employees who refused to go along with the fraud. He often directed them not to “[expletive] with his patients or [expletive] with his money” by discharging patients from services. One co-conspirator said that with hospice patients “the way you make money is by keeping them alive as long as possible.”
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'Pinnacle of medical cruelness'

In announcing the 20-year prison term, authorities condemned the crimes in the harshest terms. The “pinnacle of medical cruelness to both the patient and their family,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas.

According to testimony, surgical and other medical interventions designed to extend life through technology were used unnecessarily. Some patients were put on feeding tubes to keep them alive, for example, even though the procedure didn't benefit them medically but rather served only to extend their suffering and generate more money for the Merida Group.

"Only a severe punishment will reflect the sheer magnitude of the fraud perpetrated by the defendants: the cruelty and callousness to thousands of physically and emotionally vulnerable patients and their families …"

—Federal prosecutors in a pre-sentencing memo to the judge

"It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs,” said Christopher Combs, special agent in charge of the FBI's San Antonio Division.

Mesquias was convicted of crimes including health care fraud and conspiracy to commit money laundering, conspiracy to obstruct justice, and conspiracy to pay and receive kickbacks. His attorneys did not respond to AARP requests for comment.

One of Mesquias’ co-defendants, Dr. Francisco Pena, 84, who was convicted of several crimes in the case, died Nov. 14 while awaiting sentencing. He perished after contracting COVID-19 while in custody, the Laredo Morning Times reported. Pena was once mayor of Rio Bravo, Texas, and chief of staff for Laredo Medical Center.

Three other defendants are awaiting sentencing.

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