Four Executives Charged in Federal Probe of Sacred Heart Hospital

By - October 30, 2013
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chi-sacred-heart-hospital-ceo-edward-novak-20130829The owner of Sacred Heart Hospital, now closed, as well as three other ex-executives and four doctors were charged this week on federal charges that alleged a fraud scheme that involved kickbacks. The kickbacks were given to the doctors who referred patients to Sacred Heart.

This indictment has come about six months after federal investigators raided the hospital on the west side Chicago. During the raid, they arrested the chief executive of the hospital, Edward Novak, and several of his associates.

A criminal complaint was filed at the time, and it showed that the hospital was shuttling residents of nursing homes to the facility. There they often performed medically unnecessary and risky procedures. Some of them included tracheotomies. As many as five deaths occurred at Sacred Heart in connection to this scheme.

Another media report noted that one of the doctors had allegedly done as many as 28 questionable tracheotomies on poor, black and elderly patients. According to the newspaper, the wealthy owner of the hospital, Edward Novak, pushed doctors to do the procedure, which made him up to $160,000 in government payments, even if the patient died.

None of the above allegations were made against the defendants in the indictment released last week. But according to the US attorney’s office, that part of the investigation is ongoing.

The 17 count indictment states that hospital executives paid over $350,000 in kickbacks, which are illegal, to the four doctors for referring certain patients who were covered by Medicare or Medicaid to Sacred Heart for treatment. These kickbacks were represented to be rent payments or for teaching medical students.

Authorities stated that bribes were paid to the transportation staff of the hospital and several of its employees, to refer and recruit certain patients to the hospital.

The indictment states that two ex-hospital executives and one doctor are being charged. The men are Anthony Puorro, the former chief operating officer of the hospital; Noemi Velgara, a former vice president who was a manager of marketing and recruiting, and also Rajiv Kandala, a doctor.

The Chicago Tribune also reported last month that the state of Illinois suspended the medical license of a doctor that was charged in the scandal, after one of his lawyers asked an Indiana judge to delay the trial because he was not medically fit.

Dr. Subir Maitra is one of the four doctors that was named in the conspiracy at Sacred Heart, and he faces trial in November on fraud charges in Indiana.

Specifically, his attorney asked for a delay in the trial, stating that his client, 73, is frail and has had several serious medical problems lately and cannot concentrate for very long.

This filing by his attorney made the Illinois Department of Financial and Professional Regulation suspend his medical license, as the filing showed that he could be physically or mentally impaired and not able to do his job.

The doctors being charged in this scandal all risk having their medical licenses revoked, in addition to prison time.