Chicago hospital hit with shocking Medicare and Medicaid fraud charges

Federal authorities have raided Sacred Heart Hospital on Chicago’s West Side after alleged crimes of medically unnecessary sedation, intubation and tracheotomy procedures on patients in an attempt to defraud Medicare and Medicaid.

Chicago has been hit with another shocking corruption scandal involving taxpayer money. Federal authorities have raided Sacred Heart Hospital on Chicago’s West Side after alleged crimes of medically unnecessary sedation, intubation and tracheotomy procedures on patients in an attempt to defraud Medicare and Medicaid.

The case also involves numerous questionable penile enlargement procedures and a kickback scheme where doctors were paid by Sacred Heart for making referrals to the hospital.

According to a press release from the U.S. Attorney’s office, six people from Sacred Heart have been arrested:

• Edward J. Novak, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer
• Roy M. Payawal, 64, of Burr Ridge, Sacred Heart’s executive vice president and chief financial officer
• Dr. Venkateswara R. Kuchipudi, 66, of Oak Brook
• Dr. Percy Conrad May, Jr., 75, of Chicago
• Dr. Subir Maitra, 73, of Chicago
• Dr. Shanin Moshiri, 57, of Chicago

Some of the alleged fraud details in the U.S. Attorney Office’s press release are shocking:

“Between January 2010 and February 2013, May allegedly received $74,000 in the form of 37 checks, for $2,000 each, disguised as ‘rental payments’; Moshiri, a podiatrist, allegedly received $86,000 in 38 checks pursuant to a purported contract to teach podiatry students; and Maitra allegedly received $68,000 in 34 checks pursuant to a purported teaching contract – and the $228,000 total in alleged kickbacks were all in exchange for their referral of patients to Sacred Heart, the charges allege.

…

“In a recorded conversation last month, Maitra allegedly explained to Administrator A that he used to make Novak ‘so much money’ performing almost daily penile implant procedures on patients, but that he no longer performed as many of those procedures because Medicare had decreased its rates of reimbursement for the procedure. Maitra did not comment on whether the patient need for the procedure had somehow changed, according to the affidavit.”

…

“On March 1, 2013, Administrator A recorded Novak stating that tracheotomies are Sacred Heart’s ‘biggest money maker’ and the hospital can make $160,000 for a tracheotomy if the patient stays 27 days. On March 7, 2013, the Intensive Care Unit case manager told Administrator A that she must often ‘stretch’ a tracheotomy patient’s stay to 28 days to maximize Medicare reimbursements ‘to make Novak happy.’”

If true, these disturbing allegations show gross medical misconduct from high-level executives at Sacred Heart, as well as a number of local doctors. Encouraging or forcing patients to undergo unnecessary medical procedures risks the lives of patients, all in an elaborate attempt to steal from taxpayers through Medicare and Medicaid fraud.

Sadly, cases like these are not uncommon in Illinois.

In fiscal year 2011, the Department of Health and Human Services reported that in Illinois alone there were:

• 326 Medicaid fraud investigations
• 48 were indicted on Medicaid fraud charges
• 30 were convicted
• 18 cases of civil settlements/judgments
• $47.8 million dollars was recovered in Medicare fraud cases

The Health Care Fraud Prevention & Enforcement Action Team and the Medicare Fraud Strike Force investigate these types of situations. These groups maintain stopmedicarefraud.gov, where tipsters can report potential fraud.