Six Arrested in Chicago’s Sacred Heart Kickback Scheme

Medical malpractice lawyers at Pintas & Mullins Law Firm report of a troubling story out of Chicago, where Sacred Heart Hospital was recently closed. The findings of three undercover FBI agents working at the hospital led to the dawn raid on Tuesday, April 16, 2013.

Among the most troubling accusations is the habitual practice of purposefully overmedicating patients. Doctors referred to it as “snowing the patient,” because the abundance of pharmaceuticals would cause their eyes to roll back, making just the whites of their eyes visible. The overmedication was practiced to render patients too drowsy to breathe by themselves, so surgeons had an excuse to perform a tracheotomy, which creates a hole in the front of the neck into the windpipe (think anti-smoking commercials).

Sacred Heart’s owner, Edward J. Novak, pushed for the procedures, which he called his biggest money-maker. Despite its religious name, Sacred Heart is a for-profit hospital that Novak bought in the late 1990s. The tracheotomies performed there were unnecessary and dangerous, as 5 of the 28 patients one surgeon operated on died within two weeks of the procedure, a rate that is three times the Illinois state average. There are numerous short-and long-term side effects associated with the procedure, including obstruction or narrowing of the trachea and severe damage to the esophagus and lungs. Whether or not the patients survived, however, was not an issue for Novak, as the hospital received up to $160,000 for each procedure in federal funding.

The kickback scheme is just one of many listed in a 100-page affidavit filed this week. Novak was also paying other Chicago doctors to refer patients to Sacred Heart so they could perform unnecessary care to scam Medicare and Medicaid. Novak, along with his chief financial officer and four other doctors accused of kickbacks, appeared in court Tuesday. They will appear again in federal court on Friday.

The four doctors are accused of ordering needless ER visits and unlawfully referring patients to various nursing homes and ambulance services with which Sacred Heart had a relationship. The illegal activities were recorded by three undercover special agents who were employed at the hospital for about a year. The agents were working for the FBI and the Department of Health and Human Services. They recorded the doctors as they schemed about how to defraud the government.

Investigators seized more than $2 million in Medicare funds from doctor’s bank accounts, though they stress that the investigation is ongoing. Fortunately, investigators were able to intervene and prevent a needless tracheotomy on March 1. 2013.

There are 40 patients currently being cared for at Sacred Heart, and state and federal health officials are working to ensure they receive safe and adequate care while the investigation continues. The top Health Department investigator in Chicago is encouraging anyone with information about the hospital, its doctors, or Novak, to come forward.

This is not the first time Novak has been accused of wrongly obtaining patient referrals, nor is it the first time a Chicago hospital closed for defrauding the federal government. In 2001/2002, the North Side’s Edgewater Medical Center closed when it was unable to recover from similar fraud investigations. In a 2009 whistleblower suit, Novak was accused of participating in a kickback arrangement to refer Sacred Heart patients to a home health service he also owned. Between 2004 and 2006, a minimum of eight doctors participated in a supposedly-mandatory policy to send patients to Superior Home Health. According to the complaint, filed by a former Superior employee, Sacred Heart sent as many as 300 patients a week to the home health service.

Medical malpractice lawyers at Pintas & Mullins Law Firm encourage anyone with knowledge about this hospital, its employees and practices, to come forward. If you or a loved one was seriously injured by physicians at Sacred Heart, you have important legal rights, and may be entitled to significant compensation through a malpractice or wrongful death lawsuit.

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