Chicago’s Sacred Heart Hospital Arrests: CEO/Owner, Executive and 4 Doctors Arrested Today in FBI Sting Alleging Things Like Unnecessary Procedures Performed on Patients for Profits Through Insurance Fraud


Chicago’s Sacred Heart Hospital Arrests: CEO/Owner, Executive and 4 Doctors Arrested Today in FBI Sting Alleging Things Like Unnecessary Procedures Performed on Patients for Profits Through Insurance Fraud

Today, agents from the Federal Bureau of Investigation (FBI) and the Office of the Inspector General’s Human Services Department entered Chicago’s Sacred Heart Hospital on West Franklin Boulevard and started making arrests.

Four Chicago Doctors, Hospital Owner, and Hospital Executive Arrested This Morning by FBI

Not of visitors, not of patients – no, in today’s federal operation the men arrested in Chicago were four doctors, one hospital administrator, and the owner of the hospital itself. The youngest man arrested is 57 years old, the oldest is age 75.

According to the press release issued by the U.S. Department of Justice, these six people have been charged with serious violations of federal law, for things like performing unnecessary procedures on patients so they could file for more money in claims to Medicare and Medicaid. Here are those arrested today, as identified in the Justice Department report:

EDWARD J. NOVAK, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer since the late 1990s;
ROY M. PAYAWAL, 64, of Burr Ridge, executive vice president and chief financial officer since the early 2000s; and
DR. VENKATESWARA R. “V.R.” KUCHIPUDI, 66, of Oak Brook,
DR. PERCY CONRAD MAY, JR., 75, of Chicago,
DR. SUBIR MAITRA, 73, of Chicago, and
DR. SHANIN MOSHIRI, 57, of Chicago.

Sacret Heart Hospital: Long History With Chicago

You may recognize Sacred Heart Hospital as a small facility (119 beds) that has been serving Chicago since the 1920s. According to U.S. News and World Report. Sacred Heart is one of approximately 220 hospitals serving the Chicago area as a “… general medical and surgical hospital … accredited by the American Osteopathic Association.”

Image: CDC Image Library - Surgery

What Did These Doctors (and Hospital Administrators) Allegedly Do?

  • kickbacks being made in order to send patients to the hospital for treatment that ran into hundreds of thousands of dollars;
  • unnecessary medical treatments including one physician’s claim of “…almost daily [unnecessary] penile implant procedures on patients”  until Medicare dropped what it would pay for these claims;
  • having staff perform the work of a physician in order to save money;
  • working with some unnamed ambulance companies so they would bring nursing home patients to the hospital “irrespective of any medical necessity” where the hospital profited by their admission and the ambulance company by billing for transport as emergency room patients.
  • an unnamed doctor (not one of the four arrested today) is suspected of performing unnecessary intubations on people in order to bill insurance for the procedures as well as boosting the amount of those claims by directing heavy sedation be used on these patients: here, the allegation is severe because his greed has resulted in many people being forced to have tracheotomies which may not have been medically necessary, which is the procedure alleged to be Sacred Heart’s “biggest money maker” with each of these procedures bringing in $160,000/tracheotomy if the tracheotomy patient stays at Sacred Heart for 27 or more days as an inpatient.

Chicago Has Been Victimized by Unacceptable, Shocking Actions by Health Care Providers

Physicians and hospitals are places of care, where loved ones are entrusted to professionals to mend their injuries and to heal their wounds, cure their diseases.  The actions outlined in today’s federal complaint shows actions that betray that trust — that slash at the credibility of the name of this facility itself: Sacred Heart.  Shame on those guilty of these bad acts.

However, there are others to consider here, as well.  People have been hurt here by greed — assuming that these allegations are proven true, then patients have received unnecessary treatment and elder nursing home residents have experienced unneeded trauma of being moved from their homes to the hospital in unwarranted scares.  These claims of injury will not be addressed in the Justice Department operation; once again, these victims of crime must look to the civil justice system of personal injury law for redress.

One More Example of The Distinction Between Criminal Justice Goals and Civil Justice Ability to Help the Victim

It is important to remember the need for that arm of justice in times like these, despite the criticisms of the personal injury lawsuit.  It is needed for justice to be done because the criminal justice system exists to do what the FBI did today: make criminal arrests based upon allegations of crimes to stop criminals from taking further action.  Its focus is on punishing wrongdoers; it is the civil system that focuses on helping the victim.  Consider the statements made today:

“These charges and the affidavit’s other allegations outline a kickback conspiracy to bribe doctors to refer patients to Sacred Heart where they would be treated in in an environment in which the quality of care and appropriate medical analysis were less important than maximizing the numbers of patients funneled into the hospital,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.

“The payment of kickbacks or bribes in exchange for the referral of Medicare or Medicaid patients, regardless of the form in which they are paid, is a crime,” said Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of HHS-OIG. “The Office of Inspector General will continue to work closely with our law enforcement partners to aggressively investigate alleged illegal patient referral schemes and hold accountable those who seek to exploit vulnerable patients and the Medicare and Medicaid programs.”

“Today’s arrests demonstrate our commitment to enforcing the laws intended to prevent abuses of the Medicare and Medicaid programs and to preserve the ability of those programs to provide appropriate medical services to the elderly and the needy,” said Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation.

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