Chicago’s Sacred Heart Hospital claimed it had a “patient first focus.” The families of two patients who recently died at the hospital tell a much different story. They sued the hospital for racketeering and claimed both the hospital and its administrators conspired to perform medically unnecessary and sometimes dangerous surgeries simply to maximize Medicaid and Medicare payouts.
Those families aren’t alone.
According to the Chicago Sun Times, “Poor, elderly and vulnerable, many [patients] found themselves driven by ambulance across the city, past countless better hospitals, to Sacred Heart, the maggot-infested, substandard facility where some of them died.” In 2013, the U.S. Department of Justice charged 11 administrators and physicians affiliated with the hospital with felony healthcare fraud.
After the indictments, federal Medicare officials suspended payments to the for-profit hospital. Shortly thereafter, the facility closed its doors. Although the once bustling hospital had 100 patient beds, press reports say by the time it closed its doors only a half dozen patients remained. Because the hospital was accused of paying kickbacks to doctors who referred patients, many physicians appeared reluctant to admit patients. The gruesome and ghoulish tales of squalor and horror probably didn’t help.
Many of the physicians and administrators affiliated with Sacred Heart Hospital have already pleaded guilty. Their stories paint a fascinating but chilling portrait of profits before patient care.
Noemi Velgara signed a plea agreement in late December. According to her statement, she started at Sacred Heart as a “patient recruiter.” Although not illegal, patient recruiters are a giant red flag in Medicare fraud schemes.
Velgara says that the hospital’s owner, millionaire Ed Novak, and its Chief Operating Officer, Anthony Puorro, set “patient recruitment quotas.” If the hospital’s beds were not full, Velgara and other recruiters would call former patients to see if they were sick. If a patient said yes, a recruiter would send a van to pick them up and bring them to the hospital or one of its satellite clinics.
Another favorite tool of recruiters was conducting free health screenings at nursing homes. Velgara and other recruiters would give gifts to nursing home administrators in order to access their facilities.
If a recruiter didn’t meet their quota they would be fired.
Velgara also claims that the hospital paid ambulance companies to transport patients to Sacred Heart even if other hospitals were closer. Worse, prosecutors say that several physicians were part of the recruitment conspiracy. It is illegal for a hospital to pay kickbacks to doctors in order to get patients and also illegal for doctors to accept these kickbacks.
In recent years, crooked physicians and hospitals have grown sophisticated in their attempts to conceal Medicare fraud and kickbacks. Prosecutors say that Novak and others at the hospital characterized the illegal bribes as employee compensation, rent payments and teaching stipends.
It isn’t just Velgara who is cooperating. Antony Puorro as Sacred Heart Hospital’s COO was the number two person at the hospital. He pleaded guilty to criminal charges late last December and is now cooperating with the government.
Puorro claims the hospital paid several people, including physician assistants and doctors, educational stipends that he says were nothing more than bribes. Puorro says that Ed Novak, the hospital owner’s tracked the referrals made by each of the professional staff that was purportedly receiving the teaching payments.
Puorro also knew that the hospital and certain ambulance companies used a special code to make it appear that patients were a “direct admit” thereby allowing the ambulance to transport critically ill patients to Sacred Heart instead of closer hospitals.
At least one of the physicians at the heart of the Sacred Heart Medicare fraud case has also cooperated. Dr. Jagdish Shah was affiliated with the hospital for several years. He told prosecutors that when he closed his private clinic, he approached Novak about referring his clinic patients to the hospital. Shah says that shortly thereafter, a hospital administrator offered Shah a $2000 per month stipend for providing an extra 20 hours per month in services to establish a cancer screening program. Shah never performed those services and understood the $2000 was a concealed kickback.
What happened to Ed Novak? His trial started this week. Prosecutors say that he was the mastermind behind this huge Medicare fraud scheme. According to them, he allegedly said in a secretly taped conversation, “Just keep us kosher, you know, that’s all just to cover our asses.”
Novak vehemently denies the allegations and wants his day in court. If convicted, he faces decades in a federal prison.
Do kickbacks, bribes and Medicare fraud impact on patient care? According to the families of two patients who died at the hospital, doctors there performed unnecessary surgical procedures including tracheotomies. They say the results were sometimes fatal. According to their lawsuit, one of the offending doctors performing unnecessary tracheotomy surgeries had a horrific mortality rate of 17.85%, far in excess of other physicians performing similar procedures.
The Justice Department says that critically ill patients were sometimes forced to suffer longer because certain ambulance companies received bribes to take patients to Sacred Heart even if closer hospitals were available.
It’s not just patient care that suffers. Unnecessary testing and procedures costs taxpayers billions annually and often means that truly needy patients must wait longer for care.
One thing jurors will not hear is testimony about a Sacred Heart physician referred to as the “butcher” and allegations that operating room nurses sprayed patients with “Off!” bug repellent to keep flies away from incisions during surgery.
Is Novak guilty? His fate is in the hands of a Chicago federal jury.
If the Sacred Heart allegations are true – and at least some of the allegations are true since several co-conspirators have already pleaded guilty – we are disturbed that someone didn’t come forward sooner. Medicare fraud is not a victimless crime. Patient care invariably suffers when healthcare professionals put profits before patient care.
Most Medicare fraud schemes are brought to light by whistleblowers; concerned women and men who grow weary of watching greed and poor patient care on a daily basis. The federal False Claims Act pays whistleblowers a percentage of any recovery from the defendants in cases involving Medicare fraud. Illinois has a similar state law that pays awards in Medicaid fraud cases.
As whistleblower lawyers, we take pride in representing the brave nurses, billing clerks and doctors that do step forward. We hope that stories such as these – and the knowledge that substantial award monies are available – causes more people to come forward earlier. Last year courts and prosecutors paid out $435,000,000.00 in whistleblower awards under the federal False Claims Act.
Think you have information entitling you to an award under federal or state whistleblower laws? Give us a call. Whistleblowers with original source knowledge of fraud against a government sponsored or funded program can get an award of up to 30% of whatever the government collects.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct).
MahanyLaw – America’s Whistleblower Lawyers