Top executives from shuttered Sacred Heart Hospital guilty in kickback case
The CEO, CFO and COO paid hundreds of thousands in illegal kickbacks to funnel referrals to the cash-starved and now defunct hospital.
Photo of Sacred Heart Hospital in Chicago from Google street view
Desperate for hospital revenue, the top executives for the now-closed Sacred Heart Hospital face jail time and steep fines after they paid hundreds of thousands in illegal kickbacks in exchange for referring patients insured by Medicare and Medicaid, according to the U.S. Attorney’s Office in the Northern District of Illinois.
A federal grand jury on March 19 convicted Sacred Heart owner and CEO Edward J. Novak, 60, of Park Ridge; Executive Vice President and CFO Roy M. Payawal, 66, of Burr Ridge; and former COO Clarence Nagelvoort, 59, of Chicago, for paying physicians concealed bribes and kickbacks to induce referrals, which increased patient numbers and hospital revenue, according to the prosecutors.
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The defendants, who are free on bond, face five years in prison and a $250,000 fine on each count when they are sentenced in July. They are also required to pay restitution.
During the trial, prosecutors said the hospital was desperate for funds, according to the Chicago Tribune, which motivated the executives to commit the fraud.
Sacred Heart Hospital, a 119-bed acute care facility in Chicago closed and filed for bankruptcy in 2013 after Medicare payments were suspended in the aftermath of criminal charges filed in April 2013.
All three defendants were convicted of one count of conspiring to violate the federal healthcare anti-kickback statute.
The conspiracy spanned from 2001 through 2013, prosecutors said.
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The jury also convicted Novak of 26 counts of paying kickbacks for patient referrals; Payawal of 17 counts of paying kickbacks for patient referrals; and Nagelvoort of 11 counts of paying kickbacks for patient referrals, according to prosecutors.
Four defendants previously entered guilty pleas in the case. They are: Dr. Subir Maitra, 73, of Chicago; Dr. Jagdish Shah, 70, of Oakbrook; former COO Anthony J. Puorro, 57, formerly of Chicago; and Noemi Velgara, 64, of Chicago, Sacred Heart’s vice president of geriatric services.
Four additional physicians associated with Sacred Heart Hospital are scheduled to face trial later this year, according to the U.S. Attorney’s Office.
The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011.
Twitter: @SusanMorseHFN
