Sacred Heart Hospital Execs Arrested for Medicare Referral Kickback Conspiracy

On April 16, the owner and another senior executive of Chicago’s Sacred Heart Hospital and four physicians affiliated with the facility were arrested in connection with a Medicare and Medicaid kickback and fraud scheme, the U.S. Department of Justice reported.

Edward J. Novak, Sacred Heart’s owner and chief executive officer, and Roy M. Payawal, Sacred Heart’s executive vice president and chief financial officer, allegedly engaged in a number of kickback and Medicare and Medicaid fraud schemes.  They allegedly paid kickbacks to physicians to refer Medicaid and Medicare patients to the hospital, with the kickbacks disguised as rent check payments, physician ghost contracts for duties without any real responsibilities, or payments for teaching nonexistent medical students, among other things.  Sacred Heart also allegedly billed Medicare for unnecessary emergency room care and unnecessary tracheotomy procedures.

“The arrests should send a chilling message both to health care executives and physicians: If you pay or accept kickbacks, big trouble follows,” former federal prosecutor Michael A. Hirst, said to the Report on Medicare Compliance journal.  Michael Hirst works for the Hirst Law Group in Davis, Calif., a firm affiliated with The Chanler Group.

The investigation is ongoing.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.