Sacred Heart Hospital in Chicago is now under the management of a turnaround firm after its CEO and CFO were arrested on fraud charges in April, according to a Crain's Chicago Business report.
Federal authorities arrested Edward Novak, owner and CEO of for-profit Sacred Heart, along with Executive Vice President and CFO Roy Payawal and four physicians. The alleged scheme involved physicians receiving more than $225,000 in cash and other forms of payment for referring Medicare and Medicaid patients to the 119-bed hospital.
There have been more developments in the case since the executives' arrest, including a state and federal inspection report that quoted Sacred Heart staff recalling the provision of allegedly unnecessary tracheotomies on patients, according to a Bloomberg report.
An FBI affidavit includes allegations that a pulmonologist at Sacred Heart sedated patients to the point where they were unable to breathe on their own, according to Bloomberg. The pulmonologist then allegedly ordered unneeded tracheotomies for them. This allowed the hospital to reap revenue of up to $160,000 per case, according to the report.
New York City-based Alvarez & Marsal Holdings LLP has taken over operations Sacred Heart, and Crain's said the change raises the possibility that the hospital may soon be put up for sale.
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