Healthcare News & Insights

Chicago hospital abruptly shuts its doors amidst scandal

Despite the fact that the state of Illinois requires 90-day notification of a hospital closure, Sacred Heart Hospital, in Chicago, abruptly closed its doors for good on Monday, July 1. 163070248According to the Chicago Tribune, the Illinois Department of Public Health got a phone call Monday informing the department that the hospital was closing. The department immediately sent staff over to monitor the shutdown and transfer of patients, noted Melaney Arnold, the department’s spokeswoman.

“I don’t know how many patients (are at the hospital),” Arnold told the Tribune. “Our priority is the patients and making sure they are being cared for.”

It’s likely that the hospital will face some type of sanctions for its abrupt closure of its operations, but Arnold said she was unsure what those sanctions would be.

Federal charges

Back in April, the owner and another senior executive of Sacred Heart Hospital and four physicians affiliated with the west side facility were arrested for allegedly conspiring to pay and receive illegal kickbacks. According to U.S. Attorney for the Northern District of Illinois Gary Shapiro, the kickbacks included more than $255,000 in cash, as well as other forms of payment in exchange for Medicare and Medicaid patient referrals to the 119-bed facility.

Arrested were:

  • Edward Novak, Sacred Heart’s owner and CEO since the late 1990s
  • Roy Payawal, executive VP and CFO since the early 2000s
  • Dr. Venkateswara Kuchipudi
  • Dr. Percy Conrad May, Jr.
  • Dr. Subir Maitra, and
  • Dr. Shanin Moshiri.

In addition, agents from the FBI and the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) executed search and seizure warrants in connection to an ongoing investigation of alleged Medicare and Medicaid fraud schemes at the hospital involving:

  • emergency room evaluation, testing and observation services that were not medically necessary, and
  • medically unnecessary sedation, intubation, and tracheotomy procedures performed on patients.

They also seized $2 million in Medicare reimbursement payments from various bank accounts.

Dismal atmosphere

Workers left the building with their stuff as an ambulance took the last patient to another facility.

When James Camacho, a lab technician who worked at Sacred Heart for about 5 years, first started working at Sacred Heart, he said he was overwhelmed by the booming business the hospital was doing. However, he told the Tribune that by Saturday it was very apparent that something was going on. The facility was down to about a dozen patients — the lowest occupancy he had ever seen there. And the atmosphere inside was “dry, dead and gloomy.”

It’s not only the staff who are mourning the loss of the hospital, the neighborhood residents were saddened, too.

According to one resident, the hospital provided a sense of security in a “distressed” neighborhood due to its lights and security guards, which will be missed.


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