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Feds raid Sacred Heart Hospital, arrest owner and doctors

Sacred Heart Hospital | Sun-Times files

Sacred Heart Hospital | Sun-Times files

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Updated: May 18, 2013 6:33AM

The doctors called it “snowing the patient” — and the alleged scam was as ghoulish as it gets.

First, a doctor at the West Side’s Sacred Heart Hospital deliberately over-medicated patients so that only the whites of their eyes were visible, federal prosecutors say.

Then, when the drugged patients were too drowsy to breathe unassisted, a surgeon had the excuse he needed to cut a hole in the patient’s neck.

The surgery ­— called a tracheotomy — wasn’t necessary, the feds say.

And 5 of the 28 patients the unnamed surgeon operated on died within two weeks — a mortality rate three times the Illinois state average.

But the hospital cashed in up to $160,000 a time either way, thanks to the hefty government payments it received for the surgeries and lengthy hospital stays.

That chilling allegation was just one of many in a 100-page affidavit filed in federal court Monday and unsealed Tuesday following a dawn raid on Sacred Heart.

Edward J. Novak, the for-profit hospital’s 58-year-old owner, pushed for the tracheotomies, which he called his “biggest money maker,” according to the search warrant affidavit. The Park Ridge man was arrested and charged with running a massive kickback scheme, paying doctors to refer cases to Sacred Heart’s facility at 3240 West Franklin, regardless of medical need so that they could scam Medicare and Medicaid out of cash.

Though the doctor and the surgeon involved in the alleged unnecessary surgeries have yet to be identified or charged, Novak, his chief financial officer, Roy Payawal, 64, of Burr Ridge, and four grim-faced doctors accused of taking kickbacks appeared in federal court Tuesday afternoon.

Doctors Venkateswara Kuchipudi, 66, Percy May Jr., 75, Subir Maitra, 74, and Shanin Moshiri, 57, also ordered unnecessary emergency room visits, and fraudulently referred patients to nursing homes and ambulance services with which the hospital had a relationship, it’s alleged. Maitra even allegedly boasted that he’d done penile implants almost daily, only to cut back once Medicare reduced its implant payments.

But three of the doctors’ coworkers were secretly working with the FBI and Department of Health and Human Services investigators, recording them as they schemed, the affidavit says.

Investigators Tuesday seized bank accounts containing $2 million in Medicare funds, the U.S. Attorney’s office said. State and federal health workers were working to ensure the safe care of 40 in-patients currently being treated at the 119 bed hospital.

FBI special agent in charge Cory B. Nelson and acting U.S. Attorney Gary Shapiro both stressed that the investigation was ongoing. Shapiro said that investigators were able to intervene to prevent the most recent unnecessary tracheotomy on March 1.

And Lamont Pugh III, the top Health Department investigator in Chicago, encouraged anyone with information about Scared Heart to come forward.

Novak and the doctors were “using patients as pawns for profit,” he said.

The allegations angered relatives who came to visit loved ones Tuesday only to find FBI agents removing computers and files from the hospital.

Omar Midence has been talking his 82-year-old mother to Sacred Heart for six years. “It’s terrible you can’t trust anything nowadays,” he said. “Not even your doctor.”

Contributing: Tina Sfondeles

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