Government Pulls Out All the Stops to Investigate and Prosecute Medicare Fraud Against Sacred Heart Hospital Executives in Chicago

On March 19, a federal jury convicted Edward Novak, the former chief executive officer of Chicago’s Sacred Heart Hospital, and two other executives after a six-week trial for defrauding Medicare and Medicaid by engaging in an elaborate kickback scheme.

In the article, Mr. Zeidenberg and Mr. Greenberg wrote that, “Medicare fraud is hardly an uncommon occurrence. What is unusual about this case is the type of evidence the government used to prosecute this case and how this evidence was gathered. Clearly not satisfied relying on hospital e-mails and internal documents to prove its case, the government instead elected to ‘flip’ two high-level Sacred Heart executives and then, after they secretly pleaded guilty and agreed to cooperate, had them wear wires and go back inside the hospital to gather incriminating evidence against other executives and physicians. ‘Flipping’ defendants like this is a tactic routinely used by prosecutors investigating narcotics cases and other criminal RICO cases.”

The article also provides key takeaways for hospital executives, including highlighting the need for administrators to make sure hospital and physician relationships have been vetted thoroughly and that they comply with the federal Anti-Kickback Statute and Stark Law.

To read the Bloomberg BNA article, click here.

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