State temporarily suspends doctor charged in Sacred Heart health care fraud case

The state has temporarily suspended the license of a doctor charged in the Sacred Heart Hospital Medicaid and Medicare fraud scandal after his attorneys asked a judge in Indiana to delay his unrelated trial there because he is was "medically unfit."

Dr. Subir Maitra, one of four doctors named in the alleged Sacred Heart conspiracy, faces trial in November in the Northern District of Indiana on similar fraud charges. This week his attorneys asked a judge to delay the start of that trial, saying the 73-year-old was physically frail, had suffered several medical setbacks recently and had lost the ability to concentrate for long periods.

That filing prompted the Illinois Department of Financial and Professional Regulation on Friday to temporarily suspend Maitra's license, saying the filing indicates he "may be "physically and/or mentally impaired" and his practice "presents an immediate danger to the safety of the public."

A hearing on the suspension is set for next week. Thomas Anthony Durkin, Maitra's attorney, declined to comment.

Maitra and three other doctors are charged along with hospital CEO Edward Novak and its chief financial officer, Roy Payawal, in a scheme that allegedly involved paying kickbacks for patient referrals and performing unnecessary procedures, including tracheotomies. Five deaths tied to tracheotomies performed at the hospital are under investigation as part of the probe.

Novak sought to last month have his unusually high $10 million cash bond reduced, based on what his attorneys said were emerging questions about the evidence against him. U.S. Magistrate Judge Daniel Martin on Thursday denied the request, saying it was not appropriate for him to weigh the evidence. He also noted Novak's extraordinary wealth.

"Mr. Novak's personal wealth is estimated at approximately three times the amount posted on his behalf," Martin wrote in his order. "He has set forth no argument demonstrating any type of financial difficulty suffered as a result of the cash amount posted."

http://my.chicagotribune.com/#section/-1/article/p2p-77397961/

Hospital Accused of Unnecessary Throat Surgeries Closes Abruptly

By Charles R. Babcock - Jul 2, 2013 6:19 PM ET

Chicago’s Sacred Heart Hospital, where the owner and two physicians are under an investigation for allegedly unneeded tracheotomies, closed abruptly Monday after what owner Edward Novak called a cutoff of federal funding.

The Centers for Medicare and Medicaid Services decided in early May “to suspend all payments” for hospital services to Sacred Heart patients, said Novak, who had also served as Sacred Heart’s chief executive, in a written statement Tuesday. Novak was arrested in April for trading money for patient referrals.

Losing the federal funds would “inevitably force the hospital to close” and employees would lose their jobs, said Novak, who was prohibited from running the hospital after his arrest. Free on a $10 million bond, he also denied the allegations in a criminal complaint.

The remaining eight patients at the 119-bed hospital were discharged or moved to other facilities Monday, said Melaney Arnold, a spokeswoman for the Illinois Department of Public Health.

“Sacred Heart is presently reviewing offers from interested buyers,” said Rebecca Baker, a spokeswoman for Alvarez & Marsal, a New York-based turnaround and interim management firm that has been running it. “It remains hopeful that a sale can be completed quickly and that the state and federal governments will cooperate with a prompt change of ownership.”

‘Rare Occasion’

Officials at CMS in Chicago and the inspector general’s office of the federal Health and Human Services Department who are working on the Sacred Heart inquiry didn’t respond to requests for comment.

“It’s a rare occasion for a hospital to close and this is certainly a unique situation,” said Phyllis Pavese, a spokeswoman for the Illinois Hospital Association.

It’s also unusual for federal officials to suspend Medicare payments to a hospital, said Ryan Stumphauzer, a former federal health care fraud prosecutor in Miami.

“There’s a risk of interfering with legitimate patient care and there are less drastic remedies,” Stumphauzer said. “Here the government has alleged fraud and wants to stop the bleeding.”

The FBI arrested Novak and five other people affiliated with the hospital on Medicare fraud charges on April 15, alleging they traded kickbacks for patient referrals. An FBI affidavit filed with the criminal complaint alleges that doctors also performed unneeded tracheotomies.

The hospital could get as much as $160,000 from Medicare for each tracheotomy and related care afterward, according to the affidavit. In such procedures, an opening is cut in a patient’s throat to open an air passage directly to the windpipe for patients who can’t breathe otherwise.

Sacred Heart depended on Medicare and Medicaid for 97 percent of its patient revenue in 2011. Novak told Medicare authorities the hospital made a $9.4 million profit in the year ending June 30, 2012, up from $1.3 million the year before.

http://www.bloomberg.com/news/2013-07-02/hospital-accused-of-unnecessary-throat-surgeries-closes-abruptly.html

Tracheotomies cited in Medicare fraud case

Published: June 16, 2013 3:00 a.m.

Charles R. Babcock | Bloomberg News

WASHINGTON – A surgeon at Chicago’s Sacred Heart Hospital cut a hole in Earl Nattee’s throat Jan. 3, the day before he died. It’s not clear why.

The medical file contained no explanation of the need for the procedure, called a tracheotomy, according to a state and federal inspection report that quotes Sacred Heart’s chief nursing officer as saying it happened “out of the blue.” Tracheotomies are typically used to open an air passage directly to the windpipe for patients who can’t breathe otherwise.

Now, amid a federal investigation into allegations of unneeded tracheotomies at the hospital, Nattee’s daughter, Antoinette Hayes, wonders whether her father was a pawn in what an FBI agent called a scheme to defraud Medicare and Medicaid.

“My daddy said, ‘They’re killing me,’ ” Hayes recalled, in reference to the care he received at the hospital.

Based in part on surreptitious tape recordings, an FBI affidavit lays out allegations that a Sacred Heart pulmonologist kept patients too sedated to breathe on their own, then ordered unneeded tracheotomies for them – enabling the for-profit hospital to reap revenue of as much as $160,000 per case.

The Sacred Heart case is unusual because of the troubling nature of some of the allegations, said Ryan Stumphauzer, a former federal health care fraud prosecutor in Miami who reviewed the affidavit. “A typical indictment might allege phantom billing or improper coding,” he said. “This complaint alleges the hospital and doctors were performing unnecessary invasive surgery to justify false billing.”

It’s also unusual to have recordings from cooperating witnesses, he said, “but it is always very difficult to challenge a physician’s judgment.”

The government has already charged Sacred Heart owner Edward Novak, his chief financial officer and five physicians with Medicare fraud, in a criminal complaint alleging that they gave or received kickbacks in return for patient referrals.

A physician and two Sacred Heart administrators worked with federal investigators, secretly taping conversations with other hospital staff members, according to the complaint. The 90-page FBI affidavit includes a quote attributed to Novak saying tracheotomies were the hospital’s “biggest money maker.” The hospital’s pulmonologist, or respiratory specialist, is quoted as saying during an April conversation that Novak asked him “to provide two more tracheotomy cases for the hospital soon,” before inspectors – who had visited the hospital in March – returned.

Sergio Acosta, an attorney representing Novak, said his client declined to comment. Robert Clarke, attorney for Sacred Heart CFO Roy Payawal, also declined to comment.

A Sacred Heart surgeon performed tracheotomies on 28 Medicare patients between early 2010 and January, according to the affidavit, which doesn’t identify the surgeon by name. Five patients died within two weeks – a death rate three times the statewide rate in Illinois.

The affidavit quotes a nursing supervisor as saying the hospital’s pulmonologist directed an ICU nurse to “snow the patient” in one case – a phrase that means to sedate the patient so heavily that only the whites of the eyes were visible, according to the complaint.

The affidavit identified the pulmonologist only as “Physician D” and said he chairs Sacred Heart’s Critical Care Committee. That position is held by Venkata Buddharaju, according to his attorney, Thomas Breen. Buddharaju, who hasn’t been charged with any violations, declined to be interviewed for this story, citing the ongoing investigation, Breen said in an emailed statement.

Breen said his client “does not use the word ‘snow,’ and it is preposterous to suggest that he does,” Breen said. “The other allegations in the complaint are equally untrue.”

The affidavit contains an allegation that tracheotomy patients were lucrative for doctors as well as the hospital: The physician could bill $160 each time he visited a tracheotomy patient at the hospital, versus $32 for seeing a ventilator patient in a nursing home.

The state Medicaid program paid Buddharaju more than any other physician at Sacred Heart for such patient visits in the six months that ended Dec. 30, according to state records. A Sacred Heart surgeon, Vittorio Guerriero, received seven of the nine Medicaid payments made for tracheotomies at the hospital during that period, records show. In both cases, the billing rate was about double that of previous years.

http://www.journalgazette.net/article/20130616/NEWS03/306169916/1066/NEWS03