FBI raids Sacred Heart Hospital

The owner, an executive and four doctors affiliated with Sacred Heart Hospital were arrested in a Medicare and Medicaid kickback scene. (WGN-TV / April 16, 2013)

A federal indictment filed today expanded the scope of an alleged insurance fraud scheme at Sacred Heart Hospital and included charges against two new defendants as well as a doctor who had previously been dismissed from the case.

The 57-count superseding indictment charged a total of 11 former administrators and doctors at the now-shuttered West Side hospital with participating in the elaborate kickback scheme allegedly masterminded by former hospital CEO Edward Novak. The new charges allege the plot dated back to 2001, three years earlier than prosecutors previously said.

Among those charged in the new indictment was Dr. Venkateswara Kuchipudi, 67, the so-called “king of nursing homes” who in September had been dropped from the case without explanation by prosecutors. The indictment also adds as defendants former hospital Chief Operating Officer Clarence Nagelvoort, 58, of Chicago, and Dr. Jagdish Shah, 69, of Oak Brook.

Federal authorities raided the hospital last April after hospital insiders were caught on secret recordings offering or taking tens of thousands of dollars in kickbacks in order to fill beds, according to the charges. 

The criminal complaint filed at the time of the arrests alleged Sacred Heart had an arrangement with an ambulance company to transport patients there even if numerous other hospitals were closer. Many of the patients were admitted to the emergency room even though they didn't need that level of care, then subjected to medically unnecessary procedures such as tracheotomies, all to fraudulently bill millions of dollars to Medicare and Medicaid, the criminal complaint alleged.

The Tribune reported last year that at least five patient deaths at the hospital were being probed. The indictment filed today does not mention the tracheotomies or deaths.

The other administrators charged in the indictment were : Roy Payawal, 64, of Burr Ridge, the hospital's executive vice president and chief financial officer; Noemi Valgara, 64, of Chicago, the hospital’s vice president of geriatric services; and Anthony Puorro, 57, who took over as chief operating officer when Nagelvoot left.

The affiliated doctors charged were Percy Conrad May Jr., 75; Subir Maitra, 73; Shanin Moshiri, 57; and Rajiv Kandala, 41, all of Chicago.

jmeisner@tribune.com