Sacred Heart Hospital boss, aides guilty in kickback scam
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He instructed his staff to “cover our asses.”
But multimillionaire hospital owner Ed Novak’s behind was left nude and blowing in the breeze Thursday when he was convicted of masterminding a massive kickback scam.
Novak, the 60-year-old owner and CEO of the West Side’s now-shuttered Sacred Heart Hospital, faces a likely prison sentence for ripping off Medicare and Medicaid.
Along with his co-defendants — Sacred Heart’s former finance chief, Roy Payawal, and its former chief operating officer, Clarence Nagelvoort, both of whom were also found guilty on multiple counts at the end of a seven-week federal trial — Novak bribed doctors to send patients to what prosecutors have said was a substandard, and at times maggot-infested hospital.
The bribes ensured that poor, elderly, vulnerable and most often black patients from far-flung corners of the city would be driven by ambulance past far better hospitals to be admitted at Sacred Heart, which could then bill taxpayers for the treatment it provided, prosecutors said.
Assistant U.S. Attorney Diane MacArthur said the scam turned what should have been a trusting relationship between patients and their doctors “upside down.”
“A patient, when they go to a doctor, has to trust that doctor to make decisions about their care based on what is best for the them, not on what will make the doctor money,” she said at the start of the trial.
Novak’s attorneys had attempted to blame a pair of corrupt hospital workers, Noemi Velgara and Anthony Puorro, for cooking up the scam under which bribes to doctors were disguised as rental payments, teaching and staffing fees.
But after two and a half days of deliberations, jurors disagreed.
Novak, of Park Ridge, may have been undone by his own gruff words in secretly recorded conversations, including one in which he instructed staff to “cover our asses” before investigators examined the hospital books.
The case first hit the headlines when federal agents raided the hospital in 2013, alleging that doctors were essentially kidnapping patients and bringing them to Sacred Heart.
Among the most lurid allegations originally leveled at Novak — though it did not result in charges — was that he encouraged his doctors to order patients undergo unnecessary tracheotomies so that Sacred Heart could bill Medicare or Medicaid for the surgery.
Doctors would “snow” the patients by doping them up so that they couldn’t breathe unassisted, then use that as justification to cut a hole in the patient’s neck, the government alleged in court documents. In some cases, the surgery was fatal, the feds said.
The government was barred from referring to those allegations during the trial but could yet attempt to use them at Novak’s sentencing hearing later this year.
Novak, who was cleared of a single fraud count and left court without comment following the verdict, faces up to 5 years behind bars on each of 27 counts he was convicted of, though a far shorter prison term is likely when he is sentenced in July. Payawal faces up to five years on each of 11 counts and Nagelvoort up to five years on each of 12 counts.
Four defendants in the case previously pleaded guilty. Four doctors who deny participating in the scheme are due to stand trial later this year.