CEO, CFO of Sacred Heart Hospital in Chicago Arrested

Federal authorities have arrested Edward Novak, owner and CEO of Sacred Heart Hospital in Chicago, along with the hospital's CFO and four physicians, for allegedly participating in a kickback scheme, according to a Chicago Tribune report.   

Agents from the Federal Bureau of Investigation raided the 119-bed hospital this morning as part of a criminal probe, according to the report. The alleged scheme involves physicians receiving more than $225,000 in cash and other forms of payment for referring Medicare and Medicaid patients to Sacred Heart, according to the report.

Sacred Heart Executive Vice President and CFO Roy Payawal was also arrested this morning. Mr. Novak and Mr. Payawal allegedly attempted to conceal bribes made to physicians by masking them as fake rental payments and ghost contracts, according to the report.

Federal authorities have seized roughly $2 million in Medicare reimbursement payments the hospital allegedly received as a result of the alleged scheme. The money was in various bank accounts, according to the report. All six defendants were scheduled to appear for hearings today at the Dirksen U.S. Courthouse in Chicago.

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