Six Arrested in Chicago Hospital Kickback Scheme

Charged with performing unnecessary procedures to bill to Medicare and Medicaid


An elderly man was admitted to Sacred Heart Hospital on Chicago's West Side in late February, intubated and sedated for more than a week and scheduled for an emergency tracheotomy even though it was medically unnecessary, federal prosecutors allege.

After a hospital administrator raised questions, the surgery was postponed. Later that day, the administrator asked the longtime owner of the hospital, Edward Novak, if he was upset about the cancellation. "Tell me about it! Tell me about it!" Novak allegedly replied.

What Novak didn't know was the administrator was secretly recording their conversation while working undercover as part of a federal investigation into an elaborate kickback scheme at Sacred Heart that allegedly involved everything from unnecessary sedation to penile implants, all fraudulently billed to Medicare and Medicaid.