8 Indicted on Fraud Charges at Chicago Hospital

Wednesday, Oct 23, 2013  |  Updated 2:52 PM CDT
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Hospital Abruptly Shuts Down

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Hospital Abruptly Shuts Down

Sacred Heart Hospital on Chicago's West side closed its doors for good on Monday, leaving patients and employees in the lurch. Christian Farr reports.
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Eight people face federal fraud charges in an alleged kickback scheme involving Medicare and Medicaid patients at a Chicago hospital, the U.S. attorney's office said Wednesday.

The owner of the now-closed Sacred Heart Hospital, three executives and four physicians were charged in a federal grand jury indictment that claims physicians were paid hundreds of thousands of dollars in exchange for referring Medicare and Medicaid patients to the hospital to inflate its revenue.

The 17-count indictment was returned by the grand jury on Tuesday, and announced Wednesday by U.S. Attorney Zachary T. Fardon just hours after he was sworn in to lead the Chicago office.

The indictment alleges the conspiracy occurred between 2004 and April 2013, and bribes to physicians were concealed as payments for other purposes, including consulting and instructional services.

Five defendants were charged and arrested in April; three were charged for the first time in the new indictment.

The 119-bed acute care facility on Chicago's West Side closed this summer following an FBI raid. The Illinois Department of Public Health revoked the hospital's license in September, saying it was "not fit, willing and able to provide a proper standard of care" as required by law.

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