Three years after former patients of the shuttered Galesburg Cottage Hospital began receiving suspicious bills postmarked in Michigan, the former owner of the hospital has been fined $15,000 for multiple violations of Illinois’ Fair Patient Billing Act.
Sanjay Sharma signed an Assurance of Voluntary Compliance with the Illinois Attorney General agreeing to pay restitution to five patients who paid the “deceptively issued” bills that were sent more than a year after the hospital closed.
The agreement allows Sharma to settle a consumer protection investigation without admitting to wrongdoing.
It also bars Sharma from collecting debts from more than 6,600 other people who owed the hospital for services when it closed on Jan. 8, 2022, following the loss of Medicare and Medicaid funding due to multiple patient care violations.
The state's investigation found the Galesburg Hospital Corporation, operating under Sharma’s leadership and doing business as Galesburg Cottage Hospital, began sending fraudulent bills to 1,734 former patients in May 2023 – 16 months after the closure.
As previously reported by TSPR, some area residents received bills dated May 1, 2023, that fall. The bills listed a return address of an apartment in Pontiac, Mich., located next to Pontiac General Hospital, which is owned by the Sharma family.
The bills directed former patients to an Austin, Texas, customer service phone number, but no one answered. A message would say the mailbox was full — and then the call would be disconnected.
The investigation found the Galesburg Hospital Corporation failed to maintain copies of its own billing records for patient care after Cottage Hospital closed.
In 2020, when Sharma purchased Cottage Hospital through his company, SBJ Group, he contracted with Infrahealth India, Pvt. Ltd.—a company he founded — to collect its patient care receivables.
But the state found the May 2023 bills were “deceptively issued” because they were generated using third-party claims processing records without disclosing that to former patients.
The Galesburg Hospital Corporation also failed to communicate its Fair Patient Billing Act obligations to Infrahealth, violating a state law that requires hospitals to ensure external entities agree in writing to comply with statutory billing standards.
The Attorney General’s Health Care Bureau identified multiple additional violations as part of the investigation:
- Missing billing details: The bills failed to provide brief descriptions of the medical services rendered, omitted required notices regarding a patient's right to request an itemized bill, and failed to include information on how uninsured patients could apply for financial assistance.
- Unresponsive inquiry lines: Although the bills directed patients to a customer service phone number in Texas, the Galesburg Hospital Corporation regularly failed to return patient inquiry calls within the mandated two business days.
- Unlawful financial assistance demands: The hospital’s online financial assistance application omitted required disclosures about eligibility and improperly requested unauthorized personal and financial information, including Social Security numbers, three months of pay stubs, 401(k) account details, trust information, and business ownership assets.
Out of the 1,734 patients fraudulently billed, five paid a total of $4,612. Sharma was required to pay full restitution to those five patients prior to the execution of the settlement.
The $15,000 fine paid to the Illinois Attorney General Court Ordered and Voluntary Compliance Payment Projects Fund to resolve the investigation will go toward law enforcement activity and educational programs associated with the enforcement of the Consumer Fraud Act.
The provisions of the settlement apply to all officers, agents, directors, and shareholders affiliated with Sharma and SBJ Group.
Following the closure of Cottage, OSF HealthCare bought the property.
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