Gateway Regional parent company owes Illinois $120M+ as Medicare end date nears

GRANITE CITY (First Alert 4) -- State documents obtained by First Alert 4 Investigates show Metro East hospital Gateway Regional Medical Center and Vista Medical Center East owe Illinois more than $120 million in unpaid provider fees and penalties. CMS plans to end its Medicare agreement with Gateway on November 17.

After complaints and an unauthorized diversion of a cardiac patient, the state sent inspectors into Gateway Regional Medical Center. Its report found no governing body, no budget and unsafe staffing. The state gave the hospital weeks to fix the problems or risk losing Medicare status.

Records show Gateway’s corrective plan contains promises, not proof.

CMS determined Gateway no longer qualifies for deemed status because significant deficiencies were identified. The hospital is now subject to oversight by the state survey agency until it is found to be in compliance with all Medicare Conditions of Participation.

The removal of deemed status is separate from termination of Medicare participation. CMS also issued a preliminary determination that it plans to terminate Gateway’s Medicare provider agreement, with a projected termination date of Nov. 17 unless the hospital takes corrective action and CMS determines it has returned to compliance.

A current Gateway employee spoke on camera for the first time. The employee, a longtime worker at the hospital, agreed to an interview only if their identity was hidden, citing fear of losing their job.

“I’m scared that as of January, I won’t have a job anymore,” the employee said. “I guess that’s why I’m here speaking out now.”

The employee said that, as far as they know, the hospital has only the emergency room, the critical care unit and behavioral health units open.

“The fourth floor is now closed, and the nurses and the techs that used to be there are on furlough,” the employee said.

The employee is one of several who told First Alert 4 Investigates that layoffs have increased since October 1.

The employee also said the hospital has no computer IT staff.

“You’d think we would need those safeguards being a hospital,” the employee said. “That seems like a big safety violation to me.”

Gateway and its parent company, American Healthcare Systems (AHS), did not respond to requests for comment.

Vista facility faces similar problems

First Alert 4 Investigates has reported on millions of dollars Gateway owes in late property taxes, unpaid bills and broken vendor contracts. Records show AHS has more than a dozen satellite properties, which add hundreds of thousands of dollars in unpaid taxes to the county.

Jennifer Banek, a former nurse at Vista Medical Center East, a facility near Chicago owned by AHS, said the situation at Gateway is playing out at Vista as well. Banek is the current Lake County coroner.

“It’s a very similar recipe,” Banek said.

Vista has years of delinquent taxes, a $2.2 million lawsuit over owed electric bills and $360,000 owed for water. A hearing was held this month about the facility’s possible foreclosure.

“This is just an astronomical amount of money,” Banek said. “My fear is Gateway would also be potentially seeing closure on the horizon.”

State safety net funds and payments

Both hospitals are falling behind as state safety net dollars meant for them were allegedly sent out of state.

First Alert 4 Investigates previously reported that former CFO Anthony Sunzeri swore under oath that Gateway received safety net funds in October 2025. Two days later, CEO Mike Sarian directed a $4.5 million wire to California.

“Taxpayers should have an expectation that their tax money is staying here in the state of Illinois,” Banek said.

An email from former AHS COO Faisal Gill shows that, as bills piled up, AHS asked Illinois for advances to make payroll. The state approved three $10 million payments, the last in July 2024. The next month, AHS agreed to wire top executive Aramais Paronyan $8.2 million.

The state documents show Gateway and Vista owe more than $120 million in unpaid provider fees and penalties. Gateway owes about $47 million, and Vista owes about $74 million.

“It is the personification of too big to fail,” Banek said.

The documents show a 72-month repayment plan through August 2032.

Lawmakers respond

A bipartisan effort is underway to find out where the money went and how to get it back. Illinois Sen. Erica Harriss called on the Illinois attorney general and the Department of Justice for a forensic audit.

U.S. Rep. Nikki Budzinski (D-IL) of the 13th District, said she is talking with members of Congress in and out of Illinois who have AHS facilities in their districts with similar issues.

“I would definitely say it’s a trend,” Budzinski previously said.

Asked whether something should be done at the federal level to regulate that better, Budzinski said, “We are looking into that. Are there some guardrails that we can put in place ... to make sure that if there is private investment coming in, we want to make sure they’re doing the proper things as far as governance, financial stability, good staffing.”

Employees, health professionals and lawmakers all said they want Gateway Regional to stay open.

“It would be a big downfall for the community, for sure,” the current Gateway employee said. “It’d be like just if the steel mill never opened again ... We’re a low-income area ... They’re on Medicaid or Medicare, they’re scared of losing that.

“We want somebody that cares to come in and buy the hospital, to be honest. To come in and save the hospital and save the employees.”

First Alert 4 Investigates sent Gateway and AHS eight questions Tuesday on unit closures, no on-site IT, the $4.5 million wire, the $8.2 million payout, the $120 million owed and the Nov. 17 Medicare termination. They did not respond.

Gateway and AHS previously said they are “operating as usual.”