Government audit records have shed new light on failing conditions inside West Suburban Medical Center in the leadup to the hospital’s abrupt closure in late March.
An Illinois Healthcare and Family Services audit and a federal Center for Medicare and Medicaid Services inquiry outlined a host of administrative and patient care issues at the Oak Park hospital, according to documents reviewed by Wednesday Journal. The federal inquiry provided details on how investigators blamed structural issues at the hospital for contributing to the recent death of a patient, according to the documents.
Both government probes were completed in February, just weeks before the hospital shut down on March 27 with hospital leadership citing a year-long collapse in West Sub’s online Electronic Medical Record billing system.
The HFS funded audit, which was completed by consultant group Health Management Associates, confirmed Resilience Healthcare CEO Manoj Prasad’s previous claims that the billing system breakdown led to a 90% reduction in hospital revenue beginning in March 2025. The audit estimated $500 million in uncaptured charges as result of the failure in the EMR system.
At the time of the audit, the agency said West Sub was operating with only three days’ worth of cash on hand.
The 16-page audit had scathing comments for hospital leadership. One section of the audit document reviewed by Wednesday Journal was titled “Strategy (lack of.)”
“West Suburban lacks a data-driven strategy to stabilize operations or rebuild service lines,” the auditors wrote. “Planned expansions such as obstetrics restart and behavioral health expansion lack financial modeling, staffing plans, or validated assumptions. Leadership expects EMR transition to solve structural issues despite lacking foundational financial infrastructure. There are proposed new but unvetted initiatives. Unclear if and how can be successful. Actions are determined day to day.”
A lawsuit filed by Patlola included the record of a CMS “immediate jeopardy” inspection at the hospital. The 22-page CMS inquiry included federal investigators findings that poor organization and equipment failures contributed to the death of a patient who contracted sepsis while at West Sub.
The inquiry details the case of a patient with end stage renal disease who was admitted to the hospital because they had not been able to receive dialysis for over a week. The hospital did not have a functioning portable chest x-ray machine to help treat the patient while they were in the ICU, according to CMS investigators.
The report detailed several other cases where portable x-rays were not available to unstable patients in February.
“The standard is not met,” investigators wrote. “Based on observation, document review and interview for three of three unstable patients’ clinical records reviewed of patients requiring portable chest x-ray, the hospital failed to provide the appropriate chest x-ray modality to ensure proper provision of care.”
The “immediate jeopardy” inquiry also noted lapses in the hospital’s overnight staffing and communications that fell well below federal standards. Investigators interviewed a doctor at West Sub who spoke to the communication issues at the hospital.
“There has been a gradual deterioration in basic services in the hospital,” the doctor told investigators. “There is a generalized problem with communication in the hospital, physician schedules are not distributed, leadership coverage is not communicated when leaders are on vacation so it becomes an issue when problems arise and no one is available to call or to respond.”
The weeks since the hospital’s closure have been colored by a legal battle among the hospital’s ownership group.
Earlier this month, Rathnaker Reddy Patlola — the landlord of West Suburban through Ramco Holdings and a minority owner of Resilience Healthcare — posted eviction notices addressed to Prasad and Resilience at West Sub’s River Forest campus alleging millions in unpaid rent. Days later, Prasad challenged the eviction in county court saying that he and Patlola had a deal where rent would be only $1 a year until the hospital became profitable.
Patlola filed the suit for seven counts of breach of contract, seeking to recover over $24 million in unpaid rent and fees from Resilience-owned West Suburban, Weiss Memorial Hospital in Chicago’s Uptown neighborhood and other medical office buildings.
Ramco’s lawsuit calls for a court-appointed receiver to take over hospital operations from Prasad and alleges that he misappropriated a $10 million state loan.
According to Ramco’s suit, the same day that Resilience received a $10 million loan for Weiss Memorial Hospital on May 2, 2025, the money was moved from Weiss’ lockbox account to the hospital’s operating account, then transferred to Westlaw Management Group — a company owned solely by Prasad. Ramco claims the state money was not used for hospital operations, which led to Weiss closing that August after its Medicare agreement was terminated.
Prasad denied the claims of financial malfeasance in a statement provided to Wednesday Journal on Tuesday. West Suburban’s Oak Park campus reopened some clinic-level patient services shortly after the eviction notice was posted at the River Forest campus.
“While Mr. Patlola files lawsuits, West Suburban Medical Center is treating patients,” Prasad said. “The claim regarding the $10 million is false. Those funds were sent to an account co-owned by Mr. Patlola and were used for hospital payroll and operating expenses. Mr. Patlola knows this.”
“The hospital has resumed outpatient services, staff are returning from furlough, and the focus is to achieve full operations by July.”
Ramco’s preferred receiver is likely Insight Chicago, a Michigan-based non-profit health system that manages the former Mercy Hospital in Chicago’s Bronzeville neighborhood.