Ill. (First Alert 4) — The parent company of Gateway Regional Medical Center is at least $600,000 behind on payments to the local water provider, according to recently filed court documents — the latest in a series of financial problems at the 343-bed Metro East hospital
American Healthcare Systems, the Los Angeles-based company that acquired the hospital in 2023, has denied the water bill allegations in its court response.
A pattern of financial problems
Gateway Regional’s financial difficulties first surfaced publicly in late July, when employees reported they had not been paid. In one instance, an employee said a bank refused to cash their paycheck.
Hospital administration sent a letter to staff acknowledging the delay, attributing it to a “temporary cash flow issue” and announcing a $1 million personal loan from AHS founder Mike Sarian and his wife, Evelina, to cover payroll for the facility’s hundreds of employees.
“This payroll delay is the result of a temporary cash flow issue. We want to reassure you that we are actively addressing this situation and remain focused on strengthening the financial stability of Gateway Regional Medical Center,” the letter read.
An anonymousce in this company. This is at least the fourth time since January 2026 that this has happened. The hospital is literally falling apart, and they won’t fix anything.”
Mike Sarian, the founder of American Healthcare Systems, is currently facing civil lawsuits in Florida and Nevada. In a Miami-Dade County filing, Sarian is accused of diverting $14 million in hospital operational funds to trust accounts and personal expenses, including more than $100,000 spent on a party at the Four Seasons in Beverly Hills.
Sarian has denied the charges in public statements.
The plaintiffs in the two consolidated Miami-Dade County lawsuits filed a stipulation to stay those cases, meaning both sides will work toward a settlement agreement. A representative for Sarian called it a positive resolution.
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“Mr. Sarian is pleased the parties resolved these matters cooperatively, and his focus remains on patients and hospital employees, including at Gateway Regional,” the representative said.
Millions in unpaid property taxes
Madison County property tax records show American Healthcare Systems Illinois has not paid property taxes on the Gateway Regional campus since purchasing the facility in 2023. The company owes millions of dollars in unpaid property taxes over the past three years.
This year’s tax bill alone shows the company owes more than $932,000, with a payment deadline of December. Records also show the company owes taxes on other lots surrounding the campus in Granite City.
The CEO of American Healthcare Systems told First Alert 4 Investigates on Wednesday that new management had resolved the tax issues.
“New AHS management has resolved all property tax issues, with debts fully paid or on installment plans,” a representative for AHS CEO Mike Sarian said.
However, Madison County property tax records continued to show no payments had been made on the outstanding balance at the time of this report.
A history of hospital closures
American Healthcare Systems is the same company that permanently closed St. Alexius Hospital in south St. Louis City in 2023, citing money issues, bankruptcy, and vacant property issues. That facility had operated for 150 years before closing.
AHS also owns at least one other hospital outside of Chicago. The Illinois Department of Public Health sent inspectors to that facility last week as well.
Employees working without pay, insurance cut off
Despite the ongoing financial issues, employees say they have continued working. In written statements, staff described the situation in their own words.
One employee wrote that she continued working out of concern for her patients, but said her health insurance had been terminated.
“I am still currently working because… I think about the patients… but I was contacted today to be informed that as of July 31st, my insurance was terminated,” she wrote.
A healthcare worker with more than 20 years at the hospital wrote that staff had continued working despite expecting no pay the following week.
“I continued to work this week, just for the sake of our patients, knowing I won’t get paid… We more than likely will not receive pay next Friday also,” that employee wrote.
A decade-long employee described conditions at the facility since AHS took over.
“When AHS took over, our bills weren’t getting paid… The 4th floor was closed because staff keeps quitting… This is literally rock bottom,” that employee wrote.
State regulators and lawmakers respond
The Illinois Department of Public Health sent inspectors to Gateway Regional this week following the recent payroll issues and remains on-site conducting an investigation into life safety compliance.
State Sen. Erica Harriss, who represents the area, previously said her office had been in contact with IDPH officials.
“My office is aware of reports regarding ongoing issues at Gateway Regional Medical Center. I have been in contact with officials at the Illinois Department of Public Health, who are actively monitoring and investigating the situation to help ensure patients continue to receive the care they need,” Harriss said.
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