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Arizona Heart Hospital Reaches Settlement Regarding Clinical Research Matter
Date:11/5/2007

CHARLOTTE, N.C., Nov. 5 /PRNewswire-FirstCall/ -- MedCath Corporation (Nasdaq: MDTH) announced today that Arizona Heart Hospital, one of the 11 hospitals in which MedCath owns an interest, has entered into a settlement with the United States Department of Justice (the DOJ) and the United States Attorneys' Office in Phoenix under the federal Civil False Claims Act.

The settlement concerns Medicare claims submitted between June 1998 and October 2002 for physician services involving the implantation of certain endoluminal graft devices (utilized to treat aneurysms) that had not received final marketing approval from the Food and Drug Administration, and allegedly were either implanted without an approved investigational device exception (IDE) or were implanted outside of the approved IDE protocol. The DOJ's allegations related solely to whether the procedures were properly reimbursable by Medicare; quality of patient care was not at issue.

The parties reached a settlement of the allegations to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation. Further, the hospital denies engagement in any wrongdoing or illegal conduct, and the settlement agreement does not contain any admission of liability. As previously disclosed in MedCath's filings with the Securities and Exchange Commission, the hospital will pay approximately $5.8 million to settle and obtain a release from any civil or administrative monetary claims related to the DOJ's investigation. Additionally, the hospital has entered into a five- year corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services under which the hospital will continue to maintain its existing
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SOURCE MedCath Corporation
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