Hospital Chains in Congressional Probe

MedCath Corp. and other specialty hospital chains are under scrutiny by the chairman of the House Ways and Means Committee, which oversees Medicare, officials said.

Speaking to health-care executives in Washington, D.C., Rep. Bill Thomas (R-Bakersfield) said facilities such as MedCath’s heart hospitals shouldn’t be allowed to carve out profitable lines of business without providing services such as emergency care.

MedCath, based in Charlotte, N.C., operates a heart hospital in Bakersfield, Thomas’ congressional district.

Local doctors own equity interests in MedCath’s hospitals. Thomas said he would like to see better enforcement of anti-fraud rules that bar doctors from referring Medicare and Medicaid patients for certain health services to company-owned facilities when they own a financial stake.

MedCath, in its Securities and Exchange Commission filings, said its business practices are legal.