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AETNA, METLIFE, SUE NATIONAL MEDICAL ENTERPRISES FOR FRAUD AND RACKETEERING IN PSYCHIATRIC HOSPITAL SCHEMES

 AETNA, METLIFE, SUE NATIONAL MEDICAL ENTERPRISES FOR FRAUD
 AND RACKETEERING IN PSYCHIATRIC HOSPITAL SCHEMES
 DALLAS, Sept. 14 /PRNewswire/ -- Aetna Life Insurance Company (NYSE: AET) and Metropolitan Life Insurance Company filed suit in U.S. District Court today against National Medical Enterprises, Inc. (NME), alleging widespread fraud in NME's practices for obtaining and institutionalizing patients in its affiliated psychiatric hospitals.
 The complaint charges NME with insurance fraud that constituted racketeering activity under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.
 "We expect evidence at trial to demonstrate an elaborate scheme by NME to admit patients, regardless of medical need, to its affiliated hospitals, and to bill for treatments that were never provided or were provided without medical justification in order to obtain payments from insurance companies," said James L. Garcia, director of Aetna Health Plans' Health Insurance Tracking Unit.
 "Consumers always bear the ultimate burden of health care fraud," said Ann Browne, manager of MetLife's group insurance health Care Fraud and Abuse unit. "What is particularly alarming about this case is the evidence that the welfare of patients was so blatantly disregarded."
 Aetna and MetLife stated that during the period that was investigated, the two companies paid more than $500 million to NME's psychiatric hospitals, including almost $200 million to Dallas-area institutions.
 The complaint alleges that NME relied on illicit recruiting of patients through kickback schemes with referring physicians, intervention and assessment services, and public school guidance counselors. In addition, NME allegedly used direct marketing techniques to screen for prospective patients with insurance coverage. The company also allegedly instituted procedures to ensure patients remained hospitalized until insurance coveage was exhausted, regardless of medical need.
 Also named as defendants in the lawsuit were subsidiaries of NME and NME'si?ated psychiatric hospitals in Texas. NME is the parent company of the former Psychiatric Institutes of America, Inc., whose psychiatric hospitals in Texas and elsewhere have been the subject of numerous complaints and governmental investigations during the past year.
 Aetna and MetLife are seeking compensatory and treble damages plus the costs of litigation.
 -0- 9/14/92
 /CONTACT: John C. Hawkins of Aetna, 203-273-2667, or John Harris of MetLife, 212-578-7157/
 (AET) CO: Aetna Life Insurance; Metropolitan Life Insurance ST: Texas, Connecticut IN: FIN SU:


DH -- NE016 -- 9082 09/14/92 11:09 EDT
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Publication:PR Newswire
Date:Sep 14, 1992
Words:380
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