Community Psychiatric Centers Under Probe : Regulators: The Laguna Hills-based hospital chain says it doubts that the Texas attorney general will turn up any insurance fraud.

The Texas Attorney General’s office said Monday that it is investigating Community Psychiatric Centers--a chain of psychiatric hospitals headquartered in Laguna Hills--and three other chains for alleged insurance fraud.

Community Psychiatric said that it was aware Texas authorities were looking into psychiatric hospitals and that it had expected the investigation to grow in scope.

But “we’d be surprised if they find anything” improper about Community Psychiatric’s business practices, spokeswoman Suzanne Hovdey said Monday, because “we set certain corporate policies and ethical standards that we expect everybody to conform to.”

Community Psychiatric was added Friday to a broader probe of private psychiatric hospitals operating in Texas, a spokesman for Texas Atty. Gen. Dan Morales said.

The investigation began several months ago with allegations of impropriety against Psychiatric Institutes of America, a subsidiary of Santa Monica’s National Medical Enterprises Inc.

Several other states and the federal government are also looking into allegations that the Psychiatric Institutes hospital chain may have defrauded insurance companies and otherwise violated Texas law, said Gray McBride, a spokesman for the Texas Attorney General’s office.

The Texas investigation of all four companies centers on violations of a state law prohibiting deceptive trade practices, McBride said. The allegations include improper solicitation of patients; improper admissions of patients to psychiatric hospitals; fraudulent patient diagnoses, and fraudulent billing of private insurers and federal programs such as Medicare.

There are also allegations that a Texas law prohibiting referral of patients in return for payment has been violated.

The Texas Department of Mental Health and Mental Retardation on Friday asked the state’s attorney general to widen his investigation of Psychiatric Institutes of America to include Community Psychiatric and the two other hospital chains, Charter Medical Corp. of Macon, Ga., which Community Psychiatric tried unsuccessfully to buy earlier this year, and Hospital Corp. of America, based in Nashville, Tenn.

Community Psychiatric operates 50 psychiatric hospitals, five in Texas. It had profit of $83.2 million on revenue of $381 million last year.

Allegations of fraud concerning Community Psychiatric aren’t new; similar charges were raised against the company in several shareholder’s lawsuits filed in federal court in Santa Ana in September and October.

The lawsuits’ allegations are part of a broader claim by unhappy shareholders that Community Psychiatric hid its financial problems from them.

On the New York Stock Exchange Monday, the company’s stock fell 50 cents a share to $11.25, its lowest point this year. Community Psychiatric shares had traded as high as $40 earlier in the year.