HEALTH CARE : NME to Pay $15 Million to Settle 66 Psychiatric Malpractice Suits : Courts: Deal resolves more than half the lawsuits against the hospital operator, but federal probe continues.

National Medical Enterprises Inc., continuing efforts to put its legal woes behind it, will pay approximately $15 million to settle 66 malpractice suits brought by former patients at its psychiatric hospitals in Texas, company officials said Tuesday.

The cases represent more than half of the more than 100 civil suits brought by patients claiming physical mistreatment, abuse, fraud and conspiracy at NME psychiatric facilities.

Since Jeffrey C. Barbakow took over as chief executive in June and ousted several co-founders, he has tried to repair the Santa Monica-based hospital operator’s tattered image by moving aggressively to settle a plethora of lawsuits by insurers, shareholders and patients. However, the company continues to face a Justice Department investigation that could lead to significant civil and criminal penalties.

“These (patient case) settlements represent our acknowledgment that we had to resolve these cases before we could regain the public’s trust,” said Christi R. Sulzbach, NME’s associate general counsel and senior vice president.

NME stock closed unchanged at $11.50 a share in New York Stock Exchange trading.

NME, one of the nation’s largest hospital operators, still faces about 70 patient suits in Texas, California, Louisiana and other states, the company said.

The 66 cases--mostly involving activities in the late 1980s--were handled by Robert Andrews, a Ft. Worth attorney for the plaintiffs. Seven of the cases involve minors and will require court approval.

“My clients are very happy that this chapter of their lives can be put to bed, and participating in such a significant settlement helps them to overcome the pain,” Andrews said in an interview.

Andrews, in a prepared statement, said he believes NME “is serious about resolving its past problems.”

Andrews and NME officials declined to discuss specific terms of the settlement.

The $15 million is included in a $250-million reserve fund that NME established to cover the costs of settling various lawsuits filed by insurers, shareholders and patients.

In September, NME agreed to pay up to $125 million to settle two suits filed by insurers who accused it of submitting $740 million in false claims. A third insurance company suit is pending in federal court in Washington.

Two weeks ago, Colonial Hills Hospital, a now-closed NME facility in Texas, pleaded guilty to federal criminal charges of providing false billing information to a federal agency. It agreed to pay $2 million in restitution and fees to settle the charges.

That settlement was not expected to affect the broader federal inquiry disclosed in August when federal authorities raided NME’s corporate headquarters and company offices across the nation.

Sulzbach said NME is in “continuing discussions” with the federal government to attempt to resolve that investigation. Andrews said federal investigators have interviewed more than a dozen of the patients involved in the 66 Texas cases.

The Texas lawsuits involved activities at Brookhaven Psychiatric Pavilion near Dallas, the former Psychiatric Institute of Ft. Worth and other facilities in Texas. The suits alleged civil rights violations, false imprisonment, invasion of privacy and fraud, among other charges.

The Ft. Worth hospital gained national attention in 1991 when Duard Bok, a former staff psychiatrist, accused it of illegally paying for patient referrals and abusing patients. NME denied the charges.