Psychiatrist Pleads Guilty in Fraud Case

A Claremont psychiatrist pleaded guilty Tuesday to federal conspiracy charges and receiving more than $300,000 in illegal kickbacks for referring patients to two Southern California psychiatric hospitals formerly owned by National Medical Enterprises.

The guilty plea is the latest result of an ongoing federal investigation into one of the biggest medical fraud scandals in U.S. history. In June 1994, Santa Monica-based National Medical Enterprises agreed to settle government allegations of Medicare fraud by paying a then-record $362.7-million fine.

Although the 1994 settlement ended the government’s investigation of NME, federal investigators have continued to pursue cases against doctors and others. NME changed its name to Tenet Healthcare and recently moved its headquarters to Santa Barbara.

In the settlement announced Tuesday by U.S. Atty. Nora M. Manella, Dr. Jeffrey S. Arden, 40, admitted receiving $150,000 between 1990 and 1992 for referring Medicare patients and others in federal health programs to Glenbrook Hospital and Mental Health Center in Azusa. He also admitted receiving $155,500 in payments and other financial benefits for referrals to Glenbrook and Yorba Hills Hospital and Mental Health Center in Yorba Linda. Arden is cooperating with the government in its investigation, Assistant U.S. Atty. Ronni B. MacLaren said.

NME owned both hospitals at the time. The Azusa facility was closed and the company later sold the Yorba Hills facility.

Arden admitted that the payments were disguised as monthly stipends under a so-called “services agreement.”