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April 20, 1993|From Times Staff and Wire Reports

Cigna Sues NME, Claims Fraud: Cigna Corp. said it has sued National Medical Enterprises Inc., alleging that the psychiatric hospital operator committed widespread insurance fraud against the Connecticut health insurer. The suit, filed in U.S. District Court in Dallas on March 24, seeks repayment of millions of dollars of patient treatment charges that it alleges were billed fraudulently. Equitable Life Assurance Society of the United States, based in New York, is also a plaintiff in the suit. Equitable no longer writes health insurance. The plaintiffs allege that they paid well in excess of $250 million to NME's hospitals between 1987 and 1991 for services that were unwarranted. Santa Monica-based NME maintains that it did nothing wrong.

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