NME to Settle Lawsuits: National Medical Enterprises Inc. said it will pay $2.5 million to settle lawsuits by 23 former patients over alleged insurance fraud at its psychiatric hospitals. The settlement will be paid from a $250-million reserve that Santa Monica-based NME established in the first quarter of fiscal 1994. More than 100 lawsuits filed across the nation allege over-treatment and other malpractice, and accuse executives of everything from false imprisonment to sexual harassment. NME is one of the largest hospital companies in the United States. It owns or manages psychiatric, acute care and physical rehabilitation hospitals and substance-abuse treatment centers.