Ex-Federal Officials to Help NME Clean Up Unit : Health: The consultants will work on improving ethical standards in the psychiatric division.

National Medical Enterprises said Wednesday that it is bringing in some heavy guns in its continuing efforts to clean up its scandal-plagued psychiatric division.

The Santa Monica-based health care giant said it has hired Richard P. Kusserow, former inspector general of the U.S. Department of Health and Human Services, to review its plans for improving ethical standards and help put those plans in place.

NME has been embroiled in charges of insurance fraud since last year, when the Texas attorney general sued the company, accusing it of admitting patients without regard to need in order to milk their insurance. Without admitting guilt, NME agreed to settle the suit in June by paying a $9-million settlement and implementing a series of reforms at its Texas hospitals.

A number of large insurance companies have also sued NME for fraud. NME denies the charges and has sued the insurance companies for failure to pay what it says are legitimate bills.

“The retention of Mr. Kusserow signals our determination to operate to the highest ethical and legal standards in the industry, while continuing to provide the highest quality care for our patients. We want NME to be synonymous with trustworthiness,” said Richard K. Eamer, NME’s chairman and chief executive.

Kusserow said his task is to do for NME what he did as inspector general: “to root out waste and abuse and fraud . . . and promote effectiveness and integrity.” He will work under contract as a consultant and said he expects his job to take at least a year.

“They’ve given me carte blanche. They want me to look at the entire spectrum of NME’s businesses,” said Kusserow, who became senior vice president of Strategic Management Associates, a Washington, D.C., management consultant, after leaving the government last summer. Also part of Kusserow’s team are Strategic Management President John J. O’Shaughnessy, former assistant secretary for management and budget for the U.S. Department of Health and Human Services; Raymond Maria, former deputy inspector general of the U.S. Department of Labor, and David Martin, former director of the U.S. Office of Government Ethics.