A psychiatric hospital has pleaded no contest to mail fraud, admitting it paid a psychologist $41,000 for referring patients to it in 1990 and 1991.
Two Rivers Psychiatric Hospital in Kansas City, Mo., entered the plea last week in U.S. District Court. It paid more than $63,000 in restitution and agreed to establish a new mental health program as part of the community service required during the five-year probation ordered by Judge D. Brook Bartlett.
"This was just the most expeditious way to get this over with," said Craig Nuckles, the hospital's chief executive officer.
Nuckles said the plea and the restitution would allow Two Rivers to continue to treat patients covered by federal programs.
The hospital paid the money to Swaran Kumar Jain, who had been convicted of mail fraud in 1994 for receiving referral payments from North Hills Hospital in Kansas City. Earlier this month, the 8th U.S. Circuit Court of Appeals in St. Louis reversed that conviction. However, it upheld his conviction on a count of taking kickbacks for referring Medicare patients.
Last November, Jain was indicted for arranging similar referral payments from Two Rivers. Ronald R. Rowe, former managing director at Two Rivers, also was indicted.
Court records filed last week alleged Rowe paid Jain $5,000 a month for patient referrals, then increased the payment to $8,000.
In its plea agreement, Two Rivers admitted paying the $41,000 to Jain and said he referred eight patients covered by federal benefits. The hospital acknowledged receiving $63,159 in federal payments for those patients, and repaid that amount last week.
Jain and Rowe, who left Two Rivers in 1991, face trial in December.