Last August, just as Jeffrey Barbakow was settling in as CEO at scandal-ridden National Medical Enterprises, 600 FBI agents raided NME's headquarters in Santa Monica, Calif., and other facilities. The feds were searching for evidence of overbilling, a charge 19 insurers had already made in two lawsuits.
Barbakow seems to be getting a grip. On Dec. 13, NME agreed to reimburse 13 insurance companies $89.9 million, part of a total $230 million in settlements. Ten days earlier, the company had announced the sale of its deteriorating rehabilitation-care unit for $300 million. Barbakow's maneuvering has propelled NME's stock to 13, double its price four months ago.
Barbakow, a former Merrill Lynch investment banker, vows he will next sell off the company's chain of 61 psychiatric hospitals. Then he plans to cobble together a deal with the Justice Dept., hoping to head off potential indictments. Analysts speculate that Barbakow's ultimate goal is selling off the entire company. A full agenda? When he started, Barbakow says, "I had a list in my top drawer of sixteen things I needed to get done. Now, the list is down to two."