The University of California, Irvine agreed to pay $1.2 million to settle fraud allegations that it allowed residents at its medical center to give patients anesthesia without supervision, then billed Medicare as if doctors were present.

UC regents, who were sued by a whistle-blower in 2008, agreed last week to the settlement of federal Department of Justice allegations involving conduct at the UCI Medical Center from 2002 to 2011, attorney Louis J. Cohen, who represented the whistle-blower, said Thursday.

Federal officials began investigating after Dr. Dennis O'Connor, a former UCI medical professor, brought the federal suit against the UC regents and others.

He contended that anesthesiologists at UCI's medical center filled out reports in advance that indicated they were present when residents or nurse anesthetists administered anesthesia — even though they sometimes were in an entirely different building.

Federal officials contended that the hospital submitted Medicare bills falsely indicating that the supervising doctor was present, as regulations require.

The settlement was approved and a federal court dismissed the lawsuit last week. O'Connor will receive $120,000 of the settlement money and the federal government will receive the rest.

O'Connor contended that doctors were double-booked to supervise procedures in two buildings.

"It was all about money," he told the Orange County Register (http://bit.ly/YHMjIX ).

Similar allegations were made in 2008. The anesthesiology department was placed under state supervision after federal inspectors found several instances where doctors had filled out medical records about a surgery before it happened.

Two years later, the California Medical Board disciplined Dr. Peter H. Breen, former head of the anesthesiology department, after he acknowledged that he had filled out a surgery form in advance. He was ordered to attend courses in ethics and record-keeping.

A UC Irvine statement said the university regents deny all claims of wrongdoing.

The statement said the anesthesiology department conducted "a top-to-bottom review" of its operations in 2008 and put new training and procedures in place.

"New positions such as anesthesia safety officer were created to ensure compliance. The department now uses an electronic record-keeping system that does not permit the practices alleged," the statement said. "It remains committed to the highest standards of patient care."