Coast Plaza Doctors Hospital, Norwalk, Calif., and the estate of its former chief executive officer will pay $4.1 million combined to settle a civil whistleblower lawsuit alleging Medicare fraud. Coast Plaza's former chief financial officer filed a False Claims Act suit in 1999 alleging that former CEO Gerald Garner billed Medicare for nonexistent expenses between 1994 and 1999. Garner died in an auto accident in 2002. The settlement represents 2 1/2 times the alleged damages. Coast Plaza CEO Craig Garner, Gerald Garner's son, said the 126-bed hospital is pleased to resolve the matter. "As soon as we were informed of the possible errors in our reporting, we instituted changes," he said. The settlement includes a five-year corporate integrity agreement. The hospital did not admit wrongdoing.
In 1996 federal regulators banned Gerald Garner, his wife and their American National Commerce Bank in Anaheim, Calif., from the banking business for life and assessed $200,000 in civil monetary penalties. The bank closed in 1993. Gerald Garner was accused of making false statements, causing the bank to compensate him and other directors too highly, and concealing ownership interests. The Garners did not admit or deny the charges, according to federal documents. Garner, who held an interest in the limited partnership that owns for-profit Coast Plaza, became involved with the hospital in 1991. -- by Mark Taylor