Lex Reddy, CEO of beleaguered Prime Health Care, has resigned from the Ontario-based company and been replaced by Dr. Prem Reddy, the current chairman, as interim CEO.
Lex Reddy had served as President and CEO of Prime Healthcare since its inception in 2001.
"Lex Reddy has been an important part of our success, and he will be missed," said Prem Reddy said in a prepared statement.
The company also announced that Luis Leon, the regional CEO of the San Diego Region, has been named as chief operating office of Prime.
The moves come the day before Prime officials are due to appear before a State Senate and Assembly Health Committee hearing in Los Angeles Feb. 24 for hospital billing practices in which Prime billed Medicare for rare diseases such as septicemia at rates far higher than other hospitals or for billing for conditions the patients did not have.
Prime, which owns and operates Encino and Sherman Oaks Hospitals in the San Fernando Valley, has been the subject of numerous reports by the investigative journalism organization California Watch, and more recently, the FBI.
The committees are investigating billing practices that are driving up the cost of health care in California and the country.