L.A. County to get $1.5-million settlement for bungled computer system
Los Angeles County supervisors agreed Tuesday to accept a $1.5-million settlement from an information technology company that created a bungled billing system that cost the county millions.
The computer system created by Sierra Systems to process reimbursement claims by mental health clinics caused problems as soon as it was activated in 2004.
Billing requests received by the Los Angeles County Department of Mental Health were supposed to be forwarded to the state, which oversees Medi-Cal, the government insurance program for the poor.
But mental health clinics complained they weren’t getting paid by the county and state, and problems continued through 2006.
Eventually, 18 mental health clinics sued the county and state, accusing them of owing $25 million. In the summer of 2009, a settlement was reached in which more than $12 million was paid to the clinics. The county paid $5.8 million and forgave outstanding debt the clinics owed the county, and the state chipped in $3 million.
The county paid more than $800,000 in attorney fees before the initial settlement with the clinics was reached.
County officials, in turn, sued Sierra Systems.
In November, Sierra won a contract from L.A. County to create a new system for helping manage and collect property taxes.
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