Health Services Chief Scolded : Finances: The Board of Supervisors assails Robert Gates over the faulty computerized billing system. A secret report on its problems is ordered.

The Los Angeles County health director came under blistering criticism Tuesday for failing to inform the Board of Supervisors until recently about the potential failure of a $65-million computerized billing system.

But after upbraiding Health Services Director Robert C. Gates for failing to disclose severe problems with the computer system, the Board of Supervisors then participated in what critics called another cover-up by ordering a secret report on the reasons the problems occurred.

Supervisors said the report’s contents should not be publicly disclosed because it could be used against the county if officials declare the computer system developed by IBM Corp. and Baxter Healthcare Corp. a failure and either side files suit.

“The numbers are so big and the potential losses to the county are so great,” said Supervisor Yvonne Brathwaite Burke, explaining why the report should be kept confidential.

But the board’s decision angered the tipster who first brought problems with the IBAX computer system to the board’s attention in early September.

“It’s just another cover-up,” said the whistle-blower, who asked not to be identified. “What they’re doing doesn’t sound right to me. People have to know about this so it doesn’t happen again.”

The county has not only failed to realize $2 million this year in projected savings from the IBAX system, but delays and problems at High Desert Medical Center in Lancaster and Rancho Los Amigos in Downey could end up costing taxpayers more than $16 million--and that is if the glitches can be fixed.

To finance the project, the county sold at least $38 million in publicly offered, tax-exempt bonds, which could make it difficult to back out of the deal without incurring a significant loss, health officials said.

In documents filed with the board in response to the whistle-blowers’ complaints, Gates blamed IBAX for, among other problems, the county’s failure to bill the state for up to $10 million in Medi-Cal claims that have gone unpaid because of missed deadlines.

“When were you guys going to bring this to our attention?” Molina asked Gates during Tuesday’s board meeting. “Mr. Gates, it is your duty to tell us about things like this. . . . I don’t know if I trust you.”

Gates did not directly respond to Molina’s questions about the timing of his reports. But he warned that the county may have to abandon the computer system and sue IBAX unless the problems are quickly resolved. “It’s an ongoing problem which we consider extremely serious,” Gates said. “So far, I have not seen the kind of cooperation I’d like to see from them (IBAX).”

IBAX executives did not return repeated phone calls from The Times.