Board OKs Funds to Continue Costly Hospital Billing System : Finances: The county is setting aside $6.8 million to handle costs for 18 months. IBAX had been lauded as state of the art, but has proved an embarrassment.

Los Angeles County supervisors Tuesday approved spending $6.8 million to continue operating a hospital computer system that was designed to make patient bill collecting more efficient but has cost more than $10 million to fix.

Although estimates vary, county officials say the IBAX computer system has lost between $2 million and $17 million in hospital billings that might not be retrievable. The county canceled the IBAX contract in June after an investigation of the system’s shortcomings.

The $6.8 million approved Tuesday came out of the Health Services Department budget for non-patient service, an amount that had been set aside in case an alternative billing system was needed, according to Kathryn Barger, a health deputy for Supervisor Mike Antonovich. Instead, supervisors decided to spend the money in an attempt to improve the system.

The funds will cover costs for the next 18 months, including a computer consultant and two computer firms helping to develop a new billing system.

“What we are trying to do is integrate the new system with IBAX so we don’t risk losing any more billings,” Barger said.

In the meantime, county officials are searching for a replacement system to handle Medi-Cal and other billing at two county hospitals.

IBAX, which cost $65 million, has been both a frustration and an embarrassment to the cash-strapped county.

Supervisor Gloria Molina has taken the lead in pursuing alternatives. “This IBAX monster failed us miserably,” Molina said during Tuesday’s meeting. “We need to get this behind us as quickly as we can.”

The board’s decision came a week after the county reached a settlement with IBAX in which the firm paid $3 million in cash and $5.5 million in credits to purchase medical supplies and computer-related equipment. Neither side admitted wrongdoing.

When the Board of Supervisors awarded IBAX the hospital billing contract in late 1990, the system was billed as state of the art, capable of replacing myriad contractors and in-house methods that were failing to promptly bill patients, insurance companies and other providers for hospital health care costs.

The system was installed first at High Desert Hospital in Lancaster and Rancho Los Amigos Medical Center in Downey and was planned to be used in four other county hospitals. It was projected to save more than $10 million by the time its contract expired in 1998.