O.C. Grills Billing System Maker

Times Staff Writer

A $17-million computerized billing system designed to track Orange County’s indigent healthcare costs but which hasn’t worked for two years should be operating by December, the manufacturer told a skeptical Board of Supervisors on Tuesday.

The county has been forced to prepare medical bills for its various healthcare services through an outdated computer system -- at a cost of at least $475,000 -- since September 2003, when the new system debuted and immediately malfunctioned.

The computer system, from Cerner Corp. of Kansas City, Mo., was supposed to begin operating in July 2002.

“There is a time for finger-pointing ... and we’re pointing it at Cerner,” said Supervisor Chris Norby. He criticized the company’s product and a lawsuit filed this month by Cerner officials to keep its contract with the county from being publicly disclosed.


Cerner Corp., with annual sales of $1.6 billion, makes clinical, financial and managerial software for healthcare organizations. Orange County bought its system in January 2001, with the promise that it would integrate patient record-keeping and submit bills electronically to the state for Medi-Cal reimbursement.

But the promised savings didn’t materialize as the system malfunctioned from the get-go.

County workers in recent weeks slogged through a backlog of bills that were due to the state by March 1, for billings from September. In the past three weeks, 91% of October’s bills, 89% of November’s bills and 70% of December’s bills have been submitted to the state, said Dave Riley, chief compliance officer for the Health Care Agency.

The county hasn’t yet lost any money from tardy bills, officials insisted. About 10% of the bills being submitted through the county’s 20-year-old computer system have been sent back with errors; those bills are being resubmitted, Riley said.


“I just want to know if [the system] is going to work,” Supervisor Bill Campbell said Tuesday after a 20-minute back-and-forth between the board and Mike Neal, Cerner’s western regional vice president.

Neal assured supervisors that the company was confident that software enhancements to be installed in April and May would fix the problems -- prompting Norby to remark that the company made similar assurances three years ago.

“They haven’t done anything they said they would in their contract,” Norby said in a later interview. He said he has reviewed the document but has been barred by county attorneys from publicly disclosing it because of Cerner’s lawsuit.

A May 24 deadline for installing new software was set by the county this month. If the company can’t comply, the county will probably set a new deadline, Norby said.


“At some point, we have to work to get this done,” he said. “It’s like you have a contractor who’s building your house and they’re a year behind schedule. We hate to go to litigation because then the whole thing shuts down.”

But, he said, the county should charge Cerner for the cost of duplicate billing. “This shouldn’t come out of our pocket,” Norby said.

The Health Care Agency’s Riley blamed some of the problems on requirements in the Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA, which mandates better privacy protection for patient medical records.

The state requires Medi-Cal bills to be sent through a new format, he said, one that neither the old computer system nor the new Cerner system could produce.


Hospitals, insurers and pharmacies had until April 2003 to comply.

Neal said company officials would present their next update to the board at its April 20 meeting.