Facts

Claimant Los Angeles County (county) Dept. of Mental Health (DMH) contracted with respondent Sierra Systems Inc. for a computer system that processed mental health service providers' claims for reimbursement. The county contracted for the system in order to comply with federal HIPAA requirements. The system, however, was plagued with problems resulting in the providers being denied payment. The providers filed lawsuits against the county and the State of California (state), which lawsuits the county and state settled for a combination of cash payments and forgiveness of outstanding amounts owed to the county. The county then sought contribution from Sierra Systems.

PLAINTIFF'S CONTENTIONS:
The county contended that the payment errors were, at least in part, the result of design errors by Sierra Systems.

Result

The parties reached a settlement which has been approved by the Board of Supervisors.

Other Information

The settlement was reached without any litigation between the county and Sierra Systems. While the litigation was pending, the county and Sierra Systems entered into a tolling agreement which allowed them to mediate after the underlying litigation was resolved.