Y2K update

HIMA acknowledges possibility of pre-emptive stockpiling’

A Healthcare InfoTech Staff Report

A major association representing the medical device industry cautioned Congress recently that there is a possibility of "pre-emptive inventory stockpiling" in the medical device industry leading up to midnight, Dec. 31, 1999.

The warning was issued by Kent Smith, a member of the Health Industry Manufacturers Association’s (HIMA; Washington) Y2K working group and chairman, of the Year 2000 committee for Baxter Healthcare (Deerfield, IL). Smith said, however, that HIMA, as a member of the Health Care Sector of the President’s Council on Year 2000 Conversion, is working closely with the American Hospital Association, the Health Industry Distributors Association and others on a White House-sponsored Roundtable on Hospital Supplies scheduled for early June.

Smith also reaffirmed HIMA’s commitment to ensure that medical technologies continue to function and function safely into the year 2000. Testifying before the House Commerce Committee’s Subcommittee on Health and the Environment and Oversight and Investigations, Smith said, "We want the patients who we serve as an industry to have confidence in us, and we will continue to do whatever we must to deserve their trust."

He predicted that there will be few disruptions in patient care as a result of non-compliant medical equipment, saying that many of the highest-risk devices vital to keeping patients alive are not date-sensitive. "We know of no pacemakers or defibrillators that are date-dependent," Smith said.

He said that, based on preliminary findings of a Y2K readiness survey, companies supplying most of the country’s medical devices have neared complete Year 2000 readiness. HIMA recently distributed to its members a survey, based on a template developed by the President’s Council on Year 2000 Conversion, to evaluate the device industry’s Y2K readiness.

"Though we have not completed our analysis of the survey, our initial work indicates that the companies that supply the bulk of the country’s medical devices are well on their way to complete Year 2000 readiness," Smith said. "The results have also given us a handle on general industry trends."

Smith pointed to several HIMA activities to provide compliance information to government entities and to customers, including:

• Development and execution of a comprehensive program to advise HIMA member and non-member companies regarding their responsibility to provide compliance information to the government.

• Support of the FDA’s Year 2000 Biomedical Equip ment Clearinghouse as a central collection point for Year 2000 device compliance information.

• Insurance of 100% response rate to FDA’s request for Y2K status information from HIMA’s 800 member companies which together, according to HIMA, make nearly 90% of the medical technology products sold in the U.S.

• Creation of a Year 2000 section on HIMA’s web site.

Smith did caution against the potential for pre-emptive inventory stockpiling. "As Jan. 1, 2000, nears, serious concerns have been expressed throughout the supply chain that some providers may, as part of their contingency planning, pre-emptively hoard supplies."

HCFA’s readiness still in doubt

The pendulum of confidence keeps swinging back and forth for the Health Care Financing Administration (HCFA; Baltimore). Despite recent assurances by HCFA officials that the agency was nearing Y2K compliance, the General Accounting Office (GAO) recently told Congress that that the agency’s readiness has been exaggerated.

Testifying before the House Ways and Means committee, GAO investigators said they are worried about potential delays in both Medicare and Medicaid reimbursement payments to providers and the implementation of HCFA’s Year 2000 scheduled fee updates. The GAO also said it is concerned that Medicare may have problems processing provider claims in the first quarter of 2000.

In its own report to Congress, HCFA indicated that all of its 54 mission-critical systems were now Y2K-compliant, with the exception of some "minor problems." However, the GAO claims these "minor problems" are far more significant than HCFA says and none of HCFA’s mission-critical systems are truly compliant.

The GAO also expressed concern about a lack of adequate contingency plans should HCFA or its contractors not be able to process provider claims or distribute payments and what effect this could have on the quality of patient care.

To address the problem, GAO officials are urging Congress to quickly approve legislation requiring HCFA to develop payment contingency plans. Others say all payments HCFA is scheduled to make during the first quarter of 2000 should be made early so providers can continue operating should the Y2K bug disrupt HCFA’s reimbursement processes.

Meanwhile, the independent testing contractor hired by the government to verify Y2K compliance has said it will only be able to test eight of HCFA’s internal systems a significant drop from the 22 systems HCFA had promised would be independently tested. Experts also worry that there will be little time for HCFA to execute necessary changes and contingency plans after the tests are completed in late summer.

According to the GAO, HCFA has not established an integrated schedule to track all of the agency’s major internal systems or a formal risk management system. HCFA’s independent contractor recommended earlier that HCFA develop a system to track specific information, including time, test schedules, and resource considerations.

A key component of HCFA’s Medicare and Medicaid computer system centers around the agency’s ability to exchange data both internally and with such external clients as physicians and hospitals.

The GAO report indicates that of HCFA’s 3,418 internal data exchange systems, 309 are not Y2K-compliant, and of 255,000 external data exchange systems, more than 37,000 are not compliant. In addition, HCFA has several internal systems scheduled for a software upgrade in 1999, several of which are legislatively mandated. All of these upgraded systems will require testing and certification a process the GAO fears may not be completed before 2000.