Will HCFA be able to pay up on Jan. 1, 2000?
Agency says it will be ready; GAO says no way
If you listen to the General Accounting Office (GAO) in Washington, DC, you’ll hear that the Health Care Financing Administration (HCFA) hasn’t even come close to fixing its year 2000 (Y2K) problem.
If you listen to HCFA, you’ll hear that while all the fixing hasn’t yet been finished, it will be ready by Dec. 31.
So which agency should you listen to? Will your Medicare payments be delayed? Will there be widespread Medicare fraud? The problem with answering those questions is the same in answering anything about Y2K — nobody really knows. Experts advise health care providers to hope for the best but prepare for the worst. That means taking all the steps you can to make sure your facility or practice and your suppliers are Y2K-compliant. (See Healthcare Benchmarks, April 1999, pp. 37-41.) It also means keeping tabs on what everybody else, including HCFA, is doing.
As recently as March, Joel Willemssen, director of civil agencies information systems at the GAO, told lawmakers that HCFA was nowhere near ready for Y2K. "There is a high probability that there will be some system failures," he said. Medicaid was also at risk, Willemssen said, because some state agencies were falling behind in computer systems upgrades. That means billions of dollars in Medicare and Medicaid benefits could be delayed or miscalculated, or go unpaid.
HCFA’s 25 most critical internal computer systems have been certified as Y2K-compliant, according to HCFA Administrator Nancy-Ann DeParle, but Willemssen said none of the agency’s 78 external systems were compliant as of March.
DeParle said 54 of those systems were compliant and GAO is overstating the risks. "We are committed to everything we have to do to fix the problem," she told Congress. "This is our No. 1 priority."
She said doctors and hospital bills will get paid, and HCFA is continuing to retest systems and refine contingency plans. She explained that the qualifications HCFA allowed in self-certifications of its systems were minor and that HCFA’s independent validation and verification contractor agreed. The GAO has said that all qualifications must be removed before certifications are accepted.
"It’s sort of like with a car — there may be dings in the fender, and the dome light may flicker," DeParle added. "But when you turn the key, the engine roars, you step on the gas and you go, and you can steer just fine. That’s where we are today."
More than 150 different computer systems are used in administering the Medicare program, and the agency expects to process more than 1 billion claims and pay $288 billion in benefits annually by 2000. HCFA plans to freeze all of its systems over the summer and then re-test and re-certify in the fall in a "fully production-ready, integrated environment," she said.
Concerned that HCFA’s vulnerabilities could spawn a rash of Medicare fraud, Sen. Chuck Grassley (R-IA), chairman of the Senate Special Committee on Aging, sent a letter to Finance Committee Chairman Sen. Bill Roth (R-DE). "What better timing for a provider intent on gaming the system than when Medicare computers are in disarray? If computers fail, fraudulent claims could go undetected. Proper claims could be misidentified as fraudulent," Grassley wrote.
Donald Palmisano, MD, JD, a New Orleans surgeon and American Medical Association (AMA) trustee who has testified before Congress about the Y2K bug, says the AMA is "cautiously optimistic" that HCFA will be ready. "We don’t know if HCFA will be ready, but it says it will," he says. "That’s the whole purpose of the hearings, to determine if any of the agencies need more money or more help from Congress. They said they didn’t need either."
But that doesn’t mean there aren’t concerns. Palmisano testified in February about a Medicare test run in Louisiana that left some physicians cash-starved for as long as six weeks.
"Arkansas Blue Cross & Blue Shield, the Medicare claims processor for Louisiana, implemented a new computer system — intended to be Y2K-compliant — to handle physicians’ Medicare claims," he told Congress.
"Although physicians were warned in advance that the implementation might result in payment delays of a couple of weeks, implementation problems resulted in significantly longer delays. For many physicians, this became a real crisis. Physicians who were treating significant numbers of Medicare patients immediately felt significant financial pressure and had to scramble to cover payroll and purchase necessary supplies," Palmisano stated.
Palmisano explains in an interview with HB that he had a significant problem with payment in his private practice because of the glitch. "We found out the information had all been lost, and we had to start from scratch to resubmit it," he says. "HCFA says they have the remedial software for their intermediaries, but it’s not enough to say we have something to fix the problem. It’s got to actually work. There’s one example where it didn’t work. It points out the importance of early preparation because if there’s a glitch in one place, you can get it fixed before you try it everywhere."
Early preparation is the provider’s best hope, Palmisano says. He advises providers to contact HCFA about participating in the agency’s claims processing test to see if it works in their area.
It seems that many providers have not yet taken that advice. A survey of 5,000 providers released in March by the Health and Human Services Inspector General found that less than 20% of respondents had tested data exchanges between their systems and their external vendors. Less than half had developed a contingency plan in preparation for possible Y2K-related system failures.
About half of the providers surveyed said that their billing and medical records systems are already Y2K-compliant. Of those who are not currently ready, more than 90% of hospitals and 70% to 84% of other provider groups said they believed their billing systems would be Y2K-compliant by Dec. 31.
"This survey makes it clear that providers need to take steps in their own self-interest to be sure their computer systems will be able to successfully submit claims for reimbursement," says Inspector General June Gibbs Brown. "Y2K readiness is the responsibility of each individual provider."
In January, DeParle wrote directly to the 1.25 million Medicare providers — the largest such mailing in Medicare history — urging them to assess their Y2K status and to begin preparing if they had not done so already. HCFA also sponsored half-day conferences around the country in late March on preparing for Y2K.
(To read DeParle’s letter, go to HCFA’s Web site: www.hcfa.gov.)
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