Industry, for the most part, says it is prepared for Y2K
The Office of Inspector General (OIG) conducted two sets of surveys to provide information about the Y2K readiness of Medicare-managed care organizations and fee-for-service providers.
The first survey of Medicare fee-for-service providers was released in March 1999, and the first survey of Medicare-managed care organizations was released in May 1999. The two surveys released provide self-reported information about the Y2K readiness of providers and managed care organizations as of July 1999.
The surveys indicate both groups have made significant progress in preparing for the year 2000. However, some providers and managed care organizations have not taken needed steps to prepare their computer systems — especially relating to testing, contingency planning, medical equipment, and ensuring compliance with external business partners.
Key findings of the managed care survey include:
• Internal systems. More than four-fifths of managed care organizations reported that their systems are Y2K-compliant. Overall, 85% of managed care organization respondents said they are Y2K-ready. About 9% of those managed care organizations had not completed testing.
A managed care organization was considered Y2K-compliant if it reported that all applicable systems were Y2K-ready. Ninety-four percent of managed care organizations reported that vendor-supported products, such as hardware, telecommunications, and embedded processors, were compliant. Almost all managed care organizations had established recommended infrastructures in preparation for Y2K testing, but most had not contracted out for independent assessment of Y2K readiness.
• Vendor systems. About one-half of managed care organizations indicated they were taking steps toward ensuring compliance with external partners. Fifty-six percent of managed care organizations reported receiving commitments from relevant data exchange partners to participate in end-to-end testing; 9% said such commitments were not applicable; 50% had tested exchanging data with their subcontractors’ systems; and 35% tested exchanging data with their medical providers’ systems.
• Contingency plans. About 80% of managed care organizations reported developing contingency plans, and some 30% reported testing their contingency plans. Compared to the previous study, 5% to 10% more managed care organizations reported developing contingency plans related to specific computer systems. As of last July, 83% reported developing a contingency strategy for their membership enrollment systems, 79% reported developing a contingency strategy for their premium billing systems, and 73% reported developing a contingency plan for their medical information systems. As of last July, 28% of managed care organizations reported they had tested contingency plans, compared to only 8% in February.
HCFA required managed care organizations to submit contingency plans for review of content and feasibility of implementation. According to the HCFA review, 33% of the contingency plans submitted as of August 1999 required little or no modification, while 67% needed major or complete revision.
Fee-for-service payers
Key findings of the fee-for-service survey include:
• Billing and medical records. About two-thirds of Medicare fee-for-service providers reported that their billing and medical records systems were Y2K-ready. Between 61% and 75% of providers that use computerized billing and medical records systems reported that their systems were Y2K-compliant. Almost all providers expected their billing and medical records systems to be fully ready by the end of 1999. However, at least one-third of providers reported that they had not yet tested the readiness of those systems and many providers had not tested data exchanges with vendors and contractors.
• Biomedical equipment. Even fewer fee-for-service providers reported that their biomedical equipment was Y2K-ready. Less than half of providers reported that all of their biomedical equipment was Y2K-ready. However, most providers expected their biomedical equipment to be completely ready by the end of the year. Hospitals were the most likely of the provider groups to report that they had tested their equipment. The majority of providers indicated that they were relying on the manufacturers of their biomedical equipment to provide Y2K information.
• Contingency plans. Many Medicare fee-for-service providers had not completed contingency plans. Less than 60% of survey respondents said they had completed contingency plans. Some providers reported that they did not intend to make contingency plans before the end of the year. In addition, uncertainty about external suppliers and utility providers was also a cause of concern among some Medicare providers.
• Getting help. Not all providers were taking advantage of federal outreach efforts. Some providers were not aware that Y2K information is available on a number of federal Web sites. However, almost all of the respondents who had visited the web sites found them to be helpful. While approximately 70% of providers reported that their Medicare contractors had sent them information or offered assistance with Y2K, about 30% were unaware of contractor efforts.
• Ready or not? Many Medicare fee-for-service providers were not Y2K-ready as of last July and some providers may not be ready by Jan. 1. In the six months between the two surveys, health care providers generally reported improvements in the status of their billing systems, medical records systems, and biomedical equipment. Providers were also more likely to report having completed contingency plans than they were six months ago.
The two surveys were conducted by HCFA and the OIG, which identified 149 managed care organizations for inclusion in the survey. Separately, HCFA identified 204 managed care organizations and conducted 59 site visits to determine the Y2K readiness of those organizations. Those 204 managed care organizations were not included in the OIG survey. Of the 149 managed care organizations sent surveys, 144 responded to the survey for a response rate of 97%. Another 17 managed care organizations completed surveys, bringing the total number of respondents to 161.
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