Medicare’s ready . . .
But a glitch-free Jan. 1 depends on you
"War room" operatives at the Health Care Financing Administration (HCFA) in Baltimore have been working feverishly over the past months to respond to the Y2K challenge for Medicare and Medicaid claims.
According to a recent Fact Sheet, as of Dec. 31, 1998, all of HCFA’s mission-critical internal systems were certified as Y2K-ready. Also, most of the 73 external systems owned by the private insurance companies that process and pay Medicare claims were certified ready in January. Follow-up work still is needed in some areas, but HCFA expected to meet its goal of having all systems ready by the end of March.
The federal agency holds providers — including hospitals, physicians’ offices, laboratories, medical equipment suppliers, managed care plans, and Medicaid state agencies — accountable for their own compliance because their conversion is critical to the smooth processing of claims. "As we certify our own systems and those of our contractors who pay Medicare claims, we are reaching out with information and guidance to help our partners in the private sector achieve Y2K compliance," stated HCFA Administrator Nancy-Ann DeParle. "They must take action themselves so every Medicare provider will be protected. The Medicare program will be ready — and individual providers must be ready, too."
HCFA’s Web site, at www.hcfa.gov/Y2K, provides tools and support materials that tell you:
• How to inventory hardware and software programs and identify everything that is critical to business operations.
• How to assess the readiness of programs. To do this, providers will need to contact hardware and software vendors, maintenance and service contractors, and state professional and business associations. They also will need to obtain key information from various vendors’ Web sites to determine readiness as well as to learn options for systems upgrade or replacement.
• How to update or replace systems.
• How to test existing and newly purchased systems and software. Providers will need to contact vendors, billing services, banks, and insurance companies.
• How to develop contingency plans in case of unexpected problems.
Y2K analysts at the Gartner Group in Stamford, CT, predict that 30% to 60% of the nation’s health care facilities will not be completely ready and will encounter bugs in about 10% of their most vital systems. Here are two organizations doing their best to meet the Y2K challenge:
• Kaiser Permanente in Oakland, CA, is spending at least $200 million — more than two months’ worth of the hospital’s drug budget — on its Y2K contingency plan. The organization houses about 82,000 critical items that have to be checked for Y2K compliance, because each item contains at least one embedded computer chip that makes it a Y2K problem waiting to happen.
The hospital is planning to scale back some services around the turn of the year to allow for problems. No elective surgeries will be scheduled, so that all of the hospital’s resources can be mobilized in case of unforeseen crises. The high-tech facility, like others around the country, may find itself doing things the old-fashioned, manual way in the new year.
• Egleston Children’s Hospital in Atlanta has been checking every piece of equipment to see which ones need adjustment. Even if a device continues to function, it could have serious flaws. For example, entering a child’s birthday as 12-31-00 could register as 12-31-1900. That would result in computing a dose of medicine for a 100-year-old person — possibly fatal for a child.
Getting ready for Y2K is not easy for a program as large and complex as Medicare, which pays about $207 billion each year to about 39 million beneficiaries. The government program uses seven standard claims processing systems and deals with 73 private contractors and financial institutions around the country to process the 800 million claims that come in each year from a million hospitals, physicians, and equipment suppliers. (See chart giving an over view of the structure of Medicare’s system, p. 56.) Over 85% of the claims are submitted and paid electronically. HCFA recently estimated that its internal and external Medicare systems contain 49 million lines of computer code that must be assessed for Y2K compliance. Its estimated costs for the effort range between $917 million and $1.3 billion.
Until late 1998, HCFA foresaw a disruption to critical Medicare functions. According to Medicare Computer Systems: Year 2000 Challenges Put Benefits and Services in Jeopardy, a federal publication, HCFA and its contractors were "severely behind schedule in repairing, testing, and implementing the mission-critical systems supporting Medicare." HCFA’s contractor remediation, testing, and validation effort has cost a total of $350 million.
[Editor’s note: For a free copy of the publication cited above, GAO/AIMD-98-284, or its update due to be published in March, call the U.S. General Accounting Office at (202) 512-6000, or write to P.O. Box 37050, Washington, DC 20013. Information also is available on the Internet at www.gao.gov.]
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