To find time to fix date code, HHS delays other work

The Health Care Financing Administration is 70 percent through rewriting 49 million
lines of code, an agency spokeswoman said.

HCFA hired retired federal employees to work on the code under a $128 million budget
that runs through September, HCFA administrator Nancy-Ann DeParle told the Senate Special
Committee on the Year 2000 Technology Problem last month.

Following the advice of contractor Intermetrics Inc. of Burlington, Mass., HCFA
postponed programming for more than 100 of the 300 balanced-budget provisions that
Congress passed in 1997, she said.

Although HCFA completed a health insurance system that benefits about a million
children, it had to delay work on prospective payment systems for outpatient care and home
health services, a consolidated Medicare billing system for nursing-home physician
payments and a fee schedule for ambulance services, DeParle said.

HCFA, which pays 70 million Medicare and Medicaid beneficiaries and reimburses 1.6
million health care providers, has 98 mission-critical systems and processes nearly a
billion claims each year, DeParle said.

The agency’s 4,000 employees handle 98 percent of inpatient hospital and other
Medicare Part A claims, and 85 percent of physician and Medicare Part B claims. There are
24 internal mission-critical systems. More than 60 contractors run the other Medicare
systems, the spokeswoman said.

The agency has negotiated contract amendments that make plain the Medicare
contractors’ readiness responsibility and provide additional funding, DeParle said.

The Administration for Children and Families, another HHS bureau, has completed a
readiness assessment of its mainframe and networked PC programs, ACF spokesman Michael
Kharfen said.

The agency has 1,700 PCs and is trying to replace old 386 and 486 PCs with Pentiums,
Kharfen said. If it cannot do so, it will replace the motherboards of the older PCs. The
century date change also sparked a move from MS-DOS to Microsoft Windows.

Rather than rewrite several old grant-management systems individually, ACF consolidated
them, Kharfen said.

“Basically, we are on target” for HHS’ Dec. 31 deadline for readiness,
Kharfen said.

ACF has notified state and local grantees that it will be ready a year early, he said.
Its Web site at!y2k.htm
is the main way ACF shares readiness information and contingency plans.

ACF was fortunate to have hosted many of its programs on National Institutes of Health
and Social Security Administration mainframes, Kharfen said. SSA, which began to take note
of the readiness issue in 1989, has been widely applauded for its efforts to bring systems
up to date.

ACF awards and distributes 1,400 Head Start grants each year to benefit low-income
children and families.

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