Agency vows to be 2000-ready

Date code problems could
cripple the health care system by delaying reimbursement payments, Sen. Robert Bennett

The Health Care Financing Administration last month tried to reassure
lawmakers that its systems will be ready for the year 2000, despite the daunting task
facing the agency.

HCFA administrator Nancy-Ann DeParle told the Senate Special Committee on the Year 2000
Technology Problem that HCFA expects a tough time in fixing its numerous mission-critical

“We are making solid, steady progress in preparing for the year 2000,”
DeParle said. “We have made difficult decisions to delay other priorities in order to
clear the decks for necessary year 2000 work.”

The complexity of the Medicare system also makes date code repair work difficult,
DeParle said.

Health and Human Services deputy secretary Kevin L. Thurm called it the
department’s greatest year 2000 challenge.

The Medicare system, which processes nearly 17 million transactions a day and 1 billion
claims each year, is the largest automated health care payer in the country, she said.
Even though HCFA must repair nearly 50 million lines of its own system code, it also
depends on myriad external systems, including those run by 50 state Medicaid programs, 60
external contractors, countless banks and 1.6 million health care providers, she said.

HCFA also must leap a hurdle other agencies face.

“We must test Feb. 29, 2000, and March 1, 2000, because 2000 is a leap year,”
DeParle told the committee. “Normally we would never consider so much change and
testing at one time, but we have no choice.”

Lawmakers consider HCFA systems to be one of the government’s toughest year 2000

Rep. Steve Horn (R-Calif.), chairman of the House Y2K Task Force, gave the Health and
Human Services Department a failing grade on his most recent report card of agency date
code progress. The Office of Management and Budget also put HHS on its critical list of
agencies that are in the deepest year 2000 trouble.

Sen. Robert Bennett (R-Utah) predicted big problems if HCFA doesn’t fix its date
code in time.

“I am very concerned about the health care system,” said Bennett, chairman of
the Senate’s year 2000 committee during a speech in Washington last month.

“There are health care entities that may very well go bankrupt because they cannot
get reimbursement from Medicare and Medicaid,” he said. “That is, in my view,
one of the No. 1 issues that John Koskinen faces in trying to get HCFA so that it can
process Medicare claims.”

Koskinen is chairman of the President’s Council on Year 2000 Conversion.

HHS has notified Congress that it has delayed implementing several initiatives to
direct its efforts at year 2000 conversion. For instance, HCFA told Medicare contractors
to halt the conversion of their claims systems to HCFA standards and delayed implementing
many provisions of the Balanced Budget Act of 1997.

HCFA has renovated five of six standard systems and completed renovations on 24 of its
37 mission-critical internal systems, DeParle told the committee.

The agency also hired Intermetrics Inc. of Vienna, Va., to perform independent
validation and verification of its data exchange points and hired Seta Corp. of McLean,
Va., for testing services.

HCFA’s contingency plans include processing claims by hand if its systems fail
come 2000, DeParle told the committee.

“Given the nearly one billion Medicare claims we process each year, it is a
possibility that strongly motivates us to succeed,” she said.

Another option is to pay providers based on previous payments, but that would be a task
itself, she said. “Clearly, our best option is to successfully complete all of our
year 2000 renovations,” DeParle said.

The agency is amending agreements with Medicare contractors to make them responsible
for fixing their date code.

HCFA is also seeking more year 2000 funding. The agency wants $65.1 reallocated to year
2000 work in its fiscal 1999 budget. All total, it would have $99 million available for
date code work next year.  

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