House report rebukes HHS, Treasury on year 2000

The report said that Treasury has
made inadequate progress.

Jan. 3, 2000, will more likely see a disruption in Medicare payments than in Social
Security checks, according to a House Ways and Means’ Subcommittee on Oversight

The report evaluates the year 2000 status of agencies under the committee’s

The Ways and Means Committee has jurisdiction over the Social Security Administration
and the Treasury and Health and Human Services departments.

“Each of these agencies must successfully renovate their own systems and be able
to effectively interact with the renovated systems of the Treasury’s Financial
Management Service, which has responsibility for actually making the payments to the
beneficiaries and taxpayers,” the report said.

The subcommittee found that Treasury had made inadequate progress in renovating FMS
systems, which process checks for Social Security, Medicare and other programs.

“SSA is relatively well-positioned to have its systems renovated to function
properly in the year 2000,” the subcommittee reported. “SSA is currently working
with FMS to test its entire process, including payments to beneficiaries.”

HHS is in the weakest position among the agencies, the subcommittee found. Of
particular concern are the Health Care Financing Administration and the contractors that
process most of the Medicare claims, the report said.

Major systems development difficulties recently led the agency to abandon a new payment
transaction system.

The system would have replaced more than 60 payment programs used by private carriers
and third-party processors of Medicare bills. With that option gone, the report said, HCFA
is back to the drawing board.

But in the meantime, “multiple older systems must be renovated by both HCFA and
its contractors, and the time remaining to complete the renovations is extremely
tight,” the subcommittee report said.

The subcommittee also faulted HHS for getting a late start in renovating systems for
welfare and child support programs, systems that must be able to share data with state

Next to the Defense Department, HHS is expected to spend the most preparing for the
year 2000, the report said. HHS has 289 mission-critical systems, which will cost an
estimated $288.6 million to fix.

Regardless of what the report said, HHS Secretary Donna Shalala has set an internal
deadline of this Dec. 31 to have the department’s critical systems ready for testing,
deputy secretary Kevin Thurm said.

HCFA set the same deadline for its contractors so that it can use the remaining year to
test its work, Thurm said.

HHS, like many agencies, has delayed initiatives to concentrate on year 2000 work.

The subcommittee made five suggestions in the report:

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