HCFA chief says feds ready for Y2K, but states may need help

The head of the Health Care Financing Administration today told a House committee that Medicare payments will be disbursed on time next year despite concerns that the agency is behind schedule in making Year 2000 fixes.

Nancy Ann DeParle, HCFA's administrator, told the House Ways and Means Committee that all 25 of the agency's internal mission-critical systems are Year 2000-compliant, three months before the governmentwide March 31 deadline set by the Office of Management and Budget.

DeParle said 54 of the 78 external mission-critical systems, many of which handle the billions of dollars in medical claims and payments for Medicare beneficiaries, are compliant. DeParle said all mission-critical systems will be compliant before Jan. 1, 2000.

For months Congress and the General Accounting Office have cited HCFA as one of the few federal agencies that are at the highest risk of not having their systems ready for 2000. For HCFA, the consequences of not having computers ready for the new millennium could be dire because the agency manages, through a network of independent insurance providers, about $250 billion worth of claims and medical bills for the Medicare health program for the elderly.

DeParle said 58 percent of hospitals are submitting Medicare claims forms that are Year 2000-compliant. Last year HCFA decided to send its own independent verification and validation contractors to states because DeParle was concerned that the states were not thoroughly fixing and testing their systems. After evaluating 14 states, DeParle said most state systems are in good shape, but she is concerned about the readiness of their payment systems. She plans to give more details about the payment systems at a House hearing scheduled for Feb. 26.

After data from all the states is reviewed, DeParle said she will share the results with Congress to determine what assistance states may need.

"I must be clear, however, about what HCFA can and cannot do," she said. "HCFA pays bills. We do not have the authority, ability or resources to step in and fix systems for others, such as states or providers. And that leads to a rather substantial concern for which we need the assistance of Congress and others to address."

Joel Willemssen, director of civil agencies information systems at the General Accounting Office, said HCFA has made progress in fixing computer systems, but it overstates the facts. Some renovation and a significant amount of testing must still be performed this year, he said.

"Until HCFA completes its planned rectification between July and November 1999, the final status of the agency's Year 2000 compliance will be unknown," he said.

HCFA has gone through one round of testing mission-critical systems and is expected to retest more systems July 1.