<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:61209.wais]
YEAR 2000 AND MEDICARE: IS HEALTH SERVICE DELIVERY AT RISK?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 27, 1999
__________
Serial No. 106-55
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
61-209 CC WASHINGTON : 1999
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Matt Ryan, Senior Policy Director
Bonnie Heald, Communications Director/Professional Staff Member
Chip Ahlswede, Clerk
Trey Henderson, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on Septmber 27, 1999................................ 1
Statement of:
Addington, Whitney W., M.D., president, American College of
Physicians, American Society of Internal Medicine.......... 55
Baker, Joe, executive vice president, Medicare Rights Center. 212
Brown, Fred, vice chairman, BJC Health Systems, Senior
Advisor, President's Council of Y2K Conversion, and
chairman, Board of Trustees, American Hospital Association. 181
Christoph, Gary, Ph.D., Chief Information Officer, Health
Care Financing Administration.............................. 43
Wilkey, Elizabeth, electronic data interchange coordinator,
Blue Cross and Blue Shield of Georgia...................... 195
Willemssen, Joel, Director, Civil Agencies Information
Systems, U.S. General Accounting Office.................... 12
Letters, statements, etc., submitted for the record by:
Addington, Whitney W., M.D., president, American College of
Physicians, American Society of Internal Medicine:
Prepared statement of.................................... 179
Y2K tool kit............................................. 56
Baker, Joe, executive vice president, Medicare Rights Center,
prepared statement of...................................... 215
Brown, Fred, vice chairman, BJC Health Systems, Senior
Advisor, President's Council of Y2K Conversion, and
chairman, Board of Trustees, American Hospital Association,
prepared statement of...................................... 183
Christoph, Gary, Ph.D., Chief Information Officer, Health
Care Financing Administration, prepared statement of....... 45
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 3
Morella, Hon. Constace A., a Representative in Congress from
the State of Maryland, prepared statement of............... 6
Turner, Hon. Jim, a Representative in Congress from the State
of Texas, prepared statement of............................ 10
Wilkey, Elizabeth, electronic data interchange coordinator,
Blue Cross and Blue Shield of Georgia, prepared statement
of......................................................... 197
Willemssen, Joel, Director, Civil Agencies Information
Systems, U.S. General Accounting Office, prepared statement
of......................................................... 14
YEAR 2000 AND MEDICARE: IS HEALTH SERVICE DELIVERY AT RISK?
----------
MONDAY, SEPTEMBER 27, 1999
House of Representatives,
Subcommittee on Government Management, Information,
and Technology,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present from the Subcommittee on Government Management,
Information, and Technology: Representatives Horn and Turner.
Present from the Subcommittee on Technology, Committee on
Science: Representative Morella.
Staff present: J. Russell George, staff director/chief
counsel; Matthew Ryan, senior policy director; Bonnie Heald,
director of communications/professional staff member; Chip
Ahlswede, clerk; P.J. Caceres, intern; Trey Henderson, minority
counsel; and Jean Gosa, minority staff assistant.
Mr. Horn. The hearing of the House Subcommittee on
Government Management, Information, and Technology, in
participation with the Subcommittee on Technology of House
Science Committee will come to order.
Today, we will hear testimony about the year 2000
preparations needed to guarantee the seamless delivery of
health care financing by the Nation's largest health insurer,
the Federal Government. Through the Medicare program, the
government provides health insurance to more than 39 million
senior citizens.
Unfortunately, this massive health insurance program has
severe weakness in its year 2000 readiness. Medicare has been
identified by the President's Office of Management and Budget
as one of the 43 essential Federal programs. Yet, 2 weeks ago,
we reported that it is unknown when large portions of the
Medicare program will be year 2000 ready.
The outlook did seem alarming, and we hope to hear what the
situation is today. As of last week, less than 2 percent of the
230,000 hospitals, nursing homes, doctors and other health care
providers who submit claims to Medicare had tested their
computer systems with Medicare contractors.
Of the nearly 4,000 health care providers who had begun
this testing, many experienced significant failures. Worse,
some health providers report that they are just not ready for
the January 1st deadline.
We are not here today to be alarmists, but we do want to
provide an accurate portrayal of Medicare's Y2K landscape.
In February, we held a hearing to review the Health Care
Financing Administration's year 2000 preparations. At the time,
the agency's systems were not ready. Since then, however, HCFA
has made substantial progress in fixing and testing its
systems. We commend them for this very hard work. Yet, equally
strenuous work remains.
HCFA has stated that if Medicare providers cannot submit
proper claims, health care providers will not get paid.
Furthermore, according to HCFA, providers who do not test their
claims submissions are not exercising due diligence and,
therefore, must be prepared to accept any cash-flow
consequences that might arise from this lack of preparation.
We will examine four key areas in the Medicare program
today: First, whether the Health Care Financing Administration
has completed its final year 2000 computer tests; second, how
some Medicare contractors and providers are testing their
computer systems; third, the year 2000 preparations of managed
care organizations; and, finally, whether the Health Care
Financing Administration, Medicare contractors and managed care
organizations have developed and tested their business
continuity and contingency plans.
Health Care Financing Administration, its contractors and
health care providers have only 95 days to find an antidote to
strengthen the Nation's health care financing system. They must
meet that deadline, because 39 million American seniors are
depending on it.
I welcome today's panel of witnesses and look forward to
their testimony.
I'll now yield to the co-chairman representing the
Subcommittee on Technology of the House Committee on Science
for an opening statement, and then I'll yield to the ranking
member on the Government Management, Information, and
Technology Subcommittee.
[The prepared statement of Hon. Stephen Horn follows:]
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Mrs. Morella. Thank you, Mr. Chairman.
Mr. Chairman, this past February we held a hearing that
examined the status of the efforts of the Department of Health
and Human Services focusing on the Health Care Financing
Administration to prepare for the technical challenges
associated with the year 2000 problem, and at that hearing the
GAO, General Accounting Office, reported the severe
difficulties HCFA has experienced with Y2K, stating that,
``HCFA and its contractors were severely behind schedule,'' in
preparing, testing and implementing the mission-critical
systems that support Medicare.
Faced with this stark finding, there was little or no
confidence from the approximately one-quarter of our Nation's
population who receive over $170 billion annually of Medicare
and Medicaid assistance that their elderly, disabled or
indigent benefits would continue uninterrupted after January
1st, 2000. Subsequent to the hearing, we've seen the agency
undertake dramatic actions in management, resources, personnel
and funding to correct the Y2K problem. Are these refocused
efforts, however, enough to overcome HCFA's auspiciously
horrendous start? HCFA says yes, but others and I are not quite
so certain.
You have to be concerned when HCFA just last week tells us
that only 2 percent of their physicians and hospitals that
submit claims to them have tested their computer systems with
Medicare contractors, and of those that have tested their
systems, 10 to 20 percent have experienced significant
failures. These startling facts are obviously not very
comforting.
I know that HCFA disputes some of the GAO's conclusions,
and I know that both HHS and HCFA have demonstrated a great
deal of progress in the last quarter. So I look forward to
hearing from our distinguished panel today and especially to
hear our witnesses representing other Medicare partners to
determine exactly where the agency stands in their Y2K
remediation and validation efforts. No less than a successful
continuation of our Nation's health and welfare is at stake,
especially for those who can least afford a disruption in their
health benefits. If there are to be any disruptions, the
American people need to know that there should be adequate
contingency plans to cover any failures related to Y2K.
So, Mr. Chairman, I look forward to hearing from our
witnesses on this critical problem.
[The prepared statement of Hon. Constance A. Morella
follows:]
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Mr. Horn. I thank my colleague and now would yield time for
an opening statement to the ranking member of the Subcommittee
on Government Management, Information, and Technology, Mr.
Turner of Texas.
Mr. Turner. Thank you, Mr. Chairman.
It's good to have all of our witnesses here today to talk
about this very important issue. I've always held the opinion
that some of the greatest risks facing us with regard to Y2K
problems was in the health care industry and HCFA, which
relates primarily to the prompt payment of claims and ensuring
the system works. We know that that is a critical part.
There are many hospitals today that a short disruption in
payments could represent financial destruction for them. So I
think it's very important that we continue to pay attention to
this issue, as we have done through several meetings of this
committee held jointly with Chairwoman Morella and her
subcommittee.
I do believe that in February we found that there were
problems remaining at HCFA. I do understand that much progress
has been made in the last few months; and, of course, the
purpose of our hearing today is to address the remaining areas
of concern that we have at the committee.
I thank the Chair for continuing to stay on top of this
very important matter because, after all, HCFA is the largest
health insurer in the entire Nation and pays out $288 billion a
year. It's a very important agency to the many billions of
Americans who depend upon Medicare for their health care.
Thank you, Mr. Chairman.
[The prepared statement of Hon. Jim Turner follows:]
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Mr. Horn. Thank you very much.
Let me explain how this subcommittee functions. We would
like--because we do have your statements, we'd like it if you
could summarize between 5 and 10 minutes each of your
statements. That will give us more of an opportunity for dialog
among the panel, as well as dialog with the members and the
panel, but don't feel bad if you worry about the 5 to 10. Just
take the time you need to tell the story, and if we can tell it
succinctly, that helps.
The other thing is that we do submit all of our witnesses
and their staff that might tell them what the answer is on
questions, we are really down to, as an investigative
committee, to giving the oath. So if you don't mind standing
and putting up your right hands, with the people that will
advise you also taking the oath, then I don't have to have 18
baptisms here.
[Witnesses sworn.]
Mr. Horn. I have six witnesses, and I have six helpers, all
of which are important. So let us just go down the way we have
it on the agenda.
That's Mr. Willemssen, the Director of Civil Agencies
Information Systems, U.S. General Accounting Office. He's been
our principal witness at every system I think this last year,
be it in the States or overseas or here, wherever. So he has a
lot of knowledge, and we'd appreciate his summary of what the
GAO has done in terms of their studies on Medicare in
particular.
Mr. Willemssen.
STATEMENT OF JOEL WILLEMSSEN, DIRECTOR, CIVIL AGENCIES
INFORMATION SYSTEMS, U.S. GENERAL ACCOUNTING OFFICE
Mr. Willemssen. Thank you, Chairman Horn, Chairwoman
Morella, Ranking Member Turner. Thank you for inviting GAO to
testify today. As requested, I will briefly summarize our
statement on the readiness of Medicare and Y2K.
HCFA continues to make progress in its efforts to address
numerous Medicare Y2K issues. For example, HCFA is more
effectively identifying and managing risks. It also is more
effectively managing its electronic data exchanges and has
improved its testing program.
HCFA has also shown progress in the development of its
business continuity and contingency plans and has taken
comprehensive measures in conducting numerous Y2K outreach
activities.
Even with this progress, however, HCFA still faces a
considerable amount of work and challenges over the next few
months. For example, HCFA is using a less than ideal approach
of having key claims processing systems tested concurrently.
Because of the limited time remaining, HCFA, though, has little
choice but to test in this manner. This approach invites
additional risk because resolving one system's testing errors
can lead to problems in another system that's being tested at
the same time. Therefore, HCFA must aggressively manage these
risks through an integrated testing schedule that defines
interdependencies and a critical path, establishing the
sequence in which tasks must be completed.
In addition to these system interdependencies, ongoing
testing of contractors' systems continues to identify errors,
some of which would result in Y2K failures. HCFA's use of
system quality assurance tools also continues to find system
problems that will need to be resolved in the short time
remaining.
HCFA also will need to carefully manage contractor
transitions to a new data center that is planned between now
and early November and will have to implement its policy of
minimizing system changes during the rollover period.
HCFA faces challenges in several other areas. For example,
as noted earlier by you, Chairwoman Morella, contractor
progress and testing with providers has been disappointing. The
most recent available HCFA information shows that more than
half of HCFA's contractors have tested with less than 1 percent
of their providers, and for the testing that has been done an
error rate of 10 to 20 percent is being reported.
In addition to fee-for-service contractors, many of
Medicare's beneficiaries are enrolled in managed care
organizations. The available data on the Y2K status of these
organizations also raise concerns. In June, only 4 of 425 of
these organizations were reporting that they were fully
compliant. Further, HCFA's Y2K risk assessments of managed care
organizations showed that 94 of them were considered high risk.
To ensure that managed care organizations are adequately
addressing Y2K, HCFA is conducting site visits covering 184 of
these organizations; and as part of our ongoing work for the
Senate Special Committee on Aging, we plan to followup on
HCFA's actions in this area.
Given the magnitude of the challenges that HCFA faces, the
development of business continuity and contingency plans is
crucial. HCFA has completed its agency-wide business continuity
and contingency plan that includes 29 internal plans. However,
essential validation activities still remain.
Regarding contractor business continuity and contingency
plans, their status is essentially unknown. Our assessment of
available plans revealed that most contractors did not have
specified detailed procedures that are required for executing
and testing the plans.
The status of contingency plans for managed care
organizations is also not encouraging. By early September HCFA
had received plans from over 300 of these managed care
organizations. However, its review concluded that about 69
percent of them needed major improvement.
In conclusion, it's clear that HCFA has made substantial
progress on Y2K over the last several months. Nevertheless, the
agency still faces a considerable amount of work and challenges
over the next few months to ensure that Medicare providers will
be made paid and beneficiaries will continue to receive care.
Thank you.
Mr. Horn. Thank you very much.
[The prepared statement of Mr. Willemssen follows:]
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Mr. Horn. We now go to the principal witness from the
Health Care Financing Administration, which is the Chief
Information Officer Gary Christoph. Dr. Christoph.
STATEMENT OF GARY CHRISTOPH, PH.D., CHIEF INFORMATION OFFICER,
HEALTH CARE FINANCING ADMINISTRATION
Dr. Christoph. Chairman Horn, Chairwoman Morella and
Congressman Turner, thank you for inviting me here today to
discuss the Health Care Financing Administration progress on
meeting the year 2000 challenge. I'm happy to report to you
that we continue to make solid progress.
We have continued our aggressive Y2K activities since we
last came before Chairman Horn's committee this past April, and
we are on track toward meeting this challenge successfully. All
of our internal systems have been renovated, fully tested,
certified compliant and implemented. All of our external claims
processing systems, those at our contractors, have been fully
tested, including future date testing and integrated testing
and certified as compliant; and all of these systems are in
production and are processing Medicare claims today.
We've taken the advice of Congress to heart and have worked
diligently with the GAO to achieve our mutual goal that
Medicare function into the new millennium with minimal
disruption due to Y2K. For all of us in the health care
industry, the year 2000 challenge is more than a business and
technical issue. It is a patient care issue. As the GAO has
reported, provider readiness surveys have had very low response
rates and consist of self-reported status information that we
suspect of being overly optimistic.
We continue to have serious concerns about the readiness of
Medicare providers. We have made extraordinary efforts to reach
out to providers and to raise awareness about what they must do
to meet their responsibility. We are sponsoring hundreds of
conferences, learning sessions, and lectures throughout the
country, and we meet regularly with the health care sector
trade groups to raise awareness.
We have established a Y2K website, a toll-free line to
provide up-to-date information on a wide range of issues, and
we have made other steps to help readiness.
We are encouraging providers to test future-dated claims
with our claims processing contractors.
Despite these unprecedented efforts, too few providers are
taking advantage of the opportunity we've created for them to
test with us. We're doing all we can to ensure that our systems
will work and that providers will get paid. That's the best way
to ensure that beneficiaries continue to get care, and we've
pulled out all the stops to encourage providers to get ready,
too, but it is frustrating that they are still not willing or
able to test with us.
In fact, less than 2 percent of claim submitters have
tested with our contractors. Of those that have tested, 10 to
20 percent have found errors. Those that have found problems
have been able to correct them. That's the purpose of the
testing. That's the good news.
We remain deeply concerned, however, about those who have
not tested at all. If they have not tested, it is unlikely if
they know whether or not their systems will work. We are doing
all we can to raise providers awareness, and we are very open
to your advice and suggestions on how best to reach them in the
limited time that remains.
We at HCFA have and continue to do a great deal of testing
and retesting to ensure that our own systems will continue
operating come January 1st, 2000. We continue to refine and
validate our contingency plans which were developed using GAO
guidance to prepare for any unforeseen glitches. We've actually
exercised some parts of our plans successfully during Hurricane
Floyd several weeks ago. We have also required our claim
processing contractors to have appropriate and validated
contingency plans, and we're carefully reviewing those plans,
as GAO has recommended. And we continue to help health care,
managed care organizations and State Medicaid plans and the
health community at large to develop and refine their
contingency plans.
We have had a lot of help with our Y2K effort. We
appreciate and have greatly benefited from the advice of our
independent validation and verification contractor, AverStar,
as well as advice from the Health and Human Services Inspector
General and the General Accounting Office. And we certainly
would not have made the progress we have without the support
and funding that has been provided to us by you, Congress. I am
confident that our systems will be ready to process and pay
claims at the turn of the century. We will continue to do all
we can to reach out to providers and to share information and
assistance.
Again, I thank you for your attention to this essential
issue. Thank you, Mr. Chairman.
Mr. Horn. Thank you very much.
[The prepared statement of Dr. Christoph follows:]
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Mr. Horn. We now have the president of the American College
of Physicians and the American Society of Internal Medicine,
Dr. Whitney W. Addington. Dr. Addington.
STATEMENT OF WHITNEY W. ADDINGTON, M.D., PRESIDENT, AMERICAN
COLLEGE OF PHYSICIANS, AMERICAN SOCIETY OF INTERNAL MEDICINE
Dr. Addington. Thank you and good afternoon.
I am Dr. Whitney Addington. I am an internist and
pulmonologist in Chicago and president of the American College
of Physicians American Society of Internal Medicine. The
college is the Nation's largest medical specialty organization.
Many of the more than 115,000 members of the college are
involved in internal medicine practices in which they
constantly rely on computer technology which provides
invaluable assistance in the provision of patient care, as well
as in the administrative aspects of running their medical
practice. You are to be commended for the subcommittee's
ongoing focus on the serious challenges posed by Y2K readiness
issues.
ACP-ASIM was quick to recognize the threat posed by Y2K.
Unless our members addressed it, we knew it could disrupt their
practice operations and thereby impede delivery of vital health
care services to their patients. As early as March 1998, our
monthly newsletter ran a full-length article posing the
question, ``Is your practice prepared for the millennium bug?''
Early in 1999, the college mobilized a college-wide
information campaign to alert, inform and assist our membership
in addressing the Y2K threat. Articles appeared in most of this
year's issues. The topic has been further publicized through
our State chapters.
ACP-ASIM's Center for a Competitive Advantage created a
special Y2K webpage on our own website, www.acponline.org, and
published a Y2K Tool Kit to give members detailed, practical
information and guidance on how to address the issue.
This is the Y2K Tool Kit that has been given to our
members, and I have included a copy, together with my
testimony, and would respectfully request that it be included
in the record of this hearing.
Mr. Horn. Without objection, it is so ordered at this point
in the hearing.
Dr. Addington. Thank you.
[The Y2K Tool Kit follows:]
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Dr. Addington. The college staff also is available to
respond directly by telephone to inquiries regarding this
issue. At our April annual meeting, which was attended by
10,000 physicians, special Y2K educational sessions were
repeatedly conducted by the college's Medical Informatics
Department. A press conference was also held, and the Y2K Tool
Kit was widely distributed.
Nor are we finished with this campaign. The Y2K webpage
continues to be updated to reflect more recent information, the
growing number of physicians who have initiated corrective
steps and the evolving nature of Y2K-related problems.
We have not attempted to monitor the number of physicians
who have evaluated or corrected their practice computer
systems. That number changes constantly. Various government and
other surveys indicate that a fairly high level of physician
awareness now exists regarding Y2K and that most physician
practices have undertaken some corrective measures. Time,
however, is running out for those who have not, and the
available options are rapidly declining.
Later this week, we meet with all the Governors, which is
our grassroots organization, and I will be stressing that their
systems need to be tested.
As the year-end deadline swiftly approaches, our attention
is shifting to problems potentially faced by those practices
that have undertaken corrective measures but not yet tested to
be sure those measures will actually work. Nationwide
Insurance, which processes Medicare Part B claims for 7,500
physicians and other electronic claims submitters, recently
indicated that fewer than 10 percent of its clients had
completed testing as of September 13th. Of those who had
tested, 56 percent proved unsuccessful on the first try. Only 6
percent of those with critical date failures have been able to
resolve the errors and complete the testing. They may or may
not have to replace their supposedly Y2K compliant systems.
The college is very concerned, therefore, that too many
physicians may be relying on vendor certifications that the
vendor's software is Y2K compliant without requiring testing
that all parts of the system are, in fact, compliant. While we
think it risky for nonexperts to try rolling forward the dates
on computer systems to determine their Y2K readiness, it is
imperative that even new systems, as well as those supposedly
corrected for Y2K, be tested by experts to confirm the
operational success of the corrective measures. Such requisite
testing must include all individual software and hardware
components of a system.
In matters like electronic claims, problems can arise in
the interface between two organizations' supposedly Y2K
corrected systems. Even when such problems are correctable, the
first test may fail in a high percentage of cases, thus
requiring some debugging of a physician's system. Only a finite
number of computer technicians are able to help with this
debugging process. Therefore, we are concerned that delayed
testing by medical practices might lead to a last minute
debugging demand that could overwhelm available resources.
We will be doing everything we can to make our members
aware
of the need for testing and the importance of performing that
testing now.
I'll be pleased to respond to your questions. Thank you.
Mr. Horn. Thank you very much, Dr. Addington.
[The prepared statement of Dr. Addington follows:]
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Mr. Horn. Our next witness is Fred Brown, The vice chairman
of BJC Health Systems, senior advisor on the President's
Council of Y2K Conversion. He's also chairman of the Board of
Trustees of the American Hospital Association.
Thank you for coming.
STATEMENT OF FRED BROWN, VICE CHAIRMAN, BJC HEALTH SYSTEMS,
SENIOR ADVISOR, PRESIDENT'S COUNCIL OF Y2K CONVERSION, AND
CHAIRMAN, BOARD OF TRUSTEES, AMERICAN HOSPITAL ASSOCIATION
Mr. Brown. Thank you very much, Chairman Horn, Chairwoman
Morella and Congressman Turner.
As we approach the Y2K period, January 1st, just 95 days
away, the American Hospital Association and its members are
continuing to be committed to ensure smooth delivery of high-
quality health care, because the bottom line is patient safety
and patient care.
Hospitals of all kinds in every community across America
have been diligently preparing all aspects of their operations
for Y2K. The focus has been on medical devices and equipment,
information systems and infrastructure, and there's every
indication as we have coordinated our activities through our
State hospital associations and hospitals across the country
that the hospital sector will be ready for Y2K, and our own
survey information makes that clear.
So does the report issued earlier this year by the HHS
Inspector General's office; and the Healthcare Year 2000
Readiness Assessment #2, conducted for HCFA, identified
hospitals as the health care sector that is among the most
aggressive in meeting the Y2K deadlines.
And as hospitals continue to perform this inside
preparation, we are also deeply involved in efforts to
communicate with our communities. We're helping to support and
be very active in the community conversations being conducted
across the country, and we've encouraged every hospital in
every part of this country to get involved with their
communities in terms of communication. The hospitals are
working with their local agencies, their police, fire,
utilities and, most recently, there was a recent drill in
California. 372 hospitals took part. This drill was for the
purpose of Statewide coordination of communications systems,
the transmission of data about available hospital beds and the
hospital's own contingency plans for Y2K, and all of these test
were completed successfully.
These extensive preparations that the hospitals are
undergoing cost money, and we expect to spend somewhere around
$8 billion to become Y2K compliant, and this huge sum is made
even more daunting because it comes on top of the Balanced
Budget Act's $71 billion in Medicare hospital payment cuts.
We commend HCFA for announcing that the fiscal year 2000
PPS update would not have to be delayed while the agency's
computer systems are prepared for Y2K. HCFA has tackled this
problem in a way that will prevent nearly $300 million in
payment updates from being held back from hospitals who badly
need them.
We do remain concerned, however, that HCFA has not
disclosed its contingency plan to prevent a systematic failure
in claims processing as a result of Y2K, and it is imperative
that HCFA establish a fail-safe contingency plan in case HCFA
or its contractors' payment mechanisms fail at the turn of the
century. And such a plan also would provide payment to
facilities which, for reasons beyond their control, are not
able to follow routine procedures in getting claims to their
fiscal intermediaries.
A system of advance payments based on past payment levels
is one way to prevent this from happening and would ensure that
hospitals have the resources necessary to care for Medicare
patients, and we'd urge Congress to enact legislation, if
needed, to authorize such a system.
As hospitals, we are cooperating with HCFA as we have with
the Food and Drug Administration; and as this issue of future
date testing comes about, we are, through our communications
with our State hospital associations and all of our hospitals
across the country, encouraging them to do the necessary
testing to be assured that they are Y2K compliant.
In conclusion, Mr. Chairman, Y2K will obviously affect
every aspect of America's life. However, few, if any, are as
important as health care, and American hospitals and their
health systems, their State associations and the AHA are
partners in the effort to prepare for Y2K, and we encourage
Congress and the various agencies to continue working with us
as well, and we pledge our cooperation during these last 95
days and in the future together to assure a smooth and healthy
transition to the new millennium.
Thank you very much for the opportunity to testify.
Mr. Horn. Thank you very much.
[The prepared statement of Mr. Brown follows:]
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Mr. Horn. Our next witness is Elizabeth Wilkey. She's the
electronic data interchange coordinator for Blue Cross and Blue
Shield of Georgia.
Thank you for coming.
STATEMENT OF ELIZABETH WILKEY, ELECTRONIC DATA INTERCHANGE
COORDINATOR, BLUE CROSS AND BLUE SHIELD OF GEORGIA
Ms. Wilkey. Thank you.
Chairman Horn, Chairwoman Morella, Congressman Turner and
distinguished subcommittee members, thank you for the
invitation and the opportunity to speak with you today on the
Georgia Part A intermediary community outreach and testing
progress for the millennium.
For the past 18 months, I've been referred to in the State
of Georgia as the Georgia blues Y2K evangelist. I've traveled
throughout the State preaching a Y2K get ready sermon to
vendors, clearinghouses, providers, billing services, the
Georgia Hospital Association, the Health Care Finance
Administration, anybody and everybody that would listen to me.
In Georgia, we have conducted seminars and conferences
which include but are not limited to what you need to do to
prepare institutional providers, claims, products and systems
for the millennium. I would like to extend a special thanks to
HCFA Central for their participation, encouragement and support
in our first Y2K vendor clearinghouse conference that was held
in Atlanta, Georgia, on June 2nd, 1999. It sent a message to
our vendors, clearinghouses and billings services, and that
message was we need your help. Let us test this monster known
as the millennium, Y2K, before the year 2000, and that's just
what we've been doing.
I want to thank the vendors and the clearinghouses and the
billing services and the providers for participating in testing
and future date testing. As a result of our testing efforts, we
were able to test with customers representing 98.25 percent of
our vendor provider community, and we are now pursuing the
remaining 1.75 percent.
There are certain advantages to this Y2K testing monster.
If you would test and vendors get into the swing of testing
with their providers, it will eliminate the element of
surprise.
It allows contractors, vendors, clearinghouses, providers,
billing services to test their hardware and software in a
future-dated environment.
It assures and shows assurance to the vendors and providers
that they have the ability to submit electronic claims into the
year 2000.
It gives the vendors and providers a comfort level of the
contractor's ability to accept year 2000 claims.
It gives the vendors and providers assurance that the
contractors edits will work properly into the year 2000.
It will create a proactive--not reactive, but proactive
approach to resolving any issues before the millennium is here
because you will have time to correct your systems before you
go into the millennium.
It will enable the contractors and the vendors and the
billing service to create a log of Y2K issues, and in that log
not only would they have the issues but they would have the
resolution to those issues, what should happen if, and how to
resolve if we see this into the year 2000.
It will aid providers in testing and contractors in meeting
their Y2K certification efforts.
Now, in our testing environment and testing for the year
2000, there were certain findings that we had great concern
about. There were problems that we experienced with future-date
testers, that most of them were very common errors that we see
on a day-to-day basis.
However, there was one that we had great concern with, and
that's where we uncovered that one of our vendors' front-end
system had a problem when it came to a windowing technique, and
that windowing technique did not populate our electronic format
properly to show month/month, day/day, century/century, year/
year dates of service properly in those fields, but it really
showed 99/99/99 as the dates of service. Now, you've got to
understand that this was one of those vendors that truly did
not want to test with us, and the provider and I had to
convince them and persuade them that they needed to do this
testing. Today, that vendor is very happy that they did because
now they can say I'm being proactive in resolving this Y2K
issue before the year 2000.
Now, I don't know about other States but I can truly tell
you that I believe the State of Georgia is ready for the
millennium. We're ready to proceed with our testing and getting
those providers that have not tested tested; and, again, I
thank you for the opportunity to share with you the Y2K testing
experiences we've had in the State of Georgia.
Mr. Horn. Thank you very much. I hear you've done a
terrific job throughout Georgia. So thank you for coming and
sharing some of those experiences with us.
[The prepared statement of Ms. Wilkey follows:]
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Mr. Horn. We now have our last witness, and it's Mr. Baker.
Mr. Baker heads the New York-based Medicare Rights Center as
their executive vice president. I'm curious, Mr. Baker, was
that funded by Medicare or was it funded by a foundation? It's
a good idea. You don't lack for customers.
Mr. Baker. No. We certainly do not. You're right. We're
funded in part by a grant from the Health Care Financing
Administration that's administered by the New York State Office
for the Aging and then we fund-raise through foundations,
through individuals and through others, but all of our services
are provided free of charge to people on Medicare and their
families.
Mr. Horn. Now, is that limited to New York or is it
regionwide?
Mr. Baker. We do have a contract in New York State to take
calls. However, we take calls from across the country on
various toll-free hotlines.
Mr. Horn. There is a toll-free line?
Mr. Baker. Yes, there is.
Mr. Horn. What is the number?
Mr. Baker. 1-800.
Mr. Horn. 1-800.
Mr. Baker. 333.
Mr. Horn. 333.
Mr. Baker. 4114.
Mr. Horn. 4114. The reason I ask is, there's 435 members of
the House whose caseworkers might like to call you.
Mr. Baker. Yes. I hope they all don't decide to call
tomorrow. I'll get in trouble.
Mr. Horn. You've got 50,435, and if the Senate gets in on
it, you've got another hundred.
Well, thank you. Go right ahead.
STATEMENT OF JOE BAKER, EXECUTIVE VICE PRESIDENT, MEDICARE
RIGHTS CENTER
Mr. Baker. Sure. Thank you for inviting me today, Chairman
Horn, Chairwoman Morella and Congressman Turner. I am the
executive vice president of the Medicare Rights Center. We're a
national not-for-profit organization based in New York. We help
seniors and people with disabilities and their families who are
on Medicare through telephone counseling, through education
efforts and through our public policy work. Last year, we
fielded more than 50,000 calls, as you had mentioned, from
people on Medicare and their families, and we handled or
directly intervened in over 10,000 of those cases.
In February, we also testified with regard to the Y2K issue
and Medicare, and today, 6 months later and 95 days to the
millennium, we still have many of the same concerns.
Our foremost concern is that the 40 million people on
Medicare, seniors and people with disabilities, have access to
ongoing health care services through the Medicare program. We
note that the Medicare and year 2000 booklet that was put out
by HCFA just recently in its mailing to all 40 million Medicare
beneficiaries does have information on Y2K. We understand that
they will not, and they are told in that booklet, that they
will be not be responsible for health care costs that may be
caused by Y2K computer glitches. However, there's no mention of
how this advice might help them if they cannot get that care in
the first place, and that's our major concern.
They're given a phone number, 1-800-MEDICARE, to call if
they have trouble regarding Y2K issues. I note that, right now,
with 1-800-MEDICARE and the Medicare Plus Choice program,
frequently our organization is receiving inappropriate
referrals and a lot of referrals from that particular number.
So I question the ability of 1-800-MEDICARE counselors to
handle these calls, and if they do refer them on to our
organization, whether or not we have the resources or the
training, frankly, with Y2K to handle those kinds of issues.
We're particularly concerned about the Medicare managed
care program, or the Medicare HMOs. Unlike original Medicare,
Medicare HMOs, as you know, require preauthorization for
specialty care or other types of care, and we're most concerned
about those 6 million beneficiaries who are enrolled in
Medicare HMOs. Unless Medicare HMOs are Y2K compliant, and we
heard earlier that many are not, we could see a significant
increase in the number of people on Medicare who, because of
system failures, can't get authorization for the care they need
with potentially devastating consequences.
To consider a potential scenario, in February 2000, a woman
on Medicare and in a Medicare HMO goes to the hospital with
stomach pains. The doctor calls the HMO requesting approval to
perform a Medicare covered procedure to alleviate that pain.
The HMO does not have the systems in place to find the
patient's name on its data base or can't use its system to
determine whether the service is covered and, therefore, may
not or does not authorize care. As a result, this particular
individual would not get the care that she needed and which was
Medicare--and which is Medicare covered.
We're also concerned about what kind of tools HCFA is going
to use to hold Medicare HMOs accountable and to make sure that
people on Medicare get the care they need. As we know, HCFA has
asked all of its contractors to submit Y2K compliance forms,
but, as you know, these statements are not admissible in a
court of law, and in the past HCFA has lacked the staff and
resources to properly oversee its contracting agents. The Y2K
issue highlights the Federal Government's and HCFA's, in this
case, limited ability to ensure that people on Medicare get the
health care they need from the private health plans that
contract with HCFA.
Second, we're also concerned about those programs that
primarily help people with low incomes on Medicare, and these
are the QMB, SLMB, QI1 and QI2 programs. We are already seeing
a lot of access problems in those programs and particularly
with regard to the interaction of State and Federal computer
systems because these are programs that are administered by the
States. The application process is already very slow and
difficult, and so we feel that system failures may even further
deny access to these important programs for people who are most
vulnerable in the Medicare population.
Finally, I don't--in the Medicare population, we see a lot
of questions from seniors on our hotline about prescription
drugs and medical equipment, and I don't know and I don't think
that there has been the appropriate kind of outreach to them
about how they should handle the prescription drug and medical
equipment issues that might come up because of Y2K. I know this
may be outside of HCFA's purview to a certain degree, but we do
think that, as the major financer of health care in this
country and particularly, of course, with the Medicare program,
that HCFA should be taking some proactive steps to give
consumers tips or other information about how to deal with
prescription drugs or medical equipment contingencies or issues
that may arise because of Y2K.
As you know, people on Medicare have already lived through
many changes and hardships. Most do not own a computer. They're
probably not overconcerned with the ability of computer systems
to transition smoothly into the year 2000. We don't want to
instill fear in them, but it's our job as professionals who
work closely with them to educate our clients on how they can
get the care they need and when they need it. We are telling
our clients to ask their doctors, pharmacists and medical
suppliers if they are Y2K. We hope that Congress and HCFA will
do whatever possible to make sure that people on Medicare keep
getting the care they need in the new millennium.
Thank you very much.
Mr. Horn. We thank you. That's a very helpful statement.
[The prepared statement of Mr. Baker follows:]
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Mr. Horn. We're now going to go to questions, and we're
going to treat ourselves the way we treated you. Each person
will have questions for 5 minutes. We'll have another round.
And I'm going to start with yielding my 5 minutes to the co-
chairwoman, Mrs. Morella of Maryland, and then we'll have it to
Mr. Turner for 5 minutes, and if they haven't covered it all, I
will take 5 minutes. So that's the way it will work.
Mrs. Morella. Thank you, Mr. Chairman. You're very fair
about that.
And I must commend the panelists. You all stayed within the
time limit. You all presented your statements very succinctly,
and I applaud that.
My question will be basically to GAO and HCFA to begin
with. The 425 managed care organizations serving 6.9 million
Medicare beneficiaries of the 39 million Medicare beneficiaries
were never deemed mission-critical by HCFA, and the latest HCFA
reports show that few of these managed care organizations are
Y2K compliant. My question is, why weren't the managed care
organizations deemed mission-critical if they're serving 6.9
million Medicare beneficiaries? In other words, why are they
deemed different from the fee-for-service contractors?
Dr. Christoph. That's a complex question, Congresswoman
Morella.
The managed care organizations are different from the
Medicare contractors in that the managed care organizations
contract to provide a service. They contract to provide care.
The Medicare contractors are contracted to provide processing
of claims. What we have asked the managed care organizations to
certify to is not only that they will make their systems ready
by January 1st, 2000, but that they continue to provide
operations and continue to provide care to the beneficiaries
enrolled. In a sense, it doesn't matter what systems they're
using to back up their operations. What they have contracted to
do is to have providers provide care, and that's fundamentally
different from how the Medicare claims processing contractors
operate.
Mrs. Morella. You also changed your mind, too. I mean, at
one point weren't they going to have to report, you know, later
on in 1999 and then you rescinded it?
Dr. Christoph. I am sorry, can you repeat the question?
Mrs. Morella. Yes. My understanding is that HCFA originally
requested that the managed care organizations recertify in 1999
and then later rescinded that.
Dr. Christoph. No, we have not rescinded it. We have--
because events overtook that original statement that we were
going to have them recertify, we subsequently decided we needed
to watch them more carefully. So we demanded of them their
contingency plans. We, subsequent to that original
determination, have gone out and visited the plans that we
thought had the highest impact. So we were rethinking whether
or not recertification was necessary. They'd already certified,
they'd already testified that they would be operational come
January 1st. However, we just revisited that and, in fact,
today have--are issuing the letter requiring that
recertification statement of the managed care organizations.
Mrs. Morella. You just did it today?
Dr. Christoph. Yes, ma'am.
Mrs. Morella. Great timing. That's great.
Mr. Willemssen, would you comment on that?
Mr. Willemssen. Yes, couple of points. We're very
encouraged to hear that HCFA has decided to go out with that
certification statement on managed care organizations. We think
that that can go a long way toward giving further assurance
that these organizations are indeed ready. I think before any
organization wants to submit a certification they will want
some extent of evidence internally that they are ready. So I
think that's a step in the right direction, and this is the
first we've heard of it, so I'm very glad to hear that.
In terms of your prior question on why the systems
supporting MCOs were not mission-critical, in retrospect there
should have been some, in my opinion, designation of mission-
criticality. Probably not identifying 425 or 383 systems but--
and it's easy to sit here now and say that, in retrospect
having some designation in the quarterly reports that these
also are fairly important organizations serving almost 7
million beneficiaries. I think now that the level of attention
has been brought to bear on managed care organizations that
that will assist in making sure that whatever can be done in
the next few months is done.
Mrs. Morella. Very good. I guess looking at the lights I
have a little more time, and maybe I'll try to also get into
the ACP-AISM question with HCFA, also.
Based on data that was presented I understand last week at
HCFA's Y2K electronics submission summit, 60 percent of the
part B providers, which is equivalent to about 500,000
physicians, are not prepared to submit Y2K compliant electronic
submissions. What actions is HCFA taking to remedy that
situation, and, you know, what recourse might they have?
And I am going to ask you if you would comment on that
also, Dr. Addington.
Dr. Christoph. I think you've made a very important point
there, Congresswoman.
We have endeavored in all of our outreach to encourage
providers to get ready, and we have told all of our contractors
that they must be ready and able to test with submitters. The
response has been very disappointing. As we testified, the
difficulty is, in all of our outreach, as GAO has noted, we
aren't reaching all of the providers. The ones that show up to
our conferences, to our presentations are probably the ones who
are most aware and most worried. It's the others that--who
aren't getting our message--that concern us.
We've been trying to be more focused. Last week, in
Washington, we had a conference with organizations that submit
claims and clearinghouses, and we discussed with them ways to
encourage more testing with us. Our goal was to make available
to providers as many resources as we can so they could test,
but while bringing the horse to water, we haven't succeeded in
making them drink yet. So that's where we're trying to focus
our outreach efforts, is convincing them to make use of what
we've been able to provide to help them.
Mr. Horn. Thank you very much, and we now yield 5 minutes
to the gentleman from Texas, Mr. Turner.
Mrs. Morella. Mr. Chairman, Dr. Addington can later fill in
on that, please?
Mr. Horn. Sure.
Mrs. Morella. Find out what he's going to do to whip these
physicians into shape.
Mr. Turner. Thank you, Mr. Chairman.
It seems to me our discussion on Y2K compliance by managed
care organizations probably gives us an opportunity to shed a
little light on the relationship between the government and
managed care and the beneficiaries, and I might ask Mr. Baker,
first, to comment on this.
I was noticing in your statement you made the comment that
HCFA cannot guarantee that Medicare HMOs will be Y2K compliant,
and a few paragraphs later you asked the question, what tools
does HCFA have at its disposal to ensure that HMOs provide
people on Medicare with the care they need? I'd like for you to
perhaps comment a little bit on that, and maybe Mr. Christoph
can add a perspective from the agency point of view. I am not
sure what control HCFA has over these managed care
organizations, and we're talking about the GAO's request that
they demand a certification after the agency seems to be
somewhat reluctant to do so.
Now they announce they're going to require it again. I am
not even sure what legal rights HCFA has to demand such from
these managed care organizations. Is there something inherent
here with regard to the relationship between HCFA and managed
care organizations that makes it a little difficult to secure
compliance in the Y2K area or in other areas relating to care?
Mr. Baker. Well, I think that there has been issues, as I
think all of us are aware through GAO reports and others,
around HCFA's ability to oversee the Medicare managed care
program and to make sure that Medicare HMOs are providing the
care to people on Medicare that they deserve and are eligible
for under the program.
As I said in my testimony, I think the Y2K issue highlights
the inability in many instances of HCFA to appropriately
oversee the managed care organizations. I think that HCFA has
made great strides in recent months and in recent years in
oversight of the managed care organizations, but I think, you
know, in our hotline, time and time again, and while this
information is anecdotal, I think it's still that we can see
these trends arise where managed care organizations and
Medicare HMOs just don't seem to know or are literally, you
know, unconsciously not following Medicare coverage guidelines
but instead putting their own coverage guidelines or their own
ideas about what Medicare should and should not cover into the
mix, whereas that really isn't appropriate or allowed under
Medicare regulations.
There is a real flaunting of the rules in many instances,
and in other instances just an ignorance of the rules, which is
just as bad when it means that people are not getting the care
that they are entitled to and need.
Mr. Turner. Dr. Christoph, do you see the managed care and
Medicare HMO organizations flaunting the rules, as Mr. Baker is
referring to?
Dr. Christoph. That sounds more like a policy issue, and I
am not prepared to talk about how the rules are enforced. I
don't personally see that. I am preoccupied with the systems
kind of issues.
Mr. Turner. What is your legal authority specifically to
the Y2K compliance issue to tell a managed care organization or
a Medicare HMO that you have to give us a certification
statement of Y2K compliance? Do you have that authority?
Dr. Christoph. We have very few levers to exert on the
managed care organizations. We have required that they submit
documents. We don't have much legal authority about how a
private business that is contracted with us carries out that
business. So other than getting them to certify that their
systems will work or that they will deliver a quality of
service, we have relatively few rules or levers to exert on
them.
Mr. Turner. Mr. Willemssen, do you believe that we need
greater legal authority to require managed care organizations
to certify or maybe in other areas other than Y2K
certification?
Mr. Willemssen. I think, with the limited time remaining,
an approach that has worked in other sectors is, whether the
legal authority is there or not, HCFA can request the
information and then publicize the results by organization and
say we asked 383 MCOs for certification information and here is
what we got back by organization. If certain MCOs don't want to
provide the information, that fact can also be published.
My concern is that, in the limited amount of time
available, I don't know that a full accounting of the legal
intricacies can be done, and we may have to take more of the
approach which has been done in the biomedical device area
where the publicity of individual organizations and what they
have reported ended up dramatically increasing the response
rate.
Mr. Turner. Has Y2K compliance been a factor in any of the
52 HMOs that have dropped out of providing Medicare managed
care?
Dr. Christoph. I am not aware of why they chose not to stay
in the program. It possibly is, but I can't answer that with
certainty.
Mr. Turner. Mr. Baker, it seems to me that it is difficult
to know whether HCFA can ensure that HMOs are providing
Medicare beneficiaries with the care that they are entitled to.
I think I have always held the view that we inadequately
reimburse our providers now under the Medicare program. Many of
our rural hospitals that I represent are having difficulty
keeping the doors open, and yet somehow we think that a managed
care company can provide that same care cheaper and make a
profit while they are doing it. It seems like a difficult
thing, but I guess you would concur that we do need to have
some tightening up in terms of the control that HCFA has over
managed care organizations?
Mr. Baker. That is right. I think we need more control and
oversight. At this stage of the game, we need more information
to go out directly to consumers about what they can do, what
are--for lack of a better term--advocacy steps or survival
skills. I don't know what kind of social marketing campaign we
want to use but something that will give them some information
about how to deal with this crisis if it becomes a crisis and
how to get the care that they need should they keep hearing no.
What organization will be there for them should they need care
and can't get it. I think we need to give some of those answers
so they can start preparing for it. Not scare them with that
information but at least start to train them about how they
might have to meet this situation.
Mr. Turner. Thank you.
Mr. Horn. We will have another round on this.
I yield myself 5 minutes, but first Chairman Morella wanted
I think Dr. Addington's answer to the question that was asked
of Mr. Christoph, so let's get it on the record.
Dr. Addington. Thank you, Congressman.
First, let me say that, responding to Chairwoman Morella's
suggestion to whip them into shape, I am reminded of the old
saw that ``whipping physicians into shape'' is sort of like
herding cats.
I would like to think that our members whose systems have
not been tested will respond. Many of our members are part of
huge organizations. I would say 50 percent of our 115,000
physician members are part of large organizations that have
considerable expertise. I personally am a faculty member of
such an institution, and we have been thoroughly checked and
tested.
It is the 50 percent that do not have the expertise in-
house. In a two- or three-physician practice, clearly the
person who sends out the bills is probably the most
sophisticated member of the office. Nonetheless, we are
confident that we will get our college approach to this and
insist that every member avail themselves of our Tool Kit and
of our capacity and expertise in identifying for them those
individuals in their community that should be contacted to
actually do the testing.
So I think the prognosis is excellent for internists. I
think there will be some problems, but I trust that those will
be straightened out rapidly.
Mr. Horn. Well, thank you for that very full answer and
optimistic answer.
The first time I ever heard the expression you used,
herding cats, was my first year here in 1993; and my wife,
looking up in the gallery, concluded after one evening of
voting was that the Members of the House of Representatives are
like herding cats. You are looking at a tenured professor, and
they act more like herding cats than anybody. Nobody can touch
them.
Dr. Addington. Well, we are in good company then.
Mr. Horn. You are in very good company. The cats might get
upset if they are listening here.
On the recertification testing, HCFA, their mission-
critical systems, are their systems now compliant, the internal
ones?
Dr. Christoph. We went through a thorough round of testing
and certification last year. All of our internal systems,
including the systems that send money to managed care
organizations, were certified as compliant by December 31st
last year.
We made changes to those systems. Any computer system
evolves. We have had to incorporate some changes because of
congressional mandates and maintenance. GAO has recommended
that we freeze those systems and make sure that any changes
that have been made haven't influenced their Y2K certification.
A lot of folks in industry will only test the changes that
they have made. What we have done is to put a program in place
during this freeze period of retesting everything. We are
putting them through all of the rigor and the tests that we did
before, including future day testing. That round of testing
should be done in November.
So I guess the short answer is, I believe our systems are
ready, but we are going after double assurance, and that is why
we are doing such an intensive retesting, recertification, plus
the addition of quality assurance tools like Mr. Willemssen
mentioned.
Mr. Horn. The recertification done by outside verifiers,
how have you handled that?
Dr. Christoph. The testing itself is done by internal staff
and contractors that are basically providing staff support, but
we have an IV&V contractor that is looking over our shoulder
every step of the way, validating our procedures and looking at
the test results and, in fact, signing off on the certification
statements. So we are having independent evaluation to keep us
honest.
Mr. Horn. When you went through this testing and the
certification, what was the magnitude of Y2K errors? Did it
seem to be a very important thing where you had more than one
aspect of it and you might have had 10 times that it would
cause mischief? What did you get out of that testing and
recertification?
Dr. Christoph. Well, the original round revealed that we
did have some issues, and that is the whole point of testing,
is to show you what works and what doesn't. Yes, we found
issues, and we fixed them. I don't think that we had any more
Y2K bugs than are common in codes of this magnitude. Some of
our systems are over a million lines of code on the internal
side.
After renovation, we have been using quality assurance
tools, and we find in looking at them that the things that were
missed were the things that these tools point up. Actually, far
fewer than what I read in the trade press about the frequency
of errors in renovated code.
Mr. Horn. Mrs. Wilkey, I commend you for your hard work to
assure that Blue Cross Blue Shield of Georgia is year 2000
ready. What have been the critical success factors for you?
Ms. Wilkey. I think the critical success factors would be
getting out in the vendor world and getting their attention,
first of all. That was a big chore for us.
Providers have a tendency to leave things when it comes to
their billing up to vendors, and you have to work very closely
with the vendors and the clearinghouses in order to get the
providers to do what you need them to do.
The 98 percent test factor that we have now we feel good
about. We have gone through DDE tests, direct data entry system
testing. We have gone through electronic remits. We have come
through electronic funds transfer, and it is good. If we can
get the remaining 1.75 percent going----
Mr. Horn. What do you see as your biggest remaining
problems and concerns? After all of this outreach that you have
had, what worries you the most, if anything?
Ms. Wilkey. That 1.75 percent that has not tested, that I
have to knock on their door and do surveys and say why are you
not testing? Are you going to pay the providers if you cannot
send me a claim? That worries me.
Mr. Horn. It sounds like you are keeping after them, and
that is the only way that it is going to get done.
I now yield 5 minutes to my colleague from Texas, Mr.
Turner.
Mr. Turner. I don't have any other questions.
Mr. Horn. Mr. Brown, there has been some question that the
biomedical equipment could fall victim to year 2000 failures.
What equipment is still at risk due to your year 2000 problems?
Mr. Brown. I think in the scheme of things, Chairman Horn,
medical devices and equipment was really the first priority,
along with the information systems and infrastructure, and I
think hospitals are working with the FDA and working with our
vendors and doing the testing. And I know in my own
organization, which consists of 14 hospitals in metropolitan
St. Louis and medical centers in urban and suburban areas, we
went through an extensive testing program.
As I have traveled the country and talked to different
hospitals and as we have had the dialog, the equipment piece of
it is No. 1. We have worked very closely with the vendors. We
have done the testing and worked with FDA. We changed a lot of
equipment.
The other thing is to be assured that equipment has
overrides on it, and that we have adequate staffing to be able
to make that transition. So I feel that the hospitals--in
working with HCFA and the FDA and others on equipment issues--
that we really have done a significant job in terms of working
on a cooperative basis to be sure that the equipment will be
functional and that there is adequate staffing to support that
equipment come January 1st and during the transition.
Mr. Horn. When we were in Cleveland about a year ago we had
testimony from the representative of the Cleveland clinic as to
how they were going about looking at the various pieces of
equipment to make sure that they are year 2000 compliant.
Apparently, there was and maybe still is a website nationally
where hospitals can plug into that by getting into the web and
you can describe the name for the piece of equipment, what the
model number is. We were worried about the chips, that a lot of
people don't even know where they are in the equipment. What is
going on on that?
Mr. Brown. A couple of things. We have been working closely
with HHS, with the FDA, with HCFA. We have worked with the
vendors. There are websites that the FDA has put up. We have
our own websites on which we can convey information to our
members across the country. We have set up communication
devices between the American Hospital Association and each of
our 50 State associations working with their members. So we are
continually dialoguing and making available to them information
where they can access the websites.
Mr. Horn. For the manufacturers of some of the equipment
years before we ever knew there was a problem here, have you
found that they have been cooperative?
Mr. Brown. Over the last 6 to 9 months they have been. We
have had several manufacturers who through our publications and
periodicals, through communications indicated that they are Y2K
ready. So we found good cooperation.
Mr. Horn. One of the things that we have looked at in about
10 different field hearings is the backup power. This is
particularly true of hospitals. What is the estimate of what a
minimum is that a hospital should have in order to have
generators that are run on diesel or whatever it is?
Mr. Brown. You should have the ability to run for a period
of time and have access to additional fuel, and I think
hospitals really have focused over the years on disaster
recovery. And I think as we have gone through the issues with
the hurricanes and the natural disasters, the flood in Missouri
in 1993, hospitals have been working with their fuel suppliers
and utilities in terms of backup.
You have contingency plans with other institutions in your
metro area. In St. Louis, for example, we have 35 different
hospitals that communicate with each other in terms of
availability of beds and ability to transfer in emergencies. So
this is routine for disaster planning.
Mr. Horn. How many days do they need to get through a
blackout or brownout?
Mr. Brown. We have the capability of normally 3 to 5 days
to be able to get through the blackout.
Mr. Horn. Let's hope it does.
On the provider testing with contractors, we know it has
been limited, and until these data exchanges between the
providers and contractors are future-date tested, the ability
of these entities to process Medicare claims in a future-date
environment is unknown. Why doesn't HCFA do the end-to-end
testing program to include providers? Is it too late to include
them or what? Or are they just ornery?
Dr. Christoph. Well, they are certainly not ornery, sir.
We have done end-to-end testing. As you know, the claims
processing systems are batch systems. They don't operate in the
same sense that credit card transactions occur, but claims are
batched up at the beginning, whether they are submitted
electronically or on paper and, that point, defines the one end
of the claims processing system. They then go through the
system and are adjudicated. It is on the back end of the
process that the instructions for payment or printing of
notices, such as beneficiary notices, come out. That is the
other end.
We have engaged in end-to-end testing, everything in
between, including a connection to our common working file that
is tested in a future-date environment.
We have tried to cover the front end where claims come in
by requiring submitters to submit claims in the proper 8-digit
year format. April 5th of this year we set a hard date, and by
and large now everyone is using that.
So that means that once a claim hits us and if it is in the
proper format, we can process it.
Now the difficulty is in determining whether or not
providers or submitters can actually get us a bill. It is
possible to take existing systems that a submitter has and put
bridge software in place and translate the dates so that it is
in the proper format, but that does not tell us anything about
the submitter's system, its readiness or the provider's systems
or readiness, and that is why we have engaged in this outreach
effort to reach them and encourage them to test. We have made
available to them the opportunity to test with our contractor's
front ends.
Again, we have made that available to them, but getting
them to come in and test, there is some reluctance there to
test. Perhaps they are not ready. Perhaps they just don't feel
that it is necessary. We think that it is, and that is why we
have been strongly encouraging them to do so.
Mr. Horn. Well, as I understand it, the General Accounting
Office has informed us that the status of contractor business
continuity plans is unknown because the HCFA never requested
detailed plans from these contractors. Is that true or have we
changed that now?
Dr. Christoph. We changed that. Some time--and I can't tell
you exactly when, but it was fairly recently, we did send a
requirement to the contractors to make that information
available, to have those documents onsite available, and we are
going to be checking and reviewing those on our next round of
visits. We have had onsite staff looking at them. We have had
the IV&V folks going with us for all of our oversight on the
contractors. As we go out and review their status and progress,
we will be reviewing that documentation, and we have invited
GAO to participate on some of those visits with us. So we are
trying to get that paper documentation.
I might add that the fact that we came through Hurricane
Floyd so well, quickly making up for the 2 days that the
processing centers were shut down there testifies to the
quality of our contingency readiness. The Florida data center
handles the claims from 6 States worth of fiscal
intermediaries. They didn't have power for 2 days. They came up
again after the hurricane passed through and made up all of
that backlog. One of the contractors transferred its operations
to a hot site in Connecticut and maintained operation.
So we believe that those contingency plans are real because
we have exercised them, but without being able to present GAO
with a documentation to back that up, of course, they came out
with their conclusion. But I believe it is there because we
have demonstrated, as in the hurricane, that we can operate
through that.
Mr. Horn. Since this is a paper processing operation, what
is the typical contingency plan? How would you boil it down?
Dr. Christoph. I am not sure that there is a typical
contingency plan. The contingency plans look at the impact of
whatever the event is. In the case of Hurricane Floyd, it was a
power outage. We are required to pay claims--electronic claims
after the 14th day. We look at the duration--the possible
duration of the event and decide on that basis how we are going
to deal with it. In this case, the duration was relatively
short, and we dealt with the contingency of not being able to
process claims those 2 days by adding time in the evening in
order to make up that processing. That, in effect, took care of
the problem transparently to the submitters.
Mr. Horn. Assuming that, given modern medicine and all of
the replacement parts that we get, that we might be around in
the third millennium, if you could start over what would you do
differently to solve the year 2000 computer program?
Dr. Christoph. As a systems programmer who has cut code, I
would certainly do a better job at the front end of writing
code, anticipating these problems. I think 20, 30 years ago
when we were writing such code, no one believed that the
software would be around this long, and I think if we are more
careful about how we develop and write software up front and
anticipate these problems, the problems won't be there.
Mr. Horn. Was this mostly COBOL at Medicare?
Dr. Christoph. Yes, 80, 90 percent of the code is COBOL.
There is a significant portion of assembler language, though.
Mr. Horn. Interesting.
Do any more questions come to mind?
Mr. Turner. No.
Mr. Horn. We are going to ask that the record be held open
for 10 days. We understand that some managed care organizations
would like to add their statements, and that is fine. We will
give them to you and if you wouldn't mind responding to their
statements so we can get a complete record. All of the
witnesses actually can do that.
I thank you for your testimony. I am especially pleased to
learn that the Health Care Financing Administration decided to
require year 2000 certifications from the managed care
organizations that currently provide managed care to 6.9
million seniors in the country. We have encouraged these
Americans to enter managed care programs as a way to curb
rising health care costs. The very least that we can do for
those who have joined these programs is to ensure that their
medical care will continue, whether the date is December 31,
1999, or January 1, 2000.
Obviously, much work remains in all segments of the
Medicare program. Time is running out. That combination of
events demands that, at a minimum, HCFA and its vendors and
contractors need to immediately begin coordinating a thorough
end-to-end business continuity plan.
That said, and thanking the staff here, we will adjourn.
J. Russell George, the staff director and chief counsel, is
back against the wall; and Matt Ryan is right next to me.
Bonnie Heald, professional staff member/communications
director, against the wall. Chip Ahlswede is the clerk, and
P.J. Caceres is an intern.
With the Technology Subcommittee on Science, we have Jeff
Grove, staff director; Ben Wu, who has been with us,
professional staff member; Joe Sullivan.
And from Mr. Turner's staff on the minority we have Trey
Henderson, minority counsel, Jean Gosa, staff assistant.
And the Technology Committee ranking people are Michael
Quear, the professional staff member, Marty Ralston, staff
assistant.
And your testimony was so fascinating we had to have three
court reporters, so Melinda Walker, Doreen Dotzler and Cindy
Sebo.
With that, we thank all of you for coming and spending your
time and advice with us. Thank you.
We are adjourned.
[Whereupon, at 3:31 p.m., the subcommittee adjourned.]
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