HCFA is certifying that its information systems and those of its fiscal intermediaries are ready, darn ready, to operate without a glitch on New Year's Day.
But unless the nation's providers can make the same claim, their cash flow from Medicare and Medicaid could slow to a trickle.
HCFA has 25 computer systems considered critical to accepting, adjudicating and paying claims for medical care. In addition, fiscal intermediaries between HCFA and providers operate 75 "mission critical" systems.
Problems with handling dates past 1999 were fixed in all 100 key systems, and HCFA and an independent contractor have already tested and certified the systems as Y2K-ready, says William Gould, senior technical adviser at HCFA's Office of Financial Management.
That's a far cry from a year ago, when the federal agency said it was under such a crunch to complete Y2K-related projects that it would delay scheduled reimbursement updates for hospitals and physicians until spring 2000.
HCFA announced in May that the crunch had ended and hospitals would receive updated fee schedules for fiscal 2000 on Oct. 1 as originally planned. The Medicare physician fee schedule update will be implemented in the first two weeks of 2000 and will be ready by Jan. 17 to pay claims submitted as of Jan. 1, Gould says.
Now the onus is on the nation's providers and the 1.3 million computer systems they use to compile, send and receive Medicare and Medicaid claims. Medicare counts more than 200,000 providers and others with which it exchanges data.
"If you can't bill us, you're not going to be paid," says Kelly Collins, information systems manager for audit and reimbursement with Mutual of Omaha Insurance Co., a fiscal intermediary in every state except North Dakota.
A survey conducted for HCFA in March showed most hospitals and laboratories had plans to correct Y2K flaws in their organizations. But only about 65% of physician clinics had Y2K plans, and home healthcare agencies trailed the industry with 60% (See chart).
As of April 5, providers and suppliers were required to submit Medicare claims using a four-digit data field to record the year, says Gould, who spoke late last month to providers at a conference in Chicago on Y2K readiness. HCFA is visiting 23 cities to raise awareness of the problem and advise the industry on how to prepare.
The root of the Y2K computer crisis is a two-digit field used in many systems. It assumes years in the 1900s, which causes a problem with dates starting in 2000.
Expanding the date field is a step in the right direction, but providers must do a lot more work to ensure their systems will be ready for 2000, Gould says.
For example, a provider's billing system may work fine with the newly expanded date field but refuse to go along with the rollover to four-digit dates in 2000, he says. Supporting software somewhere down the line could be "hard coded" in the 1900s and confound attempts to produce a 2000-era date in an electronic claim.
HCFA and its intermediaries are gearing up to help providers check for such glitches by encouraging them to set their systems ahead to 2000, submit dummy claims and see whether the federal electronic reimbursement system accepts the claims.
At Wisconsin Physician Services, a Medicare Part B intermediary, employees will help providers meet the specific date requirements for a test of claims set in the year 2000, says Kathie Wood, Y2K coordinator at Wisconsin Physician Services.
The contractor asks for 25 to 30 varied claims to approximate the normal process of sending a batch for payment, she says.
All intermediaries are required to establish a test environment that will allow Medicare claim formats from providers and others to be validated.
A more comprehensive test covers a dry run of claims through the complete claims process-submission, adjudication and transmission of a resolved claim back into a provider's billing system. But the offer of such a test will be limited because intermediaries can't handle all comers at this late date, Gould says.
Besides the transmission to and from the HCFA system, providers must make sure their systems can receive the electronic funds transfers handled by financial institutions, Collins says. For example, Mutual of Omaha has tested its connections with all banks to which it sends payments. "But what if we get it to the bank, and the bank can't get it to you?"
Collins advises against planning to use paper claims forms if electronic systems fail the first week in January 2000.
Besides the intensive work and extra time to prepare the claims manually, HCFA's policy is to hold payment of paper claims for 28 days, compared with 14 days for electronic claims. So payments likely won't be made any faster than if a provider took a week or two to iron out the problem, he says.
HCFA has a no-frills software program available from Medicare contractors to help providers submit compliant electronic claims if their systems are not up to the task, Gould says.