Thank you for inviting me here today to discuss the Department's number one priority -- the Year 2000 computer
challenge. I appreciate the opportunity to appear before the Committee again on this
important issue. Y2K is a challenge that we and the health care providers who serve our
programs' beneficiaries must meet. The
Department continues to make remarkable progress on its own systems such as the Medicare
claims processing. To ensure continued smooth operation of the health care system and the
health and safety of its patients, it is essential that providers also ready their systems
for the new millennium. To facilitate reaching this goal, we are engaged in an
unprecedented outreach effort to raise awareness in the provider community of the need to
be Year 2000-ready and to have contingency plans in place.
Mr. Chairman, I want to thank you for your role in helping us turn the corner on
the Y2K challenge. We would have had a much more difficult time meeting this challenge
without the support and attention we received from this Committee and the Congress.
In your letter of invitation, you asked me to address three issues: (1) the Department's assessment of the overall Y2K preparedness of the
healthcare industry; (2) any particular concerns that the Department may have with regard
to rural and inner-city hospitals and skilled nursing facilities; and (3) the Y2K status
of biomedical devices and FDA's role in ensuring
the preparedness and safety of these devices.
Update on HCFA's Preparedness
Before I address the readiness of the industry, I would like to comment on the
readiness of the Health Care Financing Administration. A year ago, few believed that HCFA
could be fully Y2K ready by December 31, 1999. Thanks to the strong leadership of
Administrator Nancy-Ann DeParle and the dedication of her staff, HCFA has made remarkable
progress. We are fully confident that HCFA will be able to timely and accurately pay
Medicare claims at the turn of the millennium. I'm
happy to reaffirm that all of HCFA's internal
systems were renovated, end-to-end and future-date tested, certified compliant, and
implemented by the government-wide Year 2000 deadline of March 31, 1999. Among other
things, these internal systems manage the eligibility, enrollment, and premium status of
39 million Medicare beneficiaries, and make payments to about 400 managed care
organizations. Second, all of the 75 mission-critical claims processing systems, operated
by private insurance contractors that process Medicare fee-for service claims and pay
bills, have been fully tested and certified as compliant, and are paying bills today.
HCFA's independent verification and
validation (IV&V) expert, with oversight from the Department's Office of the Inspector General (OIG), has verified
the readiness of the claims processing systems. HCFA has worked closely with the General
Accounting Office which has helped HCFA reach its goals by holding it to a high standard.
HCFA's progress in recent months has not
lured the agency into relaxing its efforts. Because of the complexity of the Medicare
program and the numerous small changes that need to be made to systems between now and
this fall, HCFA will continue to check and retest its systems for the remainder of 1999.
Assessment of Health Care Provider Readiness
As you know, last year HCFA notified all Medicare-participating providers and their
billing agents that they must submit 8-digit date Y2K-compliant claims by no later than
April 5, 1999, or their claims would be returned as unprocessable. To ease the transition
to the new billing format, Medicare's fiscal
intermediaries and carriers made compliant billing software available to all providers and
submitters for free or at a minimal cost. This has yielded positive results. Virtually
every claims submitter in the country is now submitting compliant claims to Medicare's contractors.
While the ability to submit 8-digit date claims is an important step toward Year 2000
readiness, it is only a first step. It does not mean that a provider's entire billing system is Y2K compliant, nor that
its office computer or practice management software will function into the millennium.
Providers must make sure that any and all software used in their practices has been made
compliant and has been future-date tested.
HCFA is giving providers the opportunity to test with the contractors' systems to determine whether provider claims,
including future-dated claims, can be successfully accepted and processed by the
contractors. This type of testing can assure providers that HCFA's data exchanges do work and that future-dated claims
will be accepted by Medicare's systems. It gives
HCFA a better indication of how many providers have actually done the necessary
renovations to make their entire billing systems compliant, and helps HCFA refine and
target its future outreach efforts to providers who may not be making adequate progress in
meeting their Y2K responsibility.
Of course, health care providers receive payment from insurance sources other than
Medicare. Providers need to work with their other payers to verify that those payers are
as ready as HCFA is to pay claims at the turn of the millennium.
Being able to submit claims and get paid is, of course, only one reason why health care
providers must meet their Year 2000 responsibility. Computer system problems could impact
quality of care and patient safety. Patient management systems, clinical information
systems, medical devices, such as defibrillators and infusion pumps, and even elevators
and security systems all must be checked, renovated, and tested to make sure they are
ready so that providers can give quality care.
We are concerned that some providers will not fully meet the Year 2000 challenge on
time. Monitoring of surveys of the health care sector by the Department's Inspector
General, HCFA, Rx2000, the Gartner Group, and others indicates that some providers are
substantially behind in their remediation efforts and could well fail. Providers have the
primary responsibility to ready their own systems for the Year 2000 in a timely manner to
meet the millennium challenge successfully. The Department does not have the authority,
ability, or resources to step in and fix systems for others. We are providing assistance
to the extent that we are able, but in some cases that may not be enough. This matter is
of urgent concern, and it grows in importance with each passing day.
While these surveys seem to indicate that many hospitals and clinical laboratories are
progressing well in addressing the Year 2000 problem, other types of providers, especially
physicians and skilled nursing facilities, do not indicate as great an overall state of
readiness. Also, smaller facilities, as measured by number of beds or number of employees,
seem less ready than larger facilities. This seems to be the case regardless of whether
the smaller facility is rural or urban, and I should note that our OIG specifically
over-sampled rural providers because they have been a special concern for us. In addition,
a recent study by the OIG on the readiness of managed care organizations yielded troubling
results. While most health plans report that all of their computer systems will be ready
by the turn of the millennium, only 22 percent of Medicare HMOs responding to the OIG
survey reported that they were ready in early 1999. Finally, we note that the various
surveys indicate that providers, by and large, have more work to do on developing and
validating realistic contingency plans.
According to the latest IG report, "Secondary
Analysis of Medicare Provider Readiness for Y2K,"
dated June 2, 1999, there is little difference between urban and rural providers on most
Y2K issues. However, there were a few specific areas where the responses of urban and
rural providers differed.
- Rural hospitals were more likely to report having financial and personnel problems,
while urban hospitals reported more problems with external vendors. Additionally, urban
hospitals were more likely to have renovated their billing systems and to have identified
all of their external vendors and contractors than rural hospitals.
- Urban nursing facilities were more aware of changes to HCFA forms and of the
availability of free contractor software than rural nursing facilities. Furthermore, urban
nursing facilities were more likely to have identified all of their external vendors and
I don't need to caution you that the data reflected by these various surveys become
outdated very quickly. The burden is on us to continue close monitoring of the industry,
and we are committed to doing that. And the Office of the Inspector General is continuing
its survey work.
Of course, we did not wait for survey results to reach out to the health care
community. As you are aware, we have made and are continuing to make a vigorous and
unprecedented outreach effort to raise awareness of this critical issue and to encourage
providers to take the steps necessary for ensuring their own millennium compliance.
Because our mission is to ensure that beneficiaries continue to have access to quality
health care into the new millennium, we are going beyond our statutory responsibilities.
The surveys help us focus our outreach efforts on areas of greatest concern.
Provider Outreach Activities
The Department is leading the health care sector of the President's Council on Year 2000 Conversion. We chair
twice-monthly meetings in coordination with a number of provider trade associations and
our public sector health partners, like the Defense Department, the Department of Veterans
Affairs, and the Labor Department, among others, to share insights, raise millennium
awareness, and encourage all providers to become Year 2000 compliant.
Within the Department, HCFA has engaged in an unprecedented campaign to reach out to
the provider community. In January, Administrator DeParle sent letters to over one million
health care providers outlining the Year 2000 challenge, including a checklist for what
they must do to meet their responsibility. A second letter from the Administrator was
mailed a few days ago to these more than one million providers further urging them to
complete their Y2K remediation work, test their systems, and complete and test their
contingency plans. HCFA and the FDA collaborated on these letters. As such, these letters
also prompt providers to consult the FDA's website on the compliance of medical devices.
HCFA installed a toll-free telephone line where callers can receive up-to-date answers
to their Y2K questions relating to medical supplies, their facilities and business
operations, as well as referrals for more specific billing-related information. HCFA also
has a website dedicated to the Year 2000, which contains advice and information on Y2K
compliance, such as how to identify mission-critical hardware and software and assess its
readiness. It also explains how to test systems and how to develop contingency plans. HCFA
is also staffing a Y2K speakers bureau which works with provider groups on Year 2000
readiness. HCFA's speakers have made literally hundreds of presentations on Year 2000
issues to providers and others around the nation.
Finally, HCFA, in collaboration with the FDA, the Health Resources and Services
Administration (HRSA), and the Veterans Administration, is continuing to participate in a
series of training sessions, seminars and conferences, across the country. HCFA and HRSA
are sponsoring smaller, more individualized Year 2000 educational sessions targeted toward
HCFA has also been working to address the Year 2000 readiness of managed care plans, an
area of special concern. HCFA's first objective
-- to ensure its own systems for paying managed care plans were compliant -- has already
been accomplished. HCFA is now working hard to raise managed care plans' awareness of the importance of being Year 2000-ready
and of having meaningful contingency plans. HCFA has been meeting regularly with managed
care industry groups and trade associations to discuss and resolve Year 2000 issues.
Importantly, HCFA required all Medicare managed care organizations to submit
certifications about their Year 2000 readiness by April 15, 1999. HCFA is reviewing these
certifications and the results of these reviews and other information will determine which
health plans will receive focused onsite reviews by HCFA and its IV&V expert. HCFA is
also requiring managed care organizations to provide contingency plans by July 15, 1999.
HCFA will review these plans to determine that they address mission-critical systems
encompassing their business functions. Our goal is to make sure that our managed care
beneficiaries continue to receive uninterrupted quality health care during the transition
to the next millennium.
During the last quarter, the other HHS health care sector components conducted numerous
outreach activities. The following depicts only a few highlights of their most recent
The Centers for Disease Control and Prevention (CDC) has posted all Y2K
quarterly reports, white papers, assessments, outreach efforts, and other Year 2000
activities on the web at www.cdc.gov/y2k/y2khome. (This website can be reached
through the CDC home page.) Additionally, CDC systems managers have provided their
findings regarding Y2K compliant software on the CDC website for easy access and
In February, CDC completed the first State health department readiness assessment and
received more than a 50 percent response rate, and, after analyzing the data, provided the
summary findings to the President's Council on
Y2K Conversion. This survey was sent again in June to State health agencies to complete.
The Food and Drug Administration (FDA) has developed a response to the public's concern about the availability of medical products
(e.g., pharmaceuticals, medical supplies). They have placed a notice in the Federal
Register to inform industry of the intent to request information, develop a survey, and
establish an audit program. FDA assisted in the White House Roundtables on Pharmaceuticals
and on Consumable Medical Supplies.
The Indian Health Service (IHS) is also engaged in an aggressive outreach effort
to raise Y2K awareness and provide information to the Tribal and urban health care
facilities where IHS has minimal authority and control. To support outreach activities to
Tribal and urban programs, a Y2K resource kit composed of videos, brochures, and reference
literatures was produced and distributed to nearly 1100 addressees. A Y2K Internet site
was also established (www.ihs.gov/y2k) and is continuously being updated to provide
a common source of pertinent information for IHS, Tribal, and urban Indian programs.
The Health Resources and Services Administration (HRSA) has disseminated Y2K
information through targeted direct mailings, through the HRSA, Human Services Sector and
other program specific web sites, speeches, conferences and the Human Services Y2K
- Each grantee has already received several mailings. In the next few weeks, each will
also receive the Y2K Information Guide and a postcard announcing the Y2K Human Services
- The HRSA prepared Y2K Assessment Tool called, "The
Workbook for Addressing the Year 2000 Bug in Community and Migrant Health Centers" has been provided to each of the Migrant and
Community Health Centers. The Y2K Assessment Tool is also on the HRSA Web Site (www.hrsa.gov)
and at (www.bphc.hrsa.gov). The workbook provides a step-by-step approach for
health center grantees to reference and document their progress in the assessment,
renovation, validation, and implementation phases of their Y2K project schedule.
Rural Health Outreach actions are being coordinated with HCFA and IHS.
- HRSA is preparing a contract with the National Association of Rural Health Clinics to
support four regional meetings for Y2K technical assistance to Medicare certified Rural
Health Clinic personnel and other rural providers.
- Meetings will be held between June and September 1999.
- HCFA is transferring $100,000 via interagency agreement for these activities
HRSA also is committed to helping our Community and Migrant Health Centers address
their Y2K compliance issues:
- Technical Assistance is being provided through contractor assistance.
- HRSA has published a Y2K Assessment Tool.
- Vendors of major patient information software that Community and Migrant Health Centers
use have been surveyed to assess the Y2K compliance level of the software and the Centers.
- HRSA is implementing technical assistance plans to help the Centers become Y2K
compliant. The technical assistance will provide sample format and outlines for Day One
Planning and BCCP Plans.
To increase the visibility for their services, the Administration for Children and
Families (ACF) prepared and sent a post card to approximately 12,500 human services
providers informing them of available Y2K resources and how to access them. ACF also
prepared business cards containing similar information to be distributed at Y2K
conferences and meetings where sector representatives have been asked to speak. ACF
continues to receive and answer information requests on their Y2K e-mail inquiry line (Y2Kinquiry"ACF.DHHS.gov)
as well as by telephone.
ACF has also placed their revised "Y2K
Information Guide For Human Services Providers"
on the web and prominently displayed a link to view or download it from the first page of
the web site. Demand for the Guide has been so overwhelming that 25,000 more guides,
revised to be more generic and applicable to the entire Sector's audience, have been printed .
At the Department, we also welcome Congress's
help in making all providers aware of the need to become Year 2000-ready and appreciate
your ongoing attention to this critical issue. You can help in identifying additional
opportunities to publicize the Year 2000 message and we encourage you to stress the
importance of this issue whenever you meet with providers.
Regardless of success in renovating and testing systems for Year 2000 readiness, we and
providers must have business continuity and contingency plans prepared in case
unanticipated problems arise. HCFA has undertaken an extensive effort to develop these
plans for all its own critical business processes. HCFA's priorities are to ensure that it
can: continue prompt and accurate payments to providers, suppliers, and others; safeguard
the Medicare Trust Funds by preventing and recovering inappropriate payments; protect
quality of care; and sustain beneficiary entitlement and enrollment.
All of the Department's agencies are following the GAO's advice on contingency planning. HCFA and other
agencies are now in the process of refining and validating their contingency and Day One
plans. Each contingency plan has a designated Emergency Response Team responsible for
executing the various contingency plans, if necessary. During the validation phase, these
teams will run practice exercises and rehearse plans in a simulated environment.
Of course, contingency planning is not a static process. We will continue to rehearse
and refine our plans throughout the coming year and up until December 31, 1999. We will
make changes, if necessary, as we learn more about the readiness status of those with whom
we interact, such as providers, pharmaceutical and medical equipment suppliers, and
States, among others.
HCFA's contingency plans provide mechanisms
to make sure that providers' claims will get
processed and paid even if parts of HCFA's
systems experience unanticipated failure. In addition, you can be sure we will have in
place at the turn of the millennium, as we do today, financial and audit controls to help
protect the integrity of the Medicare Trust Funds.
We firmly believe that no contingency plan should cause providers who fail to prepare
for the Year 2000 to be rewarded for their lack of attention, effort, or due diligence.
Being able to submit a valid claim is the minimal requirement that is necessary to ensure
that a provider can operate in the Year 2000 environment and is actually furnishing
covered services. That is why Administrator DeParle has made it very clear that HCFA has
no contingency plan to make estimated payments to providers that cannot submit a bill.
Providers simply must have their own contingency plans in place to ensure that they can
get accurate and timely claims to Medicare. Providers might consider getting the Medicare
claims submission software that I mentioned earlier as one form of back-up to their
commercial billing software packages. We, of course, are ready, willing, and able to do
all we can to help them succeed, and HCFA has made a variety of contingency planning
resources available to the provider community.
Progress on Medicaid Readiness
Although HCFA provides most of the funding for Medicaid, it is the States that operate
these programs. The Department does not have the authority, ability or resources to fix
State systems. So, it is critical that the States be Y2K ready and have solid contingency
HCFA and its contractors, with the GAO, have made in-depth site visits to all 50 states
and the District of Columbia to review readiness and provide technical assistance, and we
are just beginning a second round of visits. HCFA is sharing whatever survey information
it gathers directly with the States to give them, at a minimum, an independent appraisal
of their Year 2000 issues and progress. What we have learned in these first round of
visits is consistent with earlier work by the GAO that suggests some States may need to
devote more time and attention to Y2K compliance. Those States that are at greatest risk
seem to lack senior management support and resources, or have not conducted adequate
end-to-end future date testing, or are not developing contingency plans in sufficient
detail. HCFA and its IV&V team are revisiting approximately 35 States between now and
the end of August to monitor progress and focus on the States' contingency planning
efforts. ACF is coordinating site visits with HCFA. Finally, the Secretary has written to
the governors three times to bring to their attention the progress that has been made in
their States and to indicate what work remains to be done. We have found that the direct
communication by the Secretary to the governors results in more attention and resources
for States' compliance efforts.
Pharmaceutical Industry and Y2K Compliance
We also have been examining the intersection of Y2K risk mitigation and the
availability and quality of certain prescription drugs. In fact, the White House recently
held a roundtable discussion on the Y2K readiness of the nation's pharmaceutical supply chain. The discussion focused
on those services and supply chains that are critical to the health and well-being of all
Americans, and in particular the ready availability of pharmaceuticals from their manufacture to the filling of
prescriptions at the drug store. The consensus of those present the brand name and generic drug manufacturers,
wholesalers, and health care providers, payers, along with consumer advocates and
government regulators is that allowing
patients to obtain a substantial advance buying or stockpiling is not necessary and may
actually cause the shortage that this kind of action is trying to prevent. We are
continuing to examine this issue and will have more factual information later this summer
when the results of a Food and Drug Administration (FDA) Y2K survey from pharmaceutical
manufacturers are received.
The FDA Commissioner sent a letter, dated April 21, 1999, to the Presidents and CEOs of
approximately 4230 pharmaceutical manufacturers, distributors and repackagers requesting
their assistance in assuring FDA and the American public that their firms have addressed
the Y2K problem as it affects the adequate supply of safe and effective drugs. Included
with the letter was a "Y2K Assessment Survey" concerning the status of actions
pharmaceutical firms have taken to address this issue. FDA is committed to maximizing the
response rate particularly with manufacturers of sole source, orphan and the most
prescribed drugs. The results of this survey will provide the basis for a clear message to
reassure the American public that drugs will continue to be available as we make the
transition to the new century. FDA and the pharmaceutical industry will continue to
monitor the Y2K status and availability of pharmaceutical supplies.
FDA has processes in place to address product availability and has used these
procedures to help get necessary products to patients. FDA will continue to work with the
health professional community, industry and the patient groups regarding Y2K readiness and
Y2K Status of Biomedical Devices
In evaluating how computer-based equipment will handle the change in the
millennium date, this Committee has expressed some concern about the adaption of the wide
variety of medical devices upon which contemporary health care depends. The Food and Drug
Administration (FDA) regulates the manufacture of these devices and based on the Agency's
extensive communication with the industry, FDA believes that the Year 2000 problems with
medical devices will not be significant or widespread if facilities take appropriate,
identifiable actions to address this issue.
The FDA has taken a number of steps to enhance the confidence of the American public
that medical devices will function as intended as Year 2000 approaches. FDA is concerned
about the status of Y2K medical devices and has been actively pursuing information from
device manufacturers. FDA wants to provide sufficient information to health facilities,
professionals and consumers so that an assessment can be made as to the Y2K compliance
status of devices being used. For the past two years, FDA has continued to add to
its knowledge of medical devices to provide additional assurances. In attempting to
achieve this high level of confidence FDA has taken a number of constructive actions to
work with manufacturers and provide information to users about the Year 2000 compliance of
FDA's Year 2000
An important tool for obtaining information about biomedical equipment is FDA's
Federal Year 2000 Biomedical Equipment Clearinghouse database. In order to give the
general public, government agencies, and the healthcare and research communities one
comprehensive source of publicly available information on the Year 2000 compliance status
of biomedical equipment, FDA, VHA and DoD established the database in March 1998 and it is
available via the World Wide Web. The Biomedical Equipment Clearinghouse provides Year
2000 product status information in five categories including: products that are Year 2000
compliant; products that do not use a date; products that have a date related problem;
products whose status is provided on the manufacturers' websites; and identification of
manufacturers for whom no information is available (nonrespondents to FDA requests).
The database can be found on the Internet at fda.gov/cdrh/yr2000. Manufacturers
also may submit a World Wide Web link to their own website, if they so choose, where the
requested information is provided to the public.
While the database has proven to be useful to health facilities, professionals and
consumers -- receiving over 185,000 "hits" from 155,208 users over a period of
approximately 13 months -- FDA has continued to collect information from medical device
manufacturers. FDA wants to provide as much assurance as possible concerning the Y2K
status of medical devices. To that end, FDA has issued a series of letters requesting more
specific information about medical devices, not traditionally required by FDA. In
addition, FDA has taken a series of actions to ensure that information is available. These
- June 25, 1997, notice to all medical device manufacturers (8,322 domestic and
5,085 foreign) registered to FDA's Center for Devices and Radiological Health (CDRH)
indicating that they needed to address this issue and review both embedded and
non-embedded software products.
- January 21, 1998, letter which I sent to approximately 16,000 medical device and
biomedical equipment manufacturers to ask them to voluntarily provide information on the
Year 2000 compliance status of their products.
- June 29, 1998, targeted, follow-up letter to specific manufacturers of potentially
vulnerable computerized devices.
- September 2, 1998, follow-up to the June 29, 1998, letter directed to the
manufacturers of potentially computerized devices who had not responded to the previous
- August 14, 1998 and September 2, 1998, letters from Dr. Bruce Burlington, then
Director, CDRH, and Dr. Friedman, then Acting
Commissioner of the Food and Drug
Administration, to the Health Industry Manufacturers Association (HIMA) requesting that
the Association take aggressive and immediate actions to encourage and assist medical
device equipment manufacturers in providing information to FDA.
- Late September 1998 FDA posted on the website those manufacturers of selected product
categories which are likely to include vulnerable products that had not provided a
response to FDA's inquiries.
- March 3, 1999, letter requesting that the 2000 targeted biomedical equipment
manufacturers carefully review the Year 2000 status information that they have provided or
intended to submit, and, where necessary, provide more specific information on
- March 29, 1999, memorandum issued by the Director, Division of Emergency and
Investigational Operations, Office of Regulatory Affairs (ORA), to the FDA field
instructing investigators to expand the Year 2000 activities to include asking questions
regarding what the firm has done to assure that the computer controlled and date-sensitive
products, manufacturing processes and distribution systems are Year 2000 compliant
- March 29, 1999, letter requesting that targeted medical device manufacturers submit a
complete list of individual product models that are Year 2000 compliant. Responses from
572 manufacturers have been received as of June 1, 1999.
Additional Outreach and Guidance
FDA has had a good response rate from those manufacturers believed to have potentially
vulnerable equipment (about 2,000). In fact, there are only about 200 manufacturers in
this group which have not responded and every effort is being made to determine the status
of these companies. In an effort to reach the widest group of individuals, both to get
information and to spread information, CDRH also has been conducting extensive outreach to
the device industry and to other consumers on this issue. These efforts are as follows:
CDRH's Division of Small Manufacturers Assistance provided an article in May 1998
entitled, ABiomedical Equipment Manufacturers Urged to Share Year 2000 Information to 12
medical device trade press contacts and to 65 U.S. and 35 foreign medical device trade
associations in order to facilitate the dissemination of information to their members
regarding the website database and to encourage the posting of data by manufacturers.
- The website and database were mentioned in the FDA Column of the June 3, 1998, Journal
of the American Medical Association and in an article in FDA's Medical Bulletin that
was sent to approximately 700,000 healthcare practitioners this past summer.
- In the spring of 1998, CDRH developed a Guidance Document on FDA's expectations of
medical device manufacturers concerning the Year 2000 date problem. The guidance is
available on the FDA website.
- FDA also developed an article addressed to the users of radiation treatment planning
systems regarding the need to assess these systems. The article was published in the
newsletters of relevant professional associations.
- Staff of CDRH have participated in numerous conferences and video teleconferences
devoted to the Year 2000 problem in healthcare in order to communicate with healthcare
facilities regarding the Biomedical Equipment Clearinghouse and the need to address the
Year 2000 issue with devices.
- In a letter to providers, HCFA noted the FDA website for providers to obtain
information on medical devices and Y2K compliance.
Although most devices are regulated by CDRH, FDA's Center for Biologics Evaluation and
Research (CBER) regulates blood bank software, which is of particular concern for
potential Year 2000 problems. In January 1998, CBER posted guidance for industry entitled,
AYear 2000 Date Change for Computer Systems and Software Applications Used in the
Manufacture of Blood Products on the FDA website. The guidance provided specific
recommendations to assist industry in its evaluation of computer and software systems used
in the manufacture of blood products and to assist in evaluating the impact of potential
Year 2000 problems. CBER is aware of the status of these individual products and believes
that the blood bank software will be Y2K compliant or will have a "patch" or
"work-around" for the systems to ensure that the systems will work through Year
What Is the Data Telling Us Thus Far?
As of June 6, 1999, FDA has entered a total of 4,142 responses from the 16,000
manufacturers originally contacted. As indicated above, FDA believes that approximately
2,000 of the 16,000 manufacturers may produce equipment that may be affected by the
Year 2000 problem. The data from all of these manufacturers who have responded have been
entered into the database on the FDA website. In addition, 427 manufacturers have provided
World Wide Web links (URLs) to data provided on their own manufacturer-operated websites.
These numbers change daily as data are entered, corrected or even removed at the request
of manufacturers. Of the 4,142 manufacturers who have responded, 3,404 have reported that
their products do not use date-related data or all of their products are compliant. Six
hundred and fifty-nine manufacturers [311 manufacturers listed on the FDA website and 348
manufacturers listed on the manufacturer websites] have reported one or more products
with date-related problems. There are a few submissions in which the data were incomplete
or unclear in some manner. FDA is communicating with these manufacturers to obtain
clarification before entering the information into the database. FDA will continue to post
additional responses as they are received.
In reviewing the data received from the manufacturers so far, FDA sees no indication of
widespread problems which will place patients at risk, provided the solutions being
developed and offered by manufacturers are implemented. Of course, FDA can not make
assurances about manufacturers who have not reported product status. FDA believes that the
information received to date confirms our original expectation that the Year 2000 problems
with medical devices will not be significant or widespread if facilities take appropriate
actions to address this issue. There will be specific problems which need correction;
however, the current assessment is that, to the extent problems do arise, they are more
likely to disrupt patient care rather than be of direct danger to patients. Nonetheless,
such disruption could be serious and the potential for it to happen merits the continued
involvement of FDA in its activities of gathering, evaluating, and sharing information.
Potentially High Risk Devices
Although FDA firmly believes that its normal regulatory processes provide the necessary
assurances, FDA has come up with the following plan to provide additional assurances to
the public and healthcare facilities about the Y2K status of medical devices.
FDA is preparing a list of manufacturers with potentially high risk devices (PHRDs)
that are likely to be computer-controlled and that could present a significant risk of
immediate harm to the patient should the devices fail to operate as expected due to a Year
2000 problem. FDA will have a contractor conduct an on-site review of records to assess
the existence and adequacy of the controlled processes implemented under a quality system
to assure that potentially vulnerable devices have been adequately assessed and that any
upgrade is correctly implemented and appropriately tested and evaluated by the
The first phase will be a review of a random sample of the manufacturers to determine
if there is a significant potential that manufacturers have not taken appropriate steps to
address any Year 2000 problem which could present a risk to patients. After evaluating
the results of the first phase, a determination, after appropriate consultation, will be
made as to whether the second phase should proceed. The second phase would consist of
contractor review of a portion of the remaining manufacturers of identified devices not
yet audited. FDA is confident that this proposal will provide any additional assurances
needed by the public.
FDA will place additional emphasis on reviewing the Y2K status of potentially high risk
devices (PHRDs) during the remainder of 1999. Although there are a significant number of
device types in this category and a large number of different models for each type, FDA
expects that the number of devices that will actually present a significant risk due to
Y2K non-compliance to be only a small number.
Now that manufacturers should have completed their assessments of Y2K compliance status
and identified non-compliant devices, FDA will review this information to identify any
manufacturers of PHRDs for which information is not available or whose non-compliant
products pose an actual significant risk to patient health. FDA will review the steps
taken in these situations by the manufacturers to notify users regarding any problems that
might exist and to assure that appropriate corrections are implemented or the device
removed from service. In any situation identified where the action by the manufacturer has
been inadequate to assure patient safety, FDA will use its all of its statutory
authorities to require corrections and publicize the situations. These actions could
include public advisories to device users, suggestions to manufacturers regarding
voluntary recalls, mandatory recalls or seizure of the non-compliant devices in extreme
FDA's current plan is to complete the assessment of the PHRDs by October 1. The agency
believes, in most cases, this date strikes the appropriate balance between permitting
implementation of corrective actions and ensuring adequate time remains to recall the
device or take other remedial action. FDA will continue to evaluate the appropriateness of
enforcing Y2K compliance for particular devices before or after that date. FDA expects,
however, that the situations where such actions will be required to be rare as there are
many incentives in addition to possible FDA regulatory action which lead manufacturers to
address any such potentially high risk situations.
FDA's legal authorities place responsibility on device manufacturers for establishing a
controlled system of device manufacture and design. FDA monitors, regulates, and when
necessary, enforces compliance with this required system of controls. Moreover, FDA has
enforcement authorities specific to devices that enable the Agency to take remedial action
before harm has occurred when the device presents a serious or significant risk of harm.
As noted above, this could result in seizure of products and mandatory recalls if FDA is
not convinced that a medical device manufacturer has provided adequate assurance of Y2K
compliance of particular medical devices.
FDA's Quality System Regulation (QSR) (21 CFR Part 820) requires manufacturers to take
corrective and preventive actions, which include recall, for problems with current
production. Devices automated with computer software are subject to all requirements of
Part 820 unless expressly exempted by regulation. Any computer-automated device that has a
Year 2000 problem for which the manufacturer has not made adequate corrections is
currently subject to legal action under the Food, Drug and Cosmetic Act, even if the
device will function properly until January 1, 2000. The Food, Drug and Cosmetic Act
expressly prohibits marketing such devices.
Should FDA learn of Year 2000 problems in devices that could pose serious health risks,
FDA will take immediate remedial steps, including enforcement action. FDA's enforcement
authorities include requiring notification of all purchasers and users of the device and
ordering a recall. Using these remedies, FDA will order, if necessary, the individuals
best able to locate current users and the device itself to notify those users of Year 2000
problems, fixes or work-arounds that are available, and to recall the device if necessary.
FDA continues to emphasize to manufacturers the importance of reporting on the Year
2000 compliance status of their products and take additional steps to boost the response
The Department have made remarkable progress in meeting the Year 2000 challenge, as
have many providers. However, we remain concerned with the progress of some types of
providers in meeting their own Year 2000 challenges. Again, surveys quickly become out of
date and, to the extent that they consist of self-reported information, are not fully
adequate indicators of the complex and rapidly changing private sector landscape. We are
committed to raising awareness and providing as much assistance as we can, but in some
cases that may not be enough. We all share a common goal of having our systems and
programs function and care for our program beneficiaries continue throughout the
millennium transition. Congress can help, as you are by this hearing, to focus attention
on the responsibilities of health care providers. I am happy to answer any questions you