Senator Edwards, thank you for inviting me to be here today with you and your
constituents in North Carolina. The Year 2000 technology problem has indeed been a significant issue in health care. I am grateful for this opportunity to discuss with all of you what we have been doing to address it and what seniors need to know.
First, I want to assure you that Medicare is ready. All our mission critical systems have been fixed, tested, retested, and certified as able to function come January 1, 2000. All of these Year 2000 compliant systems are up and running now. That includes all our systems that keep track of who is eligible, who is enrolled, and who has paid premiums and deductibles. It includes the systems that pay Medicare managed care plans. It also includes all the systems of the private insurance companies that process Medicare claims and send checks to doctors, hospitals, and other health professionals for your care.
Your health care providers also must make sure that all their systems are ready. We have been working very hard to encourage and help them get ready. We have invited them to test with us to make sure their systems can send claims to us. And we are certain that, if they send a claim to us, we will be able to process and pay it as we always have.
I want to stress that you are protected even if a provider cannot get a claim to us for your care. Doctors, hospitals, and other health professionals in the Medicare program are prohibited from billing you directly for what Medicare covers. You will not have to pay for Medicare services, even if your doctor or other providers have computer problems. You will still need to pay your normal deductible and copayments. You should not, however, be asked to file the claim yourself or be asked to pay additional amounts because of a Year 2000 computer problem.
The Year 2000 problem also must be addressed in medical equipment and other health care systems, as well. Other federal agencies, such as the Food and Drug Administration, are working to help providers meet these challenges. The FDA has assessed the medical device, pharmaceutical, and biologics industries and found that companies in all three industries have taken the necessary steps to prepare for the Year 2000. The FDA says it is confident that there will be an adequate supply of safe and effective pharmaceuticals and biologics for patients, and that medical devices needed by health professionals and their patients will function properly in the Year 2000 and beyond.
You should ask your doctor and other providers what they are doing to ensure that they are ready for the Year 2000. If problems do occur, other federal agencies and we will be standing by ready to help.
The Year 2000 problem appears simple on the surface. Many computers and devices use only six digits to record dates. They may read 01-01-00 as January 1, 1900, rather than January 1, 2000. Patient care services, systems, and devices that rely on dates, the age of the patient, and other calculations could be severely affected if corrections are not made in time. Every business and organization that relies on computer systems or devices must address Y2K. For all of us in the health care industry, it is a patient care issue as well as a business and technical problem.
Addressing the Year 2000 technology problem has been the number one priority for us at the Health Care Financing Administration. All of our internal systems were renovated, fully tested, certified compliant, and implemented by March 31, 1999. All of the external claims processing systems, those operated by private insurance contractors that process Medicare fee-for-service claims and pay bills, were fully tested and certified compliant by December 1, 1999. All of these systems are in production and are processing and paying Medicare claims today.
We conducted a rigorous process for making Year 2000 fixes, certifying that the fixes work, and getting independent validation that the work has been of the highest quality and that our systems will be ready by January 1, 2000. Our independent validation contractor, AverStar, has characterized some of the steps we have developed as "best practices" that they have recommended to their other Year 2000 customers.
We have worked diligently with the General Accounting Office (GAO) to assure that Medicare will continue to operate effectively into the new millennium. The GAO highlighted several areas that helped to sharpen our efforts and we have acted on each of them. For example, we conducted unit testing to make sure that the smallest defined feature of a particular piece of software works as intended. We conducted integration testing to verify that various units of software work together as expected. We conducted end-to-end testing to ensure that interrelated systems work in combination as intended in a fully functioning
environment. We imposed a moratorium on system changes through March 31, 2000. We are monitoring provider testing of electronic claims submissions. We have increased scrutiny of Medicare managed care plans. We are carefully managing changes in the contractors who process claims and maintain our data centers. And we are paying close attention to the plans that our contractors and managed care plans will use in the event of unforeseen problems. We also have conducted complete recertification testing to re-verify that all of our external systems and those internal systems that have undergone any recent significant change work properly. In fact, our Year 2000 testing has put our systems in better shape than ever before.
But, perhaps one of the most reassuring tests occurred in August, when we successfully received and processed enrollments from the Social Security Administration for beneficiaries who will be newly entitled to Medicare on and after January 1, 2000.
This is a significant milestone providing direct evidence that both Medicare and Social Security are ready for the Year 2000 because we are already enrolling people and sending out Medicare ID cards for January and beyond.
Day One Planning
We will be closely monitoring all our systems as the millennium arrives through a new information coordination center in our Baltimore central office. It allows us to proactively assess the status of all of our systems and partners all across the country and to respond quickly to any unforeseen problems that arise. We have specifically designated people to ensure that each of our main business functions will continue without interruption. They are practicing in a simulated environment today to be sure they are ready for January 1.
Our plans are very detailed and we have shared them with the companies who pay bills for us, the states who operate the Medicaid and State Childrens Health Insurance Programs and the managed care plans who provide services to people with Medicare.
We have asked them in turn to share their plans for being ready with us and have offered assistance to states and other members of the health care community to help them make preparations.
It, of course, is not enough for us to have our systems ready. Doctors, hospitals, and other health professionals must make sure their systems also are prepared, not just for billing us, but for a wide array of patient care needs. That is why it is so important for you to ask your doctor and other providers what they are doing to be sure they are ready for the millennium.
In fact, the greatest uncertainty is the readiness of providers. There have been many surveys done to assess provider readiness, but virtually all have had fairly low response rates, and the anonymous responses are self-reported data, which may be overly optimistic. We continue to have serious, ongoing concerns about the ability of some Medicare providers to successfully meet the Year 2000 challenge, especially those in rural and inner-city areas.
To address this, we have conducted an unprecedented outreach campaign to health care providers and their trade associations to raise awareness and encourage providers to renovate and test their systems. These outreach activities have included:
- Sending three separate mailings to each of our more than 1.1 million Medicare providers and managed care plans stressing the importance of Year 2000 readiness, including the need to assess readiness, test systems, and develop contingency plans.
- Sponsoring full-day conferences and half-day public learning sessions for providers in every state urging assessment, remediation, claims testing, and contingency planning.
- Working with rural provider associations to hold smaller, more individualized educational sessions for rural providers.
- Participating in hundreds of additional conferences, symposiums, and outreach programs through our Year 2000 speakers bureau.
- Participating in the production of a Year 2000 Health Network satellite broadcast and Audio Digest taping for distribution to physicians nationwide.
- Distributing over 1,800 Year 2000 "Jump Start Kits" to assist smaller providers in addressing the Year 2000 problem.
- Creating a website dedicated to the Year 2000 (cms.hhs.gov/y2k) with up-to-date information for providers on what to do, how to do it, and who else to contact.
- Establishing a Year 2000 toll-free phone line, 1-800-958-HCFA (1-800-958-4232) where providers can receive current information and answers to Year 2000 questions.
- And working with Congress to encourage providers to address the Year 2000 issue.
We also strongly encourage providers to test our claims processing contractors to be sure they will be able to send us claims that are Year 2000 compliant. We are redoubling our efforts to encourage all of our partners and their billing agents to test their systems and ensure they will function in the new millennium.
However, I want to stress again that you are protected even if a provider cannot get a claim to us for your care. Doctors, hospitals, and other health professionals in the Medicare program are prohibited from billing you directly for what Medicare covers. You will not have to pay for Medicare services, even if your doctor or other providers have computer problems.
We have been working diligently to address the Year 2000 readiness of Medicare managed care plans, as well. We have made sure that our own internal systems for paying plans are ready. We have required all Medicare plans to certify to us that their systems will perform into the new millennium. We also reviewed their contingency plans and, where necessary, required them to make revisions to ensure that Medicare beneficiaries will continue to be able to get the care and services they need.
We also have been working closely with state Medicaid agencies to help them be ready for the Year 2000. We have undertaken an extensive effort to assess the Year 2000 readiness of state Medicaid agencies and provide technical assistance. We have taken the extra step of hiring expert consultants who, through site visits, assessed each states progress and provided technical support.
Other Year 2000 Challenges
The Year 2000 problem affects much more than health care provider billing systems. Medical devices, clinical information systems, even elevators and security systems all must be ready. If not addressed in time, there could be an adverse impact on the quality of care and patient safety.
Other federal agencies, such as the Food and Drug Administration, are working to help providers and manufacturers meet these other challenges. As mentioned above, the FDA has assessed the pharmaceutical, biologics, and medical device industries. The FDA surveyed 4,228 pharmaceutical companies and audited priority firms that are sole source prescription drug manufacturers, manufacturers of the top 200 most prescribed drugs, and manufacturers of orphan drugs. The FDA also surveyed a wide range of companies that make biologic products, such as vaccines and allergenic products. The FDA conducted two separate surveys of medical device manufacturers, again focusing on those that are the sole supplier of a product or that are among the few suppliers of an essential product. The agency also did an independent evaluation of computer-controlled medical devices that
could present risk to patients if they had Year 2000-related problems. All these efforts confirmed that companies in all three industries have taken the necessary steps to prepare for the Year 2000
We are being told that it is not a good idea to stockpile prescription medicines. Hoarding and stockpiling critical products only increases the demand that manufacturers must try to keep up with. The FDA advises that patients should refill prescriptions only when a five to seven day supply remains. The supply system is resilient and can correct any issue that might arise within five to seven days.
You should ask your doctor and other providers what they are doing to ensure that they are ready for the Year 2000, and about the Year 2000 status of any at-home medical devices they prescribed or recommended to you. You may also contact the manufacturer for additional information.
While the Year 2000 technology problem has been daunting, we are confident that Medicare systems will continue to function properly. Seniors and other Medicare beneficiaries should know that, if providers do have computer problems, they may not bill beneficiaries directly for what Medicare covers. You should ask your doctors and other providers about what they are doing to be prepared for the Year 2000. If problems do occur, other federal agencies and we will be standing by ready to help.
I thank you again for inviting me to be here with all of you today. And I am happy to answer your questions.