HCFA's uncertain year 2000 status - Healthcare Financial Management Association

Healthcare Financial Management, Oct, 1998 by Dan Rode

HCFA has acknowledged that it may not be able to resolve its year 2000 problem before January 1, 2000. (The year 2000 problem is that, at the turn of the millennium, many software systems will read the two-digit date 00 as 1900 rather than as 2000.) From October 1, 1999, to April 1, 2000, the agency essentially wants to close down its process of making computer changes to finalize its implementation of year-2000-related changes. Then it will address matters that were postponed during that period, including some provisions of the Balanced Budget Act of 1997 and the Health Insurance Portability and Accountability Act of 1996.

HCFA has asked Congress to allow it to delay the FY00 prospective payment system (PPS) updates scheduled to take effect October 1, 1999, and the resource-based relative value scale and fee updates scheduled to take effect January 1, 2000. The delays would require HCFA to adopt a method to pay providers during the interim and then adjust payments after April 1, 2000. There is still no final recommendation as to how these payments and adjustments can be made fairly without considerable additional paperwork.

Paperwork is what HCFA and many others are worried about. Even if the agency is able to resolve its year 2000 problem, it will face a significant dilemma if its providers or their fiscal intermediaries (FIs) have not done the same. Nearly 98 percent of HCFA's hospital claims and almost 75 percent of its physician claims are electronic. If these providers temporarily return to paper claims, the backlog would be enormous. For this reason, in April, HCFA issued new claims-processing instructions to its FIs and carriers.(a)

These program instructions require Medicare carriers and FIs to be ready to receive and send year-2000-compliant claims, remittances, and other forms by October 1, 1998. [TABULAR DATA FOR EXHIBIT 1 OMITTED] These instructions also require Medicare providers to submit year-2000-compliant claims by January 1, 1999. To meet these requirements, HCFA has issued the Millennium Status of Medicare Claims-Related Standards (see Exhibit 1). Providers have until January 1, 1999, to test the transaction processes of their choice (where a choice is given) and to establish a successful means of conducting transactions with their carrier or FI. (Some flexibility will be allowed regarding the January 1, 1999, deadline, but HCFA wants carriers, FIs, and providers to be able to meet the new instructions before October 1999.)

Besides updates and claims, HCFA is seeking to delay implementation of Balanced Budget Act provisions, chiefly parts of the outpatient PPS program scheduled for full implementation by January 1, 1999; the home health PPS program, with an effective date of October 1, 1999; and any program slated to begin after October 1, 1999. Accordingly, HCFA expects to issue proposed and, in some cases, final rules addressing these legislative items and also intends to delay actual implementation, reasoning that, if providers and FIs have the rules available, they will be able to better initiate implementation after all parties have dealt with the year 2000 problem.

HCFA has initiated such delays before, but current Balanced Budget Act legislation calls for an additional cut in Medicare home health payments. If it postpones home health PPS implementation, Congress would have to pass amending legislation to address these additional cuts. Other Medicare programs may have the same problem. Some of these issues will be addressed either in a very short session of Congress this fall or in the Congress convening in January.

HCFA also has promised that it will address the health insurance act's administrative simplification provisions and could issue implementing regulations as early as January 1, 2000. Of course, HCFA and HHS could issue the regulations on schedule but, as with the Balanced Budget Act legislation, delay implementation.

Additionally, HCFA, providers, and payers will have to deal with year-2000-related medical diagnostic and procedural coding updates. Generally, ICD-9-CM and CPT updates are issued every fall, with ICD-9-CM changes going into effect on October 1 and CPT changes on January 1. These dates conflict, however, with HCFA's freeze deadlines. Perhaps HCFA and the other parties will agree to a later implementation date for year 2000 code changes. This and other details remain to be dealt with next year.

a. HCFA Transmittal Nos. A-98-10, B-98-14, and AB-98-17, available at www.hcfa.gov/pubforms/transmit/pmemos.htm.>Dan Rode, FHFMA, is technical director, HFMA Knowledge Network[R], Washington, D.C.

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