Year 2000 Computing Crisis:

Medicare and the Delivery of Health Services Are at Risk

T-AIMD-99-89: Published: Feb 24, 1999. Publicly Released: Feb 24, 1999.

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Pursuant to a congressional request, GAO discussed the readiness of automated systems that support the nation's delivery of health benefits and services to function reliably without interruption throughout the turn of the century, focusing on: (1) Medicare's ability to provide accurate benefits and services to millions of Americans; and (2) the overall readiness of the health care sector.

GAO noted that: (1) as the nation's largest health care insurer, Medicare expects to process over a billion claims and pay $288 billion in benefits annually by 2000; (2) the Health Care Financing Administration (HCFA) has been responsive to GAO recommendations, and its top management is actively engaged in its year 2000 program; (3) to more effectively identify and manage risks, HCFA is relying on multiple sources of information, including test reports, reports from its independent validation and verification (IV&V) contractors, and weekly status reports from its recently established contractor and oversight teams; (4) HCFA is also more effectively managing its electronic data exchanges and has more clearly defined its testing procedures; (5) HCFA has also demonstrated progress in developing business continuity and contingency plans to ensure that, no matter what, beneficiaries will receive care and providers will be paid; (6) according to the Department of Health and Human Services' year 2000 quarterly progress report, all 25 of HCFA's internal mission-critical systems were reported to be compliant, as were 54 of the 78 external systems; (7) HCFA's reported progress on its external mission-critical systems is considerably overstated; (8) all 54 external systems that were reported as compliant have important associated qualifications exceptions, some of them very significant; (9) the IV&V contractor acknowledges that Medicare claims processing systems have made progress toward year 2000 compliance over the past year, yet the various qualifications inevitably mean that some renovation and a significant amount of retesting still needs to be accomplished before these systems can be considered compliant; (10) the question of whether medical devices such as magnetic resonance imaging systems, x-ray machines, pacemakers, and cardiac monitoring equipments can be counted on to work reliably on and after January 1, 2000, is critical to the nation's health care; (11) the Food and Drug Administration, which provides information from biomedical equipment manufacturers to the public, had a disappointing response rate from biomedical equipment manufacturers to its request for compliance information; and (12) until this information is obtained and publicized, consumers will remain in doubt as to the year 2000 readiness of key health care components.

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