Guess Which Department Missed Clinton's Deadline for Compliance Washington The White House said 92 percent of the federal government's essential computer systems were free of Year 2000 problems, but the department that supervises Medicare and Medicaid missed President Clinton's March 31 compliance deadline.

The Health and Human Services Department was one of 13 agencies still unprepared. Kevin Thurm, HHS deputy secretary, said essential computers run by his department and Medicare contractors would be fixed by this summer.

Those results underscored the findings of a Senate Special Committee on the Year 2000 Technology Problem that noted health care-with annual expenditures of $1.5 trillion-is the largest single industry in the country, which makes it the largest single potential nightmare.

"Medicare, the backbone of our nation's health care payment system, is in serious trouble," said committee Chairman Sen. Robert Bennett, R-Utah. "The agency has completed no end-to-end testing of its external and internal payment systems, so we can only hope that Medicare's billion dollars a day in payments to hospitals and caregivers continue to find their way through the high-tech maze."

The 160-page report indicated that the most disturbing Y2K revelation is the "domino effect" of Y2K failure. Medical devices can shut down or pass erroneous data to other devices, the report said.

For home medical equipment providers, with 98 percent of Medicare claims handled electronically, a Y2K problem at any step of the claims process "could either delay payment or fail to remit payment," according to the report.

The committee's findings pertaining to home medical equipment are troublesome because there isn't much anybody outside government can do about potential problems. Even if an individual provider is in Y2K compliance, there is no guarantee Medicare will be.

Medicare treats 38 million pe ople at an annual cost of $300 billion. There are four million claims totaling $1 billion daily, processed at more than 70 locations. Even if HME claims are only 3 percent of that total, as estimated by industry sources, chaos would possibly ensue if the Medicare computer system freaks out while champagne corks pop.

"Any significant failure or delay of Medicare payments would have a disastrous cash-flow effect on [health care] employees, suppliers and communities," the report said. "The Health Care Financing Administration, the agency responsible for Medicare disbursements, gave an unsettling report on how [it] recently discovered 30 million more lines of code that needed remediation."

The committee asked Nancy-Ann Min DeParle, HCFA administrator, how the agency would handle a mushrooming workload and was told the remediation would be "the most extensive and expensive in the history of Medicare, and HCFA is taking extraordinary steps to meet Y2K deadlines."

The committee asked DeParle the current level of Y2K compliance of the external Medicare payment systems. While HCFA insists it will be ready, the report states that none of the mission-critical systems was compliant as of February 24.

In other Y2K news, half of the Medicare providers responding to an Office of Inspector General survey reported their billing and medical records systems are Y2K-ready. Most felt they would be compliant by year's end.

Less than half have a contingency plan for Y2K-related failures. The survey was intended to give HCFA and health care provider associations current data that could be used to target potential impediments to providers' Y2K readiness.

Few had actually tested data exchange with external vendors, the study said. Five groups were approached- HME companies, hospitals, nursing facilities, home health agencies and physicians. -K.G.

HCFA Establishes Toll-Free 800 Number Baltimore In the midst of tackling its own Year 2000 troubles, the Health Care Financing Administration has established a toll-free hotline to assist providers in preparing for the new millennium.

The hotline number (800/958-4232) is available 8 a.m. to 8 p.m. (ET) Monday through Friday, excluding federal holidays.

The hotline provides information about Y2K issues solely, including HCFA's Y2K activities, Y2K policies, and Y2K questions relating to medical supplies, facilities and business operations and billing. -K.S.