"The bug did show up: Providers received Medicare funds from bank days late"

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This is an update on a story that received some coverage earlier this month:

http://www.modernhealthcare.com/currentissue/topten06.html


-- Linkmeister (link@librarian.edu), January 18, 2000

Answers

[Fair Use: For Educational/Research Purposes Only]

Jan. 17, 2000
Page 8
Week in Healthcare

The bug did show up: Providers received Medicare funds from bank days late

A small Chicago bank has successfully mended a Y2K glitch that early this month delayed electronic Medicare payments to healthcare providers in at least eight states nationwide.

The computer snag, which was detected at Highland Community Bank late Jan. 3, caused payment delays of up to a day and left some hospitals temporarily unable to access their newly deposited funds. The problem was corrected within three days, sources said.

It's not known how much money was involved.

"The bank had a contingency plan in place and took immediate steps to rectify the glitch," said Scott Clarke, assistant commissioner at the Illinois Office of Banks and Real Estate, which oversees the state's chartered banks. "The problem was largely nipped in the bud."

Highland Community is part of the financial network that transfers Medicare funds from the government to healthcare providers. The computer bug affected its ability to receive electronic payment instructions from eight Medicare fiscal intermediaries that process Part A claims for hospitals and one carrier that processes Part B claims for physicians.

Healthcare providers were affected in Alaska, Arizona, California, Idaho, Oregon, New York, North Carolina and Washington.

Those that receive electronic payments on a daily basis-mostly providers in Arizona, California and Oregon-felt the greatest disruption, a HCFA spokesman said. Providers that are reimbursed via paper check continued to be paid as usual.

Just how many hospitals and doctors were affected is unclear.

The Federal Deposit Insurance Corp., which regulates the country's banking system, declined to comment, and Highland Community officials did not return phone calls.

The FDIC in December 1999 said examiners had "visited and revisited" each FDIC-insured bank, including Highland Community, to ensure Y2K- readiness. The glitch came to light just two days after the agency announced that "no significant disruptions resulting from the century date change have been detected."

As a practical matter, a payment delay of a day or two has little impact on most large hospitals' cash flows.

Take Portland, Ore.-based Legacy Health System, which was involved in the slowdown. Its four hospitals were only "mildly inconvenienced" by the delay, said Mary Kjemperud, Legacy's director of reimbursements.

"We saw a slight slowdown in the number of payments coming in on that Monday and Tuesday," Kjemperud said. "But by Wednesday, our payment volumes had picked up again."

Aside from Highland Community's glitch, the FDIC has seen no major Y2K-related problems, said corporation spokesman David Barr.

"It was a singular event," he said.

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-- Linkmeister (link@librarian.edu), January 18, 2000.


As a practical matter, a payment delay of a day or two has little impact on most large hospitals' cash flows. Take Portland, Ore.-based Legacy Health System, which was involved in the slowdown. Its four hospitals were only "mildly inconvenienced" by the delay, said Mary Kjemperud, Legacy's director of reimbursements. "We saw a slight slowdown in the number of payments coming in on that Monday and Tuesday," Kjemperud said. "But by Wednesday, our payment volumes had picked up again."

Aside from Highland Community's glitch, the FDIC has seen no major Y2K-related problems, said corporation spokesman David Barr.

Of all the banks that were supposed to crash and/or have systemic problems due to Y2K, this is the only one and it was basically a non-event of little or no impact!

Linkmeister, thanks for showing how well the banking industry came through the Y2K crises!!!

-- Cherri (sams@brigadoon.com), January 18, 2000.


"Medicare payments delayed by one full day."

How horrible! Can power grid failures be far behind?

-- abc (a@b.c), January 18, 2000.


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