Given the size of the task, it is not a surprise that HCFA s progress for readiness continues to be criticized. HCFA has countered these assertions by stating Y2K remains a priority, citing it has delayed other projects, including routine payment increases and key programs under the 1997 Balanced Budget Act, such as Home Health and Hospital Outpatient Prospective Payment Systems, to focus on the problem. Hospitals continue to wait for an answer from HCFA intermediaries on how to submit Y2K compliant electronic claims. In anticipation, HCFA has posted new electronic billing specifications on its website . These slowdowns, if materialized in 2000, may have profound effects on hospitals and HCOs, some of which already have small operating margins and little excess cash.
Individual hospitals tend to project lower costs.
Some Y2K costs may not even be budgeted yet, with organizations seeking extra resources for 1999 budgets caught short. Dick Holden, who leads Y2K efforts at Texas-based VHA, a hospital alliance with 1,750 members, figures that companies will spend four to five times what they originally budgeted. Hospitals and HCOs will also likely need to increase reserves for potential liability claims, late payments from payors, and service slow downs due to Y2K compliance, such as experienced in one United Kingdom hospital, which postponed surgeries because an inventory system for sterile swabs incorrectly indicated a zero inventory. Some analysts are concerned that the current business downturn experienced by managed care organizations and portions of the health care industry will continue into the year 2000 and be exacerbated by the potential Y2K financial squeeze. All agree it is difficult to predict the outcome of the confluence of these two factors.