Copyright 1999 Oregon Live .

Belated Y2K bug bite stalls Medicare payments The software glitch at a Chicago bank delays electronic transfers to hospitals in Oregon, Washington and other states

Thursday, January 6, 2000

-------------------------------------------------------------------------------- By Steve Woodward of The Oregonian staff

A Y2K problem at a small Chicago bank has snagged electronic Medicare payments to hospitals and other health care providers in at least eight states, including Oregon, Washington and California.

The glitch, which occurred this week at Highland Community Bank, is causing payment delays of up to a day and leaving some Oregon hospitals temporarily unable to access their newly deposited funds.

Federal regulators in December had declared nearly 100 percent of the nation's banks, including Highland Community Bank, to be Y2K-compliant. The bank's problem unfolded the same day regulators declared that "no significant disruptions resulting from the century date change have been detected."

Regulators from the Federal Deposit Insurance Corp. were reported Wednesday to be meeting with bank officials to determine why the problem occurred. An FDIC spokesman said no information was available Wednesday, and bank officials did not return phone calls.

"The difficulty only affects electronic funds payments," said Gary Christoph, chief information officer for the U.S. Health Care Financing Administration, which operates the Medicare program.

Hospitals also are affected in Idaho, Alaska, Arizona and North Carolina, as are doctors in Queens County, N.Y. Hospitals and doctors that are paid by paper check continue to be paid as usual, Christoph said.

Highland Community Bank is part of the financial network that transfers Medicare funds from the government to hospitals that treat patients. The computer glitch affects Highland's ability to receive electronic payment instructions from eight companies that process reimbursement claims from hospitals, Christoph said. One of those companies is Medicare Northwest, a branch of Regence BlueCross BlueShield of Oregon that processes hospital claims in Oregon, Idaho and Clark County, Wash.

As of Wednesday, the bank was able to transfer funds only if it received payment instructions on a computer floppy diskette hand-delivered by courier. That arrangement was creating payment delays of fours hours to a day, Christoph said.

As a practical matter, a delay of that duration has little effect on large hospitals' cash flow. The four hospitals of Legacy Health System, for example, are involved in the payment slowdown, but Legacy's Medicare reimbursement specialists weren't even aware of the problem as of Wednesday, said spokesman Henry Sessions. That's because the Medicare program makes direct deposits to Legacy's account only every two weeks.

The problem stems from Highland Community Bank's failure to install a Y2K-compliant version of communications software called Network Data Mover. According to information from a Seattle Medicare spokeswoman and a Highland bank source, the bank's old version expired at midnight Dec. 31, while an updated version had sat for weeks inside the bank, uninstalled.

A technician from the software vendor installed the updated version in six hours Tuesday. By Tuesday afternoon, the bank was able to accept electronic payment instructions and transmit direct deposits via the Federal Reserve. Tests are continuing.

Other than the current glitch, the Health Care Financing Administration and its contractors have experienced no significant Y2K-related troubles.

"By and large, things have been going smoothly," Christoph said.

-- Martin Thompson (Martin@aol.com), January 06, 2000

Answers

Sorry...Medicare...

Fingers are not Y2k compliant.

-- Martin Thompson (Martin@aol.com), January 06, 2000.

"The problem stems from Highland Community Bank's failure to install a Y2K-compliant version of communications software called Network Data Mover. According to information from a Seattle Medicare spokeswoman and a Highland bank source, the bank's old version expired at midnight Dec. 31, while an updated version had sat for weeks inside the bank, uninstalled."

I guess they thought Y2K was a hoax early on. Someone loses their job over this one for sure.

-- Forrest Covington (theforrest@mindspring.com), January 06, 2000.