Millennium Bug threat looms large, but home care doesn’t seem to notice

Other concerns cause delays in assessments of agencies’ computer systems

It has been a brutal year for home care agencies nationwide. Dealing with the interim payment system (IPS), struggling with OASIS implementation, and just trying to get by have taken their toll in time and money. As a result, most agencies have not even begun to assess what impact the Millennium Bug will have on their operations.

The Millennium Bug is the name given to a host of problems that some computer programs and systems, as well as pieces of equipment that perform computerized operations, may have when the year 2000 comes.

The problem is this: Most computer programs use two-digit date codes (98 would represent 1998, for instance). When 2000 arrives, these programs will read 00 as 1900. Any program that relies on date differences — such as for the calculation of ages or time periods — is at risk of faltering or even crashing when the clock strikes 12 on Jan. 1, 2000.

According to Jeff Bonham, MBA, vice president of the Marion, IL-based consulting firm Medicare Training & Consulting, the agencies he talks with — both as a consultant and as one of the directors of the Illinois Home Care Council — have spent most of their time worried about survival. Getting through the current year is of more import to most agencies than what happens in 15 months, he says.

However, Bonham is noting a change. The topic is on the agenda for the next council meeting, and his clients are starting to ask him how to protect their computer systems.

But there is more to be concerned about than whether your computer system will crash. Just what should you worry about and how should you assess your exposure? (For a list of areas you should check in your agency, see box, p. 160.) Here is some advice from consultants and home care executives who have already started the process:

1. Create a plan of action.

Before you start checking systems, you should sit down and create an action plan. Not only will this give you a road map to follow, but it could serve as proof that you took reasonable care to protect your business and your clients from harm should litigation arise from a year 2000 (Y2K) system problem. (One agency’s path to compliance is discussed in a related story on p. 159. For more on the legal liabilities your agency might face, see related story above.)

Larry Leahy, CHE, CHCE, MHA, is director of program integrity at Ruth Constant & Associates, a Victoria, TX, company that owns three home health agencies. He only recently started preparing the company for Y2K. One of the vendors from which Leahy purchases computer equipment ran a free companywide Y2K audit. "We knew we weren’t going to be compliant," says Leahy, noting that the agency had planned to upgrade or purchase new and compliant systems in 1998, but didn’t do so because of budgetary constraints related to IPS.

After the vendor ran the audit, it developed a plan of action to bring Constant & Associates into compliance, says Leahy. "Our focus has been on internal operations, billing, and scheduling," he says. Part of the solution will be to get a new operating system that will allow seamless data input from start of service through to billing and payroll. That will eliminate the problems that their proprietary scheduling system and separate billing program could cause.

Leahy says he spent a lot of time evaluating systems at the recent National Association of Home Care (NAHC) conference in Atlanta. Next, Leahy will determine whether the companies with which Ruth Constant does business are compliant. He will start by sending out letters asking them to state whether they, the goods they produce, or the services they supply will be affected by Y2K, and if so, what they are doing to remedy the problems and when they will be compliant.

One key area Leahy will check is Constant & Associates’ communications system. "Everyone in home care is dependent on cell phones and pagers," he says. "We are talking to phone companies, our stationary phone system providers, our cell phone companies, and pager providers to find out where they stand. If those systems go down, we have to find an alternative," he says. That alternative plan will be included not just in the Y2K program, but also in the emergency plan for the agencies.

Leahy also is contacting the power company to see whether it is prepared. "If we have a patient on oxygen and power goes off, we have a problem," he says. So far, the utilities have assuaged Leahy’s fears.

2. Assess your exposure.

Joe Cortese, director of MIS at Montefiore Medical Center Home Health in New York City, has largely completed the systems upgrades his agency needs to comply with Y2K. He says he received a lot of help from the hospital and his colleagues in deciding what to put on his checklist. Such networking can be key in helping you think to check programs, machines, and systems that you might not otherwise notice.

Indeed, as Leahy is learning at Constant & Associates, there is more to look at than the computer system in your office. One of the paramount areas of concern is whether you can survive the Millennium Bug’s financial impact. "From my standpoint, the financial aspect is most important," says Bonham. "You have to worry if you will have access to funds you have in the bank, whether your payroll program will run."

There also is a big question about whether payments will come in on time — particularly Medicare and Medicaid payments. The Health Care Financing Administration in Baltimore has already announced that it is not in compliance for Y2K. Financially, you should consider whether and how you will survive if you are cut off from funding for three to four months, advises Bonham. "I think a lot of freestanding agencies won’t be able to make it," he says. "They typically don’t have the kind of capital they would need. Unless you can get a personal line of credit, or have money in a certificate of deposit that you can borrow against, I think you’ll have a problem. Banks just aren’t willing to lend that kind of money to home health agencies."

And if you think you can build the kind of reserves you might need between now and 2000, Bonham says you should think again. "If you are all Medicare, you just can’t do it," he says. You may have some salvation if you live in a market where you can diversify now, bring down your reliance on Medicare, and start doing work that is paid for by other sources, says Bonham. "If the market is there, that might also give you a better chance," he says.

Leahy agrees that cash flow is a potential problem. "If the HCFA system crashes, then the checks stop coming," he says. "We get electronic deposits every two weeks. We have to look at our lines of credit to ensure we can keep going." Leahy is less worried about fund disbursal from private sources and the state of Texas, which account for about 35% of his agency’s business.

He also feels that his relationship with his local bank will stand him in better stead in any kind of fiscal crunch than if Constant & Associates did its banking with a big national player.

As important as your financial risk is the risk to patients, says Cortese. He suggests that one of the first assessments you make should be of any equipment that has direct contact with patients or impact on patient care. "If a patient gets sick — or worse, if the equipment stops working — that should be a big priority for you," he says.

Then you can look at the less vital aspects of your business — a scheduling system, for example. If any of your systems are proprietary, you need to find the developer or programmer to find out if those systems are compliant. If you can’t locate that person, says Cortese, contact one of the many consultants who can evaluate and modify what you have.

3. Start a remediation program.

Once you know your risk, then you need to create a plan for how to operate without any noncompliant programs. Contingency plans can be simple. For instance, if you are worried about whether your computer payroll program will work, have a checkbook, pen, and calculator at hand, says Bonham. You may even want to consider having enough cash on hand to pay your staff, because the bank with which you deal may not be compliant and may not be able to honor your checks.

But keep in mind there could be tax liability problems in keeping more cash on hand at the end of the year, warns Leahy. "I think our approach will be to ensure we have good lines of credit that will see us through one quarter."

A fax machine that won’t date-stamp your incoming and outgoing faxes automatically can be dealt with by having a manual date stamp on hand. Voice mail systems can include a reminder for the person leaving the message to include the date and time he or she called.

But remediation measures can also be complex, such as the purchase of completely new computer systems, securing a bank loan or line of credit, or trying to change the mix of patients so you rely less on Medicare and Medicaid payments.

If you haven’t done anything at all yet, the start of your plan should be developing contingencies, says Greg Solecki, vice president of home health care for Henry Ford Health System Home Health in Detroit. "Assume you will go down and develop a plan for that," he says. "Then, with whatever time you have left, go back and attack the issues."

Solecki offers a less gloomy picture of the future. "I think that the worst thing that will happen is that your computer systems will crash. If you have a contingency plan for some sort of manual record keeping, I think you’ll be fine. We were there before, we can do it that way again."

Cortese also believes that the worst-case scenario isn’t as bad as some make out. "Even if HCFA can’t pay all the Medicare payments in the country because of Y2K," he says, "I have to believe they will come up with some interim payment system. You can’t shut down the home health industry, hospitals, and other facilities, or send them into financial crisis because HCFA isn’t ready."


Joint Commission on Accreditation of Health Care Organizations, Customer Service Center. Telephone: (630) 792-5800.

John Gilliland, JD, Gilliland & Associates, Crestview Hills, KY. Telephone: (606) 344-8515.

Jeff Bonham, MBA, vice president, Medicare Training & Consulting, Marion, IL. Telephone: (618) 988-8180.

Larry Leahy, CHE, CHCE, MHA, director of program integrity, Ruth Constant & Associates, Victoria, TX. Telephone: (512) 578-0762.

Joe Cortese, director MIS, Montefiore Medical Center Home Health, New York City. Telephone: (718) 405-4400.

Greg Solecki, vice president, Home Health Care, Henry Ford Health System Home Health, Detroit. Telephone: (313) 874-6539.