Medicare Program; Criteria and Standards for Evaluating Intermediary and Carrier Performance: Millennium Compliance

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-4002-GNC]

RIN 0938-AJ15

Medicare Program; Criteria and Standards for Evaluating

Intermediary and Carrier Performance: Millennium Compliance

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: General notice with comment period.

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SUMMARY: This notice revises the criteria and standards to be used for

evaluating the performance of fiscal intermediaries and carriers in the

administration of the Medicare program. This revision establishes a

performance standard requiring these contractors to meet requirements

for millennium compliance. We require contractors to certify that they

have made all necessary system(s) changes and have tested those systems

in accordance with HCFA guidelines.

DATES: Effective date: This notice is effective December 11, 1998.

Comment date: Comments will be considered if we receive them at the

appropriate address, as provided below, no later than 5 p.m. on

February 9, 1999.

ADDRESSES: Mail written comments (1 original and 3 copies) to the

following address:

Health Care Financing Administration, Department of Health and Human

Services, Attention: HCFA-4002-GNC, P.O. Box 31850, Baltimore, MD

21207-8850

If you prefer, you may deliver your written comments (1 original

and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,

Washington, D.C. 20201, or

Room C5-09-26, 7500 Security Blvd, Baltimore, MD 21244-1850.

Comments may also be submitted electronically to the following e-

mail address: [email protected] E-mail comments must include the

full name, postal address, and affiliation (if applicable) of the

sender and must be submitted to the referenced address to be

considered. All comments must be incorporated in the e-mail message

because we may not be able to access attachments.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code HCFA-4002-GNC-N. Comments received timely will be

available for public inspection as they are received, generally

beginning approximately 3 weeks after publication of a document, in

Room 309-G of the Department's offices at 200 Independence Ave., SW.,

Washington, DC, on Monday through Friday of each week from 8:30 a.m. to

5:00 p.m. (Phone: 202-690-7890).

FOR FURTHER INFORMATION CONTACT: Sue Lathroum, (410) 786-7409; Rich

Morrison, (410) 786-7142.

SUPPLEMENTARY INFORMATION:

I. Background

Section 1816 of the Social Security Act (the Act) authorizes us to

enter into agreements with fiscal intermediaries to determine whether

medical services are covered under Medicare and determine correct

payment amounts. The intermediaries then make payments to the health

care providers on behalf of the beneficiaries. Section 1816(f) of the

Act requires us to develop criteria, standards, and procedures to

evaluate an intermediary's performance of its functions under its

agreement.

Section 1842 of the Act authorizes us to enter into contracts with

carriers for the payment of Part B claims for Medicare-covered

services. Under

[[Page 68465]]

section 1842(b)(2) of the Act, we are required to develop criteria,

standards, and procedures to evaluate a carrier's performance of its

functions under its contract. We refer to these fiscal intermediaries

and carriers as Medicare ``contractors''.

On September 7, 1994, we published in the Federal Register (59 FR

46258) the criteria and standards to be used to evaluate the

performance of our contractors under their agreements or contracts with

us.

The criteria and standards we published help us determine if a

contractor's performance measures up to the expectations that we have

for the activities being evaluated to ensure that our beneficiaries and

providers are being properly served. We announced that we would use the

results of the performance evaluations in our contract management

activities, which might result in the initiation of administrative

actions. These actions could include entering into, renewing/extending,

or terminating contracts or contract amendments with our contractors.

We also announced that we would consider revising the criteria and

standards if changes were required as a result of administrative

mandate or congressional action. If changes are necessary, we are

required to issue a Federal Register notice before implementing a

change.

II. Provisions of This Notice

With the approach of the year 2000, we have been focusing on our

readiness to move into the next century and taking all appropriate

steps to ensure that Medicare claims are processed without

interruption. Millennium compliance of all claims processing and

related systems is our highest priority. We believe it is appropriate

to add a requirement to our contracts and agreements with our Medicare

contractors to ensure that all Medicare contractors are making the

commitment and taking necessary action to meet our requirements in that

regard. In addition, we are requiring each contractor to certify, under

the normal penalties that apply to false certifications, that it has

made all necessary systems changes and has tested its systems in

accordance with the guidelines we have established. The normal

penalties for false certification include criminal and/or civil

prosecution as well as appropriate administrative action, not limited

to suspension of the contractor from the Medicare program, as well as

the termination or nonrenewal of a contract or agreement.

Listed below are the revisions to the ``Administrative Activities''

criterion and section VII. ``Action Based on Performance Evaluations''

to incorporate the addition of the certification requirements for the

contractors' systems changes.

Under the ``Administrative Activities'' criterion in sections IV

and V for fiscal intermediaries and carriers, respectively, the

following introductory paragraph is added:

``A contractor must efficiently and effectively manage its

operations to ensure constant improvement in the way it does business.

Proper systems security, ADP maintenance, and disaster recovery plans

must be in place. It must also ensure that all necessary actions and

system changes have been made and tested so that it is meeting

established milestones along the critical path of HCFA's requirements

for millennium compliance.'' Year 2000 compliant means information

technology that accurately processes date and time data (including, but

not limited to, calculating, comparing, and sequencing) from, into, and

between the nineteenth, twentieth, and twenty-first centuries, and the

years 1999 and 2000 and leap year calculations. Furthermore, Year 2000

compliant information technology, when used in combination with other

information technology, must accurately process date and time data if

the other information technology properly exchanges date and time data

with it. [adapted from: FAR 39.002 Definitions]

The remaining section of the criterion is unchanged, except for the

reference to implementation reviews of ``Task management plans''. This

reference should be to implementation reviews of ``Change management

plans'' to conform with our recent implementation of the ``Change

management system'' for issuing instructions to our contractors.

We are also adding the following requirement to section VII.

``Action Based on Performance Evaluations'' after the existing

requirements:

``A contractor must certify that it has made all necessary systems

changes and has tested its systems in accordance with the guidelines

HCFA has established.''

Authority: Section 1816(f) and 1842(b)(2) of the Social Security

Act (42 U.S.C. 1395h and 1395u).

(Catalog of Federal Domestic Assistance Program No. 93.773

Medicare--Hospital Insurance Program; and No. 93.774, Medicare--

Supplementary Medical Insurance Program)

Dated: August 24, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

[FR Doc. 98-32977 Filed 12-10-98; 8:45 am]

BILLING CODE 4120-01-P