Doctors, hospitals, nursing homes and other health care providers in the Medicare program "still do not appear to be doing all that they must" to prepare for potential Year 2000 computer problems, the Clinton administration concludes in draft testimony prepared for a House hearing today.

In separate testimony, congressional auditors also worry that Medicare contractors processing benefit claims will run out of time before they can finish comprehensive Y2K tests aimed at finding glitches in data exchange systems.

Recent information on such tests "continues to be discouraging," the General Accounting Office says in draft testimony. Forty of 69 Medicare contractors--usually insurance companies--have tested with less than 1 percent of the doctors, hospitals and health providers who submit claims for payments, according to the testimony.

The draft testimony, prepared for a House Government Reform subcommittee chaired by Rep. Stephen Horn (R-Calif.), seems to reaffirm earlier findings that the health care industry lags on Y2K fixes and could face some financial consequences if billing and claims systems falter in January. By 2000, Medicare expects to process more than 1 billion claims and pay $288 billion in fee-for-service and managed-care benefits annually.

Last week, the special Senate committee assessing the Y2K problem gave high marks to a number of the nation's economic sectors but expressed concerns about the readiness of nursing homes and physician offices. "There are a lot of areas here where we don't have much information or where it seems as though not much has been done," Sen. Christopher J. Dodd (D-Conn.) said of the health care industry.

The Health Care Financing Administration, which oversees the Medicare program, has sent letters to more than 1.1 million health plans and providers stressing the importance of Y2K readiness. HCFA also has sponsored conferences, distributed "jump start kits" and set up a toll-free phone line, 1-800-958-4232, to provide information.

But it appears that doctors, hospitals and nursing homes have been reluctant to engage in Y2K tests and demonstrate their compliance, according to congressional auditors.

Gary Christoph, the chief technology officer at HCFA, acknowledges in his draft testimony that "we now see our greatest risk to the program as the uncertainties in the readiness of our partners, namely, our Medicare providers."

According to Christoph's testimony, "Virtually all of the surveys of provider readiness have fairly low response rates, and the anonymous responses are self-reported data, which may be overly optimistic. . . . We continue to have serious, ongoing concerns about the ability of some Medicare providers to successfully meet this challenge."

The Year 2000 computer glitch, known as Y2K, stems from the use in many systems of two-digit date fields, which may interpret "00" as 1900, not 2000, and malfunction or stop. Although Y2K fixes are relatively simple, coordinating and testing the fixes have created a big management problem, especially for agencies that regularly exchange data with contractors, nonprofits and local governments.

In his draft testimony, Christoph says the government computers that handle Medicare transactions have undergone extensive tests and "will be ready for the millennium." As proof, he reports that Medicare last month successfully received and processed enrollments from the Social Security Administration for beneficiaries who will be entitled to Medicare benefits on Jan. 1.

But the draft testimony by GAO Y2K expert Joel C. Willemssen, while praising Medicare's progress, stresses that HCFA's last round of internal tests will not end until November. Until then, Willemssen says, "the final status of the agency's Y2K compliance will remain unknown."